Find two ads for management or executive positions (Copy and paste them).
Follow the instructions for this assignment carefully. The DQ is asking you to select Two Ads related to the 8 attributes. DO NOT address all the 8 attributes, focus and concentrate only the attributes discussed in the Two Ads.
- What leadership attributes (competencies) are mentioned in these ads? (There are eight [8] listed in Chapter 12, p. 460).
- Personality
- Self-concept
- Leadership Motivation
- Drive
- Integrity
- Knowledge of the Business
- Cognitive Intelligence (IQ) and Practical Intelligence
- Emotional Intelligence (E.Q.)
If you were on the selection panel, what methods (or questions) would you use to identify these specific leadership attributes (competencies) in job applicants? (For example, what questions would you ask the applicant to decipher his or her leadership competencies? BE SPECIFIC).
Organizational Behavior
McShane | Von Glinow
fifth edition
emerging knowledge and practice for the real world
O
rg
anizatio
nal B
ehavio
r
ISBN 978-0-07-338123-7
MHID 0-07-338123-3
www.mhhe.com
E
A
N
em
erg
ing
kno
w
led
g
e and
p
ractice fo
r the real w
o
rld
fifth edition
McShane
Von Glinow
In their new Fifth Edition, McShane and Von Glinow continue the trailblazing
innovations that made previous editions of Organizational Behavior recognized and
adopted by the new generation of organizational behavior (OB) instructors.
McShane and Von Glinow 5e is acclaimed for:
Readability, presentation of current knowledge »
Strong International/Global orientation »
Contemporary Theory Foundation (without the jargon) »
Active Learning and Critical Thinking Support »
Textbook’s philosophy-OB knowledge is for everyone, not just traditional managers. »
The reality is that everyone needs OB knowledge to successfully thrive in and around
organizations, from sales representatives to production employees to physicians. The
authors’ ability to engage students by introducing cutting-edge OB topics while providing
relevancy to OB concepts through the ‘linking theory with reality’ approach, is the reason OB
5e remains unparalleled in its ability to engage students.
Delivering what we’ve come to expect from this exceptional author team, McShane/Von
Glinow 5e helps everyone make sense of OB, and provides the conceptual tools to work more
effectively in the workplace.
To learn more, visit www.mhhe.com/mcshane5e
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Organizational Behavior
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Emerging Knowledge and
Practice for the Real World
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Organizational Behavior
Steven L. McShane
The University of Western Australia
Mary Ann Von Glinow
Florida International University
5th Edition
Boston Burr Ridge, IL Dubuque, IA New York San Francisco St. Louis
Bangkok Bogotá Caracas Kuala Lumpur Lisbon London Madrid Mexico City
Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
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ORGANIZATIONAL BEHAVIOR:
EMERGING KNOWLEDGE AND PRACTICE FOR THE REAL WORLD
Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221
Avenue of the Americas, New York, NY, 10020. Copyright © 2010 , 2008 , 2005 , 2003 , 2000 by
The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be
reproduced or distributed in any form or by any means, or stored in a database or retrieval
system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but
not limited to, in any network or other electronic storage or transmission, or broadcast for
distance learning.
Some ancillaries, including electronic and print components, may not be available to customers
outside the United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 DOW/DOW 0 9
ISBN 978-0-07-338123-7
MHID 0-07-338123-3
Vice president and editor-in-chief: Brent Gordon
Publisher: Paul Ducham
Executive editor: John Weimeister
Senior development editor: Christine Scheid
Marketing manager: Natalie Zook
Lead project manager: Christine A. Vaughan
Production supervisor: Gina Hangos
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Cover and interior design: Pam Verros/pvdesign
Cover image: ©Veer
Typeface: 10/12 Berthold Baskerville
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Printer: R. R. Donnelley
Library of Congress Cataloging-in-Publication Data
McShane, Steven Lattimore.
Organizational behavior : emerging knowledge and practice for the real world / Steven
L. McShane, Mary Ann Von Glinow. — 5th ed.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-07-338123-7 (alk. paper)
ISBN-10: 0-07-338123-3 (alk. paper)
1. Organizational behavior. I. Von Glinow, Mary Ann Young, 1949- II. Title.
HD58.7.M42 2010
658—dc22
2009005753
www.mhhe.com
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http://www.mhhe.com
about the authors
Steven L. McShane
Steven L. McShane is Pro-
fessor of Management in
the Business School at the
University of Western
Australia (UWA), where
he receives high teaching
ratings from students in
Perth, Singapore, Manila,
and other cities where
UWA offers its programs.
He is also an Honorary
Professor at Universiti
Tunku Abdul Rahman
(UTAR) in Malaysia and
previously taught in the business faculties at Simon Fraser
University and Queen’s University in Canada. Steve has
conducted executive programs with Nokia, TÜV-SÜD,
Wesfarmers Group, Main Roads WA, McGraw-Hill,
ALCOA World Alumina Australia, and many other organi-
zations. He is also a popular visiting speaker, having given
presentations to faculty and students in almost a dozen
countries over the past four years.
Steve earned his Ph.D. from Michigan State University
in organizational behavior, human resource management,
and labor relations. He also holds a Master of Industrial
Relations from the University of Toronto, and an under-
graduate degree from Queen’s University in Canada. Steve
has served as President of the Administrative Sciences
Association of Canada (the Canadian equivalent of the
Academy of Management) and Director of Graduate Pro-
grams in the business faculty at Simon Fraser University.
Along with coauthoring Organizational Behavior, Fifth
Edition, Steve coauthors with Mary Ann Von Glinow on
Organizational Behavior: Essentials, Second Edition (2009).
He is also the coauthor with Sandra Steen (University of
Regina) of Canadian Organizational Behaviour, Seventh
Edition (2009), with Tony Travaglione (Curtin University)
of Organisational Behaviour on the Pacific Rim, Second Edi-
tion (2007), and with Charles Hill (University of Washington)
of Principles of Management, First Edition (2008). Steve is
also coauthor of Indian, Chinese, and Taiwanese editions or
translations of his OB book. Steve has published several
dozen articles and conference papers on workplace values,
training transfer, organizational learning, exit-voice-loyalty,
employee socialization, wrongful dismissal, media bias in
business magazines, and other diverse topics.
Steve enjoys spending his leisure time swimming, body
board surfing, canoeing, skiing, and traveling with his wife
and two daughters.
Mary Ann Von Glinow
Dr. Von Glinow is Director
of the Center for Interna-
tional Business Education
and Research (CIBER)
and is Research Professor
of Management and Inter-
national Business at Florida
International University.
She also is the 2006 Vice
President of the Academy
of International Business
(AIB) and an editor of
JIBS. Previously on the
Marshall School faculty of
the University of Southern California, she has an MBA and
Ph.D. in Management Science from The Ohio State Univer-
sity. Dr. Von Glinow was the 1994–95 President of the Acad-
emy of Management, the world’s largest association of
academicians in management, and is a Fellow of the Academy
and the Pan-Pacific Business Association. She sits on eleven
editorial review boards and numerous international panels.
She teaches in executive programs in Latin America, Central
America, the Caribbean region, Asia, and the U.S.
Dr. Von Glinow has authored over 100 journal articles
and 11 books. Her most recent books include Managing Multi-
national Teams (Elsevier, 2005) and Organizational Learning
Capability (Oxford University Press, 1999; in Chinese and
Spanish translation), which won a Gold Book Award from
the Ministry of Economic Affairs in Taiwan in 2002. She has
also coauthored the popular Organizational Behavior, Fifth
Edition textbook and Organizational Behavior: Essentials,
Second Edition (McGraw-Hill/Irwin, 2009). She heads an
international consortium of researchers delving into “Best
International Human Resource Management Practices,” and
her research in this arena won an award from the American
Society for Competitiveness’ Board of Trustees. She also
received an NSF grant to study globally distributed work.
Dr. Von Glinow is the 2005 Academy of Management
recipient of the Distinguished Service Award, one of the
Academy’s three highest honors bestowed.
Mary Ann consults to a number of domestic and multi-
national enterprises, and serves as a mayoral appointee to
the Shanghai Institute of Human Resources in China. Since
1989, she has been a consultant in General Electric’s “Work-
out” and “Change Acceleration Program” including “Coach-
ing to Management.” Her clients have included Asia
Development Bank, American Express, Diageo, Knight-
Ridder, Burger King, Pillsbury, Westinghouse, Southern
California Edison, The Aetna, State of Florida, Kaiser Per-
manente, TRW, Rockwell Int’l, Motorola, N.Y. Life, Amoco,
Lucent, and Joe’s Stone Crabs, to name a few. She is on the
Board of Friends of WLRN, Fielding University, Friends of
Bay Oaks, Pan-Pacific Business Association, and Animal Al-
liance in Los Angeles. She is actively involved in several
animal welfare organizations and received the 1996 Hu-
manitarian Award of the Year from Miami’s Adopt-a-Pet.
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Dedicated with love and devotion to Donna, and to our wonderful
daughters, Bryton and Madison
— S.L.M.
Dedicated to Zack, Emma, and Googun!
—M.A.V.G.
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Preface xvi
Glossary 525
References 531
Photo Credits 589
Organization Index 591
Name Index 595
Subject Index 616
URL Index 633
PART 1 Introduction 1
Chapter 1 Introduction to the Field of Organizational
Behavior 2
PART 2 Individual Behavior and Processes 31
Chapter 2 Individual Behavior, Personality, and Values 32
Chapter 3 Perception and Learning in Organizations 66
Chapter 4 Workplace Emotions, Attitudes, and Stress 96
Chapter 5 Foundations of Employee Motivation 130
Chapter 6 Applied Performance Practices 164
Chapter 7 Decision Making and Creativity 196
PART 3 Team Processes 231
Chapter 8 Team Dynamics 232
Chapter 9 Communicating in Teams and Organizations 268
Chapter 10 Power and Influence in the Workplace 298
Chapter 11 Conflict and Negotiation in the Workplace 326
Chapter 12 Leadership in Organizational Settings 358
PART 4 Organizational Processes 383
Chapter 13 Organizational Structure 384
Chapter 14 Organizational Culture 414
Chapter 15 Organizational Change 442
Additional Cases 469
Case 1: A Mir Kiss? 469
Case 2: Arctic Mining Consultants 471
Case 3: Big Screen’s Big Failure 473
Case 4: Bridging the Two Worlds—The Organizational Dilemma 478
Case 5: Fran Hayden Joins Dairy Engineering 479
Case 6: From Lippert-Johanson Incorporated to Fenway Waste Management 482
Case 7: Glengarry Regional Medical Center 484
Case 8: High Noon at Alpha Mills 488
Case 9: Keeping Suzanne Chalmers 490
Case 10: Northwest Canadian Forest Products Limited 492
Case 11: Perfect Pizzeria 494
Case 12: Simmons Laboratories 495
Case 13: Treetop Forest Products 500
Video Cases 502
Appendix A
Theory Building and Systematic Research Methods 507
Appendix B
Scoring Keys for Self-Assessment Activities 514
brief
contents
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contents
Preface xvi
Part 1 Introduction 1
Chapter 1 Introduction to the Field of
Organizational Behavior 2
The Field of Organizational Behavior 4
Organizational Behavior’s Foundations 5
Why Study Organizational Behavior? 5
Perspectives of Organizational
Effectiveness 7
Open-Systems Perspective 7
Global Connections 1.1: Hospitals Take the
Lean Journey to Efficiency 10
Organizational Learning Perspective 10
High-Performance Work Practices Perspective 12
Stakeholder Perspective 13
Types of Individual Behavior 16
Task Performance 17
Organizational Citizenship 17
Counterproductive Work Behaviors 18
Joining and Staying with the Organization 18
Maintaining Work Attendance 18
Contemporary Challenges for Organizations 19
Globalization 20
Increasing Workforce Diversity 20
Emerging Employment Relationships 22
Anchors of Organizational Behavior
Knowledge 23
The Multidisciplinary Anchor 23
The Systematic Research Anchor 24
Part 2 Individual Behavior and
Processes 31
Chapter 2 Individual Behavior, Personality,
and Values 32
MARS Model of Individual Behavior and
Performance 34
Employee Motivation 34
Ability 35
Role Perceptions 36
Situational Factors 37
Personality in Organizations 38
Personality Determinants: Nature versus Nurture 39
Five-Factor Model of Personality 39
Jungian Personality Theory and the Myers-Briggs
Type Indicator 41
Caveats about Personality Testing in Organizations 42
The Contingency Anchor 24
The Multiple Levels of Analysis Anchor 24
Chapter Summary 25
Key Terms 25
Critical Thinking Questions 26
Case Study 1.1: Jersey Dairies, Inc. 26
Case Study 1.2: Working from Home—It’s in
the Details 28
Team Exercise 1.3: Human Checkers 28
Class Exercise 1.4: Diagnosing Organizational
Stakeholders 29
Self-Assessment 1.5: It All Makes Sense? 30
Self-Assessment 1.6: Is Telecommuting for You? 30
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Contents ix
Self-Concept: The “I” in Organizational
Behavior 43
Self-Enhancement 44
Self-Verification 44
Self-Evaluation 44
Global Connections 2.1: Feeling Valued Adds
Value at Johnson & Johnson 45
The Social Self 46
Self-Concept and Organizational Behavior 47
Values in the Workplace 47
Types of Values 48
Values and Individual Behavior 49
Value Congruence 49
Values across Cultures 50
Individualism and Collectivism 50
Power Distance 51
Uncertainty Avoidance 51
Achievement-Nurturing Orientation 52
Ethical Values and Behavior 52
Three Ethical Principles 53
Moral Intensity, Ethical Sensitivity, and Situational
Influences 53
Supporting Ethical Behavior 54
Chapter Summary 56
Key Terms 56
Critical Thinking Questions 57
Case Study 2.1: SK Telecom Goes Egalitarian in a
Hierarchical Society 57
Case Study 2.2: Pushing Paper Can Be Fun 58
Case Study 2.3: The Trouble with Business
Ethics 59
Class Exercise 2.4: Test Your Knowledge of
Personality 60
Team Exercise 2.5: Comparing Cultural Values 61
Team Exercise 2.6: Ethics Dilemma Vignettes 62
Self-Assessment 2.7: Are You Introverted or
Extroverted? 63
Self-Assessment 2.8: What Are Your Dominant Values? 64
Self-Assessment 2.9: Individualism-Collectivism Scale 64
Self-Assessment 2.10: Estimating Your Locus of
Control 64
Self-Assessment 2.11: Identifying Your General
Self-Efficacy 64
Chapter 3 Perception and Learning in
Organizations 66
The Perceptual Process 68
Perceptual Organization and Interpretation 70
Social Identity and Stereotyping 71
Stereotyping in Organizations 72
Global Connections 3.1: “Your Name Says
Everything in France” 74
Attribution Theory 75
Attribution Errors 76
Self-Fulfilling Prophecy 76
Contingencies of Self-Fulfilling Prophecy 77
Other Perceptual Errors 78
Improving Perceptions 79
Awareness of Perceptual Biases 79
Improving Self-Awareness 79
Meaningful Interaction 81
Learning in Organizations 82
Behavior Modification: Learning through
Reinforcement 82
Social Learning Theory: Learning by Observing 85
Learning through Experience 86
From Individual to Organizational Learning 87
Chapter Summary 88
Key Terms 89
Critical Thinking Questions 89
Case Study 3.1: Hy Dairies, Inc. 90
Case Study 3.2: How Failure Breeds
Success 91
Class Exercise 3.3: The Learning Exercise 91
Web Exercise 3.4: Stereotyping in Corporate Annual
Reports 92
Self-Assessment 3.5: How Much Perceptual Structure
Do You Need? 92
Self-Assessment 3.6: Assessing Your Perspective Taking
(Cognitive Empathy) 94
Self-Asssessment 3.7: Assessing Your Emotional Empathy 94
Chapter 4 Workplace Emotions, Attitudes,
and Stress 96
Emotions in the Workplace 98
Types of Emotions 99
Emotions, Attitudes, and Behavior 100
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x Contents
Managing Emotions at Work 103
Emotional Display Norms across Cultures 103
Emotional Dissonance 104
Emotional Intelligence 105
Global Connections 4.1: GM Holden Revs Up
Emotional Intelligence 107
Improving Emotional Intelligence 107
Job Satisfaction 108
Job Satisfaction and Work Behavior 109
The Ethics of Job Satisfaction 112
Organizational Commitment 112
Consequences of Organizational
Commitment 112
Building Organizational Commitment 113
Work-Related Stress and Its Management 114
General Adaptation Syndrome 114
Consequences of Distress 115
Stressors: The Causes of Stress 116
Individual Differences in Stress 118
Managing Work-Related Stress 118
Chapter Summary 122
Key Terms 122
Critical Thinking Questions 123
Case Study 4.1: Riding the Emotional Roller Coaster 123
Case Study 4.2: Dispatches from the War
on Stress 124
Class Exercise 4.3: Strength-Based Coaching 125
Team Exercise 4.4: Ranking Jobs on Their Emotional
Labor 126
Team Exercise 4.5: Stage Fright! 126
Self-Assessment 4.6: School Commitment Scale 127
Self-Assessment 4.7: Dispositional Mood Scale 129
Self-Assessment 4.8: Work Addiction Risk Test 129
Self-Assessment 4.9: Perceived Stress Scale 129
Self-Assessment 4.10: Stress Coping Preference Scale 129
Chapter 5 Foundations of Employee
Motivation 130
Employee Engagement 132
Employee Drives and Needs 134
Individual Differences in Needs 134
Maslow’s Needs Hierarchy Theory 135
Global Connections 5.1: Shining the Spotlight
on Employee Recognition 137
What’s Wrong with Needs Hierarchy
Models? 138
Learned Needs Theory 138
Four-Drive Theory 140
Expectancy Theory of Motivation 143
Expectancy Theory in Practice 144
Goal Setting and Feedback 145
Balanced Scorecard 147
Characteristics of Effective Feedback 148
Sources of Feedback 149
Evaluating Goal Setting and Feedback 151
Organizational Justice 151
Equity Theory 152
Procedural Justice 155
Chapter Summary 156
Key Terms 157
Critical-Thinking Questions 157
Case Study 5.1: Vêtements Ltée 158
Case Study 5.2: Motivating Staff When the
Money Is Tight 159
Class Exercise 5.3: Needs Priority Exercise 159
Team Exercise 5.4: A Question of Feedback 160
Self-Assessment 5.5: Need-Strength Questionnaire 161
Self-Assessment 5.6: Measuring Your Growth-Need
Strength 163
Self-Assessment 5.7: Your Equity Sensitivity 163
Chapter 6 Applied Performance
Practices 164
The Meaning of Money in the Workplace 166
Financial Reward Practices 167
Membership- and Seniority-Based
Rewards 167
Job Status–Based Rewards 168
Competency-Based Rewards 169
Performance-Based Rewards 170
Connections 6.1: Nucor Rewards the Team 171
Improving Reward Effectiveness 172
Connections 6.2: When Rewards Go
Wrong 174
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Contents xi
Job Design Practices 175
Job Design and Work Efficiency 175
Job Design and Work Motivation 177
Job Design Practices That Motivate 180
Empowerment Practices 182
Supporting Empowerment 182
Self-Leadership Practices 183
Self-Leadership Strategies 184
Effectiveness of Self-Leadership 186
Self-Leadership Contingencies 186
Chapter Summary 187
Key Terms 188
Critical Thinking Questions 188
Case Study 6.1: The Regency Grand Hotel 188
Case Study 6.2: How to Make a Microserf
Smile 190
Team Exercise 6.3: Is Student Work Enriched? 191
Self-Assessment 6.4: What Is Your Attitude toward
Money? 193
Self-Assessment 6.5: Assessing Your
Self-Leadership 194
Self-Assessment 6.6: Student Empowerment Scale 195
Chapter 7 Decision Making and
Creativity 196
Rational Choice Paradigm of Decision
Making 198
Problems with the Rational Choice
Paradigm 200
Identifying Problems and Opportunities 200
Problems with Problem Identification 201
Identifying Problems and Opportunities More
Effectively 202
Evaluating and Choosing Alternatives 203
Problems with Goals 203
Problems with Information Processing 204
Problems with Maximization 206
Evaluating Opportunities 206
Emotions and Making Choices 207
Intuition and Making Choices 208
Making Choices More Effectively 209
Implementing Decisions 209
Chapter 8 Team Dynamics 232
Teams and Informal Groups 234
Informal Groups 235
Advantages and Disadvantages of Teams 236
The Challenges of Teams 237
Part 3 Team Processes 231
Evaluating Decision Outcomes 210
Escalation of Commitment 210
Evaluating Decision Outcomes More Effectively 212
Employee Involvement in Decision Making 213
Benefits of Employee Involvement 213
Contingencies of Employee Involvement 214
Creativity 215
Characteristics of Creative People 216
Connections 7.1: Going for WowWow at Nottingham-
Spirk 217
Organizational Conditions Supporting Creativity 218
Activities That Encourage Creativity 219
Chapter Summary 221
Key Terms 222
Critical Thinking Questions 222
Case Study 7.1: Employee Involvement Cases 223
Case Study 7.2: P&G’s Designer
Thinking 224
Team Exercise 7.3: Where in the World Are We? 224
Team Exercise 7.4: Winter Survival Exercise 227
Class Exercise 7.5: The Hopping Orange 228
Class Exercise 7.6: Creativity Brainbusters 228
Self-Assessment 7.7: Measuring Your Creative Personality 229
Self-Assessment 7.8: Testing Your Creative Bench Strength 230
Self-Assessment 7.9: Decision-Making Style Inventory 230
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xii Contents
A Model of Team Effectiveness 238
Organizational and Team Environment 239
Team Design Elements 240
Task Characteristics 240
Team Size 242
Team Composition 242
Global Connections 8.1: Royal Dutch Shell Finds
Team Players in Gourami 243
Team Processes 245
Team Development 245
Team Norms 249
Team Cohesion 250
Team Trust 251
Self-Directed Teams 253
Success Factors for Self-Directed Teams 254
Virtual Teams 255
Success Factors for Virtual Teams 255
Team Decision Making 256
Constraints on Team Decision Making 256
Team Structures to Improve Decision Making 258
Chapter Summary 260
Key Terms 261
Critical Thinking Questions 261
Case Study 8.1: The Shipping Industry
Accounting Team 262
Case Study 8.2: Philanthropic Team Building 263
Case Study 8.3: Seagate’s Morale-athon 264
Team Exercise 8.4: Team Tower Power 265
Self-Assessment 8.5: What Team Roles Do You Prefer? 265
Self-Assessment 8.6: Are You a Team Player? 267
Self-Assessment 8.7: How Trusting Are You? 267
Chapter 9 Communicating in Teams and
Organizations 268
The Importance of Communication 270
A Model of Communication 271
Influences on Effective Encoding and Decoding 271
Communication Channels 272
Computer-Mediated Communication 273
Connections 9.1: About-Face on Workplace
E-mail 274
Nonverbal Communication 276
Choosing the Best Communication
Channel 277
Social Acceptance 278
Media Richness 278
Communication Channels and Persuasion 281
Communication Barriers (Noise) 281
Information Overload 282
Cross-Cultural and Cross-Gender
Communication 283
Nonverbal Differences across Cultures 284
Gender Differences in Communication 285
Improving Interpersonal
Communication 285
Getting Your Message Across 285
Active Listening 286
Improving Communication throughout the
Hierarchy 287
Workspace Design 287
Web-Based Organizational Communication 288
Direct Communication with Top Management 288
Communicating through the Grapevine 289
Grapevine Characteristics 289
Grapevine Benefits and Limitations 290
Chapter Summary 290
Key Terms 291
Critical Thinking Questions 291
Case Study 9.1: Communicating with the Millennials 292
Case Study 9.2: It’s All about the
Face-to-Face 293
Team Exercise 9.3: Analyzing the Blogosphere 294
Team Exercise 9.4: Active Listening Exercise 294
Team Exercise 9.5: Cross-Cultural Communication Game 295
Self-Assessment 9.6: Active Listening Skills Inventory 296
Chapter 10 Power and Influence in the
Workplace 298
The Meaning of Power 300
A Model of Power in Organizations 301
Sources of Power in Organizations 301
Legitimate Power 302
Reward Power 302
Coercive Power 303
Expert Power 303
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Contents xiii
Referent Power 303
Information and Power 304
Contingencies of Power 305
Substitutability 305
Centrality 306
Discretion 306
Visibility 307
Social Networking and Power 307
Global Connections 10.1: Powered by the Social
Network 308
Consequences of Power 309
Influencing Others 309
Types of Influence Tactics 310
Consequences and Contingencies of Influence
Tactics 314
Influence Tactics and Organizational Politics 315
Conditions Supporting Organizational Politics 316
Personal Characteristics 316
Chapter Summary 317
Key Terms 317
Critical Thinking Questions 318
Case Study 10.1: The Rise and Fall of WorldCom 318
Case Study 10.2: Rhonda Clark: Taking Charge at the
Smith Foundation 319
Case Study 10.3: Shaking Up Oxford 322
Team Exercise 10.4: Budget Deliberations 322
Self-Assessment 10.5: Guanxi Orientation Scale 323
Self-Assessment 10.6: Machiavellianism Scale 324
Self-Assessment 10.7: Perceptions of Politics Scale (POPS) 324
Chapter 11 Conflict and Negotiation in the
Workplace 326
Is Conflict Good or Bad? 328
The Emerging View: Constructive and
Relationship Conflict 329
Connections 11.1: Constructive Confrontation
inside Intel 331
Conflict Process Model 331
Structural Sources of Conflict in
Organizations 332
Incompatible Goals 333
Differentiation 333
Global Connections 11.2: Conflict Overdrive at
VW and Porsche 334
Interdependence 334
Scarce Resources 335
Ambiguous Rules 335
Communication Problems 335
Interpersonal Conflict-Handling Styles 336
Choosing the Best Conflict-Handling Style 337
Cultural and Gender Differences in Conflict-Handling
Styles 339
Structural Approaches to Conflict
Management 340
Emphasizing Superordinate Goals 340
Reducing Differentiation 340
Improving Communication and Understanding 341
Reducing Interdependence 341
Increasing Resources 341
Clarifying Rules and Procedures 341
Resolving Conflict through Negotiation 342
Bargaining-Zone Model of Negotiations 343
Situational Influences on Negotiations 343
Negotiator Skills 345
Third-Party Conflict Resolution 346
Choosing the Best Third-Party Intervention
Strategy 347
Chapter Summary 349
Key Terms 349
Critical Thinking Questions 349
Case Study 11.1: Tamarack Industries 350
Case Study 11.2: The New Heat at Ford 351
Class Exercise 11.3: The Contingencies of Conflict
Handling 352
Team Exercise 11.4: Ugli Orange Role Play 356
Self-Assessment 11.5: The Dutch Test for Conflict
Handling 357
Chapter 12 Leadership in Organizational
Settings 358
What Is Leadership? 360
Shared Leadership 360
Competency Perspective of Leadership 361
Competency Perspective Limitations and Practical
Implications 363
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xiv Contents
Behavioral Perspective of Leadership 364
Choosing Task- versus People-Oriented
Leadership 364
Contingency Perspective of Leadership 365
Path-Goal Theory of Leadership 365
Other Contingency Theories 368
Leadership Substitutes 370
Transformational Perspective of Leadership 371
Transformational versus Transactional Leadership 371
Transformational versus Charismatic Leadership 372
Elements of Transformational Leadership 373
Evaluating the Transformational Leadership
Perspective 374
Implicit Leadership Perspective 375
Prototypes of Effective Leaders 375
The Romance of Leadership 376
Cross-Cultural and Gender Issues in
Leadership 376
Chapter Summary 378
Key Terms 379
Critical Thinking Questions 379
Case Study 12.1: Profitel Inc. 379
Case Study 12.2: Mack Attack 381
Team Exercise 12.3: Leadership Diagnostic Analysis 381
Self-Assessment 12.4: What Is Your Boss’s Preferred
Leadership Style? 382
Elements of Organizational Structure 390
Span of Control 390
Centralization and Decentralization 393
Formalization 393
Mechanistic versus Organic Structures 394
Forms of Departmentalization 395
Simple Structure 396
Functional Structure 396
Divisional Structure 397
Team-Based Structure 400
Matrix Structure 401
Network Structure 403
Contingencies of Organizational Design 405
External Environment 406
Organizational Size 407
Technology 407
Organizational Strategy 408
Chapter Summary 408
Key Terms 409
Critical Thinking Questions 409
Case Study 13.1: Macy’s Gets Personal 410
Case Study 13.2: More Than Cosmetic Changes
at Avon 411
Team Exercise 13.3: The Club Ed Exercise 412
Self-Assessment 13.4: What Organizational Structure Do
You Prefer? 412
Chapter 14 Organizational Culture 414
Elements of Organizational Culture 416
Content of Organizational Culture 418
Organizational Subcultures 419
Deciphering Organizational Culture through
Artifacts 420
Organizational Stories and Legends 420
Rituals and Ceremonies 421
Organizational Language 422
Physical Structures and Symbols 422
Is Organizational Culture Important? 423
Contingencies of Organizational Culture and
Effectiveness 424
Organizational Culture and Business Ethics 426
Part 4 Organizational
Processes 383
Chapter 13 Organizational Structure 384
Division of Labor and Coordination 386
Division of Labor 386
Coordinating Work Activities 387
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Contents xv
Merging Organizational Cultures 426
Bicultural Audit 427
Strategies for Merging Different Organizational
Cultures 427
Changing and Strengthening Organizational
Culture 429
Actions of Founders and Leaders 429
Aligning Artifacts 430
Introducing Culturally Consistent Rewards 431
Attracting, Selecting, and Socializing Employees 431
Organizational Socialization 432
Socialization as a Learning and Adjustment
Process 433
Stages of Organizational Socialization 433
Improving the Socialization Process 435
Chapter Summary 436
Key Terms 437
Critical Thinking Questions 437
Case Study 14.1: Hillton’s Transformation 438
Case Study 14.2: Merck’s New Cultural
Cure 439
Class Exercise 14.3: Diagnosing Corporate Culture
Proclamations 440
Self-Assessment 14.4: What Are Your Corporate Culture
Preferences? 441
Chapter 15 Organizational Change 442
Lewin’s Force Field Analysis Model 444
Restraining Forces 445
Connections 15.1: The FBI Meets Its Own
Resistance 448
Unfreezing, Changing, and Refreezing 449
Creating an Urgency for Change 450
Reducing the Restraining Forces 451
Refreezing the Desired Conditions 454
Change Agents, Strategic Visions, and Diffusing
Change 455
Change Agents and Strategic Visions 455
Diffusion of Change 455
Four Approaches to Organizational Change 456
Action Research Approach 456
Appreciative Inquiry Approach 458
Large-Group Interventions 460
Parallel Learning Structure Approach 461
Cross-Cultural and Ethical Issues in
Organizational Change 461
Organizational Behavior: The Journey
Continues 462
Chapter Summary 462
Key Terms 463
Critical Thinking Questions 463
Case Study 15.1: TransAct Insurance Corporation 464
Case Study 15.2: Inside Intel 465
Team Exercise 15.3: Strategic Change Incidents 466
Self-Assessment 15.4: Are You Tolerant of Change? 467
Additional Cases 469
Case 1: A Mir Kiss? 469
Case 2: Arctic Mining Consultants 471
Case 3: Big Screen’s Big Failure 473
Case 4: Bridging the Two Worlds—The Organizational
Dilemma 478
Case 5: Fran Hayden Joins Dairy Engineering 479
Case 6: From Lippert-Johanson Incorporated to Fenway
Waste Management 482
Case 7: Glengarry Regional Medical Center 484
Case 8: High Noon at Alpha Mills 488
Case 9: Keeping Suzanne Chalmers 490
Case 10: Northwest Canadian Forest Products
Limited 492
Case 11: Perfect Pizzeria 494
Case 12: Simmons Laboratories 495
Case 13: Treetop Forest Products 500
Video Cases 502
Appendix A
Theory Building and Systematic Research Methods 507
Appendix B
Scoring Keys for Self-Assessment Activities 514
Glossary 525
References 531
Photo Credits 589
Organization Index 591
Name Index 595
Subject Index 616
URL Index 633
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Welcome to the emerging knowledge and practice of organizational behavior! Social
networks and virtual teams are replacing committee meetings. Knowledge is replac-
ing infrastructure. Values and self-leadership are replacing command-and-control
management. Companies are looking for employees with emotional intelligence and
team competencies, not just technical smarts. Diversity and globalization have be-
come challenges as well as competitive opportunities for organizations. Co-workers
aren’t down the hall; they’re at the other end of an Internet connection located some-
where else on the planet.
Organizational Behavior, Fifth Edition, is written in the context of these emerging
workplace realities. This edition explains how emotions guide employee motivation,
attitudes, and decisions; how self-concept influences employee motivation and be-
havior, team cohesion, and leadership; how social networks are gaining importance
as a source of personal power and organizational effectiveness; and how appreciative
inquiry has become an important strategy for changing organizations. This book also
presents the new reality that organizational behavior is not just for managers; it is
relevant and useful to anyone who works in and around organizations.
Linking Theory with Reality
Every chapter of Organizational Behavior , Fifth Edition, is filled with examples that
make OB knowledge more meaningful and reflect the relevance and excitement of
this field. These stories about real people and organizations translate academic theo-
ries into relevant knowledge. For example, you will read how Whole Foods Market
and La-Z-Boy have discovered the advantages of teamwork; how Sony Europe has
improved employee motivation through the positive organizational behavior practice
of strengths-based feedback; how Raytheon and other companies have mapped out
informal social networks throughout the organization; and how Ernst & Young,
Procter & Gamble, and several other firms are sending employees to overseas social
responsibility assignments to improve their global mindset and other perceptual
capabilities.
These real-life stories appear in many forms. Every chapter of Organizational
Behavior, Fifth Edition , offers several detailed photo captions and many more in-text
anecdotes. Lengthier stories are distinguished in a feature we call Connections, because
it “connects” OB concepts with real organizational incidents. Case studies in each
chapter and video case studies for each part of this book also connect OB concepts to
the emerging workplace realities. These stories provide representation across the
United States and around the planet. They also cover a wide range of industries—from
software to government, and from small businesses to the Fortune 500.
Global Orientation
One of the first things you might notice about this book is its strong global orienta-
tion. This goes beyond the traditional practice of describing how U.S. companies
operate in other parts of the world. Organizational Behavior, Fifth Edition, takes a truly
global approach by illustrating how organizational behavior concepts and practices
are relevant to companies in every part of the world. For example, you will read how
Mina Ishiwatari faced resistance to change as she transformed sleepy Tokyo-based
Hoppy Beverage Co. into a high-profile brand; how Volkswagen and Porsche
xvi
preface
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Preface xvii
executives are wrapped up in high-stakes conflict over how Volkswagen should be
run; how Air New Zealand CEO Rob Fyfe relies on a hands-on approach to improve
his and others’ perceptions; how Sweden’s Svenska Handelsbanken relies on em-
ployee empowerment and organizational rewards rather than centralized budgets to
manage the business; and how Mott MacDonald’s oil and gas team improves emo-
tions and camaraderie through desert safari treks in Abu Dhabi.
This global orientation is also apparent in our discussion of many organizational
behavior topics. The first chapter of Organizational Behavior, Fifth Edition , introduces
the concept of globalization. Global issues are then highlighted throughout the book,
such as cross-cultural values and ethics, development of a global mindset, job satisfac-
tion and display of emotions in different societies, cross-cultural issues in the success
of self-directed work teams, problems with cross-cultural communication, cultural
values and expectations as a factor in preferred influence tactics, the handling of con-
flict differently across cultures, and preferred leadership styles across cultures.
Contemporary Theory Foundation
Vivid real-world examples and practices are only valuable if they are connected to
good theory. Organizational Behavior has developed a reputation for its solid founda-
tion of contemporary and classic research and writing. You can see this in the refer-
ences. Each chapter is based on dozens of articles, books, and other sources. The
most recent literature receives thorough coverage, resulting in what we believe is the
most up-to-date organizational behavior textbook available. These references also
reveal that we reach out to marketing, information management, human resource
management, and other disciplines for new ideas. At the same time, this textbook is
written for students, not the scholars whose work is cited. So, although this book pro-
vides new knowledge and its practical implications, it rarely names researchers and
their university affiliations. It focuses on organizational behavior knowledge rather
than “who’s who” in the field.
One of the driving forces for writing Organizational Behavior was to provide a con-
duit whereby emerging OB knowledge more quickly reaches students, practitioners,
and fellow scholars. This objective is so important that we state it in the subtitle of
this book. To its credit, Organizational Behavior was the first textbook to discuss work-
place emotions, social identity theory, four-drive theory, appreciative inquiry, affec-
tive events theory (but without the jargon), somatic marker theory (also without the
jargon), virtual teams, future-search events, Schwartz’s value model, resilience,
employee engagement, learning orientation, workaholism, and several other ground-
breaking topics. This edition introduces additional emerging OB concepts and prac-
tices, including social networking communication, the competencies of effective team
members, exceptions to media richness theory, the importance of self-concept in
organizational behavior, the globally integrated enterprise, the global mindset, and
strengths-based feedback.
Organizational Behavior Knowledge for Everyone
Another distinctive feature of Organizational Behavior, Fifth Edition, is that it is written
for everyone in organizations, not just managers. The philosophy of this book is that
everyone who works in and around organizations needs to understand and make use
of organizational behavior knowledge. The contemporary reality is that people
throughout the organization—systems analysts, production employees, accounting
professionals—are assuming more responsibilities as companies remove layers of
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xviii Preface
management and give the rest of us more autonomy over our work. This book helps
everyone to make sense of organizational behavior and provides the conceptual tools
needed to work more effectively in the workplace.
Active Learning and Critical Thinking Support
We teach organizational behavior, so we understand how important it is to use a text-
book that offers deep support for active learning and critical thinking. The fact that
business school accreditation associations also emphasize the importance of the learn-
ing experience further reinforces our attention to classroom activities. Organizational
Behavior, Fifth Edition, includes more than two dozen case studies in various forms
and levels of complexity. It offers three dozen self-assessments, most of which have
received construct validation. This book is also a rich resource for in-class activities,
some of which are not available in other organizational behavior textbooks, such
as “Test Your Knowledge of Personality,” “Where in the World Are We?” and “Cross-
Cultural Communication Game.”
Changes to the Fifth Edition
Organizational Behavior, Fifth Edition, has benefited from reviews by several dozen
organizational behavior teachers and researchers in several countries over the past
two years. The most significant structural change is that we have reduced the book to
15 chapters so that it more closely parallels the number of weeks in a typical OB
course. This edition also continues to update current knowledge in every chapter and
provides fresh examples to illustrate theories and concepts. The most notable im-
provements to this edition are described below:
• Chapter 1: Introduction to the Field of Organizational Behavior. This chapter has
been substantially revised and updated. It introduces four perspectives of orga-
nizational effectiveness (the ultimate dependent variable in OB), so students
now have an excellent macro-OB foundation for topics throughout this book.
The organizational effectiveness section also provides better organization for
open systems, organizational learning, high-performance work practices, and
values and ethics. The five types of individual behavior are also described in
this chapter as a natural micro-OB flow from the organizational effectiveness
discussion. The topic of workforce diversity now distinguishes surface from
deep-level diversity. Discussion of the systematic research anchor now includes
the concept of evidence-based management.
• Chapter 2: Individual Behavior, Personality, and Values. This edition provides im-
portant new knowledge about self-concept, including its main components (self-
enhancement, self-verification, self-evaluation, and social identity) and their
relevance for organizational behavior. This edition also has a rewritten and ex-
panded discussion of personality in line with the topic’s increasing importance
in OB. The MARS model now includes a fuller conceptual background.
• Chapter 3: Perception and Learning in Organizations. This edition updates the sec-
tion on selective attention, organization, and interpretation on the basis of the
rapidly developing research on this topic. It also introduces the increasingly
popular concept of global mindset in the context of perception and learning.
The chapter adds discussion about false-consensus effect as well as the implicit
association test. It also reorganizes into one section the discussion about prac-
tices that minimize perceptual problems. Positive organizational behavior,
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Preface xix
which was introduced in previous editions, is described in this chapter and
mentioned again in subsequent chapters of this book.
• Chapter 4: Workplace Emotions, Attitudes, and Stress. This chapter now incorpo-
rates the topic of stress, which is closely related to workplace emotions. It contin-
ues to present a clearer explanation of the dual (cognitive and emotional) processes
of attitudes and provides a fuller understanding about the dimensions of emo-
tional intelligence. This chapter also discusses “shock events” in job satisfaction.
• Chapter 5: Foundations of Employee Motivation. The previous edition was appar-
ently the first OB book to discuss employee engagement. This edition moves
the topic to this chapter, so employee engagement is more closely connected to
employee motivation as well as the MARS model. The balanced scorecard has
also been moved to this chapter, because of its emphasis on goal setting more
than rewards. The chapter also distinguishes drives from needs and explains
how drives and emotions are the prime movers of human motivation. It de-
scribes Maslow’s contribution to the field of human motivation. Organizational
Behavior was the first OB textbook to introduce four-drive theory, and this edi-
tion further refines the description of that model and its practical implications.
Finally, this chapter introduces the positive organizational behavior concept
and practice called strengths-based feedback.
• Chapter 6: Applied Performance Practices. This edition adds emerging information
about the situational and personal influences on self-leadership. It also updates
information about the meaning of money and reward practices.
• Chapter 7: Decision Making and Creativity. This edition introduces three of the de-
cision heuristic biases discovered and popularized by Kahneman and Tversky.
The chapter also revises and updates the discussion of problems with problem
identification, the section on the influence of emotions on making choices, and
the section on characteristics of creative people. It also has a more dedicated
overview of the rational choice concept of subjective expected utility.
• Chapter 8: Team Dynamics. This edition combines the two chapters on teams
found in previous editions. It summarizes types of teams and more fully dis-
cusses the potential benefits and problems with teams. Furthermore, this edition
introduces new information on the competencies of effective team members, re-
vises the writing on self-directed teams and virtual teams, and provides emerg-
ing knowledge about two key processes in team development: team identity
and team competence.
• Chapter 9: Communicating in Teams and Organizations. The previous edition was
apparently the first OB textbook to discuss the role of blogs and wikis in organi-
zations. This edition continues this leadership with new information about so-
cial networking communication. Other new knowledge in this chapter includes
the topic of multicommunicating, social acceptance as a contingency in the se-
lection of communication channels, conditions that offset the effects of media
richness, and four factors that influence the effectiveness of the communication
process (i.e., encoding and decoding).
• Chapter 10: Power and Influence in the Workplace. This chapter further develops the
section on social networking as a source of power. It also adds a separate section
on the consequences of power.
• Chapter 11: Conflict and Negotiation in the Workplace. This edition offers a more
detailed look at the contingencies of conflict handling. It also revises and
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xx Preface
updates the development of thinking about whether conflict is good or bad.
This description includes the emerging model of constructive versus relation-
ship conflict and the ways to allow the former while suppressing the latter. The
discussion of negotiation now includes more specific advice regarding making
concessions.
• Chapter 12: Leadership in Organizational Settings. In this edition, the competency
perspective of leadership has been rewritten to incorporate new information
about personality, self-concept, practical intelligence, and other specific compe-
tencies. The topic of implicit leadership has also been revised to incorporate
the distinction between leadership prototypes and the romance of leadership.
The topic of shared leadership has been expanded.
• Chapter 13: Organizational Structure. This edition describes the globally integrated
enterprise in the section on forms of departmentalization. The liability of new-
ness is now discussed in the section on organic structures. The chapter also
revises writing on span of control and tall/flat structures and introduces
concurrent engineering practices in the context of informal coordinating mecha-
nisms. The (dis)advantages of tall versus flat structures also receive more
precise discussion.
• Chapter 14: Organizational Culture. This edition more specifically (than in past
editions) critiques the “integration” perspective of organizational culture by re-
ferring to the alternative differentiation and fragmentation views of this topic. It
also describes attraction-selection-attrition theory as well as the Organizational
Culture Profile model. The section on organizational culture and performance
and the section on changing and strengthening organizational culture have been
substantially rewritten.
• Chapter 15: Organizational Change. In this edition, the topic of resistance to
change is further updated regarding the three functions of resistance. We added
a new section on large-group interventions as a distinct fourth approach to orga-
nizational change. The topics of urgency for change and future-search confer-
ences also received minor updates.
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supporting the learning process
The changes described
previously refer only to the
text material. Organizational
Behavior, Fifth Edition, also
has improved technology
supplements, cases, videos,
team exercises, and self-
assessments.
One of Robert Iger’s first tasks as Walt Disney Co.’s new CEO was to acquire Pixar
Animation Studios and put its leaders—John Lasseter (shown in this photo) and Ed
Catmull—in charge of Disney’s own animation unit, Walt Disney Animation Studios. The
studio that brought us Mickey Mouse and The Lion King had become moribund over the
past decade, eclipsed by Pixar’s award-winning productions. Disney already had lucrative
distribution rights to Pixar’s first five films, including any sequels, but Iger wanted something
much more valuable. He wanted the organizational behavior practices that have made Pixar
a powerhouse filmmaker, from Toy Story to y Wall-E .EE
Pixar’s success is founded on the notion that
companies depend on the quality of their employees and
how well they collaborate with each other. “From the very
beginning, we recognized we had to get the best people,
technically, from the computer science world, and from
the artistic filmmaking animation world, and get them
working together,” explains John Lasseter, who is now
chief creative officer of both Pixar and Disney Animation
Studios. “That, right there, is probably the secret to Pixar.”
Pixar enables people to work together in several ways.
First, the company relies on long-term employment
relationships rather than short-term project contracts.
These long-term relationships improve team development
and social networks. “The problem with the Hollywood
model is that it’s generally the day you wrap production
that you realize you’ve finally figured out how to work
together,” says Randy Nelson, head of Pixar University.
“We’ve made the leap from an idea-centered business to a
people-centered business.” Pixar’s campus in Emeryville,
California, is another reason why employees work well
together. The buildings were designed to cluster people
into teams yet also to encourage chance encounters with
people from other projects. “When people run into each
other and make eye contact, innovative things happen,” says Pixar director Brad Bird.
Pixar’s egalitarian, no-nonsense, perfectionist culture is a third reason why the
animation studio’s staff members work effectively. The company gives power to its
production teams rather than to senior executives, but these teams are also ruthless at
writing and rendering scenes several times until they look right. All employees—from
entry-level newcomers to the CEO—are encouraged to be creative and offer candid
feedback about work in progress. Production teams have regular “sweatbox” sessions
at which problems are discussed openly. Even the most successful films receive a
“postmortem” to discover how they could have been improved. “Our job is to address
problems even when we’re successful,” explains Pixar/Disney Animation president Ed
Catmull, whose leadership is identified as the foundation of Pixar’s unique culture. 1
Several organizational behavior practices have helped
Pixar Animation Studios become the world’s most
successful animation studio.
Yasmeen Youssef’s self-confidence was a bit shaky when she and her husband moved
from Egypt to Canada a few years ago. “I was worried no one would take a chance on
me, would believe in me,” she recalls. But any self-doubts slowly disappeared after
taking an entry-level job with Fairmont Hotels & Resorts corporate offices in Toronto.
“Everything changed when I started working at Fairmont,” says Youssef, who is now on
Fairmont’s human resource team and recently trained new staff in Cairo. “I can’t believe
the amount of value, care, respect everyone has extended to me.”
As North America’s largest luxury hotel operator,
Fairmont discovered long ago that one of the secret
ingredients for employee performance and well-being
is supporting the individual’s self-concept. “People want
to feel valued and they stay where they feel valued,”
says Carolyn Clark, Fairmont’s senior vice president of
human resources. Clark also points out that Fairmont
is able to nurture this talent by selecting the best,
which means hiring people with the right values and
personality for superb customer service. “We believed
that we could train the technical skills—that’s the easy
part,” Clark explained a few years ago. “What we can’t
train is the service orientation. We just can’t put people
in the training program and say they are going to come
out smiling if that is not inherent in them.”
Along with hiring people with the right values and
personality and nurturing their self-concept, Fairmont
is developing staff to work effectively in a multicultural
world. Sean Billing is a case in point. The economics
graduate had been working as Fairmont’s director of
rooms in Chicago when he casually asked his boss
whether the hotel chain could use his skills and
knowledge elsewhere. Soon after, Billing was offered
a position in Kenya, bringing Fairmont’s new properties
in the African country up to world-class standards
through training and technology without losing the
distinctive Kenyan character. Billing jumped at the
opportunity, but he also recognizes the challenge of inculcating Fairmont’s deep values
of customer service, environmentalism, and empowerment into another culture. “It’s a
little bit of hotel culture shock . . . things are quite different here,” he says. 1
Fairmont Hotels has excelled as North America’s largest
luxury hotel operator by hiring people such as Yasmeen
Youssef (shown here) with the right values and personality
and then nurturing their self-concept and cross-cultural
competencies.
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OPENING VIGNETTE
Each chapter begins with an engaging
opening vignette that sets the stage for
the chapter. These brief but interesting case
studies introduce students to critical issues,
challenge their preconceptions, and highlight
some of today’s hottest companies.
xxi
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LEARNING OBJECTIVES
A topical guide for the student, a list of
Learning Objectives not only can be found
at the beginning of each chapter, but
correspondingly throughout chapter.
1. Define organizational behavior and r
organizations and discuss the importance
of this field of inquiry.
2. Diagram an organization from an
open-systems perspective.
3. Define intellectual capital and describe the l
organizational learning perspective of
organizational effectiveness.
4. Diagnose the extent to which an
organization or one of its work units applies
high-performance work practices.
5. Explain how the stakeholder perspective
emphasizes the importance of values,
ethics, and corporate social responsibility.
6. Summarize the five types of individual
behavior in organizations.
7. Debate the organizational opportunities and
challenges of globalization, workforce
diversity, and virtual work.
8. Discuss how employment relationships are
changing and explain why these changes
are occurring.
9. Discuss the anchors on which
organizational behavior knowledge is
based.
1
Introduction to the Field of
Organizational Behavior
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
xxii Supporting the Learning Process
After reading the next two sections, you should be able to:
2. Diagram an organization from an open-systems perspective.
3. Define intellectual capital and describe the organizational learning
perspective of organizational effectiveness.
4. Diagnose the extent to which an organization or one of its work
units applies high-performance work practices.
5. Explain how the stakeholder perspective emphasizes the importance
of values, ethics, and corporate social responsibility.
6. Summarize the five types of individual behavior in organizations.
Learning
Objectives
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Google Attracts and Keeps Talent through “Cool” Campuses Google is ranked by college students in many countries as one of the
top 10 places to work. One reason why the Internet technology company is able to attract so many applicants is that its workplaces
look like every student’s dream of a college campus and dorm. Google’s headquarters (called Googleplex) in Mountain View,
California, is outfitted with lava lamps, exercise balls, casual sofas, foosball, pool tables, workout rooms, video games, slides, and
a restaurant with free gourmet meals. Google’s new EMEA engineering hub in Zurich, Switzerland, also boasts a fun, campuslike
environment. These photos show a few areas of Google’s offices in Zurich, including private temporary workspaces in beehives and
ski gondolas. Google’s offices are so comfortable that executives occasionally remind staff of building code regulations against making
Google’s offices their permanent home.59
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CAPTIONS
BEYOND
CURSORY
Going beyond the simple
caption, richly detailed
photos are accompanied by
more in-depth narrative.
Hospitals Take the Lean Journey
to Efficiency
Building Nissan automobiles seems unrelated to serving
surgical patients, but staff at Sunderland Royal Hospital can
see the similarities. The hospital in northern England recently
borrowed several lean management ideas from the nearby
Nissan factory, one of the most efficient car plants in Europe,
to improve its day surgery unit. “We took [Sunderland hospital
staff] on a tour of our plant, showing them a variety of lean
processes in action, and let them decide which ones could
be applied back at the hospital,” says a training manager at
Nissan’s factory in Sunderland.
Sunderland’s day surgery staff members were actively in-
volved in applying lean management to their work unit. After
attending Nissan’s two-day workshop on lean thinking, they
mapped out the work processes, questioned assumptions
about the value or relevance of some activities, and discov-
ered ways to reduce the lengthy patient wait times (which
were up to three hours). There was some initial resistance and
skepticism, but the hospital’s day surgery soon realized sig-
nificant improvements in efficiency and service quality.
“By working with Nissan’s staff, we have streamlined the
patient pathway from 29 to 11 discrete stages,” says Anne
Fleming (shown in photo), who oversees Sunderland’s 32-bed
day-case unit and its 54 employees. “We have done this by
reducing duplication, halving the time that patients spend in
the unit to three hours by giving them individual appointment
times, and introducing the just-in-time approach to the patient
pathway.” Fleming also reports that Sunderland’s operating
rooms are now much more efficient.
Sunderland Royal Hospital is one of many health care cen-
ters around the world that are improving efficiency through
lean thinking. After receiving training in Japan on lean prac-
tices, several teams of doctors, nurses, and other staff from
Virginia Mason Medical Center in Seattle, Washington, rede-
signed workflows to cut out 34 miles of unnecessary walking
each day. Park Nicollet Health Services in Minneapolis, Min-
nesota, improved efficiency at its ambulatory clinic to such an
extent that the unit does not require a patient waiting area.
One Park Nicollet team worked with orthopedic surgeons to
reduce by 60 percent the variety of instruments and supplies
they ordered for hip and knee surgery. The trauma team at
Bolton Hospitals NHS Trust in the United Kingdom reduced av-
erage wait times for patients with fractured hips by 38 percent
(from 2.4 to 1.7 days), which also resulted in a lower mortality
rate for these patients. By smoothing out the inflow of work
orders and rearranging the work process, Bolton’s pathology
department cut the time required to process samples, previ-
ously 24 to 30 hours, to just 2 to 3 hours and reduced the space
used by 50 percent.
“We know that our case for extra funding will fall on deaf
ears unless we cut out waste in the system,” explains Dr. Gill
Morgan, chief executive of the U.K.’s NHS Confederation.
“Lean works because it is based on doctors, nurses, and other
staff leading the process and telling us what adds value and
what doesn’t. They are the ones who know.”25
Global Connections 1.1
Sunderland Royal Hospital learned from the nearby Nissan
factory how to implement lean management in its new day
surgery unit.
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CONNECTIONS
Connections boxes
connect OB con cepts
with real organizational
incidents. Periodi cally,
these boxes highlight
organiza tional behavior
issues around the world
and are entitled Global
Connections.
Supporting the Learning Process xxiii
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end-of-chapter material geared
toward application
TEAM EXERCISES AND
SELF-ASSESSMENTS
Experiential exercises and self-assessments
represent an important part of the active
learning process. Organizational Behavior,
Fifth Edition, supports that learning process
by offering team and class exercises in every
chapter. Many of these learning activities are
not available in other organizational behavior
textbooks—for example, “Test Your Knowledge
of Personality” (Chapter 2), “Cross-Cultural
Communication Game” (Chapter 9), and
“Contingencies of Conflict Handling” (Chapter 11).
This edition also has three dozen self-assessments in
the book or at the Online Learning Center. Self-
assessments personalize the meaning of several
organizational behavior concepts, such as
extroversion/ introversion, self-leadership, empathy,
stress, creative disposition, and tolerance of change.
An example of a self-assessment found on the Online Learning Center.
Team Exercise 2.6 ETHICS DILEMMA VIGNETTES
PURPOSE This exercise is designed to make you
aware of the ethical dilemmas people face in various
business situations, as well as the competing princi-
ples and values that operate in these situations.
INSTRUCTIONS (SMALL CLASS) The instructor
will form teams of four or five students. Team mem-
bers will read each case below and discuss the extent
to which the company’s action in each case was ethi-
cal. Teams should be prepared to justify their evalu-
ation using ethics principles and the perceived moral
intensity of each incident.
INSTRUCTIONS (LARGE CLASS) Working alone,
read each case below and determine the extent to
which the company’s action in each case was ethical.
The instructor will use a show of hands to determine
the extent to which students believe the case repre-
sents an ethical dilemma (high or low moral intensity)
and the extent to which the main people or company
in each incident acted ethically.
CASE ONE An employee who worked for a major
food retailer wrote a Weblog (blog) and, in one of his
writings, complained that his boss wouldn’t let him go
home when he felt sick and that his district manager
refused to promote him because of his dreadlocks.
His blog named the employer, but the employee
didn’t use his real name. Although all blogs are on
the Internet, the employee claims that his was low-
profile and that it didn’t show up in a Google search
of his name or the company. Still, the employer some-
how discovered the blog, figured out the employee’s
real name, and fired him for “speaking ill-will of the
company in a public domain.”
CASE TWO Computer printer manufacturers usu-
ally sell printers at a low margin over cost and gener-
ate much more income from subsequent sales of the
high-margin ink cartridges required for each printer.
One global printer manufacturer now designs its print-
ers so that they work only with ink cartridges made in
the same region. Ink cartridges purchased in the
United States will not work with the same printer
model sold in Europe, for example. This “region cod-
ing” of ink cartridges does not improve performance.
Rather, it prevents consumers and gray marketers
from buying the product at a lower price in another
region. The company says this policy allows it to
maintain stable prices within a region rather than con-
tinually changing prices due to currency fluctuations.
CASE THREE For the past few years, the design de-
partment of a small (40-employee) company has been
using a particular software program, but the three em-
ployees who use the software have been complaining
for more than a year that the software is out of date and
is slowing down their performance. The department
agreed to switch to a competing software program,
costing several thousand dollars. However, the next
version won’t be released for six months and buying
the current version will not allow much discount on the
next version. The company has put in advance orders
for the next version. Meanwhile, one employee was
able to get a copy of the current version of the software
from a friend in the industry. The company has al-
lowed the three employees to use this current version
of the software even though they did not pay for it.
CASE FOUR Judy Price is a popular talk-show ra-
dio personality and opinionated commentator on the
morning phone-in show of a popular radio station in a
large U.S. city. Price is married to John Tremble, an
attorney who was recently elected mayor of the city
even though he had no previous experience in public
office. The radio station’s board of directors is very
concerned that the station’s perceived objectivity will
be compromised if Price remains on air as a commen-
tator and talk-show host while her husband holds such
a public position. For example, the radio station man-
ager believes that Price gave minimal attention to an
incident in which environmental groups criticized the
city for its slow progress on recycling. Price denied
that her views are biased and stated that the incident
didn’t merit as much attention as other issues that par-
ticular week. To ease the board’s concerns, the station
manager transferred Price from her talk-show host
and commentator position to the hourly news report-
ing position, where most of the script is written by oth-
ers. Although the reporting job is technically a lower
position, Price’s total salary package remains the same.
Price is now seeking professional advice to determine
whether the radio station’s action represents a form of
discrimination on the basis of marital status.
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xxiv
model. Which personality traits would you consider
to be the most important for this type of job? Explain
your answer.
5. An important aspect of self-concept is the idea that
almost everyone engages in self-enhancement. What
problems tend to occur in organizations as a result of
the self-enhancement phenomenon? What can orga-
nizational leaders do to make use of a person’s inher-
ent drive for self-enhancement?
6. This chapter discussed value congruence mostly
in the context of an employee’s personal values
versus the organization’s values. But value congru-
ence also relates to the juxtaposition of other pairs
of value systems. Explain how value congruence is
relevant with respect to organizational versus pro-
fessional values (i.e., values of a professional occu-
pation, such as physician, accountant, pharmacist).
7. People in a particular South American country have
high power distance and high collectivism. What
does this mean, and what are the implications of this
information when you (a senior executive) visit em-
ployees working for your company in that country?
8. “All decisions are ethical decisions.” Comment on
this statement, particularly by referring to the con-
cepts of moral intensity and ethical sensitivity.
1. An insurance company has high levels of absenteeism
among the office staff. The head of office administra-
tion argues that employees are misusing the compa-
ny’s sick leave benefits. However, some of the mostly
female staff members have explained that family
responsibilities interfere with work. Using the MARS
model, as well as your knowledge of absenteeism
behavior, discuss some of the possible reasons for
absenteeism here and how it might be reduced.
2. As the district manager responsible for six stores in a
large electronics retail chain, you have had difficulty
with the performance of some sales employees. Al-
though they are initially motivated and generally have
good interpersonal skills, many have difficulty with the
complex knowledge of the wide variety of store prod-
ucts, ranging from computers to high-fidelity sound
systems. Describe three strategies you might apply to
improve the match between the competencies of new
sales employees and the job requirements.
3. Studies report that heredity has a strong influence on
an individual’s personality. What are the implications
of this in organizational settings?
4. Suppose that you give all candidates applying for a
management trainee position a personality test that
measures the five dimensions in the five-factor
Critical Thinking Questions
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CRITICAL THINKING QUESTIONS
Self-Assessment 2.7
ARE YOU INTROVERTED OR EXTROVERTED?
PURPOSE This self-assessment is designed to help
you estimate the extent to which you are introverted
or extroverted.
INSTRUCTIONS The statements in the scale be-
low refer to personal characteristics that might or
might not be characteristic of you. Mark the box in-
dicating the extent to which the statement accurately
or inaccurately describes you. Then use the scoring
key in Appendix B at the end of this book to calcu-
late your results. This exercise should be completed
alone so that you can assess yourself honestly with-
out concerns of social comparison. Class discussion
will focus on the meaning and implications of extro-
version and introversion in organizations.
How accurately does each
of the statements listed
below describe you?
1. I feel comfortable around
people.
Moderately
accurate
Very
accurate
description
of me
Neither
accurate nor
inaccurate
Moderately
inaccurate
Very
inaccurate
description
of me
2. I make friends easily.
3. I keep in the background.
4. I don’t talk a lot.
5. I would describe my
experiences as somewhat dull.
6. I know how to captivate
people.
7. I don’t like to draw attention
to myself.
8. I am the life of the party.
9. I am skilled in handling
social situations.
10. I have little to say.
IPIP Introversion-Extroversion Scale
Source: Adapted from instruments described and/or presented in L. R. Goldberg, J. A. Johnson, H. W. Eber, R. Hogan, M. C. Ashton, C. R. Cloninger,
and H. C. Gough, “The International Personality Item Pool and the Future of Public-Domain Personality Measures,” Journal of Research in Personality
40 (2006), pp. 84–96.
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BUSINESSWEEK CASE STUDIES
Found at the end of each chapter, BusinessWeek case
studies introduce the online full-text article and provide
critical thinking questions for class discussion or assignments.
These cases encourage students to understand and
diagnose real-world issues using organizational behavior
knowledge. For example, one case study challenges
students to identify and evaluate the strategies that
Merck CEO Richard Clark has applied to transform the
culture of the pharmaceutical company. Another case
study asks students to explain design thinking at
Procter & Gamble and to relate design thinking to the
decision-making process in organizations.
Case Study 2.3 THE TROUBLE WITH BUSINESS ETHICS
Business ethics may have risen
to the top of most executive
agendas, but Wal-Mart Stores
has learned that practicing ethics can also present
ethical dilemmas. A few months after going through
a new employee training session with a heavy em-
phasis on ethics, Chalace Epley Lowry acted on the
guidance to report any activity that seemed the least
bit suspicious. Lowry told the company’s ethics of-
fice about possible insider trading by one of her su-
pervisors. Wal-Mart’s investigation concluded that
the supervisor had done nothing wrong, but Lowry
soon discovered that her identity as the whistle-
blower had been revealed to the supervisor she ac-
cused of wrongdoing. Now Lowry is looking for
another job, but there’s no guarantee she’ll get trans-
ferred at Wal-Mart.
This BusinessWeek case study examines the chal-
lenges of supporting ethics hotlines and whistle-
blowing, and it discusses the reasons why employees
are reluctant to communicate ethical wrongdoing.
Read the full text of this BusinessWeek article at www.
mhhe.com/mcshane5e , and prepare for the discus-
sion questions below.
Discussion Questions
1. In an organization’s efforts to maintain ethical
standards, how important is it to encourage and
support employees who report possible incidents
of ethical wrongdoing (i.e., engage in whistle-
blowing)? Why? What can companies do to sup-
port whistle-blowers?
2. What actions are described in this case study that
companies have taken to improve ethical stan-
dards in their organizations? Are these actions
substantive changes or mostly symbolic? Why?
Source: P. Gogoi, “The Trouble with Business Ethics,” BusinessWeek
Online, 22 June 2007.
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Case Study 3.1 HY DAIRIES, INC.
Syd Gilman read the latest sales figures with a great
deal of satisfaction. The vice president of marketing
at Hy Dairies, Inc., a large midwestern milk prod-
ucts manufacturer, was pleased to see that the mar-
keting campaign to improve sagging sales of Hy’s
gourmet ice-cream brand was working. Sales vol-
ume and market share of the product had increased
significantly over the past two quarters compared
with the previous year.
The improved sales of Hy’s gourmet ice cream
could be credited to Rochelle Beauport, who was
assigned to the gourmet ice-cream brand last year.
Beauport had joined Hy less than two years ago as
an assistant brand manager after leaving a similar
job at a food products firm. She was one of the few
women of color in marketing management at Hy
Dairies and had a promising career with the com-
pany. Gilman was pleased with Beauport’s work
and tried to let her know this in the annual perfor-
mance reviews. He now had an excellent opportu-
nity to reward her by offering her the recently
vacated position of market research coordinator. Al-
though technically only a lateral transfer with a
modest salary increase, the marketing research coor-
dinator job would give Beauport broader experience
in some high-profile work, which would enhance
her career with Hy Dairies. Few people were aware
that Gilman’s own career had been boosted by
working as marketing research coordinator at Hy
several years earlier.
Rochelle Beauport had also seen the latest sales
figures on Hy’s gourmet ice cream and was expect-
ing Gilman’s call to meet with her that morning.
Gilman began the conversation by briefly mention-
ing the favorable sales figures and then explained
that he wanted Beauport to take the marketing re-
search coordinator job. Beauport was shocked by
the news. She enjoyed brand management and par-
ticularly the challenge involved with controlling a
product that directly affected the company’s profit-
ability. Marketing research coordinator was a techni-
cal support position—a “backroom” job—far removed
from the company’s bottom-line activities. Market-
ing research was not the route to top management in
most organizations, Beauport thought. She had been
sidelined.
After a long silence, Beauport managed a
weak “Thank you, Mr. Gilman.” She was too be-
wildered to protest. She wanted to collect her
thoughts and reflect on what she had done wrong.
Also, she did not know her boss well enough to be
openly critical.
Gilman recognized Beauport’s surprise, which he
naturally assumed was her positive response to hear-
ing of this wonderful career opportunity. He, too,
had been delighted several years earlier about his
temporary transfer to marketing research to round
out his marketing experience. “This move will be
good for both you and Hy Dairies,” said Gilman as
he escorted Beauport from his office.
Beauport was preoccupied with several tasks
that afternoon, but she was able to consider the
day’s events that evening. She was one of the top
women and few minorities in brand management
at Hy Dairies and feared that she was being side-
lined because the company didn’t want women or
people of color in top management. Her previous
employer had made it quite clear that women
“couldn’t take the heat” in marketing management
and tended to place women in technical support
positions after a brief term in lower brand manage-
ment jobs. Obviously Syd Gilman and Hy Dairies
were following the same game plan. Gilman’s com-
ment that the coordinator job would be good for
her was just a nice way of saying that Beauport
couldn’t go any further in brand management at
Hy Dairies.
Beauport now faced the difficult decision of
whether to confront Gilman and try to change Hy
Dairies’ sexist and possibly racist practices or to
leave the company.
Discussion Questions
1. Apply your knowledge of stereotyping and so-
cial identity theory to explain what went wrong
here.
2. What other perceptual error is apparent in this
case study?
3. What can organizations do to minimize misper-
ceptions in these types of situations?
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CHAPTER CASES AND
ADDITIONAL END-OF-TEXT
CASE S
Every chapter includes at least one short case study
that challenges students to diagnose issues and
apply ideas from that chapter. One dozen additional
cases appear at the end of the book. Several cases
are new to this book and are written by instructors
around the United States and from other countries.
Other cases, such as Arctic Mining Consultants, are
classics that have withstood the test of time.
Perception involves selecting, organizing, and interpret-
ing information to make sense of the world around us.
Perceptual organization engages categorical thinking—the
mostly nonconscious process of organizing people and
objects into preconceived categories that are stored in our
long-term memory. Mental models—internal representa-
tions of the external world—also help us to make sense of
incoming stimuli.
Social identity theory explains how we perceive people
through categorization, homogenization, and differentiation.
Stereotyping is a derivative of social identity theory, in
which people assign traits to others based on their member-
ship in a social category. Stereotyping economizes mental
effort, fills in missing information, and enhances our self-
perception and social identity. However, it also lays the
foundation for prejudice and systemic discrimination.
The attribution process involves deciding whether
an observed behavior or event is caused mainly by the
person (internal factors) or the environment (external
factors). Attributions are decided by perceptions of the
consistency, distinctiveness, and consensus of the behav-
ior. This process helps us to link together the various
pieces of our world in cause-effect relationships, but it is
also subject to attribution errors, including fundamental
attribution error and self-serving bias.
Self-fulfilling prophecy occurs when our expectations
about another person cause that person to act in a way that
is consistent with those expectations. Essentially, our expec-
tations affect our behavior toward the target person, which
then affects that employee’s opportunities and attitudes,
which then influences his or her behavior. Self- fulfilling
prophecies tend to be stronger when the relationship begins
(such as when employees first join the department), when
several people hold the expectations toward the employee,
and when the employee has a history of low achievement.
Four other perceptual errors commonly noted in orga-
nizations are the halo effect, primacy effect, recency ef-
fect, and false-consensus effect. We can minimize these
Chapter Summary
and other perceptual problems through awareness of per-
ceptual bias, self-awareness, and meaningful interaction.
Learning is a relatively permanent change in behavior
(or behavior tendency) that occurs as a result of a per-
son’s interaction with the environment. Much of what
we learn is tacit knowledge, which is embedded in our
actions without conscious awareness.
The behavior modification perspective of learning states
that behavior change occurs by altering its antecedents and
consequences. Antecedents are environmental stimuli that
provoke (not necessarily cause) behavior. Consequences
are events following behavior that influence its future
occurrence. Consequences include positive reinforcement,
punishment, negative reinforcement, and extinction. The
schedules of reinforcement also influence behavior.
Social learning theory states that much learning occurs
by observing others and then modeling the behaviors
that seem to lead to favorable outcomes and avoiding
behaviors that lead to punishing consequences. It also
recognizes that we often engage in self-reinforcement.
Behavior modeling is effective because it transfers tacit
knowledge and enhances the observer’s confidence in
performing the task.
Many companies now use experiential learning be-
cause employees do not acquire tacit knowledge through
formal classroom instruction. Experiential learning be-
gins with concrete experience, followed by reflection on
that experience, formation of a theory from that experi-
ence, and then testing of that theory in the environment.
Organizational learning is any structured activity that
improves an organization’s capacity to acquire, share,
and use knowledge in ways that improve its survival and
success. Organizations acquire knowledge through indi-
vidual learning and experimentation. Knowledge sharing
occurs mainly through various forms of communication
and training. Knowledge use occurs when employees re-
alize that the knowledge is available and that they have
enough freedom to apply it.
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attribution process, p. 75
behavior modification, p. 82
categorical thinking, p. 70
contact hypothesis, p. 81
empathy, p. 82
false-consensus effect, p. 79
fundamental attribution
error, p. 76
global mindset, p. 68
halo effect, p. 78
Johari Window, p. 80
learning, p. 82
learning orientation, p. 86
mental models, p. 71
perception, p. 68
positive organizational
behavior, p. 77
primacy effect, p. 78
recency effect, p. 78
selective attention, p. 68
self-fulfilling prophecy, p. 76
self-reinforcement, p. 86
self-serving bias, p. 76
social learning theory, p. 85
stereotyping, p. 72
tacit knowledge, p. 82
Key Terms
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End-of-Chapter Material Geared Toward Application xxv
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http://www.mhhe.com/mcshane5e
http://www.mhhe.com/mcshane5e
instructor support materials
Organizational Behavior, Fifth Edition, includes a variety of supplemental materials to
help instructors prepare and present the material in this textbook more effectively.
INSTRUCTOR’S CD-ROM
The Instructor’s CD-ROM contains the Instructor’s Manual, the
Test Bank, PowerPoint presentation slides, and additional
downloads of art from the text.
INSTRUCTOR’S MANUAL
This is one of the few textbooks for which the authors write the
Instructor’s Manual. This ensures that the instructor materials
represent the textbook’s content and support instructor needs.
Each chapter includes the learning objectives, glossary of key
terms, a chapter synopsis, complete lecture outline with
thumbnail images of corresponding PowerPoint slides, and
suggested answers to the end-of-chapter discussion questions.
Also included are teaching notes for the chapter case(s), team
exercises, and self-assessments. The Instructor’s Manual also
provides complete teaching notes for the additional cases.
TEST BANK AND EZ TEST
Revised by Floyd Ormsbee of Clarkson University, the Test Bank includes more than 2,400 multiple-choice, true/
false, and essay questions. Each question identifies the relevant page reference and difficulty level.
Assurance of Learning Ready
Educational institutions are often focused on the notion of assurance of learning, an important element of many
accreditation standards. Organizational Behavior is designed specifically to support your assurance-of-learning
initiatives with a simple, yet powerful, solution. We’ve aligned our Test Bank questions with Bloom’s Taxonomy
and AACSB guidelines, tagging each question according to its knowledge and skill areas.
Each Test Bank question for Organizational Behavior also maps to a specific chapter learning objective listed
in the text. You can use our Test Bank software, EZ Test, to easily query for learning objectives that directly relate
to the learning objectives for your course. You can use the reporting features of EZ Test to aggregate student
results in a similar fashion, making the collection and presentation of assurance-of-learning data quick and easy.
AACSB Statement
McGraw-Hill Companies is a proud corporate member of AACSB International. Understanding the importance
and value of AACSB accreditation, the authors of Organizational Behavior have sought to recognize the curricular
guidelines detailed in the AACSB standards for business accreditation by connecting selected questions in the
Test Bank to the general knowledge and skill guidelines found in the AACSB standards.
xxvi
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The statements contained in Organizational Behavior are provided only as a guide for the users of this text.
The AACSB leaves content coverage and assessment clearly within the realm and control of individual schools,
the mission of the school, and the faculty. The AACSB also charges schools with the obligation of doing
assessment against their own content and learning goals. While Organizational Behavior and the teaching
package make no claim of any specific AACSB qualification or evaluation, we have, within Organizational
Behavior, labeled selected questions according to the six general knowledge and skill areas. The labels or tags
within Organizational Behavior are as indicated. There are, of course, many more within the Test Bank, the text,
and the teaching package that may be used as a standard for your course.
EZ Test Online
McGraw-Hill’s EZ Test Online is a flexible and easy-to-use electronic testing program. The program allows
instructors to create tests from book-specific items, accommodates a wide range of question types, and enables
instructors to even add their own questions. Multiple versions of a test can be created, and any test can be
exported for use with course management systems such as WebCT and BlackBoard or with any other course
management system. EZ Test Online is accessible to busy instructors virtually anywhere via the Web, and the
program eliminates the need for them to install test software. Utilizing EZ Test Online also allows instructors to
create and deliver multiple-choice or true/false quiz questions using iQuiz for iPod. For more information about
EZ Test Online, please see the Web site at www.eztestonline.com .
POWERPOINT PRESENTATION SLIDES
Organizational Behavior has received considerable praise for its professional-looking PowerPoint slides. Each
PowerPoint file has more than two dozen slides relating to the chapter, including two or more photographs from
the textbook.
Instructor Support Materials xxvii
MBTI at Southwest Airlines
Southwest Airlines uses the
Myers-Briggs Type Indicator
(MBTI) to help staff understand
and respect co-workers’
different personalities. “You can
walk by and see someone’s
four-letter [MBTI type] posted
up in their cube,” says
Southwest’s leadership
development director, Elizabeth
Bryant (shown here).
McShane/Von Glinow OB 5e 1 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
Functions of Strong Corporate
Cultures
Functions ofFunctions of
Strong CulturesStrong Cultures
• Control system
• Social glue
• Sense-making
OrganizationalOrganizational
OutcomesOutcomes
• Org performance
• Employee well-being
Culture strengthCulture strength
advantages depend on:advantages depend on:
• Environment fit
• Not cult-like
• Adaptive culture
McShane/Von Glinow OB 5e 1 © 2010 The McGraw-Hill Companies, Inc. All rights reserved
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http://www.eztestonline.com
MCGRAW-HILL’S ASSET GALLERY—NEW!
McGraw-Hill/Irwin Management is
excited to now provide a one-stop
shop for our wealth of assets, making
it super quick and easy for instructors
to locate specific materials to
enhance their course. The Asset
Gallery includes all our non–text-
specific management resources (Self-
Assessments, Test Your Knowledge
exercises, videos and information,
additional group and individual
exercises) along with supporting
PowerPoint and Instructor’s Manual
materials. Additionally, to help
incorporate the assets in the classroom, a guide is provided specific to McGraw-Hill/Irwin texts. Instructors can
reach the Asset Gallery through a link from the instructor area of the Online Learning Center.
GROUP AND VIDEO RESOURCE MANUAL: An Instructor’s Guide to an Active
Classroom (in print 0073044342 or online through the OLC)
This manual created for instructors
contains everything needed to
successfully integrate activities into
the classroom. It includes a menu of
items to use as teaching tools in
class. All of our self-assessment
exercises, Test Your Knowledge
quizzes, group exercises, and
Manager’s HotSeat exercises are
located in this one manual along
with teaching notes and
PowerPoint slides to use in class.
Group exercises include everything
you would need to use the exercise
in class—handouts, figures, etc.
This manual is organized into
25 topics such as ethics, decision-
making, change, and leadership for
easy inclusion in your lecture. A matrix is included at the front of the manual that references each resource by
topic. Students access all of the exercises and self-assessments on their textbook’s Web site.
MANAGER’S HOT SEAT ONLINE: www.mhhe.com/MHS
In today’s workplace, managers are confronted daily with issues such as ethics, diversity, working in teams, and
the virtual workplace. The Manager’s Hot Seat is interactive software that allows students to watch video of
15 real managers as they apply their years of experience to confront these issues.
xxviii Instructor Support Materials
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http://www.mhhe.com/MHS
Students assume the role of the
manager as they watch the video and
answer multiple-choice questions that
pop up, forcing them to make decisions
on the spot. They learn from the manager’s
mistakes and successes, and then
prepare a report that evaluates and
critiques the manager’s approach and
justification of that approach.
Reports can be e-mailed or printed
out for credit. These video segments
are a powerful tool for your course
that truly immerses your students in
the learning experience. Students can
obtain access through the Online
Learning Center by purchasing the
Premium Content for an additional
$10.00. Ask your sales representative
for more information.
VIDEO POSSIBILITIES
Organizational Behavior, Fifth Edition, provides a full complement of videos to liven up the classroom
experience.
Video DVD (ISBN: 0077338928; 13-digit ISBN: 9780077338923)
The new video case collection features PBS, NBC, BWTV, and original productions that relate to examples and
cases in the text. It includes segments such as:
• Wal-Mart’s Public Image Campaign
• Clockless Office: Best Buy’s ROWE Program
• Team Work: Team Activities for Co-Workers
Management in the Movies DVD (ISBN: 0073317713;
13-digit ISBN: 9780073317717)
Management in the Movies is available exclusively to adopters of McGraw-Hill textbooks and contains a
collection of “Big Screen” Hollywood films that students will recognize. Each movie has been clipped to
highlight a specific scene (each is less than two and a half minutes) and is linked to specific topics. Some of the
topics include:
• Groups—13 Going On 30
• Ethics—John Q
• Diversity—Inside Man
• Attitudes, values, culture—Hoosiers
• Control and change—Gung Ho
Along with the DVD, McGraw-Hill provides an instructor manual (at the Online Learning Center) with suggestions
for usage of the video clips, clip summaries, and discussion questions to accompany each segment. Ask your
McGraw-Hill sales representative how to obtain a copy.
Instructor Support Materials xxix
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ONLINE LEARNING CENTER
Organizational Behavior offers a comprehensive and user-friendly Online Learning Center (OLC). The site
includes practice questions in a format similar to that found in the Test Bank, links to relevant external Web sites,
additional cases, and other valuable resources for students, such as:
• Self-scoring self-assessments. The three dozen self-assessments summarized in this book are available at the
OLC, which allows for rapid self-scoring results, complete with detailed feedback.
• Additional cases. In addition to the cases provided in this textbook, the OLC offers many others that
instructors might assign for class or home assignments.
• Additional self-assessments. From the Build Your Management Skills collection, these assessments are for
students who want to delve deeper into self-awareness and for professors who’d like to choose additional
exercises, along with a matrix to identify the appropriate topic.
• Manager’s Hot Seat Online. www.mhhe.com/mhs.
xxx Instructor Support Materials
TEGRITY CAMPUS
Tegrity Campus is a service that makes class time available all the
time by automatically capturing every lecture in a searchable
format for students to review when they study and complete
assignments. With a simple one-click start and stop process, you
capture all computer screens and corresponding audio. Students replay any part of any class with easy-to-use
browser-based viewing on a PC or Mac.
Educators know that the more students can see, hear, and experience class resources, the better they learn.
With Tegrity Campus, students quickly recall key moments by using Tegrity Campus’s unique search feature. This
search helps students efficiently find what they need, when they need it, across an entire semester of class
recordings. Help turn all your students’ study time into learning moments immediately supported by your lecture.
To learn more about Tegrity, watch a 2-minute Flash demo at http://tegritycampus.mhhe.com.
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http://www.mhhe.com/mhs
http://tegritycampus.mhhe.com
acknowledgments
Have you ever worked on a high-performance team where everything just seems to
“click”? We have—on this fifth edition of Organizational Behavior! Sure, we spent plenty
of time alone writing and researching for this book, and of course there were chal-
lenges along the way. But it is always amazing how teamwork really does make a dif-
ference. Several people provided valued expertise to smooth out the rough spots of
writing, search out the most challenging photos, create a fantastic design, develop the
various forms of student and instructor support, and pull together these many pieces
into a comprehensive textbook. This teamwork is even more amazing when you
consider that most of the team members live throughout the United States and one of
the authors (Steve) spends most of his time on the other side of the world.
Executive editor John Weimeister led the way with unwavering enthusiasm and
foresight. Senior developmental editor Christine (Chipper) Scheid demonstrated super-
human skills at coordinating the volumes of e-mails and files that produced this edi-
tion. Sue Gottfried was an amazing copy editor, catching the most subtle errors and
improving the authors’ writing. Christine Vaughan, our lead project manager, was
another true professional as she guided the book through its production schedule.
Jennifer Blankenship, our photo researcher, continued to raise the bar at finding the
best photos, including obscure images that we thought no one could possibly track
down. Pam Kontopoulos created a design that represents the philosophy and style of
this book. The eye-catching cover particularly captures the “dynamic flow” of well-
performing contemporary organizations. Finally, marketing manager Natalie Zook
created information packages and marketing materials to help McGraw-Hill/Irwin’s
superb sales team. These professionals help instructors to discover that this book re-
ally does deliver the content and support needed for an excellent learning experi-
ence. Thanks to you all. This has been an exceptional team effort!
As was mentioned earlier, several dozen instructors around the world reviewed
parts or all of Organizational Behavior, Fifth Edition, or related editions in Canada, the
Pacific Rim, and elsewhere over the past two years. Their compliments were energiz-
ing, and their suggestions significantly improved the final product. The following
people from U.S. colleges and universities provided the most recent feedback for
improvements specifically for Organizational Behavior, Fifth Edition:
Forrest Aven
University of Houston—Downtown
Prasad Balkundi
State University of New York—Buffalo
Kathleen Bates
California State University—San Marcos
Lehman Benson
University of Arizona
Sandra Deacon-Carr
Boston University
Diane Galbraith
Slippery Rock University of Pennsylvania
Nathan Goates
Shippensburg University of Pennsylvania
Kanata Jackson
Hampton University
Gary Kohut
University of North Carolina—Charlotte
Jerry Kopf
Radford University
Karthik Namasivayam
Pennsylvania State University—University Park
Howard Rudd
College of Charleston
We also extend our sincere thanks to Floyd Ormsbee, Clarkson University, for his
exceptional work on revision of the Test Bank. We also extend our gratitude to the
xxxi
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xxxii Acknowledgments
many instructors in the United States and abroad who contributed cases and exercises
to this edition of Organizational Behavior .
Steve would also like to extend special thanks to his students in Perth, Manila, and
Singapore for sharing their learning experiences and assisting with the development
of the three organizational behavior textbooks in the United States, Canada, and the
Pacific Rim. Along with working with Mary Ann, Steve is honored to work with co-
authors on other editions and translations of this book, including Professor Mara
Olekalns at the University of Melbourne and Professor Tony Travaglione at Curtin
University for the Pacific Rim edition, Sandra Steen at the University of Regina for
the Canadian edition, Professor Radha Sharma at MDI for the Indian edition, Profes-
sor Runtian Jing at UESTC for the Chinese edition, and Professor Charles Benabou
at UQAM for the Quebec French edition. Steve is also very grateful to his colleagues
at the University of Western Australia for their support during changing times. But
more than anything else, Steve is forever indebted to his wife Donna McClement and
to their wonderful daughters, Bryton and Madison. Their love and support give spe-
cial meaning to Steve’s life.
Mary Ann would also like to acknowledge the many professionals at McGraw-Hill/
Irwin who have worked to make the Fifth Edition a reality. In addition, she would
like to thank the many, many students who have used and hopefully enjoyed this
book. Student appreciation of this book is apparent by the number of times Mary
Ann has been stopped on various campuses all over the world by students who say
that they recognize her picture and want to thank her! There are a few who have actu-
ally asked for Mary Ann’s autograph, and that did not happen when she was presi-
dent of the Academy of Management! Thus, it is to the students that Mary Ann says
thank you, particularly for making this learning venture fun and exciting. She would
also like to thank the faculty and staff at Florida International University, as well as
her CIBER staff: Sonia, Juan, and Kranthi. By far and away, Mary Ann thanks coau-
thor Steve McShane for his tireless efforts. Finally, Mary Ann would like to thank her
family, starting with the immediate ones—Emma, Zack, and Googun—but also John,
Rhoda, Lauren, Lindsay, and Christy. She also wants to acknowledge the critical role
that some very special people play in her life: Janet, Peter, Bill, Karen, Alan, Danny,
Debra, Mary, and Linda. I thank you all!
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Organizational Behavior
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Emerging Knowledge and
Practice for the Real World
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Part One
Introduction
Chapter 1 Introduction to the Field of Organizational Behavior
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One of Robert Iger’s first tasks as Walt Disney Co.’s new CEO was to acquire Pixar
Animation Studios and put its leaders—John Lasseter (shown in this photo) and Ed
Catmull—in charge of Disney’s own animation unit, Walt Disney Animation Studios. The
studio that brought us Mickey Mouse and The Lion King had become moribund over the
past decade, eclipsed by Pixar’s award-winning productions. Disney already had lucrative
distribution rights to Pixar’s first five films, including any sequels, but Iger wanted something
much more valuable. He wanted the organizational behavior practices that have made Pixar
a powerhouse filmmaker, from Toy Story to Wall-E .
Pixar’s success is founded on the notion that
companies depend on the quality of their employees and
how well they collaborate with each other. “From the very
beginning, we recognized we had to get the best people,
technically, from the computer science world, and from
the artistic filmmaking animation world, and get them
working together,” explains John Lasseter, who is now
chief creative officer of both Pixar and Disney Animation
Studios. “That, right there, is probably the secret to Pixar.”
Pixar enables people to work together in several ways.
First, the company relies on long-term employment
relationships rather than short-term project contracts.
These long-term relationships improve team development
and social networks. “The problem with the Hollywood
model is that it’s generally the day you wrap production
that you realize you’ve finally figured out how to work
together,” says Randy Nelson, head of Pixar University.
“We’ve made the leap from an idea-centered business to a
people-centered business.” Pixar’s campus in Emeryville,
California, is another reason why employees work well
together. The buildings were designed to cluster people
into teams yet also to encourage chance encounters with
people from other projects. “When people run into each
other and make eye contact, innovative things happen,” says Pixar director Brad Bird.
Pixar’s egalitarian, no-nonsense, perfectionist culture is a third reason why the
animation studio’s staff members work effectively. The company gives power to its
production teams rather than to senior executives, but these teams are also ruthless at
writing and rendering scenes several times until they look right. All employees—from
entry-level newcomers to the CEO—are encouraged to be creative and offer candid
feedback about work in progress. Production teams have regular “sweatbox” sessions
at which problems are discussed openly. Even the most successful films receive a
“postmortem” to discover how they could have been improved. “Our job is to address
problems even when we’re successful,” explains Pixar/Disney Animation president Ed
Catmull, whose leadership is identified as the foundation of Pixar’s unique culture. 1
Several organizational behavior practices have helped
Pixar Animation Studios become the world’s most
successful animation studio.
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1. Define organizational behavior and
organizations and discuss the importance
of this field of inquiry.
2. Diagram an organization from an
open-systems perspective.
3. Define intellectual capital and describe the
organizational learning perspective of
organizational effectiveness.
4. Diagnose the extent to which an
organization or one of its work units applies
high-performance work practices.
5. Explain how the stakeholder perspective
emphasizes the importance of values,
ethics, and corporate social responsibility.
6. Summarize the five types of individual
behavior in organizations.
7. Debate the organizational opportunities and
challenges of globalization, workforce
diversity, and virtual work.
8. Discuss how employment relationships are
changing and explain why these changes
are occurring.
9. Discuss the anchors on which
organizational behavior knowledge is
based.
1
Introduction to the Field of
Organizational Behavior
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
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4 Part One Introduction
Collaboration, motivation, communication, creativity, empowerment, organiza-
tional learning, leadership—these are some of the organizational behavior concepts
behind the success of Pixar Animation Studios and other companies. They are also
some of the topics featured in this book. Our main objective is to help you under-
stand behavior in organizations and to work more effectively in organizational set-
tings. We begin in this chapter by introducing the field of organizational behavior
and explaining why knowledge of this field is important to organizations as well as
to your career. Next, the chapter describes the four main perspectives of organiza-
tional effectiveness, which is considered the “ultimate dependent variable” in orga-
nizational behavior. This is followed by an overview of the five main types of
individual behavior in organizations. This chapter also describes three challenges
facing organizations—globalization, increasing workforce diversity, and emerging
employment relationships—and highlights the anchors that guide organizational be-
havior knowledge development.
After reading this section, you should be able to:
1. Define organizational behavior and organizations and discuss the
importance of this field of inquiry.
The Field of Organizational Behavior
Organizational behavior (OB) is the study of what people think, feel, and do in
and around organizations. Its focus is on employee behavior, decisions, perceptions,
and emotional responses. It looks at how individuals and teams in organizations re-
late to each other and to their counterparts in other organizations. OB also encom-
passes the study of how organizations interact with their external environments,
particularly in the context of employee behavior and decisions. OB researchers sys-
tematically study these topics at multiple levels of analysis, namely, the individual,
team (including interpersonal), and organization. 2
The definition of organizational behavior begs the question: What are organizations?
Organizations are groups of people who work interdependently toward some pur-
pose. 3 Notice that organizations are not buildings or government-registered entities.
In fact, many organizations exist without either physical walls or government docu-
mentation to confer their legal status. Organizations have existed for as long as peo-
ple have worked together. 4 Massive temples dating back to 3500 BC were constructed
through the organized actions of multitudes of people. Craftspeople and merchants in
ancient Rome formed guilds, complete with elected managers. More than 1,000 years
ago, Chinese factories were producing 125,000 tons of iron each year. Throughout
history, organizations have consisted of people who communicate, coordinate, and
collaborate with each other to achieve common objectives.
One key feature of organizations is that they are collective entities. They consist of
human beings (typically, but not necessarily, employees), and these people interact
with each other in an organized way. This organized relationship requires some minimal
level of communication, coordination, and collaboration to achieve organizational ob-
jectives. As such, all organizational members have degrees of interdependence with
each other; they accomplish goals by sharing materials, information, or expertise with
co-workers.
A second key feature of organizations is that their members have a collective sense
of purpose. There is some debate among OB experts about whether all organizations
Learning
Objectives
organizational
behavior (OB)
The study of what people
think, feel, and do in and
around organizations.
organizations
Groups of people who
work interdependently
toward some purpose.
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Chapter 1 Introduction to the Field of Organizational Behavior 5
really have a collective sense of purpose. The collective purpose isn’t always well
defined or agreed on. Furthermore, although most companies have vision and mis-
sion statements, these documents are sometimes out of date or don’t describe what
employees and leaders try to achieve in reality. These points may be true, but imag-
ine an organization without goals: It would consist of a mass of people wandering
around aimlessly without any sense of direction. So, whether they are producing ani-
mated feature films at Pixar Animation Studios or designing and building auto-
mobiles at General Motors, organizational members do have some sense of collective
purpose. “A company is one of humanity’s most amazing inventions,” says Steven
Jobs, CEO of Apple, Inc. (and former CEO of Pixar Animation Studios). “It’s totally
abstract. Sure, you have to build something with bricks and mortar to put the
people in, but basically a company is this abstract construct we’ve invented, and it’s
incredibly powerful.” 5
Organizational Behavior’s
Foundations
Organizational behavior emerged as a distinct field
around the 1940s, but organizations have been stud-
ied by experts in other fields for many centuries. 6
For example, the Greek philosopher Plato wrote
about the essence of leadership. Around the same
time, the Chinese philosopher Confucius extolled
the virtues of ethics and leadership. In 1776, Adam
Smith advocated a new form of organizational struc-
ture based on the division of labor. One hundred
years later, German sociologist Max Weber wrote
about rational organizations, the work ethic, and
charismatic leadership. Soon after, industrial engi-
neer Frederick Winslow Taylor proposed new ways
to organize employees and motivate them through
goal setting and rewards. In the 1920s, Elton Mayo
and his colleagues reported on how formal and in-
formal group dynamics operate in the workplace.
During that same time, Mary Parker Follett pio-
neered new ways of thinking about several OB top-
ics, including constructive conflict, team dynamics,
organizational democracy, power, and leadership. A
decade later, Chester Barnard wrote insightful views
regarding individual behavior, motivation, commu-
nication, leadership and authority, and team dynam-
ics in organizational settings. This brief historical
tour indicates that OB has been around for a long
time; it just wasn’t organized into a unified discipline
until after World War II.
Why Study Organizational Behavior?
Organizational behavior instructors face a chal-
lenge: On the one hand, students just beginning
Mary Parker Follett and Chester Barnard were pioneers of
contemporary organizational behavior thinking a decade or
two before OB became a distinct field of inquiry. Follett was
a Boston social worker and political science scholar who
suggested that conflict can be “constructive” when the parties
gain a better understanding of each other. She was also a
strong advocate of employee involvement and organizational
democracy. Chester Barnard was a career executive (including
president of New Jersey Bell Telephone Company and, later,
head of two foundations), who wrote several influential books on
management and organizations. He emphasized that organizations
depend on effective communication and that a manager’s formal
authority depends on the employee’s willingness to accept
that power. He also discussed norms of informal groups as well
as a rational perspective of employee motivation. Both Barnard
and Follett described organizations as holistic cooperative
organisms. This was a refreshing contrast to the machinelike
metaphor of organizations that dominated management theory
and practice in those days.7
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6 Part One Introduction
their careers tend to value courses related to specific jobs, such as accounting and
marketing. 8 However, OB doesn’t have a specific career path—there is no “vice
president of OB”—so these students sometimes have difficulty recognizing the value
that OB knowledge can offer to their future. On the other hand, students with sev-
eral years of work experience place OB near the top of their list of important
courses. Why? Because they have directly observed that OB does make a difference to
their career success. To begin with, they have learned that OB theories help us to
make sense of the workplace. These theories also give us the opportunity to question
and rebuild our personal mental models that have developed through observation and
experience. Thus, OB is important because it helps to fulfill our need to understand
and predict the world in which we live. 9
But the main reason why people with work experience value OB knowledge is
that they have discovered how it helps them to get things done in organizations.
This practical side of organizational behavior is, according to some experts, a
critical feature of the best OB theories. 10 Everyone in the organization needs to
work with other people, and OB provides the knowledge and tools for working with
and through others. Building a high-performance team, motivating co-workers,
handling workplace conflicts, influencing your boss, and changing employee be-
havior are just a few of the areas of knowledge and skills offered in organizational
behavior. No matter what career path you choose, you’ll find that OB concepts
play an important role in performing your job and working more effectively within
organizations.
Organizational Behavior Is for Everyone Our explanation of why organiza-
tional behavior is important for your career success does not assume that you are,
or intend to be, a manager. In fact, this book pioneered the notion that OB knowl-
edge is for everyone. Whether you are a geologist, financial analyst, customer
service representative, or chief executive officer, you need to understand and
apply the many organizational behavior topics that are discussed in this book.
Yes, organizations will continue to have managers, but their roles have changed
and the rest of us are increasingly expected to manage ourselves in the workplace.
In the words of one forward-thinking OB writer many years ago: Everyone is a
manager. 11
OB and the Bottom Line So far, our answer to the question “Why study OB?”
has focused on how OB knowledge benefits you as an individual. But organiza-
tional behavior knowledge is just as important for the organization’s financial
health. This was apparent in the opening story about Pixar Animation Studios,
which has benefited from several OB concepts and practices. According to one
estimate, firms that apply performance-based rewards, employee communication,
work–life balance, and other OB practices have three times the level of financial
success that companies have where these practices are absent. Another study con-
cluded that companies that earn “the best place to work” awards have significantly
higher financial and long-term stock market performance. Essentially, these firms
leverage the power of OB practices, which translate into more favorable employee
attitudes, decisions, and performance. The benefits of OB are well known to
Warren Buffett and other financial gurus; they consider the organization’s leader-
ship and quality of employees as two of the best predictors of the firm’s financial
potential. 12
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Chapter 1 Introduction to the Field of Organizational Behavior 7
After reading the next two sections, you should be able to:
2. Diagram an organization from an open-systems perspective.
3. Define intellectual capital and describe the organizational learning
perspective of organizational effectiveness.
4. Diagnose the extent to which an organization or one of its work
units applies high-performance work practices.
5. Explain how the stakeholder perspective emphasizes the importance
of values, ethics, and corporate social responsibility.
6. Summarize the five types of individual behavior in organizations.
organizational
effectiveness
A broad concept repre-
sented by several
perspectives, including
the organization’s fit with
the external environment,
internal-subsystems
configuration for high
per formance, emphasis
on organizational learn-
ing, and ability to satisfy
the needs of key stake-
holders.
open systems
A perspective which
holds that organizations
depend on the external
environment for re-
sources, affect that en-
vironment through their
output, and consist of
internal subsystems
that transform inputs to
outputs.
Learning
Objectives
Perspectives of Organizational Effectiveness
Almost all organizational behavior theories have the implicit or explicit objective of
making organizations more effective. 13 Indeed, organizational effectiveness is consid-
ered the “ultimate dependent variable” in organizational behavior. 14 The first chal-
lenge, however, is to define organizational effectiveness . Experts agree that this
topic is burdened with too many labels—organizational performance, success, good-
ness, health, competitiveness, excellence, and so on—with no consensus on the mean-
ing of each label.
Long ago, organizational effectiveness was defined as the extent to which an
organization achieved its stated goals. 15 According to this view, Pixar is effective
because it achieves its stated objective of producing animation features on time, on
budget, and on target regarding box office sales. The goal attainment view is no
longer accepted, however, because a company can be considered effective simply
by establishing easily achievable goals. Also, some goals—such as social responsibil-
ity to the community—are so abstract that it is difficult to know how well the orga-
nization has achieved them. A third flaw with the goal attainment definition is that
a company’s stated objectives might threaten its long-term survival. For example,
some corporate leaders receive incentives (such as stock options) to maximize short-
term profits. Some accomplish this objective by slashing expenditures, including
funds for marketing and product development. The result is often a lack of new
products and deterioration in the company’s brand value in the long run. In ex-
treme cases, the company achieves its short-term profitability targets but eventually
goes out of business.
How is organizational effectiveness defined today? The answer is that there are
several perspectives of effectiveness, so this concept is defined in terms of all of these
perspectives . 16 Organizations are considered effective when they have a good fit with
their external environment, when their internal subsystems are configured for a high-
performance workplace, when they are learning organizations, and when they satisfy
the needs of key stakeholders. Over the next few pages, we will discuss each of these
four perspectives of organizational effectiveness in some detail.
Open-Systems Perspective
The open-systems perspective of organizational effectiveness is one of the earliest
and deeply entrenched ways of thinking about organizations. In fact, the other major
organizational effectiveness perspectives might be considered detailed extensions of
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8 Part One Introduction
the open-systems model. 17 As depicted in Exhibit 1.1 , the open-systems perspective
views organizations as complex organisms that “live” within an external environment.
The word open describes this permeable relationship, whereas closed systems can exist
without dependence on an external environment.
As open systems, organizations depend on the external environment for resources,
including raw materials, employees, financial resources, information, and equipment.
Pixar, Disney, and other companies could not survive without employees, raw mate-
rials, knowledge, and so forth. The open-systems perspective also describes numer-
ous subsystems within the organization, such as processes (communication and
reward systems), work units (production, marketing), and social dynamics (informal
networks, power relationships). With the aid of technology (such as equipment, work
methods, and information), these subsystems transform inputs into various outputs.
Some outputs (e.g., products and services) may be valued by the external environ-
ment, whereas other outputs (e.g., employee layoffs, pollution) have adverse effects.
The organization receives feedback from the external environment regarding the
value of its outputs and the availability of future inputs.
According to the open-systems perspective, successful organizations monitor their
environments and are able to maintain a close fit with changing conditions. 18 One way
they do this is by finding new opportunities to secure essential inputs. For instance,
many fast-food restaurants struggle to find enough employees. To ensure that it has
enough qualified staff, McDonald’s restaurants were among the first to recruit retirees.
More recently, McDonald’s UK introduced the “family contract,” an employment ar-
rangement that allows members of the employee’s family (spouses, grandparents, and
children over the age of 16) to swap shifts without notifying management. 19 Successful
organizations also redesign outputs so that they remain compatible with demands from
the external environment. Food manufacturers have changed their ingredients to satisfy
more health-conscious consumers. Automobile manufacturers have redesigned cars to
Inputs
• Raw materials
• Human resources
• Information
• Financial resources
• Equipment
Outputs
• Products/services
• Employee behaviors
• Profits/losses
• Waste/pollution
FeedbackFeedback
FeedbackFeedback
External Environment
Organization
Subsystem
Subsystem
Subsystem
Sub-
system
Sub-
system
Subsystem
Transforming inputs
to outputs
Exhibit 1.1
Open-Systems
Perspective of
Organizations
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Chapter 1 Introduction to the Field of Organizational Behavior 9
satisfy demands for more fuel efficiency and safety, while also continually adapting to
customer preferences in models and styling.
Internal-Subsystems Effectiveness The open-systems perspective considers more
than an organization’s fit with the external environment. It also examines how well the
organization operates internally, that is, how well it transforms inputs into outputs. The
most common indicator of this internal transformation process is organizational
efficiency (also called productivity ), which is the amount of outputs relative to inputs. 20
Companies that produce more goods or services with less labor, materials, and energy
are more efficient.
A popular strategy for improving efficiency in the transformation process is lean
management . 21 Based on practices developed by Toyota Motor Company, lean
management involves continuously reducing waste, unevenness, and overburden in
the production process. Waste (called muda ) takes many forms, such as excess travel
of the product or service through the production process, too much time during
which the work is sitting idle (waiting for the next step in production), too much in-
ventory, too much employee physical movement, and too much finished product
without a buyer. Lean management also involves minimizing situations in which peo-
ple and equipment are overloaded (too much demand per unit time) and smoothing
out the production process (e.g., reducing bottlenecks). The “lean” movement origi-
nated in manufacturing, but it is now being adopted by hospitals, government, ac-
counting firms, and other service providers. 22 Global Connections 1.1 describes how
British and American hospitals have improved efficiency and effectiveness through
various lean practices.
Keep in mind that efficiency does not necessarily translate into effectiveness. Effi-
ciency is about doing things right, whereas effectiveness is about doing the right things.
A company might be highly efficient at making a product or providing a service, but
it will be ineffective if no one wants that product or service, for example. Also, effi-
ciency often requires standardization, whereas companies operating in rapidly chang-
ing environments need to remain nimble and responsive. Organizations often need
more adaptive and innovative transformation processes, not just more efficient ones.
For example, German engineering conglomerate Siemens AG has an effective trans-
formation process because its subsystems are innovative and responsive, not neces-
sarily the most efficient. “Whether I have additional costs or not doesn’t matter as
much as the speed to market and the quality of the design,” says a Siemens executive.
“We’re not talking about a pure cost game.” 23
Another important issue in the transformation process is how well the organiza-
tion’s subsystems coordinate with each other. The more each subsystem depends on
other subsystems, the higher the risk of problems that undermine the transformation
process. 24 Information gets lost, ideas are not shared, materials are hoarded, commu-
nication messages are misinterpreted, resources and rewards are distributed unfairly,
and so forth. These coordination challenges are amplified as organizations grow, such
as when employees are clustered into several departments and when departments are
clustered into several organizational divisions. That’s why even the best-laid plans are
paved with unintended consequences. A slight change in work practices in one sub-
system may ripple through the organization and affect other subsystems in adverse
ways. For example, an adjustment in accounting procedures might have the unin-
tended effect of motivating sales staff to sell more products with lower profit margin
or discouraging administrative staff from accurately completing documents that are
vital for executive decisions.
organizational
efficiency
The amount of outputs
relative to inputs in the
organization’s transfor-
mation process.
lean management
A cluster of practices to
improve organizational
efficiency by continu-
ously reducing waste,
unevenness, and over-
burden in the produc-
tion process.
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Hospitals Take the Lean Journey
to Efficiency
Building Nissan automobiles seems unrelated to serving
surgical patients, but staff at Sunderland Royal Hospital can
see the similarities. The hospital in northern England recently
borrowed several lean management ideas from the nearby
Nissan factory, one of the most efficient car plants in Europe,
to improve its day surgery unit. “We took [Sunderland hospital
staff] on a tour of our plant, showing them a variety of lean
processes in action, and let them decide which ones could
be applied back at the hospital,” says a training manager at
Nissan’s factory in Sunderland.
Sunderland’s day surgery staff members were actively in-
volved in applying lean management to their work unit. After
attending Nissan’s two-day workshop on lean thinking, they
mapped out the work processes, questioned assumptions
about the value or relevance of some activities, and discov-
ered ways to reduce the lengthy patient wait times (which
were up to three hours). There was some initial resistance and
skepticism, but the hospital’s day surgery soon realized sig-
nificant improvements in efficiency and service quality.
“By working with Nissan’s staff, we have streamlined the
patient pathway from 29 to 11 discrete stages,” says Anne
Fleming (shown in photo), who oversees Sunderland’s 32-bed
day-case unit and its 54 employees. “We have done this by
reducing duplication, halving the time that patients spend in
the unit to three hours by giving them individual appointment
times, and introducing the just-in-time approach to the patient
pathway.” Fleming also reports that Sunderland’s operating
rooms are now much more efficient.
Sunderland Royal Hospital is one of many health care cen-
ters around the world that are improving efficiency through
lean thinking. After receiving training in Japan on lean prac-
tices, several teams of doctors, nurses, and other staff from
Virginia Mason Medical Center in Seattle, Washington, rede-
signed workflows to cut out 34 miles of unnecessary walking
each day. Park Nicollet Health Services in Minneapolis, Min-
nesota, improved efficiency at its ambulatory clinic to such an
extent that the unit does not require a patient waiting area.
One Park Nicollet team worked with orthopedic surgeons to
reduce by 60 percent the variety of instruments and supplies
they ordered for hip and knee surgery. The trauma team at
Bolton Hospitals NHS Trust in the United Kingdom reduced av-
erage wait times for patients with fractured hips by 38 percent
(from 2.4 to 1.7 days), which also resulted in a lower mortality
rate for these patients. By smoothing out the inflow of work
orders and rearranging the work process, Bolton’s pathology
department cut the time required to process samples, previ-
ously 24 to 30 hours, to just 2 to 3 hours and reduced the space
used by 50 percent.
“We know that our case for extra funding will fall on deaf
ears unless we cut out waste in the system,” explains Dr. Gill
Morgan, chief executive of the U.K.’s NHS Confederation.
“Lean works because it is based on doctors, nurses, and other
staff leading the process and telling us what adds value and
what doesn’t. They are the ones who know.”25
Global Connections 1.1
Sunderland Royal Hospital learned from the nearby Nissan
factory how to implement lean management in its new day
surgery unit.
10
Organizational Learning Perspective
The open-systems perspective has traditionally focused on physical resources that
enter the organization and are processed into physical goods (outputs). This was
representative of the industrial economy but not the “new economy,” where the
most valued input is knowledge. Knowledge is the driver of competitive advantage,
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Chapter 1 Introduction to the Field of Organizational Behavior 11
however, in the organizational learning perspective (also called knowledge manage-
ment ). Through this lens, organizational effectiveness depends on the organization’s
capacity to acquire, share, use, and store valuable knowledge. 26
Knowledge acquisition occurs when information is brought into the organization
from the external environment. This can include hiring people, acquiring companies,
and scanning the environment for the latest trends. It also includes the process of
creative insight—experimenting and discovering new ideas. 27 Knowledge sharing refers
to the distribution of knowledge throughout the organization. For example, Pixar
Animation Studios deliberately centralized its cafeteria, mailroom, and restroom fa-
cilities so that employees would “bump into” and coincidentally share knowledge
with people from other areas of the organization rather than just their own team
members. Knowledge sharing also occurs through electronic whiteboards, wikis,
blogs, and other computer-mediated technology. Knowledge use is the application of
knowledge to organizational processes in ways that improve the organization’s effec-
tiveness. Essentially, new work activities involve knowledge use because they require
the application of new knowledge to break out of past routines and practices. Storage
refers to ways that companies retain valuable knowledge. They retain employees,
document best practices, record experiments (including those that didn’t work out),
and keep samples of past products.
To understand knowledge acquisition, sharing, use, and storage, consider how
Google engages in organizational learning. The company that brought us the ubiqui-
tous Internet search engine acquires knowledge by hiring the best talent, buying en-
tire companies (such as Keyhole, Inc., whose knowledge created Google Earth), and
encouraging employees to try out new ideas. Employees are expected to devote 20 per-
cent of their time to discovering new knowledge of their choosing. Google encour-
ages knowledge sharing in many ways. It has a team-oriented project culture that
encourages staff to share information as part of their job. Its campuslike environment
(called the Googleplex) increases the chance that employees from different parts of
the organization will mingle and casually share information, whether dining at the
company’s subsidized gourmet restaurant or playing a game of volleyball in the
sports area. Google also relies on sophisticated information technologies—wikis, blogs,
and intranet repositories—to support knowledge sharing. Along with promoting
knowledge acquisition and sharing, Google encourages knowledge use by giving em-
ployees the freedom to apply their newfound knowledge and encouraging them to
experiment with that knowledge. “Google is truly a learning organization,” says
Google’s chief financial officer, George Reyes. 28
An interesting dilemma in organizational learning is that the ability to acquire,
share, and use new knowledge is limited by the company’s existing store of knowl-
edge. To recognize the value of new information, assimilate it, and use it for value-
added activities, organizations require sufficient absorptive capacity . 29 For example,
many companies were slow to develop online marketing practices because no one in
the organization had enough knowledge about the Internet to fathom its potential or
apply that knowledge to the company’s business. In some cases, companies had to
acquire entire teams of people with the requisite knowledge to realize the potential of
this marketing channel. Entire countries also suffer from a lack of absorptive capacity.
Without sufficient knowledge, a society is slow or completely unable to adopt new
information that may improve social and economic conditions. 30
Intellectual Capital: The Stock of Organizational Knowledge Knowledge
acquisition, sharing, and use represent the flow of knowledge. The organi zational
absorptive capacity
The ability to recognize
the value of new infor-
mation, assimilate it,
and use it for value-
added activities.
organizational learning
A perspective which
holds that organizational
effectiveness depends
on the organization’s
capacity to acquire,
share, use, and store
valuable knowledge.
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12 Part One Introduction
learning perspective also considers the company’s stock of knowledge, called its
intellectual capital . 31 The most obvious form of intellectual capital is human
capital —the knowledge, skills, and abilities that employees carry around in their heads.
This is an important part of a company’s stock of knowledge, and it is a huge risk in
companies where knowledge is the main competitive advantage. When key people
leave, they take with them some of the knowledge that makes the company effective.
Even if every employee left the organization, intellectual capital would still remain
in the form of structural capital . This includes the knowledge captured and retained in
an organization’s systems and structures, such as the documentation of work proce-
dures and the physical layout of the production line. Structural capital also includes
the organization’s finished products because knowledge can be extracted by taking
them apart to discover how they work and are constructed (i.e., reverse engineering).
Finally, intellectual capital includes relationship capital, which is the value derived
from an organization’s relationships with customers, suppliers, and others who pro-
vide added mutual value for the organization.
Organizational Memory and Unlearning Corporate leaders need to recognize
that they are the keepers of an organizational memory . 32 This unusual metaphor
refers to the storage and preservation of intellectual capital. It includes knowledge
that employees possess as well as knowledge embedded in the organization’s systems
and structures. It includes documents, objects, and anything else that provides mean-
ingful information about how the organization should operate.
How do organizations retain intellectual capital? One way is by keeping good
employees. Progressive companies achieve this by adapting their employment prac-
tices to become more compatible with emerging workforce expectations, including
work–life balance, an egalitarian hierarchy, and a workspace that generates more fun.
A second organizational memory strategy is to systematically transfer knowledge to
other employees. This occurs when newcomers apprentice with skilled employees,
thereby acquiring knowledge that is not documented. A third strategy is to transfer
knowledge into structural capital. This includes bringing out hidden knowledge, or-
ganizing it, and putting it in a form that can be available to others (such as written
instructions or a video clip showing the task being performed).
The organizational learning perspective states not only that effective organizations
learn but also that they unlearn routines and patterns of behavior that are no longer
appropriate. 33 Unlearning removes knowledge that no longer adds value and, in fact,
may undermine the organization’s effectiveness. Some forms of unlearning involve
replacing dysfunctional policies, procedures, and routines. Other forms of unlearning
erase attitudes, beliefs, and assumptions. For instance, employees rethink the “best
way” to perform a task and how to serve clients.
High-Performance Work Practices Perspective
Although the open-systems perspective states that successful companies are good at
transforming inputs into outputs, it does not identify the most important subsystem
characteristics of effective organizations. Consequently, an entire field of research has
blossomed around the objective of determining specific “bundles” of organizational
practices that offer competitive advantage. This research has had various labels over the
years, but it is now most widely called high-performance work practices (HPWP) . 34
The HPWP perspective begins with the idea that human capital —the knowledge,
skills, and abilities that employees possess—is an important source of competitive
organizational memory
The storage and preser-
vation of intellectual
capital.
high-performance work
practices (HPWP)
A perspective which
holds that effective
organizations incorporate
several workplace
practices that leverage
the potential of human
capital.
human capital
The stock of knowledge,
skills, and abilities
among employees that
provides economic value
to the organization.
intellectual capital
A company’s stock of
knowledge, including
human capital, struc-
tural capital, and rela-
tionship capital.
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Chapter 1 Introduction to the Field of Organizational Behavior 13
advantage for organizations. 35 Human capital helps the organization realize opportu-
nities or minimize threats in the external environment. Furthermore, human capital
is neither widely available nor easily duplicated. For instance, a newly formed com-
pany cannot instantly develop a workforce identical to a workforce at an established
company. Nor can technology replace the capabilities that employees bring to the
workplace. In short, human capital is valuable, rare, difficult to imitate, and nonsub-
stitutable. 36 Therefore, organizations excel by introducing a bundle of systems and
structures that leverage the potential of their workforce.
Many high-performance work practices have been studied over the years.37 Four
practices with strong research support are employee involvement, job autonomy,
employee competence, and performance- and/or skill-based rewards. As you will
learn later in this book, employee involvement and job autonomy tend to strengthen
employee motivation as well as improve decision making, organizational responsive-
ness, and commitment to change. In high-performance workplaces, employee in-
volvement and job autonomy often take the form of self-directed teams, which are
discussed in Chapter 8.
Another key variable in the HPWP model is employee competence. Specifically,
organizations are more effective when they recruit and select people with relevant
skills, knowledge, values, and other personal characteristics. Furthermore, successful
companies invest in their employees by supporting further competency development
(see Chapter 2). A fourth characteristic of high-performance organizations is that they
link performance and skill development to various forms of financial and nonfinan-
cial rewards valued by employees. We discuss reward systems in Chapter 6 as one of
several practices to improve employee performance.
The HPWP perspective is currently popular among OB experts and practitioners,
but it also has its share of critics. One concern is that many studies try to find out
which practices predict organizational performance without understanding why those
practices should have this effect. 38 In other words, some of the practices identified as
HPWPs lack theoretical foundation; the causal connection between work practices
and organizational effectiveness is missing. Without this explanation, it is difficult to
be confident that the practice will be valuable in the future and in other situations. A
second concern with the HPWP perspective is that it may satisfy shareholder and
customer needs at the expense of employee well-being. 39 Some experts point out that
HPWPs increase work stress and that management is reluctant to delegate power or
share the financial benefits of productivity improvements. If high-performance work
practices improve organizational performance at a cost to employee well-being, then
this perspective (along with the open-systems and organizational learning perspec-
tives) offers an incomplete picture of organizational effectiveness. The remaining
gaps are mostly filled by the stakeholder perspective of organizational effectiveness.
Stakeholder Perspective
The three organizational effectiveness perspectives described so far mainly consider
processes and resources, yet they only minimally recognize the importance of relations
with stakeholders . Stakeholders include individuals, organizations, and other entities
that affect, or are affected by, the organization’s objectives and actions. They include
anyone with a stake in the company—employees, shareholders, suppliers, labor unions,
government, communities, consumer and environmental interest groups, and so on.
The essence of the stakeholder perspective is that companies must take into account
how their actions affect others, and this requires that they understand, manage, and
stakeholders
Individuals, organiza-
tions, and other entities
that affect, or are
affected by, the organi-
zation’s objectives and
actions.
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14 Part One Introduction
satisfy the interests of their stakeholders. 40 The stakeholder perspective personalizes
the open-systems perspective; it identifies specific people and social entities in the
external and internal environment. It also recognizes that stakeholder relations are
dynamic; they can be negotiated and managed, not just taken as a fixed condition. 41
Consider the troubles that Wal-Mart has faced in recent years. 42 For decades, the
world’s largest retailer concentrated on customers by providing the lowest possible
prices and on shareholders by generating healthy financial returns. Yet emphasizing
these two stakeholders exposed the company to increasing hostility from other groups in
society. Some interest groups accused Wal-Mart of destroying America’s manufacturing
base and tacitly allowing unethical business practices (such as child labor) in countries
where it purchased goods. Other groups pointed out that Wal-Mart had a poor record of
environmental and social responsibility. Still other groups lobbied to keep Wal-Mart out
of their communities because the giant retailer typically builds in outlying suburbs where
land is cheap, thereby fading the vibrancy of the community’s downtown area. These
stakeholder pressure points existed for some time, but Wal-Mart mostly ignored them
until they became serious threats. In fact, Wal-Mart recently created the position “senior
director of stakeholder engagement” to ensure that it pays more attention to most stake-
holders and to proactively manage stakeholder relationships.
Understanding, managing, and satisfying the interests of stakeholders is more chal-
lenging than it sounds because stakeholders have conflicting interests and organizations
don’t have the resources to satisfy every stakeholder to the fullest. Therefore, organiza-
tional leaders need to decide how much priority to give to each group. One commonly
cited factor is to favor stakeholders with the most power. 43 This makes sense when one
considers that the most powerful stakeholders hold the greatest threat and opportunity
to the company’s survival. Yet stakeholder power should not be the only criterion for
determining organizational strategy and resource allocation. Ignoring less powerful
stakeholders might motivate them to become more powerful by forming coalitions or
seeking government support. It might also irritate more powerful stakeholders if ignor-
ing weaker interests violates the norms and standards of society.
Values, Ethics, and Corporate Social Responsibility This brings us to one of
the key strengths of the stakeholder perspective, namely, that it incorporates values,
ethics, and corporate social responsibility into the organizational effectiveness equa-
tion. 44 The stakeholder perspective states that to manage the interests of diverse
stakeholders, leaders ultimately need to rely on their personal and organizational
values for guidance. Values are relatively stable, evaluative beliefs that guide our
preferences for outcomes or courses of action in a variety of situations. 45 Values help
us to know what is right or wrong, or good or bad, in the world. Chapter 2 explains
how values are an important part of our self-concept and, as such, motivate our ac-
tions. Although values exist within individuals, groups of people often hold similar
values, so we tend to ascribe these shared values to the team, department, organization,
profession, or entire society. For example, Chapter 14 discusses the importance and
dynamics of organizational culture, which includes shared values across the company
or within subsystems.
Values have become a popular topic in corporate boardrooms because leaders are
discovering that the values-driven organizational approach to guiding employee be-
havior is potentially more effective, as well as more popular, than the old command-
and-control approach (i.e., top-down decisions with close supervision of employees).
Bank of Montreal (BMO) is a case in point. A few years ago, in a series of meetings,
values
Relatively stable, evalu-
ative beliefs that guide
a person’s preferences
for outcomes or courses
of action in a variety of
situations.
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Chapter 1 Introduction to the Field of Organizational Behavior 15
BMO’s top executives reflected on the financial institution’s history and had deep
conversations to identify the values on which the Canadian financial institution was
built. Out of this dialogue emerged four value statements that were distributed to
employees and built into a revised reward system. Why did BMO go to such trouble
to identify and communicate its shared values? “[BMO’s values] provide a stable
base for guiding employee decisions and actions in an otherwise rapidly changing
workplace,” explains a BMO executive who attended the meetings. “Simply put,
values matter and employees care that the organizations they work for and represent
are ethical and walk the talk of their values.” 47
By incorporating values into organizational effectiveness, the stakeholder perspec-
tive also provides the strongest case for ethics and corporate social responsibility. In
fact, the stakeholder perspective emerged out of earlier writing on ethics and corpo-
rate social responsibility. Ethics refers to the study of moral principles or values that
determine whether actions are right or wrong and outcomes are good or bad. We rely
on our ethical values to determine “the right thing to do.” Ethical behavior is driven
Focus on Stakeholders Makes Lockheed Martin “Ideal” When choosing a future employer, college graduates look beyond
salary and career opportunities. These factors are important, but recent surveys indicate that the company’s ethical standards,
values, and corporate social responsibility (CSR) are also top considerations. Based on its reputation for ethics, diversity, and
CSR, Lockheed Martin Corporation is ranked by American undergraduate engineering students as one of the top companies for
an ideal career and is among the top 60 companies identified by all undergraduate students. “Students have always been
impressed with Lockheed Martin’s commitment to diversity and social responsibility,” says the CEO of Universum Communications,
the company that surveys more than 37,000 students annually. “The company is well known for its charitable contributions and
strong values.” For example, this photo shows a team of Lockheed Martin employees assisting cleanup of New Orleans following
Hurricane Katrina.46
ethics
The study of moral
principles or values
that determine whether
actions are right or
wrong and outcomes
are good or bad.
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16 Part One Introduction
by the moral principles we use to make decisions. These moral principles represent
fundamental values. Chapter 2 provides more detail about ethical principles and re-
lated influences on moral reasoning.
Corporate social responsibility (CSR) consists of organizational activities in-
tended to benefit society and the environment beyond the firm’s immediate financial
interests or legal obligations. 48 It is the view that companies have a contract with soci-
ety, in which they must serve stakeholders beyond shareholders and customers. In some
situations, the interests of the firm’s shareholders should be secondary to those of other
stakeholders. 49 As part of CSR, many companies have adopted the triple-bottom-line
philosophy: They try to support or “earn positive returns” in the economic, social, and
environmental spheres of sustainability. Firms that adopt the triple bottom line aim to
survive and be profitable in the marketplace (economic), but they also intend to main-
tain or improve conditions for society (social) as well as the physical environment. 50
Not everyone agrees with the idea that organizations are more effective when they
cater to a wide variety of stakeholders. More than 30 years ago, economist Milton
Friedman pronounced that “there is one and only one social responsibility of business—
to use its resources and engage in activities designed to increase its profits.” Although
few writers take this extreme view today, some point out that companies can benefit
other stakeholders only if those with financial interests in the company receive first
priority. Yet four out of five Americans say that a company’s commitment to a social
issue is an important factor in deciding whether to work for the company and whether
to buy its products or services. In another survey, more than two-thirds of North Amer-
ican students said they would not apply for a job if the company is considered irrespon-
sible. Most American and European MBA students also claim they would accept lower
financial rewards to work for an organization with a better ethical/CSR reputation.
However, another recent survey indicated that while most American MBA students
believe socially responsible companies have a better repu tation, less than half of these
respondents believe CSR improves revenue, employee loyalty, customer satisfaction,
community well-being, or the company’s long-term viability. 51
Capgemini recently discovered the importance of corporate social responsibility
when the Netherlands-based information technology (IT) consulting firm tried to
fill 800 IT and management consulting positions in that country. Rather than offer-
ing a T-shirt for completing the 30-minute online survey on recruitment issues,
Capgemini advised respondents (IT and management consultants) that for each
completed survey it would provide funding for a street kid in Kolkata, India, to
have one week of schooling and accommodation. The survey included an option
for respondents to find out more about employment with the consulting firm. Far
beyond its expectations, Capgemini received more than 10,000 completed surveys
and 2,000 job inquiries from qualified respondents. The company filled its 800 jobs
and developed a waiting list of future prospects. Furthermore, media attention about
this initiative raised Capgemini’s brand reputation for corporate social responsibility.
The consulting firm supported 10,400 weeks of housing and education for children
in Kolkata. 52
Types of Individual Behavior
The four perspectives described over the past few pages—open systems, organiza-
tional learning, high-performance work practices, and stakeholder—provide a multi-
dimensional view of what makes companies effective. Within these models, however,
are individual behaviors that enable companies to interact with their environments;
corporate social
responsibility (CSR)
Organizational activities
intended to benefit soci-
ety and the environment
beyond the firm’s imme-
diate financial interests
or legal obligations.
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Chapter 1 Introduction to the Field of Organizational Behavior 17
acquire, share, and use knowledge to the best advantage; process inputs to outputs
efficiently and responsively; and meet the needs of various stakeholders. While orga-
nizational effectiveness is the ultimate dependent variable, these employee behaviors
are the individual-level dependent variables found in most OB research. Exhibit 1.2
highlights the five types of behavior discussed most often in the organizational behav-
ior literature: task performance, organizational citizenship, counterproductive work
behaviors, joining and staying with the organization, and work attendance.
Task Performance
Task performance refers to goal-directed behaviors under the individual’s control that
support organizational objectives. Task performance behaviors transform raw materi-
als into goods and services or support and maintain technical activities. 53 For exam-
ple, foreign exchange traders at Wachovia make decisions and take actions to
exchange currencies. Employees in most jobs have more than one performance di-
mension. Foreign exchange traders must be able to identify profitable trades, work
cooperatively with clients and co-workers in a stressful environment, assist in training
new staff, and work on special telecommunications equipment without error. Some of
these performance dimensions are more important than others, but only by consider-
ing all of them can we fully evaluate an employee’s contribution to the organization.
Organizational Citizenship
Companies could not effectively compete, transform resources, or serve the needs of
their stakeholders if employees performed only their formal job duties. Employees
also need to engage in organizational citizenship behaviors (OCBs) —various
forms of cooperation and helpfulness to others that support the organization’s social
and psychological context. 54 In other words, companies require contextual perfor-
mance (i.e., OCBs) along with task performance.
Types of
work-related
behavior
Task
performance
Joining/staying
with the
organization
M
ai
nt
ai
ni
ng
w
or
k
at
te
nd
an
ce
O
rganizational
citizenship
Counter-
producti
ve
work
behavio
rs
Exhibit 1.2
Types of Work-
Related Behavior
organizational
citizenship behaviors
(OCBs)
Various forms of cooper-
ation and helpfulness to
others that support the
organization’s social and
psychological context.
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18 Part One Introduction
Organizational citizenship behaviors take many forms. Some are directed toward
individuals, such as assisting co-workers with their work problems, adjusting your
work schedule to accommodate co-workers, showing genuine courtesy toward co-
workers, and sharing your work resources (supplies, technology, staff) with co-workers.
Other OCBs represent cooperation and helpfulness toward the organization in general.
These include supporting the company’s public image, taking discretionary action to
help the organization avoid potential problems, offering ideas beyond those required
for your own job, attending voluntary functions that support the organization, and
keeping up with new developments in the organization. 55
Counterproductive Work Behaviors
Organizational behavior is interested in all workplace behaviors, including those on
the “dark side,” collectively known as counterproductive work behaviors (CWBs) .
CWBs are voluntary behaviors that have the potential to directly or indirectly
harm the organization. They include abuse of others (e.g., insults and nasty com-
ments), threats (threatening harm), work avoidance (e.g., tardiness), work sabotage
(doing work incorrectly), and overt acts (theft). CWBs are not minor concerns. One
recent study found that units of a fast-food restaurant chain with higher CWBs had a
significantly worse performance, whereas organizational citizenship had a relatively
minor benefit. 56
Joining and Staying with the Organization
Task performance, organizational citizenship, and the lack of counterproductive work
behaviors are obviously important, but if qualified people don’t join and stay with the
organization, none of these performance-related behaviors will occur. Attracting
and retaining talented people is particularly important as worries about skill short-
ages heat up. For instance, a shortage of qualified truck drivers is the main factor re-
stricting growth at Contract Freighters in Joplin, Missouri. “We have plenty of freight;
we have plenty of trucks,” says company president Herb Schmidt, but the “severe
shortage” of qualified drivers is making it impossible to satisfy the growing customer
base. Hotels in many parts of the United States are also struggling to find enough
staff to keep up with demand. “We’re woefully understaffed,” says the owner of a
St. Petersburg, Florida, resort that employs 265 people and still has 40 unfilled vacan-
cies. “It’s horrible. 57 ”
Companies survive and thrive not just by hiring people with talent or potential;
they also need to ensure that these employees stay with the company. Organizations
with high turnover suffer because of the high cost of replacing people who leave.
More important, as mentioned earlier in this chapter, much of an organization’s
intellectual capital is the knowledge carried around in employees’ heads. When
people leave, some of this vital knowledge is lost, often resulting in inefficiencies,
poorer customer service, and so forth. This threat is not trivial: Between one-third
and one-half of employees say they would change companies if offered a compa-
rable job. 58
Maintaining Work Attendance
Along with attracting and retaining employees, organizations need everyone to show
up for work at scheduled times. Situational factors—such as severe weather or car
breakdown—explain some work absences. Motivation is another factor. Employees
counterproductive
work behaviors (CWBs)
Voluntary behaviors that
have the potential to
directly or indirectly
harm the organization.
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Chapter 1 Introduction to the Field of Organizational Behavior 19
who experience job dissatisfaction or work-related stress are more likely to be absent
or late for work because taking time off is a way to temporarily withdraw from
stressful or dissatisfying conditions. Absenteeism is also higher in organizations with
generous sick leave because this benefit limits the negative financial impact of taking
time away from work. Studies have found that absenteeism is also higher in teams
with strong absence norms, meaning that team members tolerate and even expect
co-workers to take time off. 60
Google Attracts and Keeps Talent through “Cool” Campuses Google is ranked by college students in many countries as one of the
top 10 places to work. One reason why the Internet technology company is able to attract so many applicants is that its workplaces
look like every student’s dream of a college campus and dorm. Google’s headquarters (called Googleplex) in Mountain View,
California, is outfitted with lava lamps, exercise balls, casual sofas, foosball, pool tables, workout rooms, video games, slides, and
a restaurant with free gourmet meals. Google’s new EMEA engineering hub in Zurich, Switzerland, also boasts a fun, campuslike
environment. These photos show a few areas of Google’s offices in Zurich, including private temporary workspaces in beehives and
ski gondolas. Google’s offices are so comfortable that executives occasionally remind staff of building code regulations against making
Google’s offices their permanent home.59
Learning
Objectives
After reading the next two sections, you should be able to:
7. Debate the organizational opportunities and challenges of globaliza-
tion, workforce diversity, and virtual work.
8. Discuss how employment relationships are changing, and explain
why these changes are occurring.
9. Discuss the anchors on which organizational behavior knowledge is
based.
Contemporary Challenges for Organizations
Throughout the earlier discussion on organizational effectiveness was an underlying
theme that organizations are deeply affected by the external environment. They need to
maintain a good fit with their external environment by continuously monitoring and
adjusting to changes in that environment. This external environment is continuously
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20 Part One Introduction
changing, but some changes, over the past decade and in the decade to come, are
more profound than others. These changes require that corporate leaders and all
other employees adjust to new realities. In this section, we highlight three of the ma-
jor challenges facing organizations: globalization, increasing workforce diversity, and
emerging employment relationships.
Globalization
You might not have heard of Fonterra, but chances are that you have purchased or
eaten one of its products recently. The New Zealand–based company is the world’s
largest dairy exporting business and the world’s lowest-cost dairy ingredient pro-
ducer. It operates in 140 countries, employs 20,000 people, and represents 40 per-
cent of the global dairy trade. In many countries, it forms joint partnerships, such
as those with the Dairy Farmers of America, SanCor in Argentina, and Aria in
Europe. Fonterra’s current position on the world stage is quite different from the situ-
ation a decade ago, when three New Zealand dairy companies joined forces. They
realized that globalization was shaking up the industry and that forming a global en-
terprise was essential to their survival. The merged company was so globally focused
from the outset that it was temporarily called GlobalCo until the name Fonterra was
chosen. Fonterra’s adjustment to a global operation was not easy. Executives were
replaced as the company needed to adopt a different mindset. “A lot of people in the
[pre-merger companies] were very New Zealand–centric and culturally did not un-
derstand the global challenges of the teams offshore and the different operating
companies,” acknowledges a Fonterra executive. 61
Fonterra is a rich example of the globalization of business over the past few decades.
Globalization refers to economic, social, and cultural connectivity with people in
other parts of the world. Fonterra and other organizations globalize when they ac-
tively participate in other countries and cultures. Although businesses have traded
goods across borders for centuries, the degree of globalization today is unprecedented
because information technology and transportation systems allow a much more in-
tense level of connectivity and interdependence across the planet. 62
Globalization offers numerous benefits to organizations in terms of larger markets,
lower costs, and greater access to knowledge and innovation. At the same time, there is
considerable debate about whether globalization benefits developing nations and
whether it is primarily responsible for increasing work intensification, as well as reduc-
ing job security and work–life balance in developed countries. 63 Globalization is now
well entrenched, so the real issue in organizational behavior is how corporate leaders
and employees alike can lead and work effectively in this emerging reality. 64 OB re-
searchers are turning their attention to this topic. In Project GLOBE, for example,
dozens of experts are studying leadership and organizational practices worldwide. 65
Increasing Workforce Diversity
Walk into the offices of Verizon Communications and you can quickly see that the
communications service giant reflects the communities it serves. Minorities make up
35 percent of Verizon’s 230,000 employees and 29 percent of management positions.
Women represent 42 percent of its workforce and 38 percent of management posi-
tions. Verizon’s inclusive culture has won awards from numerous organizations and
publications representing Hispanics, African-Americans, gays and lesbians, people
with disabilities, and other groups. “A commitment to diversity is as much about
good business as it is about doing the right thing,” says Magda Yrizarry, vice president
globalization
Economic, social, and
cultural connectivity
with people in other
parts of the world.
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Chapter 1 Introduction to the Field of Organizational Behavior 21
of workplace culture, diversity and compliance for Verizon. “As a company, we serve
some of the most diverse markets; so from our leadership to our frontline employees,
we understand and value diversity.” 66
Verizon Communications is a model employer and a reflection of the increasing
diversity of people living in the United States and in many other countries. The de-
scription of Verizon’s diversity refers to surface-level diversity —the observable de-
mographic and other overt differences in people, such as their race, ethnicity, gender,
age, and physical capabilities. Surface-level diversity has changed considerably in the
United States over the past few decades. People with nonwhite or Hispanic origin
represent one-third of the American population, and the percentage is projected to
increase substantially over the next few decades. Within the next 50 years, one in
four Americans will be Hispanic, 14 percent will be African American, and 8 percent
will be of Asian descent. By 2060, people with European non-Hispanic ethnicity will
be a minority. 67 Many other countries are also experiencing increasing levels of racial
and ethnic diversification.
Diversity also includes differences in the psychological characteristics of employ-
ees, including personalities, beliefs, values, and attitudes. 68 We can’t directly see this
deep-level diversity , but it is evident in a person’s decisions, statements, and actions.
One illustration of deep-level diversity is the different attitudes and expectations held
by employees across generational cohorts. 69 Baby boomers —people born between 1946
and 1964—seem to expect and desire more job security and are more intent on im-
proving their economic and social status. In contrast, Generation-X employees—those
born between 1965 and 1979—expect less job security and are motivated more by
workplace flexibility, the opportunity to learn (particularly new technology), and egal-
itarian and “fun” organizations. Meanwhile, some observers suggest that Generation-Y
employees (those born after 1979) are noticeably self- confident, optimistic, multitask-
ing, and more independent than even Gen-X co-workers. These statements certainly
don’t apply to everyone in each cohort, but they do reflect the dynamics of deep-level
diversity and shifting values and expectations across generations.
Consequences of Diversity Diversity presents both opportunities and challenges
in organizations. 70 In some circumstances and to some degree, diversity can become
a competitive advantage by improving decision making and team performance on
complex tasks. Studies suggest that teams with some forms of diversity (particularly
occupational diversity) make better decisions on complex problems than do teams
whose members have similar backgrounds. A few studies also report that companies
that win diversity awards have higher financial returns, at least in the short run. 71
This is consistent with anecdotal evidence from many corporate leaders, namely,
that having a diverse workforce improves customer service and creativity. For instance,
PepsiCo estimates that one-eighth of its revenue growth is directly attributable to new
products inspired by diversity efforts. 72
Based on this evidence, the popular refrain is that workforce diversity is a sound
business proposition. Unfortunately, it’s not that simple. There is growing evidence
that most forms of diversity offer both advantages and disadvantages. 73 Teams with
diverse employees usually take longer to perform effectively. Diversity brings numer-
ous communication problems as well as “faultlines” in informal group dynamics.
Diversity is also a source of conflict, which can lead to lack of information sharing
and, in extreme cases, morale problems and higher turnover.
Whether or not workforce diversity is a business advantage, companies need to
make it a priority because surface-level diversity is a moral and legal imperative.
surface-level diversity
The observable demo-
graphic or physiological
differences in people,
such as their race, eth-
nicity, gender, age, and
physical disabilities.
deep-level diversity
Differences in the
psychological charac-
teristics of employees,
including personalities,
beliefs, values, and
attitudes.
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22 Part One Introduction
Ethically, companies that offer an inclusive workplace are, in essence, making fair
and just decisions regarding employment, promotions, rewards, and so on. Fairness
is a well-established influence on employee loyalty and satisfaction. “Diversity is
about fairness; we use the term inclusive meritocracy,” says Ann M. Limberg, presi-
dent of Bank of America New Jersey. “What it does for our workforce is build trust
and assures that individual differences are valued.” 74 Our main point here is that
workforce diversity is the new reality and that organizations need to adjust to this re-
ality both to survive and to experience its potential benefits for organizational success.
Emerging Employment Relationships
Combine globalization with emerging workforce diversity, and add in new informa-
tion technology. The resulting concoction has created incredible changes in employ-
ment relationships. A few decades ago, most (although not all) employees in the
United States and similar cultures would finish their workday after eight or nine hours
and could separate their personal time from the workday. There were no BlackBerrys
and no Internet connections to keep staff tethered to work on a 24/7 schedule. Even
business travel was more of an exception due to its high cost. Most competitors were
located in the same country, so they had similar work practices and labor costs. To-
day, work hours are longer (although arguably less than they were 100 years ago),
employees experience more work-related stress, and there is growing evidence that
family and personal relations are suffering. Little wonder that one of the emerging
issues in this new century is for more work–life balance —minimizing conflict be-
tween work and nonwork demands. 75
Another employment relationship trend is virtual work , in which employees use
information technology to perform their jobs away from the traditional physical
workplace. The most common form of virtual work, called telecommuting or telework-
ing, involves working at home rather than commuting to the office. In another form
of virtual work, employees are connected to the office while on the road or at clients’
offices. For instance, nearly 50 percent of employees at Sun Microsystems complete
some of their work from home, cafés, drop-in centers, or clients’ offices. More than
two-thirds of the employees at Agilent Technologies engage in virtual work some
days or all the time. 76
virtual work
Work performed away
from the traditional
physical workplace by
means of information
technology.
work–life balance
The degree to which a
person minimizes con-
flict between work and
nonwork demands.
Welcome to My Office! One of Ray Ackley’s first decisions each
workday is where to put his office. The chief creative officer for
Tipping Point Services, a metro Detroit–based marketing and
communications firm, sometimes chooses a popular bakery or café.
Other times, he sets up shop in a nearby library (Ackley is shown
here at Southfield Public Library). As long as the location has a good
Wi-Fi connection and comfortable surroundings, Ackley can get on
with his work, which includes communicating with co-workers
located elsewhere in Detroit as well as in Delhi, India, and Shanghai,
China. Tipping Point Services doesn’t even have an official office,
although it might eventually establish one. For now, Ackley and
his co-workers prefer the virtual work arrangement. “We made a
commitment to be a virtual office because we can,” says Ackley. “I can
work anywhere, which means I travel less and I can spend more
time at home.”77
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Chapter 1 Introduction to the Field of Organizational Behavior 23
Some research suggests that virtual work, particularly telecommuting, potentially
reduces employee stress by offering better work–life balance and dramatically reduc-
ing time lost through commuting to the office. Nortel Networks reports that 71 per-
cent of its U.K. staff feels more empowered through virtual work arrangements.
AT&T estimates that its telecommuters reduce pollution and are about 10 percent
more productive than before they started working from home. IBM’s virtual work
program annually saves the company $400 million a year globally, mostly in real
estate costs. 78 Against these potential benefits, virtual workers face a number of real
or potential challenges. Family relations may suffer rather than improve if employees
lack sufficient space and resources for a home office. Some virtual workers complain
of social isolation and reduced promotion opportunities. Virtual work is clearly better
suited to people who are self-motivated and organized, can work effectively with
contemporary information technologies, and have sufficient fulfillment of social
needs elsewhere in their life. It also works better in organizations that evaluate em-
ployees by their performance outcomes rather than “face time.” 79
Anchors of Organizational Behavior Knowledge
Globalization, increasing workforce diversity, and emerging employment relation-
ships are just a few of the trends that challenge organizations and make OB knowl-
edge more relevant than ever before. To understand these and other topics, the field
of organizational behavior relies on a set of basic beliefs or knowledge structures (see
Exhibit 1.3 ). These conceptual anchors represent the principles on which OB knowl-
edge is developed and refined.
The Multidisciplinary Anchor
Organizational behavior is anchored around the idea that the field should develop
from knowledge in other disciplines, not just from its own isolated research base. For
instance, psychological research has aided our understanding of individual and inter-
personal behavior. Sociologists have contributed to our knowledge of team dynamics,
organizational socialization, organizational power, and other aspects of the social sys-
tem. OB knowledge has also benefited from knowledge in emerging fields such as
communications, marketing, and information systems. Some OB experts have re-
cently argued that the field suffers from a “trade deficit”—importing far more knowledge
Multidisciplinary
anchor
OB should import knowledge from many
disciplines.
Systematic
research anchor
OB should study organizations using
systematic research methods.
Contingency
anchor
OB theory should recognize that the effects
of actions often vary with the situation.
Multiple levels of
analysis anchor
OB knowledge should include three levels of
analysis: individual, team, and organization.
Exhibit 1.3
Anchors of
Organizational
Behavior Knowledge
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24 Part One Introduction
from other disciplines than is exported to other disciplines. Although this may be a
concern, organizational behavior has thrived through its diversity of knowledge from
other fields of study. 80
The Systematic Research Anchor
A critical feature of OB knowledge is that it should be based on systematic research,
which typically involves forming research questions, systematically collecting data,
and testing hypotheses against those data. Appendix A at the end of this book details
some of the features of the systematic research process, including hypotheses,
sampling, research design, and qualitative methods research. When research is
founded on theory and conducted systematically, we can be more confident that the
results are meaningful and useful for practice. This is known as evidence-based
management —making decisions and taking actions based on research evidence.
Evidence-based management makes sense, yet OB experts are often amazed at
how frequently corporate leaders embrace fads, consulting models and their own pet
beliefs without bothering to find out if they actually work! 81 There are many reasons
that people have difficulty applying evidence-based management. One explanation is
that corporate decision makers are bombarded with so many ideas from newspapers,
books, consultant reports, and other sources that they have difficulty figuring out
which ones are based on good evidence. Another reason why people ignore evidence
and embrace fads is that good OB research is necessarily generic; it is rarely described
in the context of a specific problem in a specific organization. Managers therefore
have the difficult task of figuring out which theories are relevant to their unique situ-
ation. A third reason is that many consultants and popular book writers are rewarded
for marketing their concepts and theories, not for testing to see if they actually work.
Indeed, some management concepts have become popular (and are even found in
some OB textbooks!) because of heavy marketing, not because of any evidence that
they are valid. Finally, as you will learn in Chapter 3, people form perceptions and
beliefs quickly and tend to ignore evidence that their beliefs are inaccurate.
The Contingency Anchor
People and their work environments are complex, and the field of organizational
behavior recognizes this by stating that a particular action may have different conse-
quences in different situations. In other words, no single solution is best in all circum-
stances. 82 Of course, it would be so much simpler if we could rely on “one best way”
theories, in which a particular concept or practice has the same results in every
situation. OB experts do search for simpler theories, but they also remain skeptical
about “surefire” recommendations; an exception is somewhere around the corner. Thus,
when faced with a particular problem or opportunity, we need to understand and
diagnose the situation and select the strategy most appropriate under those conditions . 83
The Multiple Levels of Analysis Anchor
This textbook divides organizational behavior topics into three levels of analysis: in-
dividual, team, and organization. The individual level includes the characteristics and
behaviors of employees as well as the thought processes that are attributed to them,
such as motivation, perceptions, personalities, attitudes, and values. The team level of
analysis looks at the way people interact. This includes team dynamics, communication,
power, organizational politics, conflict, and leadership. At the organizational level, we
evidence-based
management
The practice of making
decisions and taking
actions based on
research evidence.
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focus on how people structure their working relationships and on how organizations
interact with their environments.
Although an OB topic is typically pegged into one level of analysis, it usually re-
lates to multiple levels. 84 For instance, communication is located in this book as a
team (interpersonal) process, but we also recognize that it includes individual and
organizational processes. Therefore, you should try to think about each OB topic at
the individual, team, and organizational levels, not just at one of these levels.
Organizational behavior is the study of what people
think, feel, and do in and around organizations. Organi-
zations are groups of people who work interdependently
toward some purpose. Although OB doesn’t have a spe-
cific career path, it offers knowledge and skills that are
vitally important to anyone who works in organizations.
OB knowledge also has a significant effect on the success
of organizations. This book takes the view that OB is for
everyone, not just managers.
Organizational effectiveness is a multidimensional
concept represented by four perspectives: open systems,
organizational learning, high-performance work prac-
tices, and stakeholder. The open-systems perspective says
that organizations need to adapt to their external environ-
ment and configure their internal subsystems to maxi-
mize efficiency and responsiveness. For the most part, the
other perspectives of organizational effectiveness are de-
tailed extensions of the open-systems model. The organi-
zational learning perspective states that organizational
effectiveness depends on the organization’s capacity to
acquire, share, use, and store valuable knowledge. Intel-
lectual capital is knowledge that resides in an organiza-
tion, including its human capital, structural capital, and
relationship capital. Effective organizations also “un-
learn,” meaning that they remove knowledge that no
longer adds value.
The high-performance work practices (HPWP) perspec-
tive states that effective organizations leverage the human
capital potential of their employees. Specific HPWPs have
Chapter Summary
been identified, and experts in this field suggest that they
need to be bundled together for maximum benefit. The
stakeholder perspective states that effective organizations
take into account how their actions affect others, and this
requires them to understand, manage, and satisfy the inter-
ests of their stakeholders. This perspective incorporates
values, ethics, and corporate social responsibility into the
organizational effectiveness equation.
The five main types of workplace behavior are task
performance, organizational citizenship, counterproduc-
tive work behaviors, joining and staying with the orga-
nization, and work attendance. These represent the
individual-level dependent variables found in most OB
research.
Three environmental shifts that are challenging orga-
nizations include globalization, increasing workforce
diversity, and emerging employment relationships.
Globalization refers to economic, social, and cultural con-
nectivity with people in other parts of the world. Work-
force diversity includes both surface-level and deep-level
diversity. Two emerging employment relationship chan-
ges are demands for work–life balance and virtual work.
Several conceptual anchors represent the principles on
which OB knowledge is developed and refined. These
anchors include beliefs that OB knowledge should be
multidisciplinary and based on systematic research, that
organizational events usually have contingencies, and
that organizational behavior can be viewed from three
levels of analysis (individual, team, and organization).
Chapter 1 Introduction to the Field of Organizational Behavior 25
absorptive capacity, p. 11
corporate social responsibility
(CSR), p. 16
counterproductive work behaviors
(CWBs), p. 18
deep-level diversity, p. 21
Key Terms
ethics, p. 15
evidence-based management, p. 24
globalization, p. 20
high-performance work practices
(HPWPs), p. 12
human capital, p. 12
intellectual capital, p. 12
lean management, p. 9
open systems, p. 7
organizational behavior (OB), p. 4
organizational citizenship behaviors
(OCBs), p. 17
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Case Study 1.1 JERSEY DAIRIES, INC.
Jersey Dairies, Inc. faced increasing competition
that threatened its dominant market share in the
Pacific Northwest. Senior management at the 300-
employee dairy food processing company decided
that the best way to maintain or increase market
share was to take the plunge into a quality manage-
ment (QM) program. Jersey hired consultants to
educate management and employees about the
QM process, and sent several managers to QM
seminars. A steering team of managers and a few
employees visited other QM companies through-
out North America.
To strengthen the company’s QM focus, Jersey
president Tina Stavros created a new position called
vice-president of quality, and hired James Alder into
that position. Alder, who previously worked as a
QM consultant at a major consulting firm, was en-
thusiastic about implementing a complete QM
program. One of Alder’s first accomplishments was
convincing management to give every employee in
4. A common refrain among executives is “People are
our most important asset.” Relate this statement to
any two of the four perspectives of organizational
effectiveness presented in this chapter. Does this
statement apply better to some perspectives than to
others? Why or why not?
5. Corporate social responsibility is one of the hottest
issues in corporate boardrooms these days, partly
because it is becoming increasingly important to
employees and other stakeholders. In your opinion,
why have stakeholders given CSR more attention
recently? Does abiding by CSR standards potentially
cause companies to have conflicting objectives with
some stakeholders in some situations?
6. Look through the list of chapters in this textbook,
and discuss how globalization could influence each
organizational behavior topic.
7. “Organizational theories should follow the contin-
gency approach.” Comment on the accuracy of this
statement.
8. What does evidence-based management mean? Describe
situations you have heard about in which companies
have practiced evidence-based management, as well
as situations in which companies have relied on fads
that lacked sufficient evidence of their worth.
1. A friend suggests that organizational behavior
courses are useful only to people who will enter man-
agement careers. Discuss the accuracy of your
friend’s statement.
2. A number of years ago, employees in a city water dis-
tribution department were put into teams and encour-
aged to find ways to improve efficiency. The teams
boldly crossed departmental boundaries and areas of
management discretion in search of problems. Em-
ployees working in other parts of the city began to
complain about these intrusions. Moreover, when
some team ideas were implemented, the city managers
discovered that a dollar saved in the water distribution
unit may have cost the organization two dollars in
higher costs elsewhere. Use the open-systems perspec-
tive to explain what happened here.
3. After hearing a seminar on organizational learning, a
mining company executive argues that this perspective
ignores the fact that mining companies cannot rely on
knowledge alone to stay in business. They also need
physical capital (such as digging and ore-processing
equipment) and land (where the minerals are located).
In fact, these two may be more important than what
employees carry around in their heads. Evaluate the
mining executive’s comments.
Critical Thinking Questions
organizational effectiveness, p. 7
organizational efficiency, p. 9
organizational learning, p. 11
organizational memory, p. 12
organizations, p. 4
stakeholders, p. 13
surface-level diversity, p. 21
values, p. 14
virtual work, p. 22
work–life balance, p. 22
26
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27
the organization several days of training in quality
measurement (e.g., Pareto diagrams), structured
problem solving, and related QM practices. Jersey’s
largely unskilled workforce had difficulty learning
this material, so the training took longer than ex-
pected and another round was required one year
later.
Alder worked with production managers to form
continuous improvement (CI) teams—groups of em-
ployees who looked for ways to cut costs, time, and
space throughout the work process. Although Alder
was enthusiastic about CI teams, most supervisors
and employees were reluctant to get involved.
Supervisors complained that the CI teams were
“asking too many questions” about activities in their
department. Less than one-quarter of the produc-
tion areas formed CI teams because employees
thought QM was a fancy way for management to
speed up the work. This view was reinforced by
some of management’s subsequent actions, such as
setting higher production targets and requiring
employees to complete the tasks of those who were
absent from work.
To gain more support for QM, Jersey president
Tina Stavros spoke regularly to employees and su-
pervisors about how QM was their answer to beat-
ing the competition and saving jobs. Although these
talks took her away from other duties, she wanted
every employee to know that their primary objec-
tive was to improve customer service and produc-
tion efficiency in the company. To encourage more
involvement in the CI teams, Stavros and Alder
warned employees that they must support the QM
program to save their jobs. To further emphasize this
message, the company placed large signs throughout
the company’s production facilities that said, “Our
Jobs Depend on Satisfied Customers” and “Quality
Management: Our Competitive Advantage.”
Alder and Stavros agreed that Jersey’s suppliers
must have a strong commitment toward the QM
philosophy, so Jersey’s purchasing manager was told
to get suppliers “on board” or find alternative
sources. Unfortunately, the purchasing manager pre-
ferred a more collegial and passive involvement with
suppliers, so he was replaced a few months later.
The new purchasing manager informed suppliers
that they should begin a QM program immediately
because Jersey would negotiate for lower prices in
the next contracts and would evaluate their bids
partly based on their QM programs.
Twenty months after Jersey Dairies began its
QM journey, Tina Stavros accepted a lucrative job
offer from a large food products company in the
Midwest. Jersey Dairies promoted its vice-president
of finance, Thomas Cheun, to the president’s job.
The board of directors was concerned about Jersey’s
falling profits over the previous couple of years
and wanted Cheun to strengthen the bottom line.
Although some CI teams did find cost savings,
these were mostly offset by higher expenses. The
company had nearly tripled its training budget and
had significantly higher paid-time-off costs as em-
ployees took these courses. A considerable sum
was spent on customer surveys and focus groups.
Employee turnover was higher, mainly due to dissat-
isfaction with the QM program. Just before Stavros
left the company, she received word that several
employees had contacted the Commercial Food
Workers Union about organizing Jersey’s nonunion
production workforce.
A group of suppliers asked for a confidential
meeting in which they told Cheun to reconsider the
QM demands on them. They complained that their
long-term relationships with Jersey were being dam-
aged and that other dairies were being more realistic
about price, quality, and delivery requirements. Two
major suppliers bluntly stated that they might decide
to end their contracts with Jersey rather than agree
to Jersey’s demands.
Almost two years after Jersey Dairies began QM,
Thomas Cheun announced that James Alder was leav-
ing Jersey Dairies, that the position of vice-president
of quality would no longer exist, and that the com-
pany would end several QM initiatives begun over the
previous two years. Instead, Jersey Dairies, Inc. would
use better marketing strategies and introduce new
technologies to improve its competitive position in the
marketplace.
Discussion Questions
1. What perspective of organizational effectiveness
did Tina Stavros and James Alder attempt to ap-
ply in this case? Describe how specific elements
of that perspective related to their interventions.
2. Explain what went wrong in this case, using one
or more of the other perspectives of organiza-
tional effectiveness.
Source: Steven L. McShane, © 1995.
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Case Study 1.2 WORKING FROM HOME—IT’S IN THE DETAILS
Roads leading to Microsoft’s
headquarters in Redmond,
Washington, simply weren’t de-
signed to handle the 35,000 commuters who report
for work there each day. The daily gridlock has be-
come so acute that it nearly caused Washington State’s
governor to miss his own speech at the software
maker on a recent morning. Microsoft has figured
out how to tackle the commuter crisis: it has intro-
duced a program to get more staff telecommuting,
either working from home or other off-site locales.
About 14% of the U.S. workforce gets its job done
at a home office more than two days per week. That’s
up from 11% in 2004, and will be around 17% in an-
other year or two. But the growth of telecommuting
has also awakened many companies to the reality that
not everyone is ready for virtual work. Companies also
need to make adjustments to the way they operate in
order for telecommuting to have lasting benefits.
This BusinessWeek case study discusses the issues
that companies are facing with the rising tide of
telecommuting, as well as the strategies these orga-
nizations are applying to overcome these obstacles.
Read the full text of this BusinessWeek article at
www.mhhe.com/mcshane5e , and prepare for the
discussion questions below.
Discussion Questions
1. Identify and discuss the main problems or con-
cerns mentioned in this case study regarding
telecommuting. In your opinion, do most of
these problems originate with the company or
the employee?
2. Describe the characteristics of people who adjust
more easily to telecommuting. How can compa-
nies identify these employees or develop others
to be better prepared for telecommuting?
Source: R. King, “Working from Home: It’s in the Details,”
BusinessWeek, 12 February 2007, p. 9.
Team Exercise 1.3 HUMAN CHECKERS
PURPOSE This exercise is designed to help stu-
dents understand the importance and application of
organizational behavior concepts.
MATERIALS None, but the instructor has more in-
formation about the team’s task.
INSTRUCTIONS
1. Form teams with eight students. If possible, each
team should have a private location where team
members can plan and practice the required
task without being observed or heard by other
teams.
2. All teams receive special instructions in class
about their assigned task. All teams have the
same task and have the same amount of time to
plan and practice the task. At the end of this
planning and practice, each team will be timed
while completing the task in class. The team that
completes the task in the least time wins.
3. No special materials are required or allowed
(see rules below) for this exercise. Although the
28
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http://www.mhhe.com/mcshane5e
task is not described here, students should learn
the follow ing rules for planning and implement-
ing the task:
a. You cannot use any written form of commu-
nication or any props to assist in the planning
or implementation of this task.
b. You may speak to other students on your team
at any time during the planning and imple-
mentation of this task.
c. When performing the task, you can move
only forward, not backward. (You are not al-
lowed to turn around.)
d. When performing the task, you can move for-
ward to the next space, but only if it is vacant. In
Exhibit 1 , the individual (dark circle) can move
directly into an empty space (light circle).
e. When performing the task, you can move for-
ward two spaces if that space is vacant. In other
words, you can move around a person who is
one space in front of you to the next space if
that space is vacant. (In Exhibit 2 , two people
occupy the dark circle, and the light circle is an
empty space. A person can move around the
person in front to the empty space.)
4. When all teams have completed their task, the
class will discuss the implications of this exercise
for organizational behavior.
DISCUSSION QUESTIONS
1. Identify organizational behavior concepts that
the team applied to complete this task.
2. What personal theories of people and work
teams were applied to complete this task?
3. What organizational behavior problems oc-
curred, and what actions were (or should have
been) taken to solve them?
Exhibit 1 Exhibit 2
Class Exercise 1.4 DIAGNOSING ORGANIZATIONAL STAKEHOLDERS
PURPOSE This exercise is designed to help you
understand how stakeholders influence organiza-
tions as part of the open-systems anchor.
MATERIALS Students need to select a company
and, prior to class, retrieve and analyze publicly
available information over the past year or two
about that company. This may include annual re-
ports, which are usually found on the Web sites of
publicly traded companies. Where possible, students
should also scan full-text newspaper and magazine
databases for articles published over the previous
year about the company.
INSTRUCTIONS The instructor may have stu-
dents work alone or in groups for this activity. Stu-
dents will select a company and investigate the
relevance and influence of various stakeholder
groups on the organization. Stakeholders can be
identified from annual reports, newspaper articles,
Web site statements, and other available sources.
Stakeholders should be rank-ordered in terms of
their perceived importance to the organization.
Students should be prepared to present or discuss
their rank ordering of the organization’s stakehold-
ers, including evidence for this ordering.
DISCUSSION QUESTIONS
1. What are the main reasons why certain stake-
holders are more important than others for this
organization?
2. On the basis of your knowledge of the organi-
zation’s environmental situation, is this rank
order of stakeholders in the organization’s best
interest, or should specific other stakeholders
be given higher priority?
3. What societal groups, if any, are not mentioned
as stakeholders by the organization? Does this
lack of reference to these unmentioned groups
make sense?
29
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30
Self-Assessment 1.5
IT ALL MAKES SENSE?
PURPOSE This exercise is designed to help you
comprehend how organizational behavior knowledge
can help you to understand life in organizations.
INSTRUCTIONS ( Note: This activity may be done
as a self-assessment or as a team activity.) Read each
of the statements below and circle whether each state-
ment is true or false, in your opinion. The class will
consider the answers to each question and discuss the
implications for studying organizational behavior.
Due to the nature of this activity, the instructor
will provide the answers to these questions. There is
no scoring key in Appendix B.
1. True False A happy worker is a produc-
tive worker.
2. True False Decision makers tend to con-
tinue supporting a course of
action even though informa-
tion suggests that the decision
is ineffective.
3. True False Organizations are more effec-
tive when they prevent conflict
among employees.
4. True False It is better to negotiate alone
than as a team.
5. True False Companies are more success-
ful when they have strong
corporate cultures.
6. True False Employees perform better
without stress.
7. True False The best way to change peo-
ple and organizations is by
pinpointing the source of
their current problems.
8. True False Female leaders involve em-
ployees in decisions to a
greater degree than do male
leaders.
9. True False The best decisions are made
without emotion.
10. True False If employees feel they are paid
unfairly, nothing other than
changing their pay will reduce
their feelings of injustice.
Self-Assessment 1.6
IS TELECOMMUTING FOR YOU?
Some employees adapt better than others to tele-
commuting (also called teleworking ) and other forms
of virtual work. This self-assessment measures per-
sonal characteristics that seem to relate to telecom-
muting, and therefore it provides a rough indication
of how well you would adapt to telework. The in-
strument asks you to indicate how much you agree
or disagree with each of the statements pro-
vided. You need to be honest with yourself to
get a reasonable estimate of your telework
disposition. Please keep in mind that this scale con-
siders only your personal characteristics. Other fac-
tors, such as organizational, family, and technological
systems support, must also be taken into account.
After reading this chapter, if you feel that you need additional tips on managing your anxiety, see
www.mhhe.com/mcshane5e for more in-depth information and interactivities that correspond to
this chapter.
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http://www.mhhe.com/mcshane5e
Part Two
Individual Behavior and Processes
Chapter 2 Individual Behavior, Personality, and Values
Chapter 3 Perception and Learning in Organizations
Chapter 4 Workplace Emotions, Attitudes, and Stress
Chapter 5 Foundations of Employee Motivation
Chapter 6 Applied Performance Practices
Chapter 7 Decision Making and Creativity
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Yasmeen Youssef’s self-confidence was a bit shaky when she and her husband moved
from Egypt to Canada a few years ago. “I was worried no one would take a chance on
me, would believe in me,” she recalls. But any self-doubts slowly disappeared after
taking an entry-level job with Fairmont Hotels & Resorts corporate offices in Toronto.
“Everything changed when I started working at Fairmont,” says Youssef, who is now on
Fairmont’s human resource team and recently trained new staff in Cairo. “I can’t believe
the amount of value, care, respect everyone has extended to me.”
As North America’s largest luxury hotel operator,
Fairmont discovered long ago that one of the secret
ingredients for employee performance and well-being
is supporting the individual’s self-concept. “People want
to feel valued and they stay where they feel valued,”
says Carolyn Clark, Fairmont’s senior vice president of
human resources. Clark also points out that Fairmont
is able to nurture this talent by selecting the best,
which means hiring people with the right values and
personality for superb customer service. “We believed
that we could train the technical skills—that’s the easy
part,” Clark explained a few years ago. “What we can’t
train is the service orientation. We just can’t put people
in the training program and say they are going to come
out smiling if that is not inherent in them.”
Along with hiring people with the right values and
personality and nurturing their self-concept, Fairmont
is developing staff to work effectively in a multicultural
world. Sean Billing is a case in point. The economics
graduate had been working as Fairmont’s director of
rooms in Chicago when he casually asked his boss
whether the hotel chain could use his skills and
knowledge elsewhere. Soon after, Billing was offered
a position in Kenya, bringing Fairmont’s new properties
in the African country up to world-class standards
through training and technology without losing the
distinctive Kenyan character. Billing jumped at the
opportunity, but he also recognizes the challenge of inculcating Fairmont’s deep values
of customer service, environmentalism, and empowerment into another culture. “It’s a
little bit of hotel culture shock . . . things are quite different here,” he says. 1
Fairmont Hotels has excelled as North America’s largest
luxury hotel operator by hiring people such as Yasmeen
Youssef (shown here) with the right values and personality
and then nurturing their self-concept and cross-cultural
competencies.
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Individual Behavior,
Personality, and Values
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Describe the four factors that directly
influence voluntary individual behavior and
performance.
2. Define personality and discuss what
determines an individual’s personality
characteristics.
3. Summarize the “Big Five” personality traits
in the five-factor model and discuss their
influence on organizational behavior.
4. Describe self-concept in terms of self-
enhancement, self-verification, and
self-evaluation.
5. Explain how social identity theory relates to
a person’s self-concept.
6. Distinguish personal, shared, espoused,
and enacted values and explain why value
congruence is important.
7. Summarize five values commonly studied
across cultures.
8. Explain how moral intensity, ethical
sensitivity, and the situation influence
ethical behavior.
2
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34 Part Two Individual Behavior and Processes
Learning
Objectives
What makes Fairmont Hotels & Resorts a successful company? There is no single
explanation, but this opening vignette reveals that North America’s largest luxury
hotel company applies many of the theories and practices discussed in this chapter. It
hires people with the right personality traits and values, trains them well, and nur-
tures their self-concept. As a global enterprise, Fairmont also ensures that its staff
members develop cross-cultural competencies.
This chapter concentrates our attention on the role of the individual in organiza-
tions. We begin by presenting the MARS model, which outlines the four direct driv-
ers of individual behavior and results. Next, we introduce the most stable aspect of
individuals—personality—including personality development, personality traits, and
how personality relates to organizational behavior. We then look at the individual’s
self-concept, including self-enhancement, self-verification, self-evaluation, and social
identity. The latter part of this chapter examines another relatively stable characteris-
tic of individuals: their personal values. We look at types of values, issues of value
congruence in organizations, cross-cultural values, and ethical values and practices.
After reading this section, you should be able to:
1. Describe the four factors that directly influence voluntary individual
behavior and performance.
MARS Model of Individual Behavior and Performance
For most of the past century, experts in psychology, sociology, and, more recently,
organizational behavior have investigated the direct predictors of individual behavior
and performance. 2 One of the earliest formulas was performance � person � situation,
where person includes individual characteristics and situation represents external
influences on the individual’s behavior. Another frequently mentioned formula is
performance � ability � motivation. Sometimes known as the “skill-and-will” model,
this formula elaborates two specific characteristics within the person that influence
individual performance. Ability, motivation, and situation are by far the most com-
monly mentioned direct predictors of individual behavior and performance, but in
the 1960s researchers identified a fourth key factor: role perceptions (the individual’s
expected role obligations). 3
Exhibit 2.1 illustrates these four variables—motivation, ability, role perceptions,
and situational factors—which are represented by the acronym MARS. 4 All four
factors are critical influences on an individual’s voluntary behavior and perfor-
mance; if any one of them is low in a given situation, the employee would perform
the task poorly. For example, motivated salespeople with clear role perceptions and
sufficient resources (situational factors) will not perform their jobs as well if they lack
sales skills and related knowledge (ability). Let’s look at each of these four factors in
more detail.
Employee Motivation
Motivation represents the forces within a person that affect his or her direction, in-
tensity, and persistence of voluntary behavior. 5 Direction refers to the path along
which people engage their effort. People have choices about where they put their
effort; they have a sense of what they are trying to achieve and at what level of qual-
ity, quantity, and so forth. In other words, motivation is goal-directed, not random.
motivation
The forces within a
person that affect his
or her direction, inten-
sity, and persistence of
voluntary behavior.
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Chapter 2 Individual Behavior, Personality, and Values 35
People are motivated to arrive at work on time, finish a project a few hours early, or
aim for many other targets. The second element of motivation, called intensity, is the
amount of effort allocated to the goal. Intensity is all about how much people push
themselves to complete a task. For example, two employees might be motivated to
finish their project a few hours early (direction), but only one of them puts forth
enough effort (intensity) to achieve this goal.
Finally, motivation involves varying levels of persistence, that is, continuing the ef-
fort for a certain amount of time. Employees sustain their effort until they reach their
goal or give up beforehand. Remember that motivation exists within individuals; it is
not their actual behavior. Thus, direction, intensity, and persistence are cognitive
(thoughts) and emotional conditions that directly cause us to move.
Ability
Employee abilities also make a difference in behavior and task performance. Ability
includes both the natural aptitudes and the learned capabilities required to success-
fully complete a task. Aptitudes are the natural talents that help employees learn spe-
cific tasks more quickly and perform them better. There are many physical and
mental aptitudes, and our ability to acquire skills is affected by these aptitudes. For
example, finger dexterity is an aptitude by which individuals learn more quickly and
potentially achieve higher performance at picking up and handling small objects with
their fingers. Employees with high finger dexterity are not necessarily better than
others at first; rather, their learning tends to be faster and performance potential
tends to be higher. Learned capabilities are the skills and knowledge that you currently
possess. These capabilities include the physical and mental skills and knowledge you
have acquired. Learned capabilities tend to wane over time when not in use.
Values
Individual
characteristics MARS model
Personality
Perceptions
Emotions and
attitudes
Stress
Motivation
Ability
Role
perceptions
Situational
factors
Behavior and
results
Exhibit 2.1 MARS Model of Individual Behavior and Results
ability
The natural aptitudes
and learned capabilities
required to successfully
complete a task.
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36 Part Two Individual Behavior and Processes
Aptitudes and learned capabilities are closely related to competencies, which has
become a frequently used term in business. Competencies are characteristics of a
person that result in superior performance. 6 Many experts describe these characteris-
tics as personal traits (i.e., knowledge, skills, aptitudes, personality, self-concept, val-
ues). Others suggest that competencies represent actions produced by a person’s
traits, such as serving customers, coping with heavy workloads, and providing cre-
ative ideas. With either definition, the challenge is to match a person’s competencies
with the job’s task requirements. A good person-job match not only produces higher
performance; it also tends to increase the employee’s well-being.
Person-Job Matching Strategies One way to match a person’s competencies
with the job’s task requirements is to select applicants who already demonstrate the
required competencies. For example, companies ask applicants to perform work
samples, provide references for checking their past performance, and complete
various selection tests. A second strategy is to provide training so that employees
develop required skills and knowledge. Research indicates that training has a strong
influence on individual performance and organizational effectiveness. 7 The third
person-job matching strategy is to redesign the job so that employees are given
tasks only within their current learned capabilities. For example, a complex task
might be simplified—some aspects of the work are transferred to others—so that a
new employee performs only tasks that he or she is currently able to perform. As
the employee becomes more competent at these tasks, other tasks are added back
into the job.
Role Perceptions
Motivation and ability are important influences on individual behavior and perfor-
mance, but employees also require accurate role perceptions to perform their jobs
well. Role perceptions are the extent to which people understand the job duties (roles)
assigned to them or expected of them. These perceptions are critical because they
guide the employee’s direction of effort and improve coordination with co-workers,
suppliers, and other stakeholders. Unfortunately, many employees do not have clear
role perceptions. According to one large-scale survey, most employees understand
their organization’s business goals, but only 39 percent know what to do in their own
jobs to achieve those goals. 8
The role perceptions concept has three components. First, employees have accu-
rate role perceptions when they understand the specific tasks assigned to them, that
is, when they know the specific duties or consequences for which they are account-
able. This may seem obvious, but employees have been (unjustly) fired for failing to
perform tasks that they didn’t even know were part of their job duties. Second, peo-
ple have accurate role perceptions when they understand the priority of their various
tasks and performance expectations. This includes the quantity versus quality di-
lemma, such as how many customers to serve in an hour (quantity) versus how well
the employee should serve each customer (quality). It also refers to properly allocat-
ing time and resources to various tasks, such as how much time a manager should
spend coaching employees in a typical week. The third component of role percep-
tions is understanding the preferred behaviors or procedures for accomplishing the
assigned tasks. This refers to situations in which more than one method could be fol-
lowed to perform the work. Employees with clear role perceptions know which of
these methods is preferred by the organization.
competencies
Skills, knowledge, apti-
tudes, and other per-
sonal characteristics
that lead to superior
performance.
role perceptions
The extent to which
people understand
the job duties (roles)
assigned to or expected
of them.
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Chapter 2 Individual Behavior, Personality, and Values 37
Situational Factors
Employees’ behavior and performance also depend on how much the situation sup-
ports or interferes with their task goals. Situational factors include conditions beyond
the employee’s immediate control that constrain or facilitate behavior and perfor-
mance. 10 Some situational characteristics—such as consumer preferences and eco-
nomic conditions—originate from the external environment and, consequently, are
beyond the employee’s and organization’s control. However, other situational factors—
such as time, people, budget, and physical work facilities—are controlled by people
within the organization. Therefore, corporate leaders need to carefully arrange these
conditions so that employees can achieve their performance potential.
The four elements of the MARS model—motivation, ability, role perceptions, and
situational factors—affect all voluntary workplace behaviors and their performance
outcomes. These elements are themselves influenced by other individual differences.
Best Buy Sorts Out Role Perceptions for Black Friday It’s 5 a.m. on Black Friday, and hundreds of eager
shoppers are pouring through the doors of the Best Buy retail outlet in Columbia, Maryland, to grab up
the advertised bargains. Fortunately, Best Buy’s 225 employees in Columbia know what is expected of
them on this extremely busy day after Thanksgiving. A huge floor plan in the back office has color-coded
stickers marking where every staff member will be located; six green dots indicate where employees
will stand outside to monitor and support customers who have lined up for hours. Many Best Buy stores
held special rehearsals—complete with acting customers—during the week before Black Friday to
help employees understand their roles and hone their customer service skills. For example, this photo
shows customer assistance supervisor Aaron Sanford orchestrating a Black Friday practice run at a
Best Buy store in Denver. “If you do it right, you’re very profitable,” advises Kevin McGrath, Best Buy’s
store manager in Columbia. McGrath explains that clear role perceptions are just as important for a
retail outlet as for a winning sports team. “The [Baltimore] Ravens are successful because [the players]
know what is expected of them,” he says.9
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38 Part Two Individual Behavior and Processes
Learning
Objectives
In the remainder of this chapter, we introduce three of the most stable individual
characteristics: personality, self-concept, and values.
After reading the next two sections, you should be able to:
2. Define personality and discuss what determines an individual’s per-
sonality characteristics.
3. Summarize the “Big Five” personality traits in the five-factor model
and discuss their influence on organizational behavior.
4. Describe self-concept in terms of self-enhancement, self-verification,
and self-evaluation.
5. Explain how social identity theory relates to a person’s self-concept.
Personality in Organizations
Brian McHale carefully screens job applicants to find those who will take his com-
pany to the next level of success. “We look for people with passion about our busi-
ness, a drive to understand consumers and what motivates them, and have a pervasive
curiosity,” says the president of Empower MediaMarketing in Cincinnati. McHale
emphasizes that his 150 employees are good at selecting applicants from interviews
and résumés, but he also asks candidates to complete a personality test indicating
whether they are the right fit. “A personality profile is just one more data point, one
more window into the person you’re thinking about hiring,” McHale says. “It’s obvi-
ously not something that we depend on solely or even primarily when making a
decision. But it can help complete a picture.” 11
Personality is an important individual characteristic, which explains why Empower
MediaMarketing and many other companies are increasingly testing the personality
traits of job applicants and employees. Personality is the relatively enduring pattern
of thoughts, emotions, and behaviors that characterize a person, along with the psy-
chological processes behind those characteristics. 12 It is, in essence, the bundle of
characteristics that make us similar to or different from other people. We estimate an
individual’s personality by what he or she says and does, and we infer the person’s
internal states—including thoughts and emotions—from these observable behaviors.
A basic premise of personality theory is that people have inherent characteristics or
traits that can be identified by the consistency or stability of their behavior across
time and situations. 13 For example, you probably have some friends who are more
talkative than others. You might know some people who like to take risks and others
who are risk-averse. This consistency is an essential requirement for personality
theory because it attributes a person’s behavior to something within him or her—the
individual’s personality—rather than to purely environmental influences.
Of course, people do not act the same way in all situations; in fact, such consis-
tency would be considered abnormal because it indicates a person’s insensitivity to
social norms, reward systems, and other external conditions. 14 People vary their be-
havior to suit the situation, even if the behavior is at odds with their personality. For
example, talkative people remain relatively quiet in a library where “no talking” rules
are explicit and strictly enforced. People typically exhibit a wide range of behaviors,
yet within that variety are discernible patterns that we refer to as personality traits .
Traits are broad concepts that allow us to label and understand individual differences.
Furthermore, traits predict an individual’s behavior far into the future. For example,
personality
The relatively enduring
pattern of thoughts,
emotions, and behav-
iors that characterize a
person, along with
the psychological
processes behind those
characteristics.
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Chapter 2 Individual Behavior, Personality, and Values 39
studies report that an individual’s personality in childhood predicts various behaviors
and outcomes in adulthood, including educational attainment, employment success,
marital relationships, illegal activities, and health-risk behaviors. 15
Personality Determinants: Nature versus Nurture
What determines an individual’s personality? Most experts now agree that personal-
ity is shaped by both nature and nurture, although the relative importance of each
continues to be debated and studied. Nature refers to our genetic or hereditary origins—
the genes that we inherit from our parents. Studies of identical twins, particularly
those separated at birth, reveal that heredity has a very large effect on personality; up
to 50 percent of variation in behavior and 30 percent of temperament preferences
can be attributed to a person’s genetic characteristics. 16 In other words, genetic code
not only determines our eye color, skin tone, and physical shape but also has a sig-
nificant effect on our attitudes, decisions, and behavior.
Some similarities of identical twins raised apart are surreal. Consider Jim Springer
and Jim Lewis, twins who were separated when only four weeks old and didn’t meet
each other until age 39. In spite of being raised in different families and communities
in Ohio, the “Jim twins” held similar jobs, smoked the same type of cigarettes, drove
the same make and color of car, spent their vacations on the same Florida beach, had
the same woodworking hobby, gave their first sons almost identical names, and had
been married twice. Both their first and second wives also had the same first
names! 17
Although personality is heavily influenced by heredity, it is also affected to some
degree by nurture —the person’s socialization, life experiences, and other forms of in-
teraction with the environment. Studies have found that the stability of an individual’s
personality increases up to at least age 30 and possibly to age 50, indicating that some
personality development and change occurs when people are young. 18 The main ex-
planation of why personality becomes more stable over time is that people form
clearer and more rigid self-concepts as they get older. The executive function—the
part of the brain that manages goal-directed behavior—tries to keep our behavior
consistent with our self-concept. 19 As self-concept becomes clearer and more stable
with age, behavior and personality therefore also become more stable and consistent.
We discuss self-concept in more detail later in this chapter. The main point here is
that personality is not completely determined by heredity; life experiences, particu-
larly early in life, also shape each individual’s personality traits.
Five-Factor Model of Personality
One of the most important elements of personality theory is that people possess spe-
cific personality traits. Traits such as sociable, depressed, cautious, and talkative rep-
resent clusters of thoughts, feelings, and behaviors that allow us to identify,
differentiate, and understand people. 20 The most widely respected model of personal-
ity traits is the five-factor model (FFM). Several decades ago, personality experts
identified more than 17,000 words in Roget’s thesaurus and Webster’s dictionary that
describe an individual’s personality. These words were aggregated into 171 clusters
and then further reduced to five abstract personality dimensions. Using more sophis-
ticated techniques, recent investigations identified the same five personality dimen-
sions. Analyses of trait words in several other languages have produced strikingly
similar results, although they also lend support for the notion of six or possibly seven
dimensions of personality. Generally, though, the five-factor model is fairly robust
five-factor model (FFM)
The five abstract dimen-
sions representing
most personality traits:
conscientiousness,
emotional stability,
openness to experi-
ence, agreeableness,
and extroversion.
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40 Part Two Individual Behavior and Processes
across cultures. 21 These “Big Five” dimensions, represented by the handy acronym
CANOE, are outlined in Exhibit 2.2 and described below:
• Conscientiousness . Conscientiousness characterizes people who are careful,
dependable, and self-disciplined. Some scholars argue that this dimension
also includes the will to achieve. People with low conscientiousness tend to
be careless, less thorough, more disorganized, and irresponsible.
• Agreeableness . This dimension includes the traits of being courteous, good-natured,
empathic, and caring. Some scholars prefer the label “friendly compliance” for
this dimension, with its opposite being “hostile noncompliance.” People with low
agreeableness tend to be uncooperative, short-tempered, and irritable.
• Neuroticism . Neuroticism characterizes people with high levels of anxiety,
hostility, depression, and self-consciousness. In contrast, people with low
neuroticism (high emotional stability) are poised, secure, and calm.
• Openness to experience . This dimension is the most complex and has the least
agreement among scholars. It generally refers to the extent to which people are
imaginative, creative, curious, and aesthetically sensitive. Those who score low
on this dimension tend to be more resistant to change, less open to new ideas,
and more conventional and fixed in their ways.
• Extroversion . Extroversion characterizes people who are outgoing, talkative,
sociable, and assertive. The opposite is introversion, which characterizes those
who are quiet, shy, and cautious. Extroverts get their energy from the outer
world (people and things around them), whereas introverts get their energy
from the internal world, such as personal reflection on concepts and ideas. In-
troverts do not necessarily lack social skills. Rather, they are more inclined to
direct their interests to ideas than to social events. Introverts feel quite comfort-
able being alone, whereas extroverts do not.
These five personality dimensions are not independent of each other. Some experts
suggest that conscientiousness, agreeableness, and low neuroticism (high emotional
Personality
dimension
People with a high score on this dimension
tend to be more:
Conscientiousness
Agreeableness
Neuroticism
Openness to
experience
Extroversion
Exhibit 2.2
Five-Factor Model’s
Big Five Personality
Dimensions
conscientiousness
A personality dimension
describing people who
are careful, dependable,
and self-disciplined.
neuroticism
A personality dimension
describing people with
high levels of anxiety,
hostility, depression,
and self-consciousness.
extroversion
A personality dimension
describing people who
are outgoing, talkative,
sociable, and assertive.
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Chapter 2 Individual Behavior, Personality, and Values 41
stability) represent a common underlying characteristic broadly described as “getting
along”; people with these traits are aware of and more likely to abide by rules and
norms of society. The other two dimensions share the common underlying factor
called “getting ahead”; people with high scores on extroversion and openness to ex-
perience exhibit more behaviors aimed at achieving goals, managing their environ-
ment, and advancing themselves in teams. 22
Studies report fairly strong associations between personality and several work-
place behaviors and outcomes, even when employee ability and other factors are
taken into account. Conscientiousness and emotional stability (low neuroticism)
stand out as the personality traits that best predict individual performance in almost
every job group. 23 Both are motivational components of personality because they
energize a willingness to fulfill work obligations within established rules (conscien-
tiousness) and to allocate resources to accomplish those tasks (emotional stability).
Various studies have reported that conscientious employees set higher personal
goals for themselves, are more motivated, and have higher performance expecta-
tions than do employees with low levels of conscientiousness. They also tend to
have higher levels of organizational citizenship and work better in organizations that
give employees more freedom than is found in traditional command-and-control
workplaces. 24
The other three personality dimensions predict more specific types of employee
behavior and performance. Extroversion is associated with performance in sales and
management jobs, where employees must interact with and influence people. Agree-
ableness is associated with performance in jobs where employees are expected to be
cooperative and helpful, such as working in teams, customer relations, and other
conflict-handling situations. People high on the openness-to-experience personality
dimension tend to be more creative and adaptable to change. Finally, personality
influences employee well-being in various ways. Studies report that personality influ-
ences a person’s general emotional reactions to her or his job, how well the person
copes with stress, and what type of career paths make that person happiest. 25
Jungian Personality Theory and the
Myers-Briggs Type Indicator
The five-factor model of personality is the most respected and supported in research,
but it is not the most popular in practice. That distinction goes to Jungian personality
theory, which is measured through the Myers-Briggs Type Indicator (MBTI).
Nearly a century ago, Swiss psychiatrist Carl Jung proposed that personality is pri-
marily represented by the individual’s preferences regarding perceiving and judging
information. 26 Jung explained that perceiving, which involves how people prefer
to gather information or perceive the world around them, occurs through two
competing orientations: sensing (S) and intuition (N). Sensing involves perceiving
information directly through the five senses; it relies on an organized structure to
acquire factual and preferably quantitative details. Intuition, on the other hand,
relies more on insight and subjective experience to see relationships among vari-
ables. Sensing types focus on the here and now, whereas intuitive types focus more
on future possibilities.
Jung also proposed that judging—how people process information or make deci-
sions based on what they have perceived—consists of two competing processes: think-
ing (T) and feeling (F). People with a thinking orientation rely on rational cause-effect
logic and systematic data collection to make decisions. Those with a strong feeling
Myers-Briggs Type
Indicator (MBTI)
An instrument designed
to measure the elements
of Jungian personality
theory, particularly
preferences regarding
perceiving and judging
information.
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42 Part Two Individual Behavior and Processes
orientation, on the other hand, rely on their emotional responses to the options pre-
sented, as well as to how those choices affect others. Jung noted that along with differing
in the four core processes of sensing, intuition, thinking, and feeling, people also dif-
fer in their degrees of extroversion-introversion, which was introduced earlier as one
of the Big Five personality traits.
In addition to measuring the personality traits identified by Jung, the MBTI mea-
sures Jung’s broader categories of perceiving and judging . People with a perceiving
orientation are open, curious, and flexible; prefer to adapt spontaneously to events as
they unfold; and prefer to keep their options open. Judging types prefer order and
structure and want to resolve problems quickly.
The MBTI is one of the most widely used personality tests in work settings as well
as in career counseling and executive coaching. 28 Still, evidence regarding the effec-
tiveness of the MBTI and Jung’s psychological types is mixed. 29 On the one hand,
MBTI does a reasonably good job of measuring Jung’s psychological types and seems
to improve self-awareness for career development and mutual understanding. On the
other hand, it poorly predicts job performance and is generally not recommended for
employment selection or promotion decisions. Furthermore, MBTI overlaps with the
five-factor personality model, yet it does so less satisfactorily than existing measures
of the Big Five personality dimensions. 30
Caveats about Personality Testing in Organizations
Personality is clearly an important concept for understanding, predicting, and chang-
ing behavior in organizational settings. However, there are a few problems that con-
tinue to hound personality testing. 31 One concern is that most tests are self-report
scales, which allow applicants or employees to fake their answers. Rather than mea-
suring a person’s personality, many test results might identify the traits that people
believe the company values. This concern is compounded by the fact that test takers
Flying High with MBTI Southwest Airlines is a people-
friendly place, but even strangers can quickly discover the
personalities of some of its employees. That’s because many
staff at the Dallas-based airline post their Myers-Briggs Type
Indicator (MBTI) results in their offices. “You can walk by and
see someone’s four-letter [MBTI type] posted up in their
cube,” says Elizabeth Bryant, shown in photo, Southwest’s
director of leadership development. Southwest began using
the MBTI a decade ago to help staff understand and respect
co-workers’ different personalities and thinking styles. The
MBTI also helps leaders work more effectively with individu-
als and teams. For example, Bryant recalls a session at which
employees and the manager in one department developed
more trust and empathy by discovering their MBTI scores.
“We saw a lot of ‘aha’ moments,” Bryant recalls about em-
ployee reactions when they saw each other’s MBTI score.
“Behaviors that might have once caused misunderstanding
and frustration now are viewed through a different filter.”27
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Chapter 2 Individual Behavior, Personality, and Values 43
often don’t know what personality traits the company is looking for and may not
know which statements are relevant to each trait. Thus, the test scores might not rep-
resent the individual’s personality or anything else meaningful.
A second issue is that personality is a relatively weak predictor of a person’s perfor-
mance. Some experts dispute this claim, pointing to strong associations between a few
personality traits and specific types of performance. Still, the effect of personality on a
person’s behavior and performance is generally low, and thus personality testing could
cause companies to wrongly reject applicants who would have performed well. Finally,
some companies have discovered that personality testing does not convey a favorable
image of the company. For example, the British operations of PricewaterhouseCoopers
(PwC) required that applicants complete an online personality test early in the selec-
tion process. The accounting firm learned that the test discouraged female applicants
from applying because the process was impersonal and the test could be faked. “Our
personality test was seen to alienate women and so we had to respond to that,” says
PwC’s head of diversity. 32 Overall, we need to understand personality in the workplace
but also to be cautious about measuring and applying it too precisely.
Self-Concept: The “I” in Organizational Behavior
To more fully understand individual behavior in organizations, we need to realize
that people develop, nurture, and act in ways that maintain and enhance their self-
concept. Self-concept refers to an individual’s self-beliefs and self-evaluations. It is
the “Who am I?” and “How do I feel about myself?” that people ask themselves and
that guide their decisions and actions. Self-concept has not received much attention
in organizational behavior research, but scholars in psychology, social psychology,
and other disciplines have discovered that it is a critically important concept for un-
derstanding individual perceptions, attitudes, decisions, and behavior. Indeed, as the
opening vignette to this chapter illustrated, managers at Fairmont Hotels & Resorts
have known for years that nurturing an employee’s self-concept can be a powerful
way to strengthen his or her motivation and well-being.
People do not have a single unitary self-concept. 33 Rather, they think of them-
selves in several ways in various situations. For example, you might think of yourself
as a creative employee, a health-conscious vegetarian, and an aggressive skier. A
person’s self-concept has higher complexity when it consists of many categories. Along
with varying in complexity, self-concept varies in the degree of its consistency. People
have high consistency when similar personality traits and values are required across
all aspects of self-concept. Low consistency occurs when some aspects of self require
personal characteristics that conflict with the characteristics required for other aspects
of self. A third structural feature of self-concept is clarity, that is, the degree to which
a person’s self-conceptions are clearly and confidently described, internally consis-
tent, and stable across time. A clear self-concept necessarily requires a consistent self-
concept. Generally, people develop a clearer self-concept as they get older.
These three structural dimensions of self-concept—complexity, consistency, and
clarity—influence an individual’s adaptability and well-being. People function better
when their self-concept has many elements (high complexity) that are compatible with
each other (high consistency) and are relatively clear. In contrast, people are more rigid
and inflexible, and therefore less adaptable, when their self-view consists of only a few
similar characteristics (low complexity). People also have poorer psychological adjust-
ment when their self-concept is less clear and includes conflicting elements.
self-concept
An individual’s self-
beliefs and self-
evaluations.
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44 Part Two Individual Behavior and Processes
Self-Enhancement
A key ingredient in self-concept is the desire to feel valued. People are inherently
motivated to promote and protect a self-view of being competent, attractive, lucky,
ethical, and important. 34 This self-enhancement is observed in many ways. Individuals
tend to rate themselves above average, selectively recall positive feedback while for-
getting negative feedback, attribute their successes to personal motivation or ability
while blaming the situation for their mistakes, and believe that they have a better
than average probability of success. People don’t see themselves as above average in
all circumstances, but this bias is apparent for conditions that are common rather
than rare and that are important to them. 35
Self-enhancement has both positive and negative consequences in organizational
settings. 36 On the positive side, research has found that individuals have better per-
sonal adjustment and experience better mental and physical health when they view
their self-concept in a positive light. On the negative side, self-enhancement can re-
sult in bad decisions. For example, studies report that self-enhancement causes man-
agers to overestimate the probability of success in investment decisions. 37 Generally,
though, successful companies, such as Fairmont Hotels & Resorts, strive to help em-
ployees feel they are valued and integral members of the organization. Global
Connections 2.1 describes how Johnson & Johnson, Inc.’s businesses worldwide also
support employees’ self-concept by making them feel valued and by aligning their
career plans with their self-view.
Self-Verification
Along with being motivated by self-enhancement, people are motivated to verify and
maintain their existing self-concept. 38 Self-verification stabilizes an individual’s self-
concept, which, in turn, provides an important anchor that guides his or her thoughts
and actions. Self-verification differs from self-enhancement because people usually
prefer feedback that is consistent with their self-concept even when that feedback is
unflattering. Self-verification has several implications for organizational behavior. 39
First, it affects the perceptual process because employees are more likely to remem-
ber information that is consistent with their self-concept. Second, the more confident
employees are in their self-concept, the less they will accept feedback—positive or
negative—that is at odds with their self-concept. Third, employees are motivated to
interact with others who affirm their self-concept, and this affects how well they get
along with their boss and with co-workers in teams.
Self-Evaluation
Almost everyone strives to have a positive self-concept, but some people have a more
positive evaluation of themselves than do others. This self-evaluation is mostly de-
fined by three concepts: self-esteem, self-efficacy, and locus of control. 40
Self-Esteem Self-esteem —the extent to which people like, respect, and are satisfied
with themselves—represents a global self-evaluation. People with high self-esteem are
less influenced by others, tend to persist in spite of failure, and think more rationally.
Self-esteem regarding specific aspects of self (e.g., a good student, a good driver, a
good parent) predicts specific thoughts and behaviors, whereas a person’s overall
self-esteem predicts only large bundles of thoughts and behaviors. 41
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Self-Efficacy Self-efficacy refers to a person’s belief that he or she can successfully
complete a task. 43 Those with high self-efficacy have a “can do” attitude. They believe
they possess the energy (motivation), resources (situational factors), understanding of
the correct course of action (role perceptions), and competencies (ability) to perform
the task. In other words, self-efficacy is an individual’s perception regarding the MARS
model in a specific situation. Although originally defined in terms of specific tasks,
self-efficacy is also a general trait related to self-concept. 44 General self-efficacy is a
perception of one’s competence to perform across a variety of situations. The higher
the person’s general self-efficacy, the higher is his or her overall self-evaluation.
Locus of Control Locus of control, the third concept related to self-evaluation, is
defined as a person’s general belief about the amount of control he or she has over
personal life events. Individuals with more of an internal locus of control believe that
their personal characteristics (i.e., motivation and competencies) mainly influence
life’s outcomes. Those with more of an external locus of control believe that events in
their life are due mainly to fate, luck, or conditions in the external environment. Lo-
cus of control is a generalized belief, so people with an external locus can feel in
control in familiar situations (such as performing common tasks). However, their un-
derlying locus of control would be apparent in new situations in which control over
self-efficacy
A person’s belief that
he or she has the ability,
motivation, correct
role perceptions, and
favorable situation to
complete a task
successfully.
locus of control
A person’s general
belief about the amount
of control he or she has
over personal life
events.
Feeling Valued Adds Value at
Johnson & Johnson
Every Saturday, Vikas Shirodkar takes his daughter to dance
lessons and pops into his office at Johnson & Johnson’s Indian
headquarters in Mumbai, which is located next door to the
dance class. Doing work at the office saves Shirodkar the
trouble of driving home and back again to pick up his daughter
after class. After three weeks, Shirodkar received a call from
J&J’s managing director, Narendra Ambwani, asking if he was
overburdened and needed additional staff. Shirodkar was sur-
prised by the question, until Ambwani explained that he no-
ticed the executive’s name on the register every Saturday and
was concerned about his workload.
The managing director’s call was a defining moment for
Shirodkar because it reflected J&J’s value system, in which
every employee “must be considered as an individual” and the
company “must respect [employees’] dignity and recognize
their merit.” The credo recognizes employees, customers,
communities, and the environment, as well as shareholders. In
India, where job-hopping has become the norm, the average
J&J employee has more than 15 years of service. Asked about
J&J’s success at attracting and retaining talented workers,
India managing director Narendra Ambwani answers: “We
make them feel the company belongs to them.”
J&J also supports each employee’s self-concept through
day-to-day coaching. For example, J&J’s Pharmaceutical Re-
search & Development division in the United States discovered
that a key ingredient of employee motivation and well-being is
to have managers ensure that employees feel valued as con-
tributors to the company’s success. The European operations of
J&J’s Global Pharmaceutical Supply Group also introduced a
new career program that takes into account employees’ self-
concept by matching their personal values with corresponding
job preferences.42
Global Connections 2.1
Johnson & Johnson is one of the world’s most respected
employers because it recognizes the value of supporting each
employee’s self-concept. “We make them feel the company
belongs to them,” says Narendra Ambwani (shown here), the
company’s managing director in India.
45
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46 Part Two Individual Behavior and Processes
events is uncertain. People with a more internal locus of control have a more positive
self-evaluation. They also tend to perform better in most employment situations, are
more successful in their careers, earn more money, and are better suited for leader-
ship positions. Internals are also more satisfied with their jobs, cope better in stressful
situations, and are more motivated by performance-based reward systems. 45
The Social Self
A person’s self-concept can be organized into two fairly distinct categories: personal
identity characteristics and social identity characteristics. 46 Personal identity consists of
characteristics that make us unique and distinct from people in the social groups to
which we have a connection. For instance, an unusual achievement that distinguishes
you from other people typically becomes a personal identity characteristic. Personal
identity refers to something about you as an individual without reference to a larger
group. At the same time, human beings are social animals; they have an inherent
drive to be associated with others and to be recognized as part of social communities.
This drive to belong is reflected in self-concept by the fact that all individuals define
themselves to some degree by their association with others. 47
This social element of self-concept is described by social identity theory . Ac-
cording to social identity theory, people define themselves by the groups to which
they belong or have an emotional attachment. For instance, someone might have a
social identity as an American, a graduate of the University of Massachusetts, and an
employee at IBM (see Exhibit 2.3 ). Social identity is a complex combination of many
memberships arranged in a hierarchy of importance. One factor determining impor-
tance is how easily we are identified as a member of the reference group, such as by
our gender, age, and ethnicity. It is difficult to ignore your gender in a class where
most other students are the opposite gender, for example. In that context, gender
tends to become a stronger defining feature of your social identity than it is in social
settings where there are many people of the same gender.
Along with our demographic characteristics, a group’s status is typically an impor-
tant influence on whether we include the group in our social identity. We identify
with groups that have high status or respect because this aids the self-enhancement of
IBM
employee
Live in the
United States
C t ti
Employees at
other firms
People living
in other countries
Graduates from
other schools
An Individual’s
Social Identity
University of
Massachusetts
graduate
Exhibit 2.3
Social Identity
Theory Example
social identity theory
A theory that explains
self-concept in terms
of the person’s unique
characteristics (per-
sonal identity) and
membership in various
social groups (social
identity).
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Chapter 2 Individual Behavior, Personality, and Values 47
our self-concept. Medical doctors usually define themselves by their profession be-
cause of its high status, whereas people in low-status jobs tend to define themselves
by nonjob groups. Some people define themselves in terms of where they work be-
cause their employer has a positive reputation in the community. In contrast, other
people never mention where they work because their employer is noted for poor re-
lations with employees and has a poor reputation in the community. 48
Self-Concept and Organizational Behavior
We began this section by stating that self-concept is an important topic for under-
standing individual perceptions, attitudes, decisions, and behavior. In fact, self-concept
may eventually be recognized as one of the more useful ways to understand and
improve an employee’s performance and well-being. Some aspects of self-concept,
such as self-efficacy and locus of control, already are known influences on job perfor-
mance. Self-concept also affects how people select and interpret information, as well
as their biases in judgments (such as probability of success). Furthermore, as you will
learn in future chapters, the social identity component of self-concept influences team
dynamics, organizational commitment, and other OB concepts.
After reading the next three sections, you should be able to:
6. Distinguish personal, shared, espoused, and enacted values and
explain why value congruence is important.
7. Summarize five values commonly studied across cultures.
8. Explain how moral intensity, ethical sensitivity, and the situation
influence ethical behavior.
Values in the Workplace
A person’s self-concept is connected to his or her personal values. 49 Values are stable,
evaluative beliefs that guide our preferences for outcomes or courses of action in a
variety of situations. They are perceptions about what is good or bad, right or wrong.
Values tell us what we “ought” to do. They serve as a moral compass that directs our
motivation and, potentially, our decisions and actions. Values are related to self-
concept because they partly define who we are as individuals and as members of
groups with similar values.
People arrange values into a hierarchy of preferences, called a value system . Some
individuals value new challenges more than they value conformity. Others value gen-
erosity more than frugality. Each person’s unique value system is developed and re-
inforced through socialization from parents, religious institutions, friends, personal
experiences, and the society in which he or she lives. As such, a person’s hierarchy of
values is stable and long-lasting. For example, one study found that value systems of
a sample of adolescents were remarkably similar 20 years later when they were
adults. 50
Notice that our description of values has focused on individuals, whereas execu-
tives often describe values as though they belong to the organization. In reality, val-
ues exist only within individuals—we call them personal values . However, groups of
people might hold the same or similar values, so we tend to ascribe these shared values
to the team, department, organization, profession, or entire society. The values shared
by people throughout an organization (organizational values) receive fuller discussion
Learning
Objectives
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48 Part Two Individual Behavior and Processes
in Chapter 14 because they are a key part of corporate culture. The values shared
across a society (cultural values) receive attention later in this chapter.
Types of Values
Values come in many forms, and experts on this topic have devoted considerable atten-
tion to organizing them into clusters. Several decades ago, social psychologist Milton
Rokeach developed two lists of values, distinguishing means (instrumental values) from
end goals (terminal values). Although Rokeach’s lists are still mentioned in some organi-
zational behavior sources, they are no longer considered acceptable representations of
personal values. The instrumental-terminal values distinction was neither accurate nor
useful, and experts have identified values that were excluded from Rokeach’s lists.
Today, by far the most respected and widely studied set of values is the model
developed and tested by social psychologist Shalom Schwartz and his colleagues. 51
Schwartz’s list of 57 values builds on Rokeach’s earlier work but does not distinguish
instrumental from terminal values. Instead, through painstaking empirical research,
Schwartz reported that human values are organized into the circular model (circum-
plex) shown in Exhibit 2.4 . 52 The model organizes values into 10 broad categories,
each representing several specific values. For example, conformity consists of four
values: politeness, honoring parents, self-discipline, and obedience.
e
Se
enhanc
Universalism
Tradition
Benevolence
Conformity
Security
Power
Achievement
Hedonism
Stimulation
Self-direction
rvation
onism
Exhibit 2.4 Schwartz’s Values Circumplex
Sources: S. H. Schwartz, “Universals in the Content and Structure of Values: Theoretical Advances and Empirical Tests in 20 Countries,” Advances
in Experimental Social Psychology, 25 (1992), pp. 1–65; S. H. Schwartz and G. Sagie, “Value Consensus and Importance: A Cross-National Study,”
Journal of Cross-Cultural Psychology, 31 (July 2000), pp. 465–497.
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Chapter 2 Individual Behavior, Personality, and Values 49
These 10 categories of values are further reduced to two bipolar dimensions. One
dimension has the opposing value domains of openness to change and conservation.
Openness to change refers to the extent to which a person is motivated to pursue inno-
vative ways. It includes the value domains of self-direction (creativity, independent
thought) and stimulation (excitement and challenge). Conservation is the extent to
which a person is motivated to preserve the status quo. This dimension includes the
value clusters of conformity (adherence to social norms and expectations), security
(safety and stability), and tradition (moderation and preservation of the status quo).
The other bipolar dimension in Schwartz’s model has the opposing value domains
of self-enhancement and self-transcendence. Self-enhancement —how much a person is
motivated by self-interest—includes the value categories of achievement (pursuit of per-
sonal success) and power (dominance over others). The opposite of self-enhancement
is self-transcendence, which refers to motivation to promote the welfare of others and na-
ture. Self-transcendence includes the values of benevolence (concern for others in one’s
life) and universalism (concern for the welfare of all people and nature).
Values and Individual Behavior
Personal values guide our decisions and actions to some extent, but this connection
isn’t always as strong as some would like to believe. Habitual behavior tends to be
consistent with our values, but our everyday conscious decisions and actions apply
our values much less consistently. The main reason for the “disconnect” between
personal values and individual behavior is that values are abstract concepts that
sound good in theory but are less easily followed in practice.
Three conditions strengthen the linkage between personal values and behavior. 53
First, we are more likely to apply values when we are reminded of them. For exam-
ple, co-workers tend to treat each other with much more respect and consideration
immediately after a senior executive gives a speech on the virtues of benevolence in
the workplace. Second, we tend to apply our values only when we can think of spe-
cific reasons for doing so. In other words, we need logical reasons for applying a
specific value in a specific situation. Third, we tend to apply our values in situations
that facilitate doing so. Work environments shape our behavior, at least in the short
term, so they necessarily encourage or discourage value-consistent behavior.
Value Congruence
Personal values not only define the person’s self-concept; they also affect how com-
fortable that person is with being associated with the organization and working with
specific people. The key concept here is value congruence, which refers to how similar
a person’s value hierarchy is to the value hierarchy of the organization, a co-worker,
or another source of comparison. Person-organization value congruence occurs when the
employee’s and organization’s dominant values are similar. Values are guideposts, so
employees whose values are similar to the dominant organizational values are more
likely to make decisions compatible with the organization’s value-based mission and
objectives. Person-organization value congruence also leads to higher job satisfaction,
loyalty, and organizational citizenship as well as lower stress and turnover. “The most
difficult but rewarding accomplishment in any career is ‘living true’ to your values
and finding companies where you can contribute at the highest level while being
your authentic self,” says Cynthia Schwalm, president of the U.S. commercial divi-
sion of biopharmaceutical company Eisai Co., Ltd. “There is nothing more important
in my estimation.” 54
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50 Part Two Individual Behavior and Processes
Do the most successful organizations have the highest possible levels of person-
organization value congruence? Not at all! While a comfortable degree of value con-
gruence is necessary for the reasons just noted, organizations also benefit from some
level of value incongruence. Employees with diverse values offer different perspec-
tives, which potentially lead to better decision making. Also, too much congruence
can create a “corporate cult” that potentially undermines creativity, organizational
flexibility, and business ethics.
A second type of value congruence involves how consistent the values apparent in
our actions (enacted values) are with what we say we believe in (espoused values).
This espoused-enacted value congruence is especially important for people in leadership
positions because any obvious gap between espoused and enacted values undermines
their perceived integrity, a critical feature of effective leaders. One global survey re-
ported recently that 55 percent of employees believe senior management behaves
consistently with the company’s core values. 55 Meyners & Co., the Albuquerque,
New Mexico, accounting firm, tries to maintain high levels of espoused-enacted value
congruence by surveying subordinates and peers about whether managers’ decisions
and actions are consistent with the company’s espoused values. 56
A third type of value congruence involves the compatibility of an organization’s
dominant values with the prevailing values of the community or society in which it
conducts business. 57 For example, an organization headquartered in one country that
tries to impose its value system on employees and other stakeholders located in an-
other culture may experience higher employee turnover and have more difficult rela-
tions with the communities in which the company operates. Thus, globalization calls for
a delicate balancing act: Companies depend on shared values to maintain consistent
standards and behaviors, yet they need to operate within the values of different cul-
tures around the world. Let’s look more closely at how values vary across cultures.
Values across Cultures
Fairmont Hotels & Resorts operates world-class hotels in several countries and is
rapidly expanding its operations into the Middle East, Africa, and other regions. As
the opening story in this chapter described, Fairmont actively develops cross-cultural
competencies in its staff through work experience and formal training. Sean Billing
and other Fairmont staff soon realize that they need to be sensitive to the fact that
cultural differences exist and, although often subtle, can influence decisions, behav-
ior, and interpersonal relations.
Individualism and Collectivism
Many values have been studied in the context of cross-cultural differences, but the
two most commonly mentioned are individualism and collectivism. Individualism is
the extent to which we value independence and personal uniqueness. Highly indi-
vidualist people value personal freedom, self-sufficiency, control over their own lives,
and appreciation of the unique qualities that distinguish them from others. As shown
in Exhibit 2.5 , Americans and Italians generally exhibit high individualism, whereas
Taiwanese tend to have low individualism. Collectivism is the extent to which we
value our duty to groups to which we belong and to group harmony. Highly collectiv-
ist people define themselves by their group memberships and value harmonious rela-
tionships within those groups. 58 Americans generally have low collectivism, whereas
Italians and Taiwanese have relatively high collectivism.
individualism
A cross-cultural value
describing the degree
to which people in a
culture emphasize
independence and
personal uniqueness.
collectivism
A cross-cultural value
describing the degree
to which people in a
culture emphasize duty
to groups to which
people belong and to
group harmony.
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Chapter 2 Individual Behavior, Personality, and Values 51
Contrary to popular belief, individualism is not the opposite of collectivism. In
fact, an analysis of previous studies reports that the two concepts are unrelated. 59
Some cultures that highly value duty to one’s group do not necessarily give a low
priority to personal freedom and self-sufficiency. The distinction between individual-
ism and collectivism makes sense when we realize that people across all cultures
define themselves in terms of both their uniqueness (personal identity) and their rela-
tionship to others (social identity). Some cultures clearly reflect one more than the
other, but both have a place in a person’s values and self-concept.
Power Distance
A third frequently mentioned cross-cultural value is power distance —the extent to
which people accept unequal distribution of power in a society. 60 Those with high
power distance accept and value unequal power. They value obedience to authority
and are comfortable receiving commands from their superiors without consultation
or debate, and they prefer to resolve differences indirectly through formal procedures
rather than directly. In contrast, people with low power distance expect relatively
equal power sharing. They view the relationship with their boss as one of interdepen-
dence, not dependence; that is, they believe their boss is also dependent on them, so
they expect power sharing and consultation before decisions affecting them are made.
People in India tend to have high power distance, whereas people in Denmark gener-
ally have low power distance.
Uncertainty Avoidance
Uncertainty avoidance is the degree to which people tolerate ambiguity (low uncer-
tainty avoidance) or feel threatened by ambiguity and uncertainty (high uncertainty
avoidance). Employees with high uncertainty avoidance value structured situations in
which rules of conduct and decision making are clearly documented. They usually
prefer direct rather than indirect or ambiguous communications. Uncertainty avoid-
ance tends to be high in Italy and Taiwan and very high in Japan. It is generally low
in Denmark.
Exhibit 2.5 Five Cross-Cultural Values in Selected Countries
Power Uncertainty Achievement
Country Individualism Collectivism distance avoidance orientation
United States High Low Medium low Medium low Medium high
Denmark Medium Medium low Low Low Low
India Medium high Medium High Medium low Medium high
Italy High High Medium High High
Japan Medium high Low Medium High High
Taiwan Low High Medium High Medium
Sources: Individualism and collectivism results are from the meta-analysis reported in D. Oyserman, H. M. Coon, and M. Kemmelmeier, “Rethinking
Individualism and Collectivism: Evaluation of Theoretical Assumptions and Meta-Analyses,” Psychological Bulletin, 128 (2002), pp. 3–72. The other
results are from G. Hofstede, Culture’s Consequences, 2d ed (Thousand Oaks, CA: Sage, 2001).
power distance
A cross-cultural value
describing the degree
to which people in a
culture accept unequal
distribution of power in
a society.
uncertainty avoidance
A cross-cultural value
describing the degree
to which people in a
culture tolerate ambi-
guity (low uncertainty
avoidance) or feel
threatened by ambiguity
and uncertainty (high
uncertainty avoidance).
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52 Part Two Individual Behavior and Processes
Achievement-Nurturing Orientation
Achievement-nurturing orientation reflects a competitive versus cooperative view
of relations with other people. 62 People with a high achievement orientation value
assertiveness, competitiveness, and materialism. They appreciate people who are
tough, and they favor the acquisition of money and material goods. In contrast, peo-
ple in nurturing-oriented cultures emphasize relationships and the well-being of oth-
ers. They focus on human interaction and caring rather than competition and
personal success. People in Sweden, Norway, and Denmark score very low on
achievement orientation (i.e., they have a high nurturing orientation). In contrast,
very high achievement orientation scores have been reported in Japan and Hungary,
with fairly high scores in the United States and Italy.
Before leaving this topic, we need to point out two concerns about cross-cultural val-
ues. 63 One concern is that country scores on power distance, uncertainty avoidance,
and achievement-nurturing orientation are based on a survey of IBM staff worldwide
more than a quarter century ago. More than 100,000 IBM employees in dozens of
countries completed that survey, but IBM employees might not represent the general
population. There is also evidence that values have since changed considerably in some
countries. A second concern is the assumption that everyone in a society has similar
cultural values. This may be true in a few countries, but multiculturalism —in which sev-
eral microcultures coexist in the same country—is becoming the more common trend.
By attributing specific values to an entire society, we are engaging in a form of stereo-
typing that limits our ability to understand the more complex reality of that society.
Ethical Values and Behavior
When employees are asked to list the most important characteristic they look for in a
leader, the top factor isn’t intelligence, courage, or even being inspirational. Although
these characteristics are important, the most important factor in most surveys is honesty/
ethics. 64 Ethics refers to the study of moral principles or values that determine whether
actions are right or wrong and outcomes are good or bad. People rely on their ethical
values to determine “the right thing to do.”
achievement-nurturing
orientation
A cross-cultural value
describing the degree
to which people in a
culture emphasize
competitive versus
cooperative relations
with other people.
You’re the CEO? So What! As a senior manager throughout Asia,
Stephen Roberts rarely received questions or critiques from staff
about his proposals or ideas. “I spent nine years in Asia and man-
aging in Asia was a relatively easy process because no one
pushed back,” he recalls. The high power distance in Asian coun-
tries motivated staff to defer to Roberts’s judgment. In contrast,
Roberts experienced very low power distance when he trans-
ferred to Australia. Even though he was now a chief executive of-
ficer at Citibank, his ideas were quickly, and sometimes brutally,
questioned. “I remember arriving in Australia and I was asked to
present to an executive committee of our equities team, and it felt
like a medical examination,” recalls Roberts, who was born and
raised in Australia. “I walked out battered and bruised. So to be
pushed, challenged all the time, is more Australian than most
other [cultures].”61
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Chapter 2 Individual Behavior, Personality, and Values 53
Unfortunately, incidents involving corporate wrongdoing continue to raise serious
questions about the ethical values of many corporate leaders. Scandals at Enron,
WorldCom, Tyco, and other companies led to the Sarbanes-Oxley Act in 2002, which
put more controls on U.S. companies and auditing firms to minimize conflict of inter-
est and disclose the company’s financial picture more fully. This legislation might
reduce some unethical conduct, but wrongdoing is unlikely to disappear completely.
Three Ethical Principles
To better understand business ethics, we need to consider three distinct types of ethi-
cal principles: utilitarianism, individual rights, and distributive justice. 65 While you
might prefer one principle more than the others on the basis of your personal values,
all three should be actively considered to put important ethical issues to the test.
• Utilitarianism . This principle advises us to seek the greatest good for the greatest
number of people. In other words, we should choose the option that provides the
highest degree of satisfaction to those affected. This is sometimes known as a con-
sequential principle because it focuses on the consequences of our actions, not on
how we achieve those consequences. One problem with utilitarianism is that it is
almost impossible to evaluate the benefits or costs of many decisions, particularly
when many stakeholders have wide-ranging needs and values. Another problem
is that even if the objective of our behavior is ethical according to utilitarianism,
the means to achieving that objective is sometimes considered unethical.
• Individual rights . This principle reflects the belief that everyone has entitlements
that let her or him act in a certain way. Some of the most widely cited rights are
freedom of movement, physical security, freedom of speech, fair trial, and free-
dom from torture. The individual-rights principle includes more than legal
rights; it also includes human rights that everyone is granted as a moral norm of
society. One problem with individual rights is that certain individual rights may
conflict with others. The shareholders’ right to be informed about corporate ac-
tivities may ultimately conflict with an executive’s right to privacy, for example.
• Distributive justice . This principle suggests that people who are similar to each
other should receive similar benefits and burdens; those who are dissimilar
should receive different benefits and burdens in proportion to their dissimilar-
ity. For example, we expect that two employees who contribute equally in their
work should receive similar rewards, whereas those who make a lesser contribu-
tion should receive less. A variation of the distributive justice principle says that
inequalities are acceptable when they benefit the least well off in society. Thus,
employees in risky jobs should be paid more if their work benefits others who
are less well off. One problem with the distributive justice principle is that it is
difficult to agree on who is “similar” and what factors are “relevant.”
Moral Intensity, Ethical Sensitivity, and Situational Influences
Along with ethical principles and their underlying values, three other factors influ-
ence ethical conduct in the workplace: the moral intensity of the issue, the individu-
al’s ethical sensitivity, and situational factors. Moral intensity is the degree to which
an issue demands the application of ethical principles. Decisions with high moral in-
tensity are more important, so the decision maker needs to more carefully apply
ethical principles to resolve it. Several factors influence the moral intensity of an
issue, including those listed in Exhibit 2.6 . Keep in mind that this list represents the
moral intensity
The degree to which
an issue demands the
application of ethical
principles.
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54 Part Two Individual Behavior and Processes
factors people tend to think about; some of them might not be considered morally
acceptable when people are formally making ethical decisions. 66
Even if an issue has high moral intensity, some employees might not recognize
its ethical importance because they have low ethical sensitivity . Ethical sensitivity
is a personal characteristic that enables people to recognize the presence of an
ethical issue and determine its relative importance. 67 Ethically sensitive people are
not necessarily more ethical. Rather, they are more likely to recognize whether an
issue requires ethical consideration; that is, they can more accurately estimate the
moral intensity of the issue. Ethically sensitive people tend to have higher empathy.
They also have more information about the specific situation. For example, accoun-
tants would be more ethically sensitive regarding the appropriateness of specific
accounting procedures than would someone who has not received training in this
profession.
The third important factor explaining why good people engage in unethical deci-
sions and behavior is the situation in which the conduct occurs. Employees say they
regularly experience pressure from top management that motivates them to lie to
customers, breach regulations, or otherwise act unethically. 68 Situational factors do
not justify unethical conduct. Rather, we need to recognize these factors so that orga-
nizations can reduce their influence in the future.
Supporting Ethical Behavior
Most large and medium-size organizations in the United States, United Kingdom,
and several other countries apply one or more strategies to improve ethical conduct.
Exhibit 2.6 Factors Influencing Perceived Moral Intensity*
Moral intensity factor Moral intensity question Moral intensity is higher when:
Magnitude of consequences How much harm or benefit will occur to The harm or benefit is larger.
others as a result of this action?
Social consensus How many other people agree that this Many people agree.
action is ethically good or bad?
Probability of effect (a) What is the chance that this action The probability is higher.
will actually occur?
(b) What is the chance that this action
will actually cause good or bad
consequences?
Temporal immediacy How long after the action will the The consequences are immediate
consequences occur? rather than delayed.
Proximity How socially, culturally, psychologically, Those affected are close rather
and/or physically close to me are the than distant.
people affected by this decision?
Concentration of effect (a) How many people are affected Many people are affected.
by this action?
(b) Are the people affected by this action Those affected are easily
easily identifiable as a group? identifiable as a group.
*These are factors people tend to ask themselves about when determining the moral intensity of an issue. Whether some of these questions should be
relevant is itself an ethical question.
Source: Based on information in T. J. Jones, “Ethical Decision Making by Individuals in Organizations: An Issue Contingent Model,” Academy of
Management Review 16 (1991), pp. 366–395.
ethical sensitivity
A personal characteris-
tic that enables people
to recognize the
presence of an ethical
issue and determine its
relative importance.
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Chapter 2 Individual Behavior, Personality, and Values 55
Creating ethical codes of conduct is the most common. Almost all Fortune 500 com-
panies in the United States and the majority of the 500 largest U.K. companies now
have codes of ethics. These statements communicate the organization’s ethical stan-
dards and signal to employees that the company takes ethical conduct seriously.
However, critics point out that ethics codes alone do little to reduce unethical con-
duct. After all, Enron had a well-developed code of ethics, but that document didn’t
prevent senior executives from engaging in wholesale accounting fraud, resulting in
the energy company’s bankruptcy. 69
To supplement ethics codes, many firms provide ethics training. At Texas Instru-
ments, employees learn to ask the following questions as their moral compass: “Is the
action legal? Does it comply with our values? If you do it, will you feel bad? How
would it look in the newspaper? If you know it’s
wrong, don’t do it! If you’re not sure, ask. Keep ask-
ing until you get an answer.” Molson Coors devel-
oped an award-winning online training program set
up as an expedition: Employees must resolve ethics
violations at each “camp” as they ascend a moun-
tain. The first few camps present real scenarios with
fairly clear ethical violations of the company’s ethics
code; later camps present much fuzzier dilemmas
requiring more careful thought about the company’s
underlying values. 70
Some companies have also introduced procedures
whereby employees can communicate possible ethi-
cal violations in confidence. Food manufacturer
H. J. Heinz Co. has an ethics hotline that operates
around the clock and in 150 languages for its global
workforce. Heinz’s director of ethics says that the
hotline “has provided an early warning signal of
problems we were not aware of.” Rogers Cable
Communications Inc. also has an anonymous “star
hotline” as well as a Web link that employees can
use to raise ethical issues or concerns about ethical
conduct. Rogers employees can even call back to
find out what actions have been taken to resolve an
ethical issue. 71
These additional measures support ethical con-
duct to some extent, but the most powerful foundation
is a set of shared values that reinforce ethical con-
duct. “If you don’t have a culture of ethical decision
making to begin with, all the controls and compli-
ance regulations you care to deploy won’t necessar-
ily prevent ethical misconduct,” warns a senior
executive at British communications giant Vodafone.
This culture is supported by the ethical conduct and
vigilance of corporate leaders. By acting with the
highest standards of moral conduct, leaders not only
gain support and trust from followers; they role-
model the ethical standards that employees are more
likely to follow. 73
Protecting E&Y’s Brand with Value-Based Ethics Training As
a leading accounting and professional services firm, Ernst &
Young (E&Y) has a lot at stake in maintaining its reputation for
ethical conduct. “We can’t ever be in a position to have our
ethics challenged,” says Michael Hamilton, E&Y’s chief
learning and development officer for the Americas. Although
the financial world has become very rule-based, the rules still
leave gaps where ethical missteps can occur. To minimize this
risk, E&Y invests heavily in values-based ethics training. “Ethics
training and value training are about providing all of our people
with a clear message and some guiding principles about what
to do when the rules don’t address a situation or area,” Hamilton
explains. All E&Y staff members are required to complete a
two-hour Web-based ethics course called “Living Our Core
Values” in which they learn about the company’s values and
ethical principles, followed by analysis of several specific
case situations. Ethical topics are also being integrated
throughout E&Y’s professional development courses. “We’re
trying to bake ethics training into all of our curriculum,” says
Jeffrey Hoops, ethics and compliance officer for the Americas
and chief privacy officer. “It’s about continually reminding
people that doing the right thing and speaking up when you
see the wrong thing is not just accepted—it is the expected
way we do things at Ernst & Young.”72
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56
Individual behavior is influenced by motivation, ability,
role perceptions, and situational factors (MARS). Motiva-
tion consists of internal forces that affect the direction,
intensity, and persistence of a person’s voluntary choice
of behavior. Ability includes both the natural aptitudes
and the learned capabilities required to successfully com-
plete a task. Role perceptions are a person’s beliefs about
what behaviors are appropriate or necessary in a particu-
lar situation. Situational factors are environmental condi-
tions that constrain or facilitate employee behavior and
performance.
Personality is the relatively enduring pattern of
thoughts, emotions, and behaviors that characterize a per-
son, along with the psychological processes behind those
characteristics. Most experts now agree that personality is
shaped by both nature and nurture. Most personality traits
are represented within the five-factor model, which in-
cludes conscientiousness, agreeableness, neuroticism,
openness to experience, and extroversion. Another set of
traits, measured by the Myers-Briggs Type Indicator, repre-
sents how people prefer to perceive and judge information.
Conscientiousness and emotional stability (low neuroti-
cism) stand out as the personality traits that best predict in-
dividual performance in almost every job group. The other
three personality dimensions predict more specific types of
employee behavior and performance.
Self-concept includes an individual’s self-beliefs and
self-evaluations. It has three structural dimensions: com-
plexity, consistency, and clarity. People are inherently
motivated to promote and protect their self-concept; this
is self-enhancement. At the same time, people are moti-
vated to verify and maintain their existing self-concept;
this is self-verification.
Self-evaluation, an important aspect of self-concept,
consists of self-esteem, self-efficacy, and locus of control.
Chapter Summary
Self-esteem is the extent to which people like, respect,
and are satisfied with themselves. Self-efficacy is a per-
son’s belief that he or she has the ability, motivation,
correct role perceptions, and favorable situation to com-
plete a task successfully; general self-efficacy is a percep-
tion of one’s competence to perform across a variety of
situations. Locus of control is defined as a person’s gen-
eral belief about the amount of control he or she has
over personal life events. Self-concept consists of both
personality identity and social identity. Social identity
theory explains how people define themselves in terms
of the groups to which they belong or have an emo-
tional attachment.
Values are stable, evaluative beliefs that guide our
preferences for outcomes or courses of action in a variety
of situations. People arrange values into a hierarchy of
preferences, called a value system. Espoused values—what
we say and think we use as values—are different from en-
acted values, which are values evident from our actions.
Values have been organized into a circle with 10 clusters.
Value congruence is the similarity of value systems be-
tween two entities.
Five values that differ across cultures are individual-
ism, collectivism, power distance, uncertainty avoid-
ance, and achievement-nurturing orientation. Three
values that guide ethical conduct are utilitarianism, indi-
vidual rights, and distributive justice. Three factors that
influence ethical conduct are the extent to which an is-
sue demands ethical principles (moral intensity), the
person’s ethical sensitivity to the presence and impor-
tance of an ethical dilemma, and situational factors that
cause people to deviate from their moral values. Com-
panies improve ethical conduct through a code of eth-
ics, ethics training, ethics hotlines, and the conduct of
corporate leaders.
ability, p. 35
achievement-nurturing
orientation, p. 52
collectivism, p. 50
competencies, p. 36
conscientiousness, p. 40
ethical sensitivity, p. 54
extroversion, p. 40
five-factor model (FFM), p. 39
individualism, p. 50
locus of control, p. 43
moral intensity, p. 53
motivation, p. 34
Myers-Briggs Type Indicator
(MBTI), p. 41
neuroticism, p. 40
personality, p. 38
power distance, p. 51
role perceptions, p. 36
self-concept, p. 43
self-efficacy, p. 45
social identity theory, p. 46
uncertainty avoidance, p. 52
Key Terms
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model. Which personality traits would you consider
to be the most important for this type of job? Explain
your answer.
5. An important aspect of self-concept is the idea that
almost everyone engages in self-enhancement. What
problems tend to occur in organizations as a result of
the self-enhancement phenomenon? What can orga-
nizational leaders do to make use of a person’s inher-
ent drive for self-enhancement?
6. This chapter discussed value congruence mostly
in the context of an employee’s personal values
versus the organization’s values. But value congru-
ence also relates to the juxtaposition of other pairs
of value systems. Explain how value congruence is
relevant with respect to organizational versus pro-
fessional values (i.e., values of a professional occu-
pation, such as physician, accountant, pharmacist).
7. People in a particular South American country have
high power distance and high collectivism. What
does this mean, and what are the implications of this
information when you (a senior executive) visit em-
ployees working for your company in that country?
8. “All decisions are ethical decisions.” Comment on
this statement, particularly by referring to the con-
cepts of moral intensity and ethical sensitivity.
1. An insurance company has high levels of absenteeism
among the office staff. The head of office administra-
tion argues that employees are misusing the compa-
ny’s sick leave benefits. However, some of the mostly
female staff members have explained that family
responsibilities interfere with work. Using the MARS
model, as well as your knowledge of absenteeism
behavior, discuss some of the possible reasons for
absenteeism here and how it might be reduced.
2. As the district manager responsible for six stores in a
large electronics retail chain, you have had difficulty
with the performance of some sales employees. Al-
though they are initially motivated and generally have
good interpersonal skills, many have difficulty with the
complex knowledge of the wide variety of store prod-
ucts, ranging from computers to high-fidelity sound
systems. Describe three strategies you might apply to
improve the match between the competencies of new
sales employees and the job requirements.
3. Studies report that heredity has a strong influence on
an individual’s personality. What are the implications
of this in organizational settings?
4. Suppose that you give all candidates applying for a
management trainee position a personality test that
measures the five dimensions in the five-factor
Critical Thinking Questions
Case Study 2.1 SK TELECOM GOES EGALITARIAN IN A
HIERARCHICAL SOCIETY
Until recently, Hur Jae-hoon could end debate with
junior staff members just by declaring that the dis-
cussion was over. Employed at the fourth tier in SK
Telecom Co.’s five-tier management/professional hi-
erarchy, the 33-year-old strategist held the corre-
sponding title of “Hur Daeri” and received plenty of
respect from people in lower positions. No one be-
low Hur was allowed to question his decisions, and
Hur was expected to silently comply with requests
from above. South Korea’s culture of deferring to
people in higher positions was deeply ingrained in
the telecommunications company. In some South
Korean companies, such as Samsung, junior staff
members aren’t even allowed to initiate conversa-
tions with anyone above their boss.
Now, in spite of South Korea’s strong hierarchical
culture, SK Telecom wants to support more egalitar-
ian values. It has already removed its five manage-
ment ranks and their differentiated titles and status.
The English word Manager is now used to address
anyone employed throughout the five former ranks.
(Hur Jae-hoon’s title has changed from Hur Daeri to
“Hur Manager”). Only vice presidents and above
retain their previous status titles. People in charge of
projects or people are also called “Team Leader.”
Furthermore, the company is assigning project
57
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58
leadership responsibilities to employees in their
twenties, whereas these roles were previously held
only by older staff with much more seniority. As an
added change, the company is allowing a more ca-
sual dress code at work.
Through this dramatic shift in values and practices,
SK Telecom’s senior executives hope that junior staff
will speak up more freely, thereby improving creativ-
ity and decision making. They particularly want to
avoid incidents such as one that occurred several
years ago in which an excellent idea from younger
employees was initially shot down by their bosses.
The junior staff suggested that allowing customers to
change their cell phone ringtones to music chosen by
the friend they’ve phoned would generate revenue
through music licensing. Fortunately, the idea was in-
troduced several months later, after a few persistent
employees proposed the idea again.
SK Telecom’s initiative is not completely new to
South Korea. Small high-tech companies already em-
brace egalitarian values and flatter corporate structures.
But SK Telecom is among the first large firms in the
country to attempt this culture shift, and it has met with
resistance along the way. SK Telecom executives were
initially divided over how quickly and to what extent
the company should distance itself from South Korea’s
traditional hierarchical culture. “There were ideas for
gradual versus all-out reforms,” recalls chief executive
Kim Shin-bae. “But the word ‘gradually’ means ‘not
now’ to some people. So we decided to go all-out.”
According to a company survey, 80 percent of emp-
loyees support the changes. However, even with the
changes in titles, many still look for subtle evidence of
who has higher status and, therefore, should receive
more deference. Some also rely on what positions
managers held under the old five-tier hierarchy. “I
know what the old titles were,” says an LG Electronics
Co. manager who supplies cell phones to SK Telecom.
“So unconsciously, I keep that in mind.”
Hur Jae-hoon admits there are times when he
prefers a more hierarchical culture, but he believes
that SK Telecom’s more egalitarian values and prac-
tices are already showing favorable results. In one
recent meeting, a younger colleague sparred with
Hur over the better way to complete a strategy proj-
ect. “For a moment, I wished it was back in the old
days when I could have shut that guy down,” Hur
recalls. “But I had to admit his opinion was better
than mine, and I adjusted. So the system worked.”
Discussion Questions
1. SK Telecom is attempting to distance itself from
which South Korean cultural value? What indi-
cators of this value are identified in this case
study? What other artifacts of this cultural value
would you notice while visiting a South Korean
company that upheld this national culture?
2. In your opinion, why is this hierarchical value so
strong in South Korea? What are the advantages
and disadvantages of this value in societies?
3. Do you think SK Telecom will be successful in
integrating a more egalitarian culture, even
though it contrasts with South Korea’s culture?
What are some of the issues that may compli-
cate or support this transition?
Source: Based on E. Ramstad, “Pulling Rank Gets Harder at One
Korean Company,” Wall Street Journal , 20 August 2007, p. B1.
Case Study 2.2 PUSHING PAPER CAN BE FUN
A large city government was putting on a number of
seminars for managers of various departments
throughout the city. At one of these sessions, the
topic discussed was motivation—how we can get
public servants motivated to do a good job. The
plight of a police captain became the central focus of
the discussion:
I’ve got a real problem with my officers. They come
on the force as young, inexperienced rookies, and we
send them out on the street, either in cars or on a
beat. They seem to like the contact they have with the
public, the action involved in crime prevention, and
the apprehension of criminals. They also like helping
people out at fires, accidents, and other emergencies.
The problem occurs when they get back to the sta-
tion. They hate to do the paperwork, and because they
dislike it, the job is frequently put off or done inade-
quately. This lack of attention hurts us later on when we
get to court. We need clear, factual reports. They must
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59
be highly detailed and unambiguous. As soon as one
part of a report is shown to be inadequate or incorrect,
the rest of the report is suspect. Poor reporting probably
causes us to lose more cases than any other factor.
I just don’t know how to motivate them to do a bet-
ter job. We’re in a budget crunch and I have absolutely
no financial rewards at my disposal. In fact, we’ll prob-
ably have to lay some people off in the near future. It’s
hard for me to make the job interesting and challeng-
ing because it isn’t—it’s boring, routine paperwork, and
there isn’t much you can do about it.
Finally, I can’t say to them that their promotions
will hinge on the excellence of their paperwork. First
of all, they know it’s not true. If their performance is
adequate, most are more likely to get promoted just
by staying on the force a certain number of years than
for some specific outstanding act. Second, they were
trained to do the job they do out in the streets, not to
fill out forms. All through their career it is the arrests
and interventions that get noticed.
Some people have suggested a number of things,
like using conviction records as a performance crite-
rion. However, we know that’s not fair—too many
other things are involved. Bad paperwork increases
the chance that you lose in court, but good paper-
work doesn’t necessarily mean you’ll win. We tried
setting up team competitions based upon the excel-
lence of the reports, but the officers caught on to that
pretty quickly. No one was getting any type of reward
for winning the competition, and they figured why
should they bust a gut when there was no payoff.
I just don’t know what to do.
Discussion Questions
1. What performance problems is the captain try-
ing to correct?
2. Use the MARS model of individual behavior
and performance to diagnose the possible causes
of the unacceptable behavior.
3. Has the captain considered all possible solutions
to the problem? If not, what else might be done?
Source: T. R. Mitchell and J. R. Larson, Jr., People in Organizations , 3d
ed. (New York: McGraw-Hill, 1987), p. 184. Reproduced with per-
mission from The McGraw-Hill Companies.
Case Study 2.3 THE TROUBLE WITH BUSINESS ETHICS
Business ethics may have risen
to the top of most executive
agendas, but Wal-Mart Stores
has learned that practicing ethics can also present
ethical dilemmas. A few months after going through
a new employee training session with a heavy em-
phasis on ethics, Chalace Epley Lowry acted on the
guidance to report any activity that seemed the least
bit suspicious. Lowry told the company’s ethics of-
fice about possible insider trading by one of her su-
pervisors. Wal-Mart’s investigation concluded that
the supervisor had done nothing wrong, but Lowry
soon discovered that her identity as the whistle-
blower had been revealed to the supervisor she ac-
cused of wrongdoing. Now Lowry is looking for
another job, but there’s no guarantee she’ll get trans-
ferred at Wal-Mart.
This BusinessWeek case study examines the chal-
lenges of supporting ethics hotlines and whistle-
blowing, and it discusses the reasons why employees
are reluctant to communicate ethical wrongdoing.
Read the full text of this BusinessWeek article at www.
mhhe.com/mcshane5e , and prepare for the discus-
sion questions below.
Discussion Questions
1. In an organization’s efforts to maintain ethical
standards, how important is it to encourage and
support employees who report possible incidents
of ethical wrongdoing (i.e., engage in whistle-
blowing)? Why? What can companies do to sup-
port whistle-blowers?
2. What actions are described in this case study that
companies have taken to improve ethical stan-
dards in their organizations? Are these actions
substantive changes or mostly symbolic? Why?
Source: P. Gogoi, “The Trouble with Business Ethics,” BusinessWeek
Online, 22 June 2007.
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http://www.mhhe.com/mcshane5e
http://www.mhhe.com/mcshane5e
Class Exercise 2.4 TEST YOUR KNOWLEDGE OF PERSONALITY
PURPOSE This exercise is designed to help you
think about and understand the effects of the Big
Five personality dimensions on individual prefer-
ences and outcomes.
INSTRUCTIONS (LARGE CLASS) Below are
several questions relating to the Big Five personal-
ity dimensions and various preferences or out-
comes. Answer each of these questions relying on
your personal experience or best guess. Later, the
instructor will show you the answers based on
scholarly results. You will not be graded on this ex-
ercise, but it may help you to better understand
the effect of personality on human behavior and
preferences.
INSTRUCTIONS (SMALL CLASS)
1. The instructor will organize students into teams.
Members of each team work together to answer
each of the questions below relating to the Big
Five personality dimensions and various prefer-
ences or outcomes.
2. The instructor will reveal the answers based on
scholarly results. ( Note: The instructor might cre-
ate a competition to see which team has the
most answers correct.)
PERSONALITY AND PREFERENCES
QUESTIONS
1. Which two Big Five personality dimensions are
positively associated with enjoyment of work-
place humor?
2. Listed below are several jobs. Please check no
more than two personality dimensions that you
believe are positively associated with preferences
for each occupation.
60
Personality Dimension
Conscien- Openness to
Job Extroversion tiousness Agreeableness Neuroticism experience
Budget analyst
Corporate executive
Engineer
Journalist
Life insurance agent
Nurse
Physician
Production supervisor
Public relations director
Research analyst
Schoolteacher
Sculptor
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61
3. Rank order (1 � highest, 5 � lowest) the Big
Five personality dimensions in terms of how
much you think they predict a person’s degree
of life satisfaction. ( Note: Personality dimen-
sions are ranked by their absolute effect, so
ignore the negative or positive direction of
association.)
___ Conscientiousness
___ Agreeableness
___ Neuroticism
___ Openness to experience
___ Extroversion
Team Exercise 2.5 COMPARING CULTURAL VALUES
PURPOSE This exercise is designed to help you
determine the extent to which students hold similar
assumptions about the values that dominate in other
countries.
INSTRUCTIONS (SMALL CLASS) The terms in
the left column represent labels that a major consult-
ing project identified with businesspeople in a par-
ticular country, based on its national culture and
values. These terms appear in alphabetical order. In
the right column are the names of countries, also in
alphabetical order, corresponding to the labels in
the left column.
1. Working alone, connect the labels with the coun-
tries by relying on your perceptions of these
countries. Each label is associated with only one
country, so each label should be connected to
only one country, and vice versa. Draw a line to
connect the pairs, or put the label number be-
side the country name.
2. The instructor will form teams of four or five
members. Members of each team will compare
their results and try to reach consensus on a
common set of connecting pairs.
3. Teams or the instructor will post the results so
that all can see the extent to which students hold
common opinions about businesspeople in other
cultures. Class discussion can then consider the
reasons why the results are so similar or differ-
ent, as well as the implications of these results
for working in a global work environment.
INSTRUCTIONS (LARGE CLASS)
1. Working alone, connect the labels with the coun-
tries by relying on your perceptions of these
countries. Each label is associated with only one
country, so each label should be connected to
only one country, and vice versa. Draw a line to
connect the pairs, or put the label number be-
side the country name.
2. Asking for a show of hands, the instructor will
find out which country is identified by most stu-
dents with each label. The instructor will then
post the correct answers.
Source: Based on R. Rosen, P. Digh, M. Singer, and C. Phillips,
Global Literacies (New York: Simon & Schuster, 2000).
Value label Country name
(alphabetical) (alphabetical)
1. Affable humanists Australia
2. Ancient modernizers Brazil
3. Commercial catalysts Canada
4. Conceptual strategists China
5. Efficient manufacturers France
6. Ethical statesmen Germany
7. Informal egalitarians India
8. Modernizing traditionalists Netherlands
9. Optimistic entrepreneurs New Zealand
10. Quality perfectionists Singapore
11. Rugged individualists Taiwan
12. Serving merchants United Kingdom
13. Tolerant traders United States
Value Labels and Country Names
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62
Team Exercise 2.6 ETHICS DILEMMA VIGNETTES
PURPOSE This exercise is designed to make you
aware of the ethical dilemmas people face in various
business situations, as well as the competing princi-
ples and values that operate in these situations.
INSTRUCTIONS (SMALL CLASS) The instructor
will form teams of four or five students. Team mem-
bers will read each case below and discuss the extent
to which the company’s action in each case was ethi-
cal. Teams should be prepared to justify their evalu-
ation using ethics principles and the perceived moral
intensity of each incident.
INSTRUCTIONS (LARGE CLASS) Working alone,
read each case below and determine the extent to
which the company’s action in each case was ethical.
The instructor will use a show of hands to determine
the extent to which students believe the case repre-
sents an ethical dilemma (high or low moral intensity)
and the extent to which the main people or company
in each incident acted ethically.
CASE ONE An employee who worked for a major
food retailer wrote a Weblog (blog) and, in one of his
writings, complained that his boss wouldn’t let him go
home when he felt sick and that his district manager
refused to promote him because of his dreadlocks.
His blog named the employer, but the employee
didn’t use his real name. Although all blogs are on
the Internet, the employee claims that his was low-
profile and that it didn’t show up in a Google search
of his name or the company. Still, the employer some-
how discovered the blog, figured out the employee’s
real name, and fired him for “speaking ill of the
company in a public domain.”
CASE TWO Computer printer manufacturers usu-
ally sell printers at a low margin over cost and gener-
ate much more income from subsequent sales of the
high-margin ink cartridges required for each printer.
One global printer manufacturer now designs its print-
ers so that they work only with ink cartridges made in
the same region. Ink cartridges purchased in the
United States will not work with the same printer
model sold in Europe, for example. This “region cod-
ing” of ink cartridges does not improve performance.
Rather, it prevents consumers and gray marketers
from buying the product at a lower price in another
region. The company says this policy allows it to
maintain stable prices within a region rather than con-
tinually changing prices due to currency fluctuations.
CASE THREE For the past few years, the design de-
partment of a small (40-employee) company has been
using a particular software program, but the three em-
ployees who use the software have been complaining
for more than a year that the software is out of date and
is slowing down their performance. The department
agreed to switch to a competing software program,
costing several thousand dollars. However, the next
version won’t be released for six months and buying
the current version will not allow much discount on the
next version. The company has put in advance orders
for the next version. Meanwhile, one employee was
able to get a copy of the current version of the software
from a friend in the industry. The company has al-
lowed the three employees to use this current version
of the software even though they did not pay for it.
CASE FOUR Judy Price is a popular talk-show ra-
dio personality and opinionated commentator on the
morning phone-in show of a popular radio station in a
large U.S. city. Price is married to John Tremble, an
attorney who was recently elected mayor of the city
even though he had no previous experience in public
office. The radio station’s board of directors is very
concerned that the station’s perceived objectivity will
be compromised if Price remains on air as a commen-
tator and talk-show host while her husband holds such
a public position. For example, the radio station man-
ager believes that Price gave minimal attention to an
incident in which environmental groups criticized the
city for its slow progress on recycling. Price denied
that her views are biased and stated that the incident
didn’t merit as much attention as other issues that par-
ticular week. To ease the board’s concerns, the station
manager transferred Price from her talk-show host
and commentator position to the hourly news report-
ing position, where most of the script is written by oth-
ers. Although the reporting job is technically a lower
position, Price’s total salary package remains the same.
Price is now seeking professional advice to determine
whether the radio station’s action represents a form of
discrimination on the basis of marital status.
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63
Self-Assessment 2.7
ARE YOU INTROVERTED OR EXTROVERTED?
PURPOSE This self-assessment is designed to help
you estimate the extent to which you are introverted
or extroverted.
INSTRUCTIONS The statements in the scale be-
low refer to personal characteristics that might or
might not be characteristic of you. Mark the box in-
dicating the extent to which the statement accurately
or inaccurately describes you. Then use the scoring
key in Appendix B at the end of this book to calcu-
late your results. This exercise should be completed
alone so that you can assess yourself honestly with-
out concerns of social comparison. Class discussion
will focus on the meaning and implications of extro-
version and introversion in organizations.
How accurately does each
of the statements listed
below describe you?
1. I feel comfortable around
people.
Moderately
accurate
Very
accurate
description
of me
Neither
accurate nor
inaccurate
Moderately
inaccurate
Very
inaccurate
description
of me
2. I make friends easily.
3. I keep in the background.
4. I don’t talk a lot.
5. I would describe my
experiences as somewhat dull.
6. I know how to captivate
people.
7. I don’t like to draw attention
to myself.
8. I am the life of the party.
9. I am skilled in handling
social situations.
10. I have little to say.
IPIP Introversion-Extroversion Scale
Source: Adapted from instruments described and/or presented in L. R. Goldberg, J. A. Johnson, H. W. Eber, R. Hogan, M. C. Ashton, C. R. Cloninger,
and H. C. Gough, “The International Personality Item Pool and the Future of Public-Domain Personality Measures,” Journal of Research in Personality
40 (2006), pp. 84–96.
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64
Self-Assessment 2.8
WHAT ARE YOUR DOMINANT VALUES?
Values have taken center stage in organizational be-
havior. Increasingly, OB experts are realizing that our
personal values influence our motivation, decisions,
and attitudes. This self-assessment is designed to help
you estimate your personal values and value system.
The instrument consists of several words and phrases,
and you are asked to indicate whether each word or
phrase is highly opposite or highly similar to
your personal values or is at some point be-
tween these two extremes. As with all self-
assessments, you need to be honest with yourself
when completing this activity in order to get the most
accurate results.
Self-Assessment 2.9
INDIVIDUALISM-COLLECTIVISM SCALE
Two of the most important concepts in cross-cultural
organizational behavior are individualism and col-
lectivism. This self-assessment measures your
levels of individualism and collectivism with one
of the most widely adopted measures. This scale
consists of several statements, and you are
asked to indicate how well each statement
describes you. You need to be honest with
yourself to receive a reasonable estimate of your
level of individualism and collectivism.
Self-Assessment 2.10
ESTIMATING YOUR LOCUS OF CONTROL
This self-assessment is designed to help you estimate
the extent to which you have an internal or external
locus-of-control personality. The instrument asks
you to indicate the degree to which you agree or dis-
agree with each of the statements provided. As with
all self-assessments, you need to be honest
with yourself when completing this activity to
get the most accurate results. The results show
your relative position on the internal-external locus
continuum and the general meaning of this score.
Self-Assessment 2.11
IDENTIFYING YOUR GENERAL SELF-EFFICACY
Self-efficacy refers to a person’s belief that he or she
has the ability, motivation, and resources to com-
plete a task successfully. Self-efficacy is usually
conceptualized as a situation-specific belief.
You may believe that you can perform a cer-
tain task in one situation but may be less
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65
After reading this chapter, if you feel that you need additional tips on managing your anxiety, see
www.mhhe.com/mcshane5e for more in-depth information and interactivities that correspond to
this chapter.
confident with that task in another situation. How-
ever, there is evidence that people develop a more
general self-efficacy. This exercise helps you esti-
mate your general self-efficacy. Read each of the
statements in this self- assessment and select the re-
sponse that best fits your personal belief. This self-
assessment should be completed alone so that you
rate yourself honestly without concerns of social com-
parison. Class discussion will focus on the meaning
and importance of self-efficacy in the workplace .
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http://www.mhhe.com/mcshane5e
In his regular job, John Leiter helps American companies carry out internal investigations
into financial wrongdoing. But the Boston-based Ernst & Young senior manager found
himself in a completely different environment as a participant in the accounting firm’s
corporate social responsibility
fellows program. For three
months, Leiter was transplanted
to Montevideo, Uruguay, assisting
Infocorp, a young information
technology company, with its first
real five-year strategic plan. Leiter
was performing different work in a
different country with a different
culture and language. “I worked
out of my comfort zone the entire
time,” he recalls.
Leiter particularly noticed that
he had to adjust his fast-paced
American business style to the
more personal approach in
Uruguay, which included
traditional quarter-hour chitchats
before meetings. The experience
gave him a different perspective of the world and his approach to working with clients.
“Oftentimes, we have such a myopic focus, and it doesn’t allow us to take a large view
of the issue,” says Leiter, who now spends more time learning about the client’s needs
before launching into the work.
International corporate volunteering is more than an important form of corporate social
responsibility; it is also a valuable tool to help employees at Ernst & Young and other
companies develop more cosmopolitan perceptions of the world. “We need people with a
global mindset, and what better way to develop a global mindset, and what more realistic
way, than for somebody to have an immersion experience with just enough safety net,”
says Deborah K. Holmes, Ernst & Young Americas director of corporate responsibility.
Ernst & Young has sent John Leiter and two dozen other high-performing employees to work
with entrepreneurs in South America. At Pfizer, the world’s largest pharmaceutical company,
between 25 and 45 employees work up to six months in Africa and elsewhere each year to combat
HIV-AIDS and other illnesses. Through its Project Ulysses program, PricewaterhouseCoopers
sends 25 partners each year to developing countries, where they spend eight weeks working with
nongovernmental organizations (NGOs) on community projects.
IBM has also made international corporate volunteering part of its global leadership
development curriculum through its recently launched Corporate Service Corps program.
John Leiter (second from left) and other employees at Ernst & Young are developing
more cosmopolitan perceptions of the world by assisting entrepreneurs in other
cultures, such as this information technology company in Uruguay.
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Perception and Learning
in Organizations
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Outline the perceptual process.
2. Explain how social identity and stereotyping
influence the perceptual process.
3. Describe the attribution process and two
attribution errors.
4. Summarize the self-fulfilling-prophecy
process.
5. Explain how halo, primacy, recency, and
false-consensus effects bias our
perceptions.
6. Discuss three ways to improve social
perception, with specific application to
organizational situations.
7. Describe the A-B-C model of behavior
modification and the four contingencies of
reinforcement.
8. Describe the three features of social
learning theory.
9. Outline the elements of organizational
learning and ways to improve each element.
3
IBM CEO Sam Palmisano explains that these corporate social responsibility initiatives will develop its global
leaders because participants “work in these other kinds of environments, so they can get a perspective and
learn . . . how to think about problems from another perspective, from another point of view.” 1
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68 Part Two Individual Behavior and Processes
Learning
Objectives
International corporate volunteering programs have become a key component of
global leadership development because they nurture a global mindset . 2 They help
employees develop a superior awareness of and openness to different “spheres of
meaning and action,” that is, the various ways that others perceive their environ-
ment. Global mindset is gaining interest among organizational behavior experts.
It is also a fitting topic to begin this chapter because it encompasses the dynamics
of perceptions and learning. From a perceptual view, global mindset begins with
self-awareness—understanding our own beliefs, values, and attitudes. Through self-
awareness, we are more open-minded and nonjudgmental when receiving and
processing complex information for decision making. Having a global mindset
also relates to learning because employees working in a global environment need
to quickly absorb large volumes of information about the diverse environments in
which they work. Furthermore, people with a global mindset have a strong learning
orientation. They welcome new situations as learning opportunities rather than
view them as threats, and they continually question rather than quickly confirm
what they know.
This chapter describes these two related topics of perceptions and learning in
organizations. We begin by describing the perceptual process, that is, the dynam-
ics of selecting, organizing, and interpreting external stimuli. Next, we examine
the perceptual processes of social identity and stereotyping, attribution, and self-
fulfilling prophecy, including biases created within these processes. Four other
perceptual biases—halo, primacy, recency, and false consensus—are also briefly in-
troduced. We then identify potentially effective ways to improve perceptions, in-
cluding practices similar to corporate volunteering. The latter part of this chapter
looks at three perspectives of learning: behavior modification, social learning the-
ory, and experiential learning, followed by the key elements in organizational
learning.
After reading the next two sections, you should be able to:
1. Outline the perceptual process.
2. Explain how social identity and stereotyping influence the perceptual
process.
The Perceptual Process
Perception is the process of receiving information about and making sense of the
world around us. It entails determining which information to notice, how to catego-
rize this information, and how to interpret it within the framework of our existing
knowledge. This perceptual process is far from perfect, as you will learn in this chap-
ter, but it generally follows the steps shown in Exhibit 3.1 . Perception begins when
environmental stimuli are received through our senses. Most stimuli that bombard
our senses are screened out; the rest are organized and interpreted. The process of
attending to some information received by our senses and ignoring other information
is called selective attention. Selective attention is influenced by characteristics of
the person or object being perceived, particularly size, intensity, motion, repetition,
and novelty. For example, a small, flashing red light on a nurse station console is
immediately noticed because it is bright (intensity), flashing (motion), a rare event
global mindset
The capacity for complex
perceiving and thinking
characterized by supe-
rior awareness of and
openness to different
ways that others per-
ceive their environment.
perception
The process of receiving
information about and
making sense of the
world around us.
selective attention
The process of attending
to some information
received by our senses
and ignoring other
information.
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Chapter 3 Perception and Learning in Organizations 69
(novelty), and has symbolic meaning that a patient’s vital signs are failing. Notice that
selective attention is also influenced by the context in which the target is perceived.
The selective attention process is triggered by things or people who might be out of
context, such as hearing someone with a foreign accent in a setting where most peo-
ple have American accents.
Characteristics of the perceiver play an important role in selective attention,
much of it without the perceiver’s awareness. 3 When information is received through
the senses, our brain quickly and nonconsciously assesses whether it is relevant or
irrelevant to us and then attaches emotional markers (worry, happiness, boredom) to
that information. The emotional markers help us to store information in memory;
they also reproduce the same emotions when we are subsequently thinking about
this information. 4
The selective attention process is far from perfect. As mentioned in Chapter 2,
we have a natural and usually nonconscious tendency to seek out information that
supports our self-concept or puts us in a favorable light and to ignore or undervalue
information that is contrary to our self-concept. This confirmation bias also screens
out information that is contrary to our values and assumptions. 5 Several studies
have found that people fail to perceive (or soon forget) statements and events that
undermine political parties that they support. One recent study examined how
people perceived and accepted stories during the first weeks of the Iraq War that
were subsequently retracted (acknowledged by the media as false stories). The
study found that most of the Germans and Australians surveyed dismissed the
retracted events, whereas a significantly large percentage of Americans continued
to believe these false stories, even though many of them recalled that the stories
had been retracted by the media. In essence, people in the American sample were
reluctant to reject and forget about information that supported their beliefs about
the Iraq War. 6
Finally, selective attention is influenced by our assumptions and conscious antici-
pation of future events. You are more likely to notice a co-worker’s e-mail among the
daily bombardment of messages when you expect to receive that e-mail (particularly
Perceptual organization
and interpretation
Environmental stimuli
Feeling Hearing Seeing
Selective attention and emotional marker response
Attitudes
and behavior
Smelling Tasting
Exhibit 3.1
Model of the
Perceptual Process
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70 Part Two Individual Behavior and Processes
when it is important to you). Unfortunately, expecta-
tions and assumptions also cause us to screen out
potentially important information. In one study, stu-
dents were asked to watch a 30-second video clip in
which several people passed around two basketballs.
Students who were asked just to watch the video clip
easily noticed someone dressed in a gorilla suit walk-
ing among the players for nine seconds and stopping
to thump its chest. But only half of the students who
were asked to carefully count the number of times
one basketball was passed around noticed the in-
truding gorilla. 7
This perceptual blindness also occurs when we
form an opinion or theory about something, such
as a consumer trend or an employee’s potential.
The preconception causes us to select information
that is consistent with the theory and to ignore con-
trary or seemingly irrelevant information. Studies
have reported that this faulty selective attention
occurs when police detectives and other forensic
experts quickly form theories about what hap-
pened. 8 These experts are now increasingly aware
of the need to avoid selective attention traps by
keeping an open mind, absorbing as much infor-
mation as possible, and avoiding theories too early
in the investigation.
Perceptual Organization and
Interpretation
People make sense of information even before they
become aware of it. This sense making partly in-
cludes categorical thinking —the mostly noncon-
scious process of organizing people and objects into
preconceived categories that are stored in our long-
term memory. 10 Categorical thinking relies on a va-
riety of automatic perceptual grouping principles.
Things are often grouped together on the basis of their similarity or proximity to
others. If you notice that a group of similar-looking people includes several profes-
sors, for instance, you will likely assume that the others in that group are also pro-
fessors. Another form of perceptual grouping is based on the need for cognitive
closure, such as filling in missing information about what happened at a meeting
that you didn’t attend (e.g., who was there, where it was held). A third form of
grouping occurs when we think we see trends in otherwise ambiguous information.
Several studies have found that people have a natural tendency to see patterns that
really are random events, such as presumed winning streaks among sports stars or
in gambling. 11
The process of “making sense” of the world around us also involves interpret-
ing incoming information. This happens quickly as selecting and organizing be-
cause the previously mentioned emotional markers are tagged to incoming
categorical thinking
Organizing people and
objects into precon-
ceived categories that
are stored in our long-
term memory.
Detectives Avoid Tunnel Vision with Art Appreciation Good
detective work involves more than forming a good theory
about the crime. It also involves not forming a theory too
early in the investigation. “The longer it goes, the more
theories there are,” warns FBI special agent Mark MacKizer
when describing a six-year-old investigation in which a
family was murdered in Henry County, Virginia. “We’re very
careful to let the evidence drive the investigation, not
theories. All the investigators on this case are cognizant of
not having tunnel vision.” Keith Findley, codirector of the
Wisconsin Innocence Project, advises that becoming
preoccupied with a single theory “leads investigators,
prosecutors, judges, and defense lawyers alike to focus on a
particular conclusion and then filter all evidence in a case
through the lens provided by that conclusion.” To minimize
this selective attention problem, officers in the New York
Police Department are attending art classes, where they
learn to be more mindful and take multiple perspectives of
all information. “[The class] reminded me to stop and take
in the whole scene and not just have tunnel vision,” says
NYPD captain David Grossi, adding that the class helped
him to discover evidence outside the area he normally would
have investigated.9
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Chapter 3 Perception and Learning in Organizations 71
stimuli, which are essentially quick judgments about whether that information is
good or bad for us. To give you an idea of how quickly and systematically this
nonconscious perceptual interpretation process occurs, consider the following
study: 12 After viewing video clips of university instructors teaching an undergrad-
uate class, eight observers rated the instructors on several personal characteristics
(optimistic, likable, anxious, active, etc.). The observers, who had never seen the
instructors before, were similar to each other on how they rated the instructors,
even though they completed their ratings alone. Equally important, these ratings
were very similar to the ratings completed by students who attended the actual
class.
These results may be interesting, but they become extraordinary when you realize
that the observers formed their perceptions from as little as six seconds of video—three
segments of two seconds each selected randomly from the one-hour class! Further-
more, the video didn’t have any sound. In other words, people form similar percep-
tions and judgments on the basis of very thin slices of information. Other studies
have reported similar findings for observations of high school teachers, courtroom
judges, and physicians. Collectively, these “thin slice” studies reveal that selective
attention, as well as perceptual organization and interpretation, operates very quickly
and to a large extent without our awareness.
Mental Models To achieve our goals with some degree of predictability and san-
ity, we need road maps of the environments in which we live. These road maps,
called mental models, are internal representations of the external world. 13 They
consist of visual or relational images in our mind, such as what the classroom looks
like or, conceptually, what happens when we submit an assignment late. We rely on
mental models to make sense of our environment through perceptual grouping; the
models fill in the missing pieces, including the causal connection among events. For
example, you have a mental model about attending a class lecture or seminar, including
assumptions or expectations about where the instructor and students arrange them-
selves in the room, how they ask and answer questions, and so forth. We can create a
mental image of a class in progress.
Mental models play an important role in sense making, yet they also make it dif-
ficult to see the world. For example, accounting professionals tend to see corporate
problems in terms of accounting solutions, whereas marketing professionals see the
same problems from a marketing perspective. Mental models also block our recog-
nition of new opportunities. How do we change mental models? That’s a tough
challenge. After all, we developed models from several years of experience and
reinforcement. The most important way to minimize the perceptual problems with
mental models is to constantly question them. We need to ask ourselves about the
assumptions we make. Working with people from diverse backgrounds is another
way to break out of existing mental models. Colleagues from different cultures and
areas of expertise tend to have different mental models, so working with them
makes our own assumptions more obvious.
Social Identity and Stereotyping
In the previous chapter, you learned that social identity is an important compo-
nent of a person’s self-concept. We define ourselves to a large extent by the groups
to which we belong or have an emotional attachment. Along with shaping our
mental models
Visual or relational
images in our mind that
represent the external
world.
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72 Part Two Individual Behavior and Processes
self-concept, social identity theory explains the dynamics of social perception —how
we perceive others. 14 Social perception is influenced by three activities in the pro-
cess of forming and maintaining our social identity: categorization, homogeniza-
tion, and differentiation.
• Categorization. Social identity is a comparative process, and the comparison be-
gins by categorizing people into distinct groups. By viewing someone (including
yourself) as a Texan, for example, you remove that person’s individuality and,
instead, see him or her as a prototypical representative of the group “Texans.”
This categorization then allows you to distinguish Texans from people who live
in, say, California or New Hampshire.
• Homogenization. To simplify the comparison process, we tend to think that
people within each group are very similar to each other. For instance, we
think Texans collectively have similar attitudes and characteristics, whereas
Californians collectively have their own set of characteristics. Of course,
every individual is unique, but we tend to lose sight of this fact when think-
ing about our social identity and how we compare to people in other social
groups.
• Differentiation. Social identity fulfills our inherent need to have a distinct and
positive self-concept. To achieve this, we do more than categorize people and
homogenize them; we also differentiate groups by assigning more favorable
characteristics to people in our groups than to people in other groups. This
differentiation is often subtle, but it can escalate into a “good-guy–bad-guy”
contrast when groups are in conflict with each other. 15
Stereotyping in Organizations
Stereotyping is an extension of social identity theory and a product of our natural
process of organizing information through categorical thinking. 16 Stereotyping has
three elements. First, we develop social categories and assign traits that are difficult to
observe. For instance, students might form the stereotype that professors are both
intelligent and absentminded. Personal experiences shape stereotypes to some ex-
tent, but stereotypes are mainly provided to us through cultural upbringing and me-
dia images (e.g., movie characters). Second, we assign people to one or more social
categories on the basis of easily observable information about them, such as their
gender, appearance, or physical location. Third, people who seem to belong to the
stereotyped group are assigned nonobservable traits associated with the group. For
example, if we learn that someone is a professor, we implicitly tend to assume the
person is also intelligent and absentminded.
One reason why people engage in stereotyping is that, as a form of categorical
thinking, it is a natural and mostly nonconscious “energy-saving” process that simpli-
fies our understanding of the world. It is easier to remember features of a stereotype
than the constellation of characteristics unique to everyone we meet. 17 A second rea-
son is that we have an innate need to understand and anticipate how others will be-
have. We don’t have much information when first meeting someone, so we rely
heavily on stereotypes to fill in the missing pieces. People with a strong need for cog-
nitive closure have a higher tendency to rely on stereotypes. A third reason is that
stereotyping enhances our self-concept. As mentioned earlier, the social identity pro-
cess includes differentiation—we have more favorable views of members of our own
groups than we do of people in other groups. When out-group members threaten our
stereotyping
The process of assigning
traits to people on the
basis of their member-
ship in a social category.
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Chapter 3 Perception and Learning in Organizations 73
self-concept, we are particularly motivated (often without our awareness) to assign
negative stereotypes to them. 18
Problems with Stereotyping Stereotypes are not completely fictional, but nei-
ther do they accurately describe every person in a social category. For instance,
the widespread “bean counter” stereotype of accountants views people in this pro-
fession as “single-mindedly preoccupied with precision and form, methodical and
conservative, and a boring joyless character.” 19 Although this may be true of some
accountants, it is certainly not characteristic of all—or even most—people in this
profession. Even so, once we categorize someone as an accountant, the features of
accountants in general rather than the features of the specific person get recalled,
even when the person does not possess many of the stereotypic traits.
Another problem with stereotyping is that it lays the foundation for discrimina-
tory attitudes and behavior. Most of this perceptual bias occurs as unintentional (sys-
temic) discrimination, whereby decision makers rely on stereotypes to establish notions
of the “ideal” person in specific roles. A person who doesn’t fit the ideal tends to re-
ceive a less favorable evaluation. This subtle discrimination often shows up in age
discrimination claims, such as the case in which Ryanair’s recruitment advertising
said it was looking for “young dynamic” employees. Recruiters at the Irish discount
airline probably didn’t intentionally discriminate against older people, but the tribu-
nal concluded that systemic discrimination did occur because none of the job appli-
cants were over 40 years old. 20
The more serious form of stereotype bias is intentional discrimination or prejudice,
in which people hold unfounded negative attitudes toward people belonging to a
particular stereotyped group. 21 Overt prejudice seems to be less common today
than a few decades ago, but it still exists. Over each of the past four years, for in-
stance, more than one-quarter of Americans say they overhead racial slurs in the
workplace. 22 In one recent case, three female advisers in California successfully
sued their employer, Smith Barney, on the grounds that their male co-workers were
deliberately assigned more lucrative clients (and therefore received higher pay) and
more administrative support. These complaints were raised less than a decade after
Smith Barney was ordered to correct discriminatory practices in its New York of-
fices, where female employees complained of sexist and discriminatory behavior. A
tribunal in Quebec was shocked to discover that one of Canada’s largest vegetable
farms prevented black employees from eating in the regular cafeteria. Instead, they
were relegated to a “blacks only” eating area that lacked heat, running water, proper
toilets, and refrigeration. 23 As Global Connections 3.1 describes, France is also
coming to terms with both intentional and unintentional discrimination against
non-Caucasian job applicants.
If stereotyping is such a problem, shouldn’t we try to avoid this process alto-
gether? Unfortunately, it’s not that simple. Most experts agree that categorical think-
ing (including stereotyping) is an automatic and nonconscious process. Intensive
training can minimize stereotype activation to some extent, but for the most part the
process is hardwired in our brain cells.24 Also remember that stereotyping helps us
in several valuable (although fallible) ways described earlier: minimizing mental ef-
fort, filling in missing information, and supporting our social identity. The good
news is that while it is very difficult to prevent the activation of stereotypes, we can
minimize the application of stereotypic information. Later in this chapter, we identify
ways to minimize stereotyping and other perceptual biases.
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“Your Name Says Everything
in France”
Hamid Senni wears a shirt and tie whenever he strolls along the
Champs Elysées in Paris. The reason for this formality? “If I’m in
jeans, people think I’m a shoplifter,” he says. What makes this
misperception even worse is that Senni, the son of Moroccan
immigrants, was born and raised in France. And in spite of his
education (three degrees in economics) and fluent language
skills, Senni was told more than once that he would never find a
job in France. A well-intentioned high school teacher once told
him that he should replace Hamid with a more traditional French
name. Incensed by the daily discrimination he experienced in
his own country, Senni moved to Sweden and now lives in
London, where he advises companies on ethnic diversity and
has written a book on his experience. “Going abroad was like
an exorcism,” he says bluntly. “In the U.K., diversity is seen as
an opportunity. In France it’s still seen as a problem.”
Senni’s perception of racial and ethnic discrimination in
France is supported by a recent study conducted jointly by the
French government and the International Labour Organization
(ILO). Researchers submitted two nearly identical job applica-
tions to 2,440 help-wanted ads. The main difference was that
the candidate in one application had a French-sounding name
whereas the individual in the other application had a North
African or sub-Saharan African name. Almost 80 percent of
employers preferred the applicant with the French-sounding
name. Furthermore, when applicants personally visited human
resource staff, those who had foreign names seldom received
job interviews; instead, they were often told that the job had
been filled or that the company would not be hiring after all.
The report concluded that “almost 90 percent of overall dis-
crimination occurred before the employer had even bothered
to interview both test candidates.”
One young black resident near Paris who calls himself Billy
Fabrice knows about the undercurrents of racial discrimina-
tion. “Your name says everything in France,” says Fabrice. “If
you are called Diallo or Amir, that’s all they want to know. If
you are called Jean-Pierre, you show up for a job and they
take you.” Some employers specifically ask hiring agencies
for applicants who are “BBR.” This acronym for the colors of
the French flag (bleu, blanc, rouge) is apparently a well-known
employment code to hire only white French people. In one re-
cent court case, prosecutors claimed that Garnier, a division
of L’Oréal, tried to hire mostly white staff for in-store promo-
tions. Garnier sent its temporary recruitment agency a fax
specifying that those hired should be within a specific age
range (18 to 22), have a certain clothing size, and be “BBR.”
Initially, 38 percent of candidates sent by the recruitment
agency were non-Caucasian. After the fax was sent, this
dropped to less than 5 percent.
While many French employers, including Garnier, deny prej-
udice or even systemic discrimination against non-Caucasian
applicants, others are taking steps to make the hiring process
more color-blind. Axa SA, the giant French insurance company,
introduced anonymous résumés, in which job applicants pro-
vide their qualifications but not their names, addresses, gender,
or age. Serge Simon, a 20-something French resident with
Haitian origins, is hopeful. “I think that with an anonymous
résumé, a person will be hired for what they are—for their qual-
ifications and not for the color of their skin,” he believes.25
Global Connections 3.1
74
Learning
Objectives
Hamid Senni was born and raised in France but eventually
moved to the United Kingdom because race discrimination
in his home country limited job opportunities.
After reading the next three sections, you should be able to:
3. Describe the attribution process and two attribution errors.
4. Summarize the self-fulfilling-prophecy process.
5. Explain how halo, primacy, recency, and false-consensus effects bias
our perceptions.
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Chapter 3 Perception and Learning in Organizations 75
Attribution Theory
The attribution process involves deciding whether an observed behavior or event
is caused mainly by the person (internal factors) or by the environment (external fac-
tors). 26 Internal factors include the person’s ability or motivation, whereas external
factors include lack of resources, other people, or just luck. If a co-worker doesn’t
show up for an important meeting, for instance, we infer either internal attributions
(the co-worker is forgetful, lacks motivation, etc.) or external attributions (traffic, a
family emergency, or other circumstances prevented the co-worker from attending).
People rely on the three attribution rules shown in Exhibit 3.2 to determine
whether someone’s behavior mainly has an internal or external attribution. Internal
attributions are made when the observed individual behaved this way in the past
(high consistency), he or she behaves like this toward other people or in different situ-
ations (low distinctiveness), and other people do not behave this way in similar situa-
tions (low consensus). On the other hand, an external attribution is made when there
is low consistency, high distinctiveness, and high consensus.
To illustrate how these three attribution rules operate, suppose that an employee is
making poor-quality products one day on a particular machine. We would probably
conclude that there is something wrong with the machine (an external attribution) if the
employee has made good-quality products on this machine in the past (low consistency),
attribution process
The perceptual process
of deciding whether an
observed behavior or
event is caused largely
by internal or external
factors.
Behavior is attributed
to external factors.
External Attribution
Behavior is attributed
to internal factors.
Internal Attribution
Exhibit 3.2
Rules of Attribution
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76 Part Two Individual Behavior and Processes
the employee makes good-quality products on other machines (high distinctiveness),
and other employees have recently had quality problems on this machine (high consen-
sus). We would make an internal attribution, on the other hand, if the employee usually
makes poor-quality products on this machine (high consistency), other employees pro-
duce good-quality products on this machine (low consensus), and the employee also
makes poor-quality products on other machines (low distinctiveness). 27
Attribution is an essential perceptual process because it forms cause-effect relation-
ships, which, in turn, affect how we respond to others’ behavior and how we act in the
future. How we react to a co-worker’s poor performance depends on our internal or
external attribution of that performance. Students who make internal attributions about
their poor performance are more likely to drop out of their programs, for instance. 28
Attribution Errors
People are far from perfect when making attributions. One bias, called fundamental
attribution error, refers to our tendency to see the person rather than the situation as
the main cause of that person’s behavior. 29 If an employee is late for work, observers
are more likely to conclude that the person is lazy than to realize that external factors
may have caused this behavior. Fundamental attribution error occurs because observ-
ers can’t easily see the external factors that constrain the person’s behavior. We didn’t
see the traffic jam that caused the person to be late, for instance. Research suggests that
fundamental attribution error is more common in Western countries than in Asian cul-
tures, where people are taught from an early age to pay attention to the context in in-
terpersonal relations and to see everything as being connected in a holistic way. 30
Another attribution error, known as self-serving bias, is the tendency to attribute
our favorable outcomes to internal factors and our failures to external factors. Simply
put, we take credit for our successes and blame others or the situation for our mistakes.
Self-serving bias is one of several related biases that maintain a positive self-concept,
particularly engaging in self-enhancement to maintain a positive self-evaluation. It is
evident in many aspects of work life. In annual reports, for example, executives
mainly refer to their personal qualities as reasons for the company’s successes and to
external factors as reasons for the company’s failures. 31
Self-Fulfilling Prophecy
Self-fulfilling prophecy occurs when our expectations about another person cause
that person to act in a way that is consistent with those expectations. In other words,
our perceptions can influence reality. Exhibit 3.3 illustrates the four steps in the self-
fulfilling-prophecy process using the example of a supervisor and a subordinate. 32
The process begins when the supervisor forms expectations about the employee’s
future behavior and performance. These expectations are sometimes inaccurate, be-
cause first impressions are usually formed from limited information. The supervisor’s
expectations influence his or her treatment of employees. Specifically, high-expectancy
employees (those expected to do well) receive more emotional support through non-
verbal cues (e.g., more smiling and eye contact), more frequent and valuable feedback
and reinforcement, more challenging goals, better training, and more opportunities to
demonstrate good performance.
The third step in self-fulfilling prophecy includes two effects of the supervisor’s be-
havior on the employee. First, through better training and more practice opportunities,
a high-expectancy employee learns more skills and knowledge than a low-expectancy
fundamental attribution
error
The tendency to see the
person rather than the
situation as the main
cause of that person’s
behavior.
self-serving bias
The tendency to
attribute our favorable
outcomes to internal
factors and our failures
to external factors.
self-fulfilling prophecy
The perceptual process
in which our expecta-
tions about another
person cause that
person to act in a way
that is consistent with
those expectations.
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Chapter 3 Perception and Learning in Organizations 77
employee. Second, the employee becomes more self-confident, which results in higher
motivation and willingness to set more challenging goals. 33 In the final step, high-
expectancy employees have higher motivation and better skills, resulting in better per-
formance, while the opposite is true of low-expectancy employees.
There are plenty of examples of self-fulfilling prophecies in work and school set-
tings. 34 Research has found that women perform less well on math tests after being
informed that men tend to perform better on them. Women perform better on these
tests when they are not exposed to this negative self-fulfilling prophecy. Similarly,
people over 65 receive lower results on memory tests after hearing that mental ability
declines with age. Another study reported that the performance of Israeli Defense
Force trainees was influenced by their instructor’s expectations regarding the trainee’s
potential in the program. Self-fulfilling prophecy was at work here because the in-
structor’s expectations were based on a list provided by researchers showing which
recruits had high and low potential, even though the researchers had actually listed
these trainees randomly.
Contingencies of Self-Fulfilling Prophecy
Self-fulfilling prophecies are more powerful under some conditions than others. The
self-fulfilling-prophecy effect is stronger at the beginning of a relationship, such as
when employees are first hired. It is also stronger when several people (rather than
just one person) hold the same expectations of the individual. In other words, we
might be able to ignore one person’s doubts about our potential but not the collective
doubts of several people. The self-fulfilling-prophecy effect is also stronger among
people with a history of low achievement. High achievers can draw on their past suc-
cesses to offset low expectations, whereas low achievers do not have past successes to
support their self-confidence. Fortunately, the opposite is also true: Low achievers
respond more favorably than high achievers to positive self-fulfilling prophecy. Low
achievers don’t receive this positive encouragement very often, so it probably has a
stronger effect on their motivation to excel. 35
The main lesson from the self-fulfilling-prophecy literature is that leaders need to
develop and maintain a positive, yet realistic, expectation toward all employees. This
recommendation is consistent with the emerging philosophy of positive organizational
behavior, which suggests that focusing on the positive rather than negative aspects of
becomes consistent
with the supervisor’s
expectations.
Supervisor forms
expectations about
employee.
Supervisor’s
expectations affect
his/her behavior
toward the employee.
Supervisor’s behavior
affects employee’s
abilities and
self-confidence.
Exhibit 3.3
The Self-Fulfilling-
Prophecy Cycle
positive organizational
behavior
A perspective of organi-
zational behavior that
focuses on building
positive qualities and
traits within individuals
or institutions as
opposed to focusing
on what is wrong with
them.
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78 Part Two Individual Behavior and Processes
life will improve organizational success and individual well-being. Communicating
hope and optimism is so important that it is identified as one of the critical success
factors for physicians and surgeons. Unfortunately, training programs that make leaders
aware of the power of positive expectations seem to have minimal effect. Instead, gener-
ating positive expectations and hope depends on a corporate culture of support and
learning. Hiring supervisors who are inherently optimistic toward their staff is another
way of increasing the incidence of positive self-fulfilling prophecies.
Other Perceptual Errors
Self-fulfilling prophecy, attribution, and stereotyping are among the most common
perceptual processes and biases in organizational settings, but there are many others.
Four others are briefly described below because they can also bias our perception of
the world around us.
• Halo effect. The halo effect occurs when our general impression of a person, usu-
ally based on one prominent characteristic, distorts our perception of other char-
acteristics of that person. 36 If a supervisor who values punctuality notices that an
employee is sometimes late for work, the supervisor might form a negative image
of the employee and evaluate that person’s other traits unfavorably as well. The
halo effect is most likely to occur when concrete information about the perceived
target is missing or we are not sufficiently motivated to search for it. Instead, we
use our general impression of the person to fill in the missing information.
• Primacy effect. The primacy effect is our tendency to quickly form an opinion of
people on the basis of the first information we receive about them. 37 This rapid
perceptual organization and interpretation occurs because we need to make
sense of the world around us. The problem is that first impressions—particularly
negative first impressions—are difficult to change. After categorizing someone,
we tend to select subsequent information that supports our first impression and
screen out information that opposes that impression.
• Recency effect. The recency effect occurs when the most recent information
dominates our perceptions. 38 This perceptual bias is most common when peo-
ple (especially those with limited experience) are making an evaluation involv-
ing complex information. For instance, auditors must digest large volumes of
information in their judgments about financial documents, and the most recent
halo effect
A perceptual error
whereby our general
impression of a person,
usually based on one
prominent characteristic,
colors our perception of
other characteristics of
that person.
primacy effect
A perceptual error in
which we quickly form
an opinion of people
on the basis of the first
information we receive
about them.
recency effect
A perceptual error in
which the most recent
information dominates
our perception of others.
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Chapter 3 Perception and Learning in Organizations 79
information received prior to the decision tends to get weighted more heavily
than information received at the beginning of the audit. Similarly, when super-
visors evaluate the performance of employees over the previous year, the most
recent performance information dominates the evaluation because it is the most
easily recalled.
• False-consensus effect. Sometimes called the similar-to-me effect, the false-consensus
effect is a widely observed bias in which we overestimate the extent to which
others have beliefs and characteristics similar to our own. 39 Employees who are
thinking of quitting their jobs believe that a large percentage of their co-workers
are also thinking about quitting. This bias occurs to some extent because we
associate with others who are similar to us, and we selectively remember informa-
tion that is consistent with our own views. We also believe “everyone does it” to
reinforce our self-concept regarding behaviors that do not have a positive image
(quitting, parking illegally, etc.).
After reading this section, you should be able to:
6. Discuss three ways to improve social perception, with specific appli-
cation to organizational situations.
Improving Perceptions
We can’t bypass the perceptual process, but we should make every attempt to mini-
mize perceptual biases and distortions. Three potentially effective ways to improve
perceptions include awareness of perceptual biases, self-awareness, and meaningful
interaction.
Awareness of Perceptual Biases
One of the most obvious and widely practiced ways to reduce perceptual biases is by
knowing that they exist. For example, diversity awareness training tries to minimize
discrimination by making people aware of systemic discrimination as well as preju-
dices that occur through stereotyping. This training also attempts to dispel myths
about people from various cultural and demographic groups. Awareness of per-
ceptual biases can reduce these biases to some extent by making people more mind-
ful of their thoughts and actions. However, awareness has only a limited effect. 40 For
example, trying to correct misinformation about demographic groups has limited
effect on people with deeply held prejudices against those groups. Also, self-fulfilling-
prophecy training informs managers about this perceptual bias and encourages them
to engage in more positive rather than negative self-fulfilling prophecies, yet research
has found that managers continue to engage in negative self-fulfilling prophecies after
they complete the training program.
Improving Self-Awareness
A more powerful way to minimize perceptual biases is to help people become more
aware of biases in their own decisions and behavior. As mentioned at the beginning
of this chapter, self-awareness is a critical foundation for developing a global mindset.
We need to understand our beliefs, values, and attitudes to be more open-minded
and nonjudgmental toward others. Self-awareness is equally important in other ways.
false-consensus effect
A perceptual error in
which we overestimate
the extent to which
others have beliefs and
characteristics similar
to our own.
Learning
Objectives
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80 Part Two Individual Behavior and Processes
The emerging concept of authentic leadership, for instance, emphasizes self-awareness
as the first step in a person’s ability to effectively lead others (see Chapter 12). 41
But how do we become more self-aware? One formal procedure, called the Im-
plicit Association Test (IAT), detects subtle race, age, and gender bias by associating
positive and negative words with specific demographic groups. 42 Many people are
much more cautious about their stereotypes and prejudices after discovering that
their test results show a personal bias against older people or individuals from differ-
ent ethnic backgrounds. For example, Jennifer Smith-Holladay was surprised to learn
after taking the IAT that she is biased in favor of white people, a group to which she
belongs, and in favor of heterosexuals, a group to which she does not belong. “I dis-
covered that I not only have some in-group favoritism lurking in my subconscious,
but also possess some internalized oppression in terms of my sexuality,” says Smith-
Holladay. She adds that the IAT results will make her more aware of personal biases
and help her to minimize their application in decision making. “In the case of my
own subconscious in-group favoritism for white people, for example, my charge is to
be color conscious, not color blind, and to always explicitly consider how race may
affect behaviors and decisions.” 43
More generally, people tend to reduce their perceptual biases by “knowing
themselves”—increasing awareness of their own values, beliefs, and prejudices. 44
The Johari Window is a popular model for understanding how co-workers can
increase their mutual understanding. 45 Developed by Joseph Luft and Harry Ingram
(hence the name “Johari”), this model divides information about you into four
“windows”—open, blind, hidden, and unknown—based on whether your own values,
beliefs, and experiences are known to you and to others (see Exhibit 3.4 ). The open
area includes information about you that is known both to you and to others. The
blind area refers to information that is known to others but not to you. For example,
your colleagues might notice that you are self-conscious and awkward when meeting
the company chief executive, but you are unaware of this fact. Information known to
you but unknown to others is found in the hidden area. Finally, the unknown area
includes your values, beliefs, and experiences that aren’t known to you or others.
Johari Window
A model of mutual
understanding that
encourages disclosure
and feedback to
increase our own
open area and reduce
the blind, hidden, and
unknown areas.
Exhibit 3.4
The Johari Window
Model of Self-
Awareness
and Mutual
Understanding
Known to
others
Feedback
Known to
self
Unknown to
self
Unknown to
others
D
is
c
lo
su
re
Open
area
Hidden
area
Unknown
area
Blind
area
Source: Based on J. Luft, Group Processes (Palo Alto, CA: Mayfield, 1984).
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Chapter 3 Perception and Learning in Organizations 81
The main objective of the Johari Window is to increase the size of the open
area so that both you and colleagues are aware of your perceptual limitations. This
is partly accomplished by reducing the hidden area through disclosure —informing
others of your beliefs, feelings, and experiences that may influence the work
relationship. 46 The open area also increases through feedback from others about
your behavior. This information helps you to reduce your blind area, because co-
workers often see things in you that you do not see. Finally, the combination of
disclosure and feedback occasionally produces revelations about information in the
unknown area.
Meaningful Interaction
While the Johari Window relies on dialogue, self-awareness and mutual understand-
ing can also improve through meaningful interaction . 47 This statement is based on the
contact hypothesis, which states that, under certain conditions, people who interact
with each other will be less prejudiced or perceptually biased against each other.
Simply spending time with members of other groups
can improve your understanding and opinion of
those persons to some extent. However, the contact
hypothesis effect is much stronger when people
have close and frequent interaction working to-
ward a shared goal and need to rely on each other
(i.e., cooperate rather than compete with each other).
Everyone should have equal status in that context
and should be engaged in a meaningful task.
An hour-long social gathering between executives
and frontline employees would not satisfy the con-
tact hypothesis conditions. On the other hand,
meaningful interaction might occur in many of the
international volunteering activities described in the
opening vignette to this chapter. In these programs,
professionals from developed countries work along-
side people from developing countries. Although the
volunteers have expertise (and therefore status), they
often perform work outside that expertise and in un-
familiar environments requiring the expertise of
people in the local community. Another potential
application of the contact hypothesis occurs when
senior executives and other staff from headquarters
work in frontline jobs frequently or for an extended
time. Everyone at Domino’s head office in Ann
Arbor, Michigan, attends Pizza Prep School, where
they learn how to make pizzas and run a pizza store.
Every new hire at 1-800-GOT-JUNK? (North Amer-
ica’s largest rubbish removal company) spends an
entire week on a junk removal truck to better under-
stand how the business works. “How can you possi-
bly empathize with someone out in the field unless
you’ve been on the truck yourself?” asks CEO and
founder Brian Scudamore. 49
contact hypothesis
A theory stating that
the more we interact
with someone, the less
prejudiced or perceptu-
ally biased we will be
against that person.
Air New Zealand Executives Get Meaningful Interaction If
the meal service seems a bit slower than usual on your next
Air New Zealand flight, it might be that CEO Rob Fyfe is doing
the serving while chatting with passengers. Every month, Fyfe
and his top executive team fill the roster as flight attendants,
check-in counter staff, or baggage handlers. (The executives
had to pass tests to work as cabin crew.) The frontline jobs
give the Air New Zealand executives a regular reality check
while working alongside employees. It also gives employees
an opportunity to see that the airline’s leaders are human
beings who care about staff and customers. The process is
also somewhat reversed; every month one staff member
spends a day with the CEO. “That will include sitting in on an
executive briefing and possibly even a lunch with a politician,”
Fyfe explains. “They go everywhere with me for the entire day.”
That program has been extended to other senior executives.
The result of this meaningful interaction and many other
initiatives to support employees is that morale and customer
service at Air New Zealand have soared in recent years.48
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82 Part Two Individual Behavior and Processes
Meaningful interaction does more than reduce our reliance on stereotypes. It also
potentially improves empathy toward others, that is, the extent to which we under-
stand and are sensitive to the feelings, thoughts, and situations of others. 50 You have
empathy when actively visualizing the other person’s situation and feeling that per-
son’s emotions in that situation. Empathizing with others improves our sensitivity to
the external causes of another person’s performance and behavior, thereby reducing
fundamental attribution error. A supervisor who imagines what it’s like to be a single
mother, for example, would become more sensitive to the external causes of lateness
and other events among such employees.
The perceptual process represents the filter through which information passes
from the external environment to our memory. As such, it is really the beginning of
the learning process, which we discuss next.
After reading the next two sections, you should be able to:
7. Describe the A-B-C model of behavior modification and the four
contingencies of reinforcement.
8. Describe the three features of social learning theory.
9. Outline the elements of organizational learning and ways to improve
each element.
Learning in Organizations
Learning is a relatively permanent change in behavior (or behavioral tendency) that
occurs as a result of a person’s interaction with the environment. Learning occurs
when the learner behaves differently. For example, you have “learned” computer
skills when you operate the keyboard and software more quickly than before. Learn-
ing occurs when interaction with the environment leads to behavior change. This
means that we learn through our senses, such as through study, observation, and
experience.
Some of what we learn is explicit knowledge, such as reading information in this
book. However, explicit knowledge is really only the tip of the knowledge iceberg.
Most of what we know is tacit knowledge. 51 Tacit knowledge is not documented;
rather, it is acquired through observation and direct experience. For example, airline
pilots learn to operate commercial jets more by watching experts and practicing on
flight simulators than by attending lectures. They acquire tacit knowledge by directly
experiencing the complex interaction of behavior with the machine’s response.
Three perspectives of learning tacit and explicit knowledge are reinforcement,
social learning, and direct experience. Each perspective offers a different angle for
understanding the dynamics of learning.
Behavior Modification: Learning through Reinforcement
One of the oldest perspectives on learning, called behavior modification (also
known as operant conditioning and reinforcement theory ), takes the rather extreme view
that learning is completely dependent on the environment. Behavior modification
does not question the notion that thinking is part of the learning process, but it views
human thoughts as unimportant intermediate stages between behavior and the envi-
ronment. The environment teaches us to alter our behaviors so that we maximize
positive consequences and minimize adverse consequences. 52
empathy
A person’s understanding
of and sensitivity to the
feelings, thoughts, and
situations of others.
Learning
Objectives
tacit knowledge
Knowledge that is em-
bedded in our actions
and ways of thinking
and is transmitted only
through observation
and experience.
behavior modification
A theory that explains
learning in terms of the
antecedents and conse-
quences of behavior.
learning
A relatively permanent
change in behavior (or
behavioral tendency)
that occurs as a result
of a person’s interaction
with the environment.
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Chapter 3 Perception and Learning in Organizations 83
A-B-Cs of Behavior Modification The central objective of behavior modifica-
tion is to change behavior (B) by managing its antecedents (A) and consequences (C).
This process is nicely illustrated in the A-B-C model of behavior modification, shown
in Exhibit 3.5 . 53
Antecedents are events preceding the behavior, informing employees that certain
behaviors will have particular consequences. An antecedent may be a sound from
your computer signaling that an e-mail has arrived or a request from your supervisor
asking you to complete a specific task by tomorrow. Such antecedents let employees
know that a particular action will produce specific consequences. Notice that ante-
cedents do not cause behaviors. The computer sound doesn’t cause us to open our
e-mail. Rather, the sound is a cue telling us that certain consequences are likely to
occur if we engage in certain behaviors. In behavior modification, consequences are
events following a particular behavior that influence its future occurrence. Generally
speaking, people tend to repeat behaviors that are followed by pleasant consequences
and are less likely to repeat behaviors that are followed by unpleasant consequences
or no consequences at all.
Contingencies of Reinforcement Behavior modification identifies four types of
consequences, called the contingencies of reinforcement, that increase, maintain, or re-
duce the probability that behavior will be repeated. 54
• Positive reinforcement occurs when the introduction of a consequence increases or
maintains the frequency or future probability of a specific behavior. Receiving a
bonus after successfully completing an important project is considered positive
reinforcement because it typically increases the probability that you will use
that behavior in the future.
• Punishment occurs when a consequence decreases the frequency or future proba-
bility of a behavior. This consequence typically involves introducing something
that employees try to avoid. For instance, most of us would consider being de-
moted or being ostracized by our co-workers as forms of punishment. 55
• Negative reinforcement occurs when the removal or avoidance of a consequence
increases or maintains the frequency or future probability of a specific behavior.
Supervisors apply negative reinforcement when they stop criticizing employees
Antecedents
What happens before
the behavior
Warning light flashes on
operator’s console.
Example
Behavior
What the person says or
does
Operator switches off the
machine’s power source.
Consequences
What happens after
the behavior
Co-workers thank operator
for stopping the machine.
Exhibit 3.5 A-B-Cs of Behavior Modification
Sources: Adapted from T. K. Connellan, How to Improve Human Performance (New York: Harper & Row, 1978), p. 50; F. Luthans and R. Kreitner,
Organizational Behavior Modification and Beyond (Glenview, IL: Scott, Foresman, 1985), pp. 85–88.
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84 Part Two Individual Behavior and Processes
whose substandard performance has improved. When the criticism is withheld,
employees are more likely to repeat behaviors that improved their performance.
Notice that negative reinforcement is not punishment. Whereas punishment
extinguishes behavior by introducing a negative consequence, negative rein-
forcement actually reinforces behavior by removing the negative consequence.
• Extinction occurs when the target behavior decreases because no consequence
follows it. In this respect, extinction is a do-nothing strategy. Generally, behav-
ior that is no longer reinforced tends to disappear; it becomes extinct. For in-
stance, research suggests that performance tends to decline when managers
stop congratulating employees for their good work. 56
Which contingency of reinforcement should be used in the learning process? In
most situations, positive reinforcement should follow desired behaviors and extinction
(do nothing) should follow undesirable behaviors. This approach is preferred because
punishment and negative reinforcement generate negative emotions and attitudes
toward the punisher (e.g., supervisor) and organization. However, some form of pun-
ishment (dismissal, suspension, demotion, etc.) may be necessary for extreme behav-
iors, such as deliberately hurting a co-worker or stealing inventory. Indeed, research
suggests that, under certain conditions, punishment maintains a sense of fairness. 57
Schedules of Reinforcement Along with the types of reinforcement, the fre-
quency and timing of the reinforcers also influence employee behaviors. 58 These re-
inforcement schedules can be continuous or intermittent. The most effective
reinforcement schedule for learning new tasks is continuous reinforcement —providing
positive reinforcement after every occurrence of the desired behavior. Employees
learn desired behaviors quickly, and when the reinforcer is removed, extinction also
occurs very quickly.
The best schedule for reinforcing learned behavior is a variable ratio schedule in
which employee behavior is reinforced after a variable number of times. Salespeople
experience variable ratio reinforcement because they make a successful sale (the re-
inforcer) after a varying number of client calls. They might make four unsuccessful calls
before receiving an order on the fifth one, then make 10 more calls before receiving
the next order, and so on. The variable ratio schedule makes behavior highly resis-
tant to extinction because the reinforcer is never expected at a particular time or after
a fixed number of accomplishments.
Behavior Modification in Practice Everyone practices behavior modification in
one form or another. We thank people for a job well done, are silent when displeased,
and sometimes try to punish those who go against our wishes. Behavior modification
also occurs in various formal programs to reduce absenteeism, improve task perfor-
mance, encourage safe work behaviors, and have a healthier lifestyle. 59 In Arkansas,
for example, the North Little Rock School Board introduced an absenteeism reduc-
tion plan in which teachers can earn $300 after every six months with perfect atten-
dance. Those with no more than one day of absence receive $100. ExxonMobil’s
Fawley refinery in the United Kingdom introduced a “Behave Safely Challenge” pro-
gram in which supervisors rewarded employees and contractors on the spot when
they exhibited good safety behavior or intervened to improve the safe behavior of
co-workers. These rewards were a form of positive reinforcement using a variable
ratio schedule (safe work behaviors were reinforced after a variable number of times
that they occurred). 60
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Chapter 3 Perception and Learning in Organizations 85
Although a natural part of human interaction, behavior modification has a num-
ber of limitations when applied strategically in organizational settings. One limita-
tion is “reward inflation,” in which the reinforcer is eventually considered an
entitlement. For this reason, most behavior modification programs must run infre-
quently and for a short duration. Another concern is that the variable ratio schedule
of reinforcement tends to create a lottery-style reward system, which is unpopular with
people who dislike gambling. Probably the most significant problem is behavior
modification’s radical view that behavior is learned only through personal interac-
tion with the environment. 62 This view is no longer accepted; instead, learning ex-
perts recognize that people also learn by observing others and thinking logically
about possible consequences. This learning-through-observation process is explained
by social learning theory.
Social Learning Theory: Learning by Observing
Social learning theory states that much learning occurs by observing others and
then modeling the behaviors that lead to favorable outcomes and avoiding behaviors
that lead to punishing consequences. 63 This form of learning occurs in three ways:
behavior modeling, learning behavior consequences, and self-reinforcement.
• Behavior modeling. People learn by observing the behaviors of a role model on a
critical task, remembering the important elements of the observed behaviors,
and then practicing those behaviors. 64 This is a valuable form of learning be-
cause tacit knowledge and skills are mainly acquired through observation and
practice. As an example, it is difficult to document or explain in a conversation
all the steps necessary to bake professional-quality bread. Student chefs also
need to observe the master baker’s subtle behaviors. Behavioral modeling also
social learning theory
A theory stating that
much learning occurs
by observing others and
then modeling the
behaviors that lead to
favorable outcomes
and avoiding behaviors
that lead to punishing
consequences.
Reinforcing the Long (and Healthy) Walk For many
of Horton Group’s 350 employees, the best parking
spots aren’t closest to the building; they are deep
in the outfield. The Chicago-based insurance
broker reinforces the healthy lifestyle of walking
by rewarding staff who take at least 7,000 steps
each day—more than twice the normal daily
average. Humana, Inc., has introduced a similar
program. Employees at the Kentucky-based health
insurance company use a pedometer to count the
number of steps, and the results are uploaded
from the pedometer to a Web site. The more steps
taken, the higher the rewards in the form of cash
cards that can be used at popular retail stores.
“This program has changed the culture within
Humana,” says Phil Smeltzer, Humana’s wellness
strategy leader. “People have started paying
attention to how many steps they are taking. When
it gets late in the day and they haven’t walked
enough, they take the long way to their car.”61
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86 Part Two Individual Behavior and Processes
increases self- efficacy because people gain more self-confidence after seeing
someone else perform the task. This is particularly true when observers identify
with the model, such as someone who is similar in age, experience, gender, and
related features.
• Learning behavior consequences. People learn the consequences of behavior
through logic and observation, not just through direct experience. They logi-
cally anticipate consequences after completing a task well or poorly. They also
learn behavioral consequences by observing the experiences of other people.
Consider the employee who observes a co-worker receiving a stern warning for
working in an unsafe manner. This event would reduce the observer’s likeli-
hood of engaging in unsafe behaviors because he or she has learned to antici-
pate a similar reprimand following those behaviors. 65
• Self-reinforcement. Self-reinforcement occurs whenever an employee has con-
trol over a reinforcer but doesn’t “take” it until completing a self-set goal. 66 For
example, you might be thinking about having a snack after you finish reading
the rest of this chapter. Raiding the refrigerator is a form of self-induced positive
reinforcement for completing this reading assignment. Self-reinforcement takes
many forms, such as taking a short walk, watching a movie, or simply congratu-
lating yourself for completing a task.
Learning through Experience
Along with behavior modification and social learning, another way that employees
learn is through direct experience. In fact, most tacit knowledge and skills are ac-
quired through experience as well as observation. Generally, experiential learning
begins when we engage with the environment; then we reflect on that experience and
form theories about how the world around us works. This is followed by experimen-
tation, in which we find out how well the newly formed theories work. 67 Experiential
learning requires all these steps, although people tend to prefer one step more than
the others.
One of the most important ingredients for learning through experience is that the
organization and its employees should possess a strong learning orientation. 68 As
mentioned at the beginning of this chapter, people with a global mindset have a
strong learning orientation, meaning that they welcome new learning opportunities,
actively experiment with new ideas and practices, view reasonable mistakes as a nat-
ural part of the learning process, and continuously question past practices. This indi-
vidual orientation becomes part of the organization’s culture when it is held by many
people throughout the organization.
Organizations develop and maintain a learning orientation culture by supporting
experimentation, acknowledging reasonable mistakes without penalty, and supporting
the mindset that employees should engage in continuous learning. They encourage
employees to question long-held assumptions or mental models and to actively
“unlearn” practices that are no longer ideal. Without a learning orientation, mistakes
are hidden and problems are more likely to escalate or reemerge later. It’s not
surprising, then, that one of the most frequently mentioned lessons from the best-
performing manufacturers is to expect mistakes. “At CIMB we have learnt to admit
our mistakes openly,” says Datuk Nazir Razak, chief executive of CIMB Group,
Malaysia’s second-largest financial services company. “Some of these mistakes cost us
a lot of money,” he adds, but “each mistake is a learning opportunity.” 69
self-reinforcement
Reinforcement that oc-
curs when an employee
has control over a rein-
forcer but doesn’t “take”
it until completing a
self-set goal.
learning orientation
An individual attitude
and organizational cul-
ture in which people
welcome new learning
opportunities, actively
experiment with new
ideas and practices,
view reasonable
mistakes as a natural
part of the learning
process, and continu-
ously question past
practices.
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Chapter 3 Perception and Learning in Organizations 87
From Individual to Organizational Learning
One of the most popular contemporary perspectives of organizational effectiveness is
organizational learning, which was defined in Chapter 1 as any structured activity that
improves an organization’s capacity to acquire, share, and use knowledge in ways
that improve its survival and success. Organizational learning is heavily dependent
on individual learning, but the “capacity” to acquire, share, and use knowledge means
that companies establish systems, structures, and organizational values that support
the knowledge management process. 71
• Knowledge acquisition. This includes extracting information and ideas from the
external environment as well as through insight. One of the fastest and most
powerful ways to acquire knowledge is by hiring individuals or acquiring entire
companies. Knowledge also enters the organization when employees learn from
external sources, such as by discovering new resources from suppliers or be-
coming aware of new trends from clients. A third knowledge acquisition strat-
egy is experimentation. Companies receive knowledge through insight as a
result of research and other creative processes.
• Knowledge sharing. This aspect of organizational learning involves distributing
knowledge to others across the organization. Although typically associated with
computer intranets and digital repositories of knowledge, knowledge sharing
also occurs through informal online or face-to-face communication. 72 Most so-
cial learning (such as behavioral modeling) and experiential learning are forms
of knowledge sharing because the learning is transferred from one employee to
another.
Learning from Near Misses If there is one thing more
serious than making mistakes in a hospital setting, it
would be failing to report and learn from those mis-
takes. With that idea in mind, Osaka University Hospital
in Japan has developed a “no-blame” Web-based sys-
tem whereby staff can anonymously report “near-miss”
incidents, thereby enabling the hospital to quickly iden-
tify practices that most urgently require better proce-
dures or training. For example, when the reporting
system identified medication ordering and dispensing
as the most common near misses, staff developed new
procedures to reduce those errors. Canossa Hospital in
Hong Kong also encourages staff to speak up about
near misses so that everyone can improve the quality of
hospital care. “The hospital believes through staff’s
alertness of potential risk and early reporting of near
misses, both quality and safety of the hospital could be
improved,” explains Terence Chow, Canossa Hospital’s
physiotherapy department manager. “The training pro-
gram also serves to help employees cultivate a positive
attitude towards learning from mistakes.”70
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88
• Knowledge use. The competitive advantage of knowledge comes from applying
it in ways that add value to the organization and its stakeholders. To do this,
employees must realize that the knowledge is available and that they have enough
freedom to apply it. This requires a culture that supports the learning process.
This chapter has introduced two fundamental activities in human behavior in the
workplace: perceptions and learning. These activities involve receiving information
from the environment, organizing it, and acting on it as a learning process. Our
knowledge about perceptions and learning in the workplace lays the foundation for
the next chapter, which looks at workplace emotions and attitudes.
Perception involves selecting, organizing, and interpret-
ing information to make sense of the world around us.
Perceptual organization engages categorical thinking—the
mostly nonconscious process of organizing people and
objects into preconceived categories that are stored in our
long-term memory. Mental models—internal representa-
tions of the external world—also help us to make sense of
incoming stimuli.
Social identity theory explains how we perceive people
through categorization, homogenization, and differentiation.
Stereotyping is a derivative of social identity theory, in
which people assign traits to others based on their member-
ship in a social category. Stereotyping economizes mental
effort, fills in missing information, and enhances our self-
perception and social identity. However, it also lays the
foundation for prejudice and systemic discrimination.
The attribution process involves deciding whether
an observed behavior or event is caused mainly by the
person (internal factors) or the environment (external
factors). Attributions are decided by perceptions of the
consistency, distinctiveness, and consensus of the behav-
ior. This process helps us to link together the various
pieces of our world in cause-effect relationships, but it is
also subject to attribution errors, including fundamental
attribution error and self-serving bias.
Self-fulfilling prophecy occurs when our expectations
about another person cause that person to act in a way that
is consistent with those expectations. Essentially, our expec-
tations affect our behavior toward the target person, which
then affects that employee’s opportunities and attitudes,
which then influences his or her behavior. Self- fulfilling
prophecies tend to be stronger when the relationship begins
(such as when employees first join the department), when
several people hold the expectations toward the employee,
and when the employee has a history of low achievement.
Four other perceptual errors commonly noted in orga-
nizations are the halo effect, primacy effect, recency ef-
fect, and false-consensus effect. We can minimize these
Chapter Summary
and other perceptual problems through awareness of per-
ceptual bias, self-awareness, and meaningful interaction.
Learning is a relatively permanent change in behavior
(or behavior tendency) that occurs as a result of a per-
son’s interaction with the environment. Much of what
we learn is tacit knowledge, which is embedded in our
actions without conscious awareness.
The behavior modification perspective of learning states
that behavior change occurs by altering its antecedents and
consequences. Antecedents are environmental stimuli that
provoke (not necessarily cause) behavior. Consequences
are events following behavior that influence its future
occurrence. Consequences include positive reinforcement,
punishment, negative reinforcement, and extinction. The
schedules of reinforcement also influence behavior.
Social learning theory states that much learning occurs
by observing others and then modeling the behaviors
that seem to lead to favorable outcomes and avoiding
behaviors that lead to punishing consequences. It also
recognizes that we often engage in self-reinforcement.
Behavior modeling is effective because it transfers tacit
knowledge and enhances the observer’s confidence in
performing the task.
Many companies now use experiential learning be-
cause employees do not acquire tacit knowledge through
formal classroom instruction. Experiential learning be-
gins with concrete experience, followed by reflection on
that experience, formation of a theory from that experi-
ence, and then testing of that theory in the environment.
Organizational learning is any structured activity that
improves an organization’s capacity to acquire, share,
and use knowledge in ways that improve its survival and
success. Organizations acquire knowledge through indi-
vidual learning and experimentation. Knowledge sharing
occurs mainly through various forms of communication
and training. Knowledge use occurs when employees re-
alize that the knowledge is available and that they have
enough freedom to apply it.
88 Part Two Individual Behavior and Processes
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89
implications of your answer for your university or
college?
4. During a diversity management session, a manager
suggests that stereotypes are a necessary part of
working with others. “I have to make assumptions
about what’s in the other person’s head, and
stereotypes help me do that,” she explains. “It’s
better to rely on stereotypes than to enter a work-
ing relationship with someone from another culture
without any idea of what they believe in!” Discuss
the merits of and problems with the manager’s
statement.
5. Describe how a manager or coach could use the pro-
cess of self-fulfilling prophecy to enhance an individ-
ual’s performance.
6. Describe a situation in which you used behavior
modification to influence someone’s behavior. What
specifically did you do? What was the result?
7. Why are organizations moving toward the use of ex-
periential approaches to learning? What conditions
are required for success?
8. BusNews Corp. is the leading stock market and busi-
ness news service. Over the past two years, BusNews
has experienced increased competition from other
news providers. These competitors have brought in
Internet and other emerging computer technologies
to link customers with information more quickly.
There is little knowledge within BusNews about how
to use these computer technologies. On the basis of
the knowledge acquisition processes for knowledge
management, explain how BusNews might gain the
intellectual capital necessary to become more com-
petitive in this respect.
1. Several years ago, senior executives at energy
company CanOil wanted to acquire an exploration
company (HBOG) that was owned by another
energy company, AmOil. Rather than face a hos-
tile takeover and unfavorable tax implications,
CanOil’s two top executives met with the CEO of
AmOil to discuss a friendly exchange of stock to
carry out the transaction. AmOil’s chief executive
was previously unaware of CanOil’s plans, and as
the meeting began, the AmOil executive warned
that he was there merely to listen. The CanOil
executives were confident that AmOil wanted to
sell HBOG because energy legislation at the time
made HBOG a poor investment for AmOil.
AmOil’s CEO remained silent for most of the
meeting, which CanOil executives interpreted as
an implied agreement to proceed to buy AmOil
stock on the market. But when CanOil launched
the stock purchase a month later, AmOil’s CEO
was both surprised and outraged. He thought he
had given the CanOil executives the cold shoulder,
remaining silent to show his disinterest in the deal.
The misunderstanding nearly bankrupted CanOil
because AmOil reacted by protecting its stock.
What perceptual problem(s) likely occurred that
led to this misunderstanding?
2. What mental models do you have about attending
a college or university lecture? Are these mental
models helpful? Could any of these mental models
hold you back from achieving the full benefit of
the lecture?
3. Do you define yourself in terms of the university or
college you attend? Why or why not? What are the
Critical Thinking Questions
attribution process, p. 75
behavior modification, p. 82
categorical thinking, p. 70
contact hypothesis, p. 81
empathy, p. 82
false-consensus effect, p. 79
fundamental attribution
error, p. 76
global mindset, p. 68
halo effect, p. 78
Johari Window, p. 80
learning, p. 82
learning orientation, p. 86
mental models, p. 71
perception, p. 68
positive organizational
behavior, p. 77
primacy effect, p. 78
recency effect, p. 78
selective attention, p. 68
self-fulfilling prophecy, p. 76
self-reinforcement, p. 86
self-serving bias, p. 76
social learning theory, p. 85
stereotyping, p. 72
tacit knowledge, p. 82
Key Terms
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90
Case Study 3.1 HY DAIRIES, INC.
Syd Gilman read the latest sales figures with a great
deal of satisfaction. The vice president of marketing
at Hy Dairies, Inc., a large midwestern milk prod-
ucts manufacturer, was pleased to see that the mar-
keting campaign to improve sagging sales of Hy’s
gourmet ice-cream brand was working. Sales vol-
ume and market share of the product had increased
significantly over the past two quarters compared
with the previous year.
The improved sales of Hy’s gourmet ice cream
could be credited to Rochelle Beauport, who was
assigned to the gourmet ice-cream brand last year.
Beauport had joined Hy less than two years ago as
an assistant brand manager after leaving a similar
job at a food products firm. She was one of the few
women of color in marketing management at Hy
Dairies and had a promising career with the com-
pany. Gilman was pleased with Beauport’s work
and tried to let her know this in the annual perfor-
mance reviews. He now had an excellent opportu-
nity to reward her by offering her the recently
vacated position of market research coordinator. Al-
though technically only a lateral transfer with a
modest salary increase, the marketing research coor-
dinator job would give Beauport broader experience
in some high-profile work, which would enhance
her career with Hy Dairies. Few people were aware
that Gilman’s own career had been boosted by
working as marketing research coordinator at Hy
several years earlier.
Rochelle Beauport had also seen the latest sales
figures on Hy’s gourmet ice cream and was expect-
ing Gilman’s call to meet with her that morning.
Gilman began the conversation by briefly mention-
ing the favorable sales figures and then explained
that he wanted Beauport to take the marketing re-
search coordinator job. Beauport was shocked by
the news. She enjoyed brand management and par-
ticularly the challenge involved with controlling a
product that directly affected the company’s profit-
ability. Marketing research coordinator was a techni-
cal support position—a “backroom” job—far removed
from the company’s bottom-line activities. Market-
ing research was not the route to top management in
most organizations, Beauport thought. She had been
sidelined.
After a long silence, Beauport managed a
weak “Thank you, Mr. Gilman.” She was too be-
wildered to protest. She wanted to collect her
thoughts and reflect on what she had done wrong.
Also, she did not know her boss well enough to be
openly critical.
Gilman recognized Beauport’s surprise, which he
naturally assumed was her positive response to hear-
ing of this wonderful career opportunity. He, too,
had been delighted several years earlier about his
temporary transfer to marketing research to round
out his marketing experience. “This move will be
good for both you and Hy Dairies,” said Gilman as
he escorted Beauport from his office.
Beauport was preoccupied with several tasks
that afternoon, but she was able to consider the
day’s events that evening. She was one of the top
women and few minorities in brand management
at Hy Dairies and feared that she was being side-
lined because the company didn’t want women or
people of color in top management. Her previous
employer had made it quite clear that women
“couldn’t take the heat” in marketing management
and tended to place women in technical support
positions after a brief term in lower brand manage-
ment jobs. Obviously Syd Gilman and Hy Dairies
were following the same game plan. Gilman’s com-
ment that the coordinator job would be good for
her was just a nice way of saying that Beauport
couldn’t go any further in brand management at
Hy Dairies.
Beauport now faced the difficult decision of
whether to confront Gilman and try to change Hy
Dairies’ sexist and possibly racist practices or to
leave the company.
Discussion Questions
1. Apply your knowledge of stereotyping and so-
cial identity theory to explain what went wrong
here.
2. What other perceptual error is apparent in this
case study?
3. What can organizations do to minimize misper-
ceptions in these types of situations?
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Case Study 3.2 HOW FAILURE BREEDS SUCCESS
Coca-Cola chairman and for-
mer CEO E. Neville Isdell
knows that the best companies
embrace their mistakes and learn from them. That’s
why Isdell doesn’t mind rhyming off the list of
Coke’s failures over the years. In fact, he is keen to
convince employees and shareholders that he will
tolerate the failures that will inevitably result from
the bigger risks that he wants Coke to take. At the
same time, say analysts, balancing a learning cul-
ture with a performance culture is a perennial chal-
lenge. Intuit, the tax software company, thinks it
has a solution. When one of its marketing strategies
recently flopped, the company celebrated the fail-
ure and spent a lot of time dissecting it.
This BusinessWeek case study describes several
ways that companies learn from their mistakes while
still maintaining a strong focus on performance and
the bottom line. Read the full text of this Business-
Week article at www.mhhe.com/mcshane5e , and pre-
pare for the discussion questions below.
Discussion Questions
1. Describe the experiential learning process that
companies mentioned in this case study apply to
learn from their mistakes and failures.
2. What perceptual problems do managers need to
overcome with failures? How can these percep-
tual problems be minimized?
Source: J. McGregor, “How Failure Breeds Success,” BusinessWeek,
10 July 2006, p. 42.
Class Exercise 3.3 THE LEARNING EXERCISE
PURPOSE This exercise is designed to help you
understand how the contingencies of reinforcement
in behavior modification affect learning.
MATERIALS Any objects normally available in a
classroom will be acceptable for this activity.
INSTRUCTIONS (LARGE OR SMALL CLASS)
The instructor will ask for three volunteers, who
are then briefed outside the classroom. The instruc-
tor will spend a few minutes briefing the remaining
students in the class about their duties. Then, one
of the three volunteers will enter the room to par-
ticipate in the exercise. When completed, the sec-
ond volunteer enters the room and participates in
the exercise. When completed, the third volunteer
enters the class and participates in the exercise.
For students to gain the full benefit of this exer-
cise, no other information will be provided here.
However, the instructor will have more details at the
beginning of this fun activity.
91
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http://www.mhhe.com/mcshane5e
Self-Assessment 3.5
HOW MUCH PERCEPTUAL STRUCTURE DO YOU NEED?
PURPOSE This self-assessment is designed to help
you estimate your personal need for perceptual
structure.
INSTRUCTIONS Read each of the statements be-
low and decide how much you agree with each ac-
cording to your attitudes, beliefs, and experiences.
Then use the scoring key in Appendix B at the end
of this book to calculate your results. It is important
for you to realize that there are no right or wrong
answers to these questions. This self-assessment
should be completed alone so that you can rate
yourself honestly without concerns of social com-
parison. Class discussion will focus on the meaning
of need for structure in terms of how we engage dif-
ferently in the perceptual process at work and in
other settings.
92
Class Exercise 3.4 STEREOTYPING IN CORPORATE
ANNUAL REPORTS
PURPOSE This exercise is designed to help you
diagnose evidence of stereotyping and identify cor-
porate role models that minimize stereotyping in
corporate annual reports.
MATERIALS Students need to complete their re-
search for this activity prior to class, including select-
ing a publicly traded company and downloading the
past four or more years of its fully illustrated annual
reports.
INSTRUCTIONS The instructor may have students
work alone or in groups for this activity. Students will
select a company that is publicly traded and posts its
annual reports on the company Web site. Ideally, an-
nual reports for at least the past four years should be
available, and these reports should be presented in
the final illustrated format (typically PDF replicas of
the original hard-copy report).
Students will closely examine images in the se-
lected company’s recent annual reports in terms of
how women, visible minorities, and older employ-
ees and clients are presented. Specifically, students
should be prepared to discuss and provide details in
class regarding:
1. The percentage of images showing (i.e., visual
representation of) women, visible minorities,
and older workers and clients. Students should
also be sensitive to the size and placement of
these images on the page and throughout the an-
nual report.
2. The roles in which women, visible minorities,
and older workers and clients are depicted. For
example, are women shown more in traditional
or nontraditional occupations and nonwork
roles in these annual reports?
If several years of annual reports are available,
students should pick one that is a decade or more
old and compare its visual representation of and role
depiction of women, visible minorities, and older
employees and clients.
If possible, students should pick one of the most
blatantly stereotypic illustrations they can find in
these annual reports to show in class, either as a
hard-copy printout or as a computer projection.
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93
To what extent do you agree or
disagree with each of these
statements about yourself?
1. It upsets me to go into a situation without
knowing what I can expect from it.
Moderately
agree
Strongly
agree
Slightly
agree
Slightly
disagree
Moderately
disagree
Strongly
disagree
2. I’m not bothered by things that interrupt
my daily routine.
3. I enjoy being spontaneous.
4. I find that a well-ordered life with regular
hours makes my life tedious.
5. I find that a consistent routine enables
me to enjoy life more.
6. I enjoy having a clear and structured
mode of life.
7. I like to have a place for everything and
everything in its place.
8. I don’t like situations that are
uncertain.
9. I hate to change my plans at the last
minute.
10. I hate to be with people who are
unpredictable.
11. I enjoy the exhilaration of being in
unpredictable situations.
12. I become uncomfortable when the rules
in a situation are not clear.
Personal Need for Structure Scale
Source: M. M. Thompson, M. E. Naccarato, and K. E. Parker, “Assessing Cognitive Need: The Development of the Personal Need for Structure and the
Personal Fear of Invalidity Scales,” paper presented at the annual meeting of the Canadian Psychological Association, Halifax, Nova Scotia, 1989.
Reprinted with permission.
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Self-Assessment 3.6
ASSESSING YOUR PERSPECTIVE TAKING (COGNITIVE EMPATHY)
Empathy is an important perceptual ability in social
relations, but the degree to which people empathize
varies considerably. This self-assessment provides an
estimate of one form of empathy, known as cognitive
empathy or perspective taking. That is, it measures the
level of your cognitive awareness of another person’s
situational and individual circumstances. To com-
plete this scale, indicate the degree to which
each of the statements presented does or does
not describe you very well. You need to be
honest with yourself for a reasonable estimate of
your level of perspective taking. The results show
your relative position along the perspective-taking
continuum and the general meaning of this score.
Self-Assessment 3.7
ASSESSING YOUR EMOTIONAL EMPATHY
Empathy is an important perceptual ability in social
relations, but the degree to which people empathize
varies considerably. This self-assessment provides an
estimate of one form of empathy, known as emotional
empathy— the extent that you are able to experience
the emotions or feelings of another person. To com-
plete this scale, indicate the degree to which each of
the statements presented does or does not de-
scribe you very well. You need to be honest
with yourself for a reasonable estimate of
your level of emotional empathy. The results show
your relative position along the emotional empathy
continuum and the general meaning of this score.
After reading this chapter, if you feel that you need additional tips on managing your anxiety, see
www.mhhe.com/mcshane5e for more in-depth information and interactivities that correspond to
this chapter.
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http://www.mhhe.com/mcshane5e
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You know the fun is about to begin at Suntech Optics when employees spot the pineapple
wearing sunglasses. The bespectacled fruit is the mascot for the eyewear supplier’s Have
Fun Team, which is responsible for creating various forms of workplace levity. Employees
at the company’s headquarters in Vancouver, Canada, might discover a puzzle on their
desk, with a prize awarded to the person who solves it first. Dozens of stuffed bears are
brought to work on Bring Your Teddy Bear to Work Day. Halloween is a special treat as
staff dress up for the occasion and show off their pumpkin-carving skills. “We try to infuse
having fun into our whole corporate culture,” says
Suntech manager Deborah Peck. “It’s one of our core
strategies. It’s part of our life.”
Fun at work? It sounds like an oxymoron. But to
attract and keep talented employees, companies are
finding creative ways to generate positive emotions in
the workplace. Don’t be surprised if you see staff at John
Laing Homes, a construction firm in California, walking
around in slippers on one of their crazy-dress days.
AstraZeneca’s “Fun Department” set up a mock doctor’s
office where employees with “terminal seriousness”
receive “prescriptions to play.” The pharmaceutical
company is also known for fun pranks, such as
surprising an employee on his birthday with a cubicle
filled to the brim with colorful peanut-shaped packing
material. Employees at Mott MacDonald, a global
management, engineering, and development consulting
firm, also have plenty of fun. For example, the Abu Dhabi
oil and gas team has an annual desert safari, complete
with camel rides (shown in photo).
Another fun-focused company is Dixon Schwabl,
a 75-employee marketing and public relations firm in
Rochester, New York. “Fun is not just a word here, it is
a way of life!” wrote one employee in a recent survey.
Employees enjoy bocce tournaments, softball leagues,
golf chipping contests, water balloon toss events,
Halloween pumpkin-decorating contests, a padded
primal scream room to release tension, and a spiral slide for those who want to descend
more quickly to the main floor. “At the end of the day, everyone’s going to be happier and
the product will be far better than if they’re not happy,” says Dixon Schwabl CEO Lauren
Dixon. 1
Having fun is part of the culture at Mott MacDonald. This
photo shows a Mott employee during the Abu Dhabi oil and
gas team’s annual desert safari for staff and families.
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4
Workplace Emotions,
Attitudes, and Stress
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Explain how emotions and cognition
(conscious reasoning) influence attitudes
and behavior.
2. Identify the conditions that require, and the
problems associated with, emotional labor.
3. Describe the four dimensions of emotional
intelligence.
4. Summarize the consequences of job
dissatisfaction in terms of the exit-
voice-loyalty-neglect model.
5. Discuss the effects of job satisfaction on
job performance and customer service.
6. Distinguish affective and continuance
commitment and discuss their influence
on employee behavior.
7. Describe five strategies for increasing
organizational (affective) commitment.
8. Define stress and describe the stress
experience.
9. Explain why a stressor might produce
different stress levels in two people.
10. Identify five ways to manage workplace
stress.
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98 Part Two Individual Behavior and Processes
Dixon Schwabl, Mott MacDonald, AstraZeneca, John Laing Homes, Suntech Optics,
and many other companies around the world are discovering that emotions and
attitudes make a difference in individual behavior and well-being, as well as in the
organization’s performance and customer service. Over the past decade, the field
of organizational behavior has experienced a sea change in thinking about work-
place emotions, so this chapter begins by introducing the concept and explaining
why researchers are so eager to discover how emotions influence attitudes and
behavior. Next, we consider the dynamics of emotional labor, followed by the
popular topic of emotional intelligence. The specific work attitudes of job satisfac-
tion and organizational commitment are then discussed, including their associa-
tion with various employee behaviors and work performance. The latter part of
this chapter examines work-related stress, beginning with an overview of the stress
experience and the consequences of distress. Three major work-related stressors
are then described, followed by coverage of five ways to manage stress in the
workplace.
Learning
Objectives
After reading this section, you should be able to:
1. Explain how emotions and cognition (conscious reasoning) influence
attitudes and behavior.
Emotions in the Workplace
Emotions have a profound effect on almost everything we do in the workplace. This
is a strong statement, and one that you would rarely find a decade ago in organiza-
tional behavior research or textbooks. Until recently, OB experts assumed that a
person’s thoughts and actions are governed primarily by conscious reasoning (called
cognition ). Yet groundbreaking neuroscience discoveries have revealed that our per-
ceptions, attitudes, decisions, and behavior are influenced by both cognition and
emotion. 2 In fact, emotions may have a greater influence because emotional processes
often occur before conscious cognitive processes and, consequently, influence the
latter. By ignoring emotionality, many theories have
overlooked a large piece of the puzzle about human
behavior in the workplace.
Emotions are physiological, behavioral, and psycho-
logical episodes experienced toward an object, person,
or event that create a state of readiness. 3 These “epi-
sodes” are very brief events that typically subside or
occur in waves lasting from milliseconds to a few min-
utes. Emotions are directed toward someone or some-
thing. For example, we experience joy, fear, anger, and
other emotional episodes toward tasks, customers, or a
software program we are using. This differs from moods,
which are less intense and longer-term emotional states
that are not directed toward anything in particular. 4
Emotions are experiences. They represent changes
in our physiological state (e.g., blood pressure, heart
rate), psychological state (e.g., ability to think clearly),
and behavior (e.g., facial expression). Most of these
emotions
Physiological, behavioral,
and psychological
episodes experienced
toward an object, person,
or event that create a
state of readiness.
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Chapter 4 Workplace Emotions, Attitudes, and Stress 99
emotional reactions are subtle and occur without our awareness. This is a particularly
important point because people often think about “getting emotional” when the subject
of emotions is mentioned. In reality, you experience emotions every minute but aren’t
even aware of most of them. Finally, emotions put us in a state of readiness. When we
get worried, for example, our heart rate and blood pressure increase to make our body
better prepared to engage in fight or flight. Strong emotions also trigger our conscious
awareness of a threat or opportunity in the external environment. 5
Types of Emotions
People experience many emotions as well as various combinations of emotions, but
all of them have two common features. First, emotions generate a global evaluation
(called core affect ) that something is good or bad, helpful or harmful, to be approached
or to be avoided. Second, all emotions produce some level of activation. However,
they vary considerably in this activation, that is, in how much they demand our atten-
tion and motivate us to act. These two dimensions of emotions are the foundation of
the circumplex model shown in Exhibit 4.1 . 6 Distressed is a negative emotion that
generates a high level of activation, whereas relaxed is a pleasant emotion that has
fairly low activation.
Exhibit 4.1
Circumplex Model of
Emotions
Source: Adapted from R. J. Larsen, E. Diener, and R. E. Lucas, “Emotion: Models, Measures, and Individual Differences,”
in Emotions in the Workplace, ed. R. G. Lord, R. J. Klimoski, and R. Kanfer (San Francisco: Jossey-Bass, 2002),
pp. 64–113; J. A. Russell, “Core Affect and the Psychological Construction of Emotion,” Psychological Review 110,
no. 1 (2003), pp. 145–172.
Aroused
Astonished
Stimulated
Quiet
Tranquil
Still
Negative
Low
High
Positive
High-activation
negative emotions
High-activation
positive emotions
Low-activation
negative emotions
Evaluation
A
ct
iv
at
io
n
Low-activation
positive emotions
Unhappy
Sad
Gloomy
Happy
Cheerful
Delighted
Bored
Tired
Drowsy
Relaxed
Content
Calm
Distressed
Fearful
Jittery
Enthusiastic
Elated
Excited
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100 Part Two Individual Behavior and Processes
Emotions, Attitudes, and Behavior
To understand how emotions influence our thoughts and behavior in the workplace,
we first need to know about attitudes. Attitudes represent the cluster of beliefs, as-
sessed feelings, and behavioral intentions toward a person, object, or event (called an
attitude object ). 7 Attitudes are judgments, whereas emotions are experiences. In other
words, attitudes involve conscious logical reasoning, whereas emotions operate as
events, usually without our awareness. We also experience most emotions briefly,
whereas our attitude toward someone or something is more stable over time.
Until recently, experts described attitudes in terms of the three cognitive components
illustrated on the left side of Exhibit 4.2 : beliefs, feelings, and behavioral intentions. Now
we have good evidence that a parallel emotional process is also at work, shown on the
right side of the exhibit. 8 Using attitude toward mergers as an example, let’s look more
closely at this model, beginning with the traditional cognitive perspective of attitudes.
• Beliefs. These are your established perceptions about the attitude object—what you
believe to be true. For example, you might believe that mergers reduce job secu-
rity for employees in the merged firms. Or you might believe that mergers in-
crease the company’s competitiveness in this era of globalization. These beliefs are
perceived facts that you acquire from past experience and other forms of learning.
• Feelings. Feelings represent your positive or negative evaluations of the attitude
object. Some people think mergers are good; others think they are bad. Your
like or dislike of mergers represents your assessed feelings. According to the tra-
ditional cognitive perspective of attitudes (left side of the model), feelings are
calculated from your beliefs about mergers. If you believe that mergers typically
have negative consequences such as layoffs and organizational politics, you will
form negative feelings toward mergers in general or about a specific planned
merger in your organization.
attitudes
The cluster of beliefs,
assessed feelings, and
behavioral intentions
toward a person, object,
or event (called an
attitude object).
Behavior
Attitude
Emotional
episodes
Perceived environment
Emotional process
Behavioral
intentions
Feelings
Beliefs
Cognitive process
Exhibit 4.2
Model of Emotions,
Attitudes, and
Behavior
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Chapter 4 Workplace Emotions, Attitudes, and Stress 101
• Behavioral intentions. Intentions represent your motivation to engage in a particu-
lar behavior regarding the attitude object. 9 Upon hearing that the company will
merge with another organization, you might become motivated to look for a job
elsewhere or possibly to complain to management about the merger decision.
Your feelings toward mergers motivate your behavioral intentions, and which
actions you choose depends on your past experience, self-concept (values,
personality), and social norms of appropriate behavior.
Exhibit 4.2 also illustrates that behavioral intentions directly predict behavior.
However, whether your intentions translate into behavior depends on all four
elements of the MARS model, such as opportunity and ability to act. Attitudes are
also more likely to influence behavior when they are strong, meaning that they are
anchored by strong emotions.
How Emotions Influence Attitudes and Behavior As we mentioned, emotions
play a central role in forming and changing employee attitudes. 10 The right side of
Exhibit 4.2 illustrates this process, which (like the cognitive process) also begins with
perceptions of the world around us. The emotional centers of our brain quickly and
imprecisely tag emotional markers to incoming sensory information on the basis of
whether that information supports or threatens our innate drives. These markers are
not calculated feelings; they are automatic and nonconscious emotional responses
based on very thin slices of sensory information. 11
Returning to the example of your attitude toward mergers, you might experience
excitement, worry, nervousness, or happiness upon learning that your company
intends to merge with a competitor. The large dots on the right side of Exhibit 4.2
illustrate the numerous emotional episodes you experience upon hearing the merger
announcement, subsequently thinking about the merger, discussing the merger with
co-workers, and so on. These emotions are transmitted to the logical reasoning
process, where they are logically analyzed along with other information about the
attitude object. 12 Thus, while you are consciously evaluating whether the merger is
good or bad, your emotions have already formed an opinion, which then sways your
conscious evaluation. In fact, we often deliberately “listen in” on our emotions to
help us consciously decide whether to support or oppose something. 13 If you experi-
ence mainly positive emotions whenever you think about or discuss the merger, these
positive emotional episodes will lean your logical reasoning toward positive feelings
regarding the merger.
The dual cognitive-emotional attitude process helps us to understand why Dixon
Schwabl and many other companies want their employees to experience plenty of
positive emotional episodes each day. Work attitudes are shaped by the almost con-
tinuous bombardment of emotional experiences people have at work. Those who
experience more positive emotions tend to have more favorable attitudes toward
their jobs and organizations, even when they aren’t consciously aware of many of
these emotional experiences. And when they do think about how they feel about
their jobs, they listen in on the emotions regenerated from past positive or negative
events in the workplace.
The influence of both cognitive reasoning and emotions on attitudes is most
apparent when they disagree with each other. People occasionally experience this
mental tug-of-war, sensing that something isn’t right even though they can’t think of
any logical reason to be concerned. This conflicting experience indicates that the
person’s logical analysis of the situation (left side of Exhibit 4.2) can’t identify reasons
to support the automatic emotional reaction (right side of Exhibit 4.2). 14 Should we
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102 Part Two Individual Behavior and Processes
pay attention to our emotional response or our logical analysis? This question is not
easy to answer, but some studies indicate that while executives tend to make quick
decisions based on their gut feelings (emotional response), the best decisions tend to
occur when executives spend time logically evaluating the situation. 15 Thus, we
should pay attention to both the cognitive and emotional sides of the attitude model,
and hope they agree with each other most of the time!
One last comment about Exhibit 4.2: Notice the arrow from the emotional epi-
sodes to behavior. It indicates that emotions directly (without conscious thinking)
influence a person’s behavior. This occurs when we jump suddenly if someone sneaks
up on us. It also occurs in everyday situations because even low-intensity emotions
automatically change our facial expressions. These actions are not carefully thought
out. They are automatic emotional responses that are learned or hardwired by hered-
ity for particular situations. 16
Cognitive Dissonance Emotions and attitudes usually lead to behavior, but the
opposite sometimes occurs through the process of cognitive dissonance . 17 Cognitive
dissonance occurs when we perceive an inconsistency between our beliefs, feelings,
and behavior. When this inconsistency violates our self-concept, it generates emo-
tions that motivate us to change one or more of these elements. For example, let’s say
that you agreed to accept a foreign posting, even though it didn’t interest you, because
you believed it might be necessary for promotion into senior management. However,
you later learn that many people become senior managers in the firm without spend-
ing any time on foreign assignment. In this situation, you will likely experience cogni-
tive dissonance because of the inconsistency between your beliefs and feelings (dislike
foreign assignments) and behavior (accepted a foreign posting).
Behavior is usually more difficult to change than beliefs and feelings. This is par-
ticularly true when the dissonant behavior has been observed by others, was done
voluntarily, and can’t be undone. In the foreign assignment example, you experience
cognitive dissonance because others know that you accepted the assignment, it was
accepted voluntarily (e.g., you weren’t threatened with dismissal if you refused the
assignment), and working overseas can’t be undone (although you might be able to
change your mind beforehand). Thus, people usually change their beliefs and feel-
ings to reduce the inconsistency. For example, you might convince yourself that the
foreign posting is not so bad after all because it will develop your management skills.
Alternatively, you might downplay the features that previously made the foreign
posting less desirable. Over time, a somewhat negative attitude toward foreign assign-
ments becomes a more favorable one.
Emotions and Personality Our coverage of the dynamics of workplace emotions
wouldn’t be complete unless we mentioned that emotions are also partly determined
by a person’s personality, not just workplace experiences. 18 Some people experience
positive emotions as a natural trait. These people are generally extroverted—outgoing,
talkative, sociable, and assertive (see Chapter 2). In contrast, other people have a
personality with a tendency to experience more negative emotions. Positive and neg-
ative emotional traits affect a person’s attendance, turnover, and long-term work
attitudes. For example, several studies report that people with a negative emotional
trait have lower levels of job satisfaction and higher levels of job burnout. 19 While
positive and negative personality traits have some effect, other research concludes
that the actual situation in which people work has a noticeably stronger influence on
their attitudes and behavior. 20
cognitive dissonance
Condition that occurs
when we perceive an
inconsistency between
our beliefs, feelings,
and behavior.
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Chapter 4 Workplace Emotions, Attitudes, and Stress 103
Learning
Objectives
After reading the next two sections, you should be able to:
2. Identify the conditions that require, and the problems associated
with, emotional labor.
3. Describe the four dimensions of emotional intelligence.
Managing Emotions at Work
The Elbow Room Café is packed and noisy on this Saturday morning. A customer at
the Vancouver restaurant half shouts across the room for more coffee. A passing waiter
scoffs: “You want more coffee, get it yourself!” The customer only laughs. Another
diner complains loudly that he and his party are running late and need their food. This
time, restaurant manager Patrick Savoie speaks up: “If you’re in a hurry, you should
have gone to McDonald’s.” The diner and his companions chuckle. To the uninitiated,
the Elbow Room Café is an emotional basket case, where staff turn rudeness into a fine
art. But it’s all a performance—a place where guests can enjoy good food and play out
their emotions about dreadful customer service. “It’s almost like coming to a theatre,”
says Savoie, who spends much of his time inventing new ways to insult the clientele. 21
Whether giving the most insulting service at Elbow Room Café in Vancouver or the
friendliest service at Dixon Schwabl in Rochester, New York, people are expected to
manage their emotions in the workplace. They must conceal their frustration when serv-
ing an irritating customer, display compassion to an ill patient, and hide their boredom
in a long meeting with senior management. These are all forms of emotional labor —the
effort, planning, and control needed to express organizationally desired emotions during
interpersonal transactions. 22 Almost everyone is expected to abide by display rules —norms
requiring us to display specific emotions and to hide other emotions.
Emotional labor is higher in jobs requiring a variety of emotions (e.g., anger as
well as joy) and more intense emotions (e.g., showing delight rather than smiling
weakly), as well as in jobs where interaction with clients is frequent and has a longer
duration. Emotional labor also increases when employees must precisely rather than
casually abide by the display rules. 23 This particularly occurs in the service industries,
where employees have frequent face-to-face interaction with clients. For instance, the
Ritz-Carlton Hotel Co.’s motto is “Smile—we are on stage.” To ensure that this stan-
dard is maintained at the dozens of properties it manages around the world, the Ritz
developed a detailed training program that teaches staff how to look pleasant in front
of guests. Its orientation manual even includes two pages on phrases to use and to
avoid saying, such as “My pleasure” rather than “OK, sure.” 24
Emotional Display Norms across Cultures
How much we are expected to hide or reveal our true emotions in public depends to
some extent on the culture in which we live. Cultural values in some countries—
particularly Ethiopia, Korea, Japan, and Austria—expect people to subdue their
emotional expression and minimize physical contact with others. Even voice intona-
tion tends to be monotonic. In other countries—notably Kuwait, Egypt, Spain, and
Russia—cultural values allow or encourage open display of one’s true emotions. People
are expected to be transparent in revealing their thoughts and feelings, dramatic in
their conversational tones, and animated in their use of nonverbal behaviors to get
their message across. These cultural variations in emotional display can be quite
emotional labor
The effort, planning,
and control needed to
express organizationally
desired emotions
during interpersonal
transactions.
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104 Part Two Individual Behavior and Processes
noticeable. One survey reported that 83 percent of Japanese believe it is inappropri-
ate to get emotional in a business context, compared with 40 percent of Americans,
34 percent of French, and only 29 percent of Italians. In other words, Italians are
more likely to accept or tolerate people who display their true emotions at work,
whereas emotional behavior would be considered rude or embarrassing in Japan. 26
Emotional Dissonance
Emotional labor can be challenging for most of us because it is difficult to conceal true
emotions and to display the emotions required by the job. Joy, sadness, worry, and
other emotions automatically activate a complex set of facial muscles that are difficult
to prevent and equally difficult to fake. Pretending to be cheerful or concerned requires
adjustment and coordination of several specific facial muscles and body positions.
Meanwhile, our true emotions tend to reveal themselves as subtle gestures, usually
without our awareness. More often than not, observers see when we are faking and
sense that we feel a different emotion. 27
All Smiles in Berlin Five months before the World Cup soccer finals arrived in Germany, the country’s
national tourist board launched a campaign encouraging Berliners to smile more often for the million
visitors attending the wildly popular tournament. The customer service campaign covered a dozen
German cities where the games were played, but the tourist board particularly targeted Berlin, a city
known for somewhat abrupt and gruff service. “Smiles create more smiles, and in this city we need a bit
more smiling,” said Klaus Böger, Berlin’s senator for education and sport. Berlin’s advertising program,
called “The Most Beautiful Smile for Our Guests” (Das schönste Lächeln für unsere Gäste), displayed
one of a dozen smiling citizens, four of whom are shown in this photo, on hundreds of billboards around the
city. “We won’t get this opportunity again for another 50 years, so it’s worth at least smiling for a few
weeks,” said German World Cup organizing committee president (and German soccer legend) Franz
Beckenbauer, with apparent sympathy for those uncomfortable with displaying friendly emotions to
strangers.25
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Chapter 4 Workplace Emotions, Attitudes, and Stress 105
Emotional labor also creates conflict between required and true emotions, which is
called emotional dissonance . The larger the gap between the required and true emo-
tions, the more employees tend to experience stress, job burnout, and psychological sep-
aration from self. 28 Hiring people with a natural tendency to display the emotions required
for the job can minimize emotional dissonance. For example, The Container Store ex-
pects employees to display positive emotions on the job, so its unofficial motto is “Grouchy
People Need Not Apply.” St. Wilfred’s Hospice in Chichester, England, takes a similar
view. “We have standards of behavior,” says chief executive Alison Moorey. “We expect
anyone who comes into the hospice to be treated with smiles and courtesy.” 29
Emotional dissonance is also minimized through deep acting rather than surface
acting. 30 People engage in surface acting when they try to modify their behavior to be
consistent with required emotions but continue to hold different internal feelings. For
instance, we force a smile while greeting a customer whom we consider rude. Deep
acting involves changing true emotions to match the required emotions. Rather than
feeling irritated by a rude customer, you might view your next interaction with that
person as an opportunity to test your sales skills. This change in perspective can
potentially generate more positive emotions next time you meet that difficult
customer, thereby producing friendlier displays of emotion. However, deep acting
also requires considerable emotional intelligence, which we discuss next.
Emotional Intelligence
Exactech, Inc., is growing quickly, so the Gainesville, Florida, orthopedic device man-
ufacturer introduced a program to develop future leaders. Two dozen high-potential
employees were identified among the staff of 260 and then given intensive yearlong
training. This program didn’t focus completely on technical skill development. Rather,
participants learned how to improve their self-awareness and interaction with other
staff members. “Especially as people rise to higher levels in organizations, their ability
to do their job effectively depends on emotional intelligence qualities more than tech-
nical qualities,” explains Exactech cofounder Bill Petty. 31
Exactech is one of many organizations discovering that emotional intelligence (EI)
can significantly improve individual, team, and organizational effectiveness. Emotional
intelligence includes a set of abilities to perceive and express emotion, assimilate emotion
in thought, understand and reason with emotion, and regulate emotion in oneself and
others. 32 One popular model, shown in Exhibit 4.3 , organizes EI into four dimensions
representing the recognition of emotions in ourselves and in others, as well as the regula-
tion of emotions in ourselves and in others. 33 These four dimensions are also found in
other models of EI, but experts disagree on the definitive list of abilities representing EI.
For example, the authors of the model shown here include a list of “abilities” for each cell,
emotional
intelligence (EI)
A set of abilities to
perceive and express
emotion, assimilate
emotion in thought,
understand and reason
with emotion, and
regulate emotion in
oneself and others.
emotional dissonance
The conflict between
required and true
emotions.
Self-Awareness
Self-Management
Social Awareness
Yourself
(personal competence)
Recognition
of emotions
Regulation
of emotions
Other people
(social competence)
Relationship Management
Sources: D. Goleman, R. Boyatzis, and A. McKee, Primal Leadership (Boston: Harvard Business School Press, 2002),
chap. 3; D. Goleman, “An EI-Based Theory of Performance,” in The Emotionally Intelligent Workplace, ed. C. Cherniss
and D. Goleman (San Francisco: Jossey-Bass, 2001), p. 28.
Exhibit 4.3
Dimensions of
Emotional
Intelligence
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106 Part Two Individual Behavior and Processes
but others warn that the list includes personality traits and personal values (e.g., achieve-
ment, optimism) as well as task outcomes (e.g., teamwork, inspirational leadership). 34
• Self-awareness. Self-awareness is the ability to perceive and understand the
meaning of your own emotions. You are more sensitive to subtle emotional
responses to events and understand their message. Self-aware people are better
able to eavesdrop on their emotional responses to specific situations and to use
this awareness as conscious information. 35
• Self-management. Self-management is the ability to manage your own emotions,
something that we all do to some extent. We keep disruptive impulses in check.
We try not to feel angry or frustrated when events go against us. We try to feel
and express joy and happiness toward others when the occasion calls for these
emotional displays. We try to create a second wind of motivation later in the
workday. Notice that self-management goes beyond displaying behaviors that
represent desired emotions in a particular situation. It includes generating or
suppressing emotions. In other words, the deep acting described earlier requires
high levels of the self-management component of emotional intelligence.
• Social awareness. Social awareness is the ability to perceive and understand the
emotions of other people. To a large extent, this ability is represented by empathy —
having an understanding of and sensitivity to the feelings, thoughts, and situa-
tions of others (see Chapter 3). This includes understanding another person’s
situation, experiencing the other person’s emotions, and knowing his or her
needs even though unstated. Social awareness extends beyond empathy to include
being organizationally aware, such as sensing office politics and understanding
social networks.
• Relationship management. This dimension of EI involves managing other people’s
emotions. This includes consoling people who feel sad, emotionally inspiring
your team members to complete a class project on time, getting strangers to feel
comfortable working with you, and managing dysfunctional emotions among
staff who experience conflict with customers or other employees. Some emotional
intelligence experts link this component of EI to a wide variety of interpersonal
activities, but we must remember that relationship management is restricted to
managing other people’s emotions, whereas working effectively with other people
extends to other competencies.
These four dimensions of emotional intelligence form a hierarchy. 36 Self-awareness
is the lowest level of EI because it is a prerequisite for the other three dimensions but
does not require the other dimensions. Self-management and social awareness are
necessarily above self-awareness in the EI hierarchy. You can’t manage your own
emotions (self-management) if you aren’t good at knowing your own emotions (self-
awareness). Relationship management is the highest level of EI because it requires all
three other dimensions. In other words, we require a high degree of emotional intel-
ligence to master relationship management because this set of competencies requires
sufficiently high levels of self-awareness, self-management, and social awareness.
Most jobs involve social interaction with co-workers or external stakeholders, so
employees need emotional intelligence to work effectively. Research indicates that
people with high EI are better at interpersonal relations, perform better in jobs re-
quiring emotional labor, are superior leaders, make better decisions involving social
exchanges, and are more successful in many aspects of job interviews. Teams whose
members have high emotional intelligence initially perform better than teams with
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low EI. 38 However, emotional intelligence does not improve some forms of perfor-
mance, such as tasks that require minimal social interaction. 39
Improving Emotional Intelligence
Emotional intelligence is associated with some personality traits, as well as with the
emotional intelligence of one’s parents. For this reason, some companies have at-
tempted to test the levels of EI in applicants. For example, all new pilots at Air
Canada receive EI testing. Pilots are team leaders of the on-board crew and need to
work effectively with staff on the ground, so they must have the ability to understand
and manage their own emotions as well as the emotions of others. “If you have to inter-
act well with other people, these [emotional intelligence tests] are instruments that we
can use during the selection process to identify people that have these enhanced
skills,” says Captain Dave Legge, vice president of Air Canada flight operations. “At
the end of the day, we want to have a better idea of who we’re hiring.” 40
Emotional intelligence is not completely innate, however. It can also be learned,
which is why Exactech invests in developing EI skills in its future leaders. 41 Sony
Europe also incorporates EI training in its executive development program, including
an exercise in which leaders keep a journal of their emotional experiences throughout
a week of work. One study reported that business students scored higher on emotional
intelligence after taking an undergraduate interpersonal skills course. 42 As Global
Connections 4.1 describes, employees at GM Holden in Australia also improved their
interpersonal relations after completing an emotional intelligence training program.
GM Holden Revs Up Emotional
Intelligence
General Motors carefully selected staff for its new GM Holden
production facility at Port Melbourne, Australia, but it wasn’t
long before the project unraveled due to infighting and inter-
personal tensions. Consultants called in to analyze the prob-
lems offered the following solution: Employees need to improve
their emotional intelligence. With this advice, the 30 plant de-
sign team members and more than 300 other employees com-
pleted a detailed assessment of their emotional intelligence.
The automaker then introduced a variety of training modules
targeting different aspects of emotional intelligence, such as ef-
fective self-expression, understanding others, and controlling
emotions.
Some staff were skeptical about these touchy-feely semi-
nars, so GM Holden evaluated the program to see whether
employee scores improved and behavior changed. The com-
pany discovered that employee scores on the emotional intel-
ligence test improved by almost 50 percent and that employees
became much more cooperative and diplomatic in their be-
havior. “It has greatly improved communication within the
team and with other teams outside the plant,” says GM Holden
quality systems engineer Vesselka Vassileva. Some employ-
ees also note that it has improved their interpersonal behavior
outside the workplace. “I’m not so aggressive or assertive,”
says manufacturing engineer Alf Moore. “I feel better and it’s
helped me at home.”37
Global Connections 4.1
Emotional intelligence training helped employees at GM Holden,
the Australian division of General Motors, to get along better.
107
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108 Part Two Individual Behavior and Processes
Personal coaching, plenty of practice, and frequent feedback are particularly effective at
developing EI. Emotional intelligence also increases with age; it is part of the process
called maturity. Overall, emotional intelligence offers considerable potential, but we
also have a lot to learn about its measurement and effects on people in the workplace.
So far, this chapter has introduced the model of emotions and attitudes, as well as
emotional intelligence as the means by which we manage emotions in the workplace.
The next two sections of this chapter introduce the concepts of job satisfaction and
organizational commitment. These two attitudes are so important in our understand-
ing of workplace behavior that some experts suggest that together they should be
called “overall job attitude.” 43
Learning
Objectives
After reading the next two sections, you should be able to:
4. Summarize the consequences of job dissatisfaction in terms of the
exit-voice-loyalty-neglect model.
5. Discuss the effects of job satisfaction on job performance and
customer service.
6. Distinguish affective and continuance commitment and discuss their
influence on employee behavior.
7. Describe five strategies for increasing organizational (affective)
commitment.
Job Satisfaction
Job satisfaction , a person’s evaluation of his or her job and work context, is proba-
bly the most studied attitude in organizational behavior. 44 It is an appraisal of the
perceived job characteristics, work environment, and emotional experiences at work.
Satisfied employees have a favorable evaluation of their jobs, based on their observa-
tions and emotional experiences. Job satisfaction is best viewed as a collection of at-
titudes about different aspects of the job and work context. You might like your
co-workers but be less satisfied with your workload, for instance.
How satisfied are employees at work? The answer depends, of course, on the per-
son, the workplace, and the country. Global surveys indicate with some consistency
that job satisfaction tends to be highest in the Nordic countries (Denmark, Sweden,
Norway, and Finland) as well as in India and the United States. The lowest levels of
overall job satisfaction are usually recorded in Hungary and several Asian countries
(e.g., China [including Hong Kong] and South Korea). 45 Exhibit 4.4 reveals that more
than 85 percent of Americans are moderately or very satisfied with their jobs, a level
that has been consistent for the past three decades. 46
Can we conclude from these results that Americans are happy at work? Possibly,
but not as much as these statistics suggest. The problem is that surveys often use a
single direct question, such as “How satisfied are you with your job?” Many dissatis-
fied employees are reluctant to reveal their feelings in a direct question because this
is tantamount to admitting that they made a poor job choice and are not enjoying life.
For instance, surveys in the United States, Canada, and Malaysia found that although
most employees in those countries say they are satisfied with their jobs and work
environment, more than half would abandon their employer if offered a comparable
job elsewhere. 47 Another indication is that employees rate almost all aspects of the
job lower than their overall satisfaction.
job satisfaction
A person’s evaluation of
his or her job and work
context.
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Chapter 4 Workplace Emotions, Attitudes, and Stress 109
19
74
19
76
19
78
19
82
19
84
19
86
19
88
19
90
19
93
19
96
20
00
20
04
0
20
40
60
80
100
Survey year
P
e
rc
e
n
ta
g
e
s
a
ti
sf
ie
d
20
06
Moderately satisfied
19
72
Very satisfied
Job Satisfaction and Work Behavior
Brad Bird pays a lot of attention to job satisfaction. “In my experience, the thing that
has the most significant impact on a budget—but never shows up in a budget—is
morale,” advises Bird, who directed Ratatouille and other award-winning films at
Pixar Animation Studios. “If you have low morale, for every dollar you spend, you
get 25 cents of value. If you have high morale, for every dollar you spend, you get
about $3 of value.” 48
Brad Bird’s opinion about the importance of job satisfaction is consistently reflected
in the actions of leaders in many companies. Along with their increasing competition
to win best-workplace awards, many companies carefully monitor job satisfaction and
related employee attitudes. In some firms, executive bonuses depend partly on em-
ployee satisfaction ratings. The reason for this attention is simple: Job satisfaction
affects many of the individual behaviors introduced in Chapter 1. A useful template
for organizing and understanding the consequences of job dissatisfaction is the exit-
voice-loyalty-neglect (EVLN) model . As the name suggests, the EVLN model iden-
tifies four ways that employees respond to dissatisfaction: 49
• Exit. Exit includes leaving the organization, transferring to another work unit,
or at least trying to get away from the dissatisfying situation. The traditional theory
is that job dissatisfaction builds over time and is eventually strong enough to
motivate employees to search for better work opportunities elsewhere. This is
likely true to some extent, but the most recent opinion is that specific “shock
events” quickly energize employees to think about and engage in exit behavior.
exit-voice-loyalty-
neglect (EVLN) model
The four ways, as
indicated in the name,
that employees respond
to job dissatisfaction.
Exhibit 4.4 Stability of Job Satisfaction in America
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110 Part Two Individual Behavior and Processes
For example, the emotional reaction you experience to an unfair management
decision or a conflict episode with a co-worker motivates you to look at job ads
and speak to friends about job opportunities where they work. This begins the
process of redefining your self-concept more in terms of another company than
in terms of your current employer. 50
• Voice. Voice is any attempt to change, rather than escape from, the dissatisfying
situation. Voice can be a constructive response, such as recommending ways for
management to improve the situation, or it can be more confrontational, such
as filing formal grievances or forming a coalition to oppose a decision. 51 In the
extreme, some employees might engage in counterproductive behaviors to get
attention and force changes in the organization.
• Loyalty. In the original version of this model, loyalty was not an outcome of dis-
satisfaction. Rather, it determined whether people chose exit or voice (i.e., high
loyalty resulted in voice; low loyalty produced exit). 52 More recent writers describe
loyalty as an outcome, but in various and somewhat unclear ways. Generally, they
suggest that “loyalists” are employees who respond to dissatisfaction by patiently
waiting—some say they “suffer in silence”—for the problem to work itself out or
be resolved by others. 53
• Neglect. Neglect includes reducing work effort, paying less attention to quality,
and increasing absenteeism and lateness. It is generally considered a passive
activity that has negative consequences for the organization.
Which of the four EVLN alternatives do employees use? It depends on the person
and situation. 54 One determining factor is the person’s self-concept. Some people
avoid the self-image of being a complainer, whereas others view themselves very
much as taking action when they dislike a work situation. Self-concept relates to
personal and cultural values as well as personality. For example, people with a high-
conscientiousness personality are less likely to engage in neglect and more likely to
engage in voice. Past experience also influences which EVLN action is applied.
Employees who were unsuccessful with voice in the past are more likely to engage in
exit or neglect when experiencing job dissatisfaction in the future. Another factor is
loyalty, as it was originally intended. Specifically, employees are more likely to quit
when they have low loyalty to the company, and they are more likely to engage in
voice when they have high loyalty. Finally, the response to dissatisfaction depends on
the situation. Employees are less likely to use the exit option when there are few
alternative job prospects, for example.
Job Satisfaction and Performance For almost a century, OB researchers have
challenged the popular belief that “a happy worker is a productive worker.” For most
of that time, they concluded that job satisfaction had a minimal effect on job perfor-
mance. Now the evidence suggests that the popular saying may be correct after all:
There is a moderate relationship between job satisfaction and job performance. In
other words, happy workers really are more productive workers to some extent. 55 Even
with a moderate association between job satisfaction and performance, there are a
few underlying reasons why the relationship isn’t stronger. One argument is that gen-
eral attitudes (such as job satisfaction) don’t predict specific behaviors very well. As
we learned with the EVLN model, job dissatisfaction can lead to a variety of out-
comes other than lower job performance (neglect). Some employees continue to work
productively while they complain (voice), look for another job (exit), or patiently wait
for the problem to be fixed (loyalty).
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Chapter 4 Workplace Emotions, Attitudes, and Stress 111
A second explanation is that job performance leads to job satisfaction (rather than
vice versa), but only when performance is linked to valued rewards. Higher perform-
ers receive more rewards and, consequently, are more satisfied than low-performing
employees who receive fewer rewards. The connection between job satisfaction and
performance isn’t stronger because many organizations do not reward good perfor-
mance. The third explanation is that job satisfaction influences employee motivation
but doesn’t affect performance in jobs where employees have little control over their
job output (such as assembly-line work).
Job Satisfaction and Customer Satisfaction Another popular belief is that
happy customers are the result of happy employees. This belief is strongly held at
Dixon Schwabl, the Rochester, New York, advertising, marketing, and public rela-
tions agency described at the beginning of this chapter. “You might think our clients
are No. 1, but really it’s our employees,” says Dixon Schwabl CEO Lauren Dixon. “If
we make our employees No. 1, they’ll make our clients No. 1.” Ralph Norris, the
CEO of Commonwealth Bank of Australia and previously CEO of Air New Zealand,
agrees. “I’m not primarily interested in shareholder returns,” says Norris. “If we look
after and inspire the staff, they will look after the customers and that will take care of
shareholder returns.” 56
These executives are referring to the service profit chain model , which proposes that
increasing employee satisfaction and loyalty results in higher customer perceptions of
value, thereby improving the company’s profitability. In other words, job satisfaction
has a positive effect on customer service. 57 There are two main reasons for this rela-
tionship. First, employees are usually in a more positive mood when they feel satis-
fied with their jobs and working conditions. Employees in a good mood display
friendliness and positive emotions more naturally and frequently, and this causes
customers to experience positive emotions. Second, satisfied employees are less likely
to quit their jobs, so they have better knowledge and skills to serve clients. Lower
turnover also enables customers to have the same employees serve them, so there is
more consistent service. Some evidence indicates that customers build their loyalty to
specific employees, not to the organization, so keeping employee turnover low tends
to build customer loyalty. 58
Employees First, Customers Second Wegmans Food Markets has an
unusual motto: “Employees first, customers second.” The grocery
chain definitely puts its 33,000 employees in New York and four nearby
states on top of the stakeholder list. They enjoy above-average pay,
health benefits, and other perks, resulting in labor costs of about
16 percent of sales compared to 12 percent at most supermarkets.
Perhaps more important is that employees feel welcome and valued.
“You’re not part of a company, you’re part of a family,” says Katie
Southard, who works in customer service at a Wegmans store in
Rochester, New York. “You’re treated as an individual, not just one of the
350 persons in the store.” Why don’t customers come first? Wegmans’
rationale is that you can’t have happy customers if employees have
low morale. The theory seems to work: Wegmans enjoys one of
the highest levels of customer loyalty and lowest levels of employee
turnover in the industry.59
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112 Part Two Individual Behavior and Processes
The Ethics of Job Satisfaction
Before leaving the topic of job satisfaction, we should mention that job satisfaction
does more than improve work behaviors and customer satisfaction. Job satisfaction is
also an ethical issue that influences the organization’s reputation in the community.
People spend a large portion of their time working in organizations, and many societ-
ies now expect companies to provide work environments that are safe and enjoyable.
Indeed, employees in several countries closely monitor ratings of the best companies
to work for, an indication that employee satisfaction is a virtue worth considerable
goodwill to employers. This virtue is apparent when an organization has low job
satisfaction. The company tries to hide this fact, and when morale problems become
public, corporate leaders are usually quick to improve the situation.
Organizational Commitment
Along with studying job satisfaction, OB researchers have been very interested in an
attitude called organizational commitment. Organizational (affective) commitment
is the employee’s emotional attachment to, identification with, and involvement in a
particular organization. 60 This definition pertains specifically to affective commitment
because it is an emotional attachment—our feelings of loyalty—to the organization.
Organizational (affective) commitment differs from continuance commitment ,
which is a calculative attachment. 61 Employees have high continuance commitment
when they do not particularly identify with the organization where they work but feel
bound to remain there because it would be too costly to quit. In other words, they
choose to stay because the calculated (typically financial) value of staying is higher
than the value of working somewhere else. You can tell an employee has high calcu-
lative commitment when he or she says: “I hate this place but can’t afford to quit!”
This reluctance to quit may exist because the employee might lose a large bonus by
leaving early or is well established in the community where he or she works. 62
Consequences of Organizational Commitment
Organizational (affective) commitment can be a significant competitive advantage. 63
Loyal employees are less likely to quit their jobs and be absent from work. They also
have higher work motivation and organizational citizenship, as well as somewhat
higher job performance. Organizational commitment also improves customer satis-
faction because long-tenure employees have better knowledge of work practices and
because clients like to do business with the same employees. One warning is that
employees with very high loyalty tend to have high conformity, which results in
lower creativity. There are also cases of dedicated employees who violated laws to
defend the organization. However, most companies suffer from too little rather than
too much employee loyalty.
Affective commitment is usually beneficial, whereas continuance commitment
tends to be dysfunctional. In fact, employees with high levels of continuance commit-
ment tend to have lower performance ratings and are less likely to engage in organiza-
tional citizenship behaviors. Furthermore, unionized employees with high continuance
commitment are more likely to use formal grievances, whereas employees with high
affective commitment engage in more constructive problem solving when employee-
employer relations sour. 64 Although some level of financial connection may be neces-
sary, employers should not confuse continuance commitment with employee loyalty.
Employers still need to win employees’ hearts (affective commitment) beyond tying
them financially to the organization (continuance commitment).
continuance
commitment
An employee’s calcula-
tive attachment to the
organization, whereby
the employee is
motivated to stay only
because leaving would
be costly.
organizational (affective)
commitment
The employee’s emo-
tional attachment to,
identification with, and
involvement in a
particular organization.
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Chapter 4 Workplace Emotions, Attitudes, and Stress 113
Building Organizational Commitment
There are almost as many ways to build organizational loyalty as there are topics in
this textbook, but the following list is most prominent in the literature:
• Justice and support. Affective commitment is higher in organizations that fulfill their
obligations to employees and abide by humanitarian values, such as fairness, cour-
tesy, forgiveness, and moral integrity. These values relate to the concept of organi-
zational justice, which we discuss in the next chapter. Similarly, organizations that
support employee well-being tend to cultivate higher levels of loyalty in return. 65
• Shared values . The definition of affective commitment refers to a person’s identi-
fication with the organization, and that identification is highest when employees
believe their values are congruent with the organization’s dominant values.
Also, employees experience more comfort and predictability when they agree
with the values underlying corporate decisions. This comfort increases their
motivation to stay with the organization. 66
• Trust. Trust refers to positive expectations one person has toward another person
in situations involving risk. 67 Trust means putting faith in the other person or
group. It is also a reciprocal activity: To receive trust, you must demonstrate trust.
Employees identify with and feel obliged to work for an organization only when
they trust its leaders. This explains why layoffs are one of the greatest blows to
employee loyalty—by reducing job security, companies reduce the trust employees
have in their employer and the employment relationship. 68
• Organizational comprehension. Organizational comprehension refers to how well
employees understand the organization, including its strategic direction, social dy-
namics, and physical layout. This awareness is a necessary prerequisite to affective
commitment because it is difficult to identify with something that you don’t know
very well. The practical implication here is to ensure that employees are able to
develop a reasonably clear and complete mental picture of the organization. This
occurs by giving staff information and opportunities to keep up to date about orga-
nizational events, interact with co-workers, discover what goes on in different parts
of the organization, and learn about the organization’s history and future plans. 69
• Employee involvement. Employee involvement increases affective commitment by
strengthening the employee’s social identity with the organization. Employees feel
that they are part of the organization when they participate in decisions that guide
the organization’s future. Employee involvement also builds loyalty because giving
this power is a demonstration of the company’s trust in its employees.
Organizational commitment and job satisfaction represent two of the most often
studied and discussed attitudes in the workplace. Each is linked to emotional episodes
and cognitive judgments about the workplace and relationship with the company.
Emotions also play an important role in another concept that is on everyone’s mind
these days: stress. The final section of this chapter provides an overview of work-
related stress and how it can be managed.
trust
Positive expectations
one person has toward
another person in
situations involving risk.
Learning
Objectives
After reading the next section, you should be able to:
8. Define stress and describe the stress experience.
9. Explain why a stressor might produce different stress levels in
two people.
10. Identify five ways to manage workplace stress.
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114 Part Two Individual Behavior and Processes
Work-Related Stress and Its Management
Josh Holmes has fond memories of working at Electronic Arts (EA) but admits that
the long hours at the electronic-game company were stressful. “From the minute I
joined [EA], I put every waking hour of my day into my work. . . . It definitely took
its toll,” says Holmes. After 10 years at EA, Holmes was burned out, so he quit. “We
had done a lot of really long grueling hours. I know I was thinking that there’s got to be
a way to do things a little differently.” So, in their quest for a less stressful electronic-
game company, Holmes and three other senior EA staff members formed Propa-
ganda Games (now a creative center within Disney’s video game division), with the
unique values of creativity, risk taking, and work–life balance. “We want you to come
into the studio, do great work, then get out and live your life,” says Propaganda’s Web
site. “We foster a start-up attitude without the start-up stress.” 70
Experts have trouble defining stress , but it is most often described as an adaptive
response to a situation that is perceived as challenging or threatening to the person’s
well-being. 71 Stress is a physiological and psychological condition that prepares us to
adapt to hostile or noxious environmental conditions. Our heart rate increases, muscles
tighten, breathing speeds up, and perspiration increases. Our body also moves more
blood to the brain, releases adrenaline and other hormones, fuels the system by releas-
ing more glucose and fatty acids, activates systems that sharpen our senses, and con-
serves resources by shutting down our immune system. One school of thought suggests
that stress is a negative evaluation of the external environment. However, critics of this
cognitive appraisal perspective point out that the stress experience is an emotional ex-
perience, which may occur before or after a conscious evaluation of the situation. 72
Whether stress is a complex emotion or a cognitive evaluation of the environment,
it has become a pervasive experience in the daily lives of most people. Three out of
four Americans (and a similar percentage of people in Germany, Canada, Australia,
and the United Kingdom) say they frequently or sometimes feel stress in their daily
lives. Approximately one in every four employees in the United Kingdom feels “very
or extremely stressed,” and this condition has become the top cause of absenteeism
there. More than one-quarter of Canadians say they experience high levels of stress
each day. A survey of 4,700 people across Asia reported that one-third were feeling
more stress than they had in the recent past. The percentage of people reporting stress
was highest in Taiwan and lowest in Thailand. The Japanese government, which tracks
work-related stress every five years, has found that the percentage of Japanese em-
ployees who feel “strong worry, anxiety or stress at work or in daily working life” has
increased from 51 percent in 1982 to almost two-thirds of the population today. 73
As these surveys imply, stress is typically described as a negative experience. This is
known as distress —the degree of physiological, psychological, and behavioral deviation
from healthy functioning. However, some level of stress—called eustress —is a necessary
part of life because it activates and motivates people to achieve goals, change their en-
vironments, and succeed in life’s challenges. 74 Our focus is on the causes and manage-
ment of distress, because it has become a chronic problem in many societies.
General Adaptation Syndrome
More than 500 years ago, people began using the word stress to describe the human
response to harsh environmental conditions. However, it wasn’t until the 1930s that
Hans Selye (often described as the father of stress research) first documented the stress
experience, called the general adaptation syndrome . Selye determined (initially
by studying rats) that people have a fairly consistent and automatic physiological
stress
An adaptive response to
a situation that is per-
ceived as challenging
or threatening to a
person’s well-being.
general adaptation
syndrome
A model of the stress
experience, consisting
of three stages: alarm
reaction, resistance,
and exhaustion.
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Chapter 4 Workplace Emotions, Attitudes, and Stress 115
response to stressful situations, which helps them to cope with environmental
demands.
The general adaptation syndrome consists of the three stages shown in Exhi-
bit 4.5 . 75 The alarm reaction stage occurs when a threat or challenge activates the phys-
iological stress responses that were noted above. The individual’s energy level and
coping effectiveness decrease in response to the initial shock. The second stage, resis-
tance, activates various biochemical, psychological, and behavioral mechanisms that
give the individual more energy and engage coping mechanisms to overcome or
remove the source of stress. To focus energy on the source of the stress, the body re-
duces resources to the immune system during this stage. This explains why people
are more likely to catch a cold or some other illness when they experience prolonged
stress. People have a limited resistance capacity, and if the source of stress persists,
the individual will eventually move into the third stage, exhaustion . Most of us are able
to remove the source of stress or remove ourselves from that source before becoming
too exhausted. However, people who frequently reach exhaustion have increased
risk of long-term physiological and psychological damage. 76
Consequences of Distress
Stress takes its toll on the human body. 77 Many people experience tension headaches,
muscle pain, and related problems mainly due to muscle contractions from the stress
response. Studies have found that high stress levels also contribute to cardiovascular
disease, including heart attacks and strokes, and may be associated with some forms
of cancer. Stress also produces various psychological consequences, such as job dis-
satisfaction, moodiness, depression, and lower organizational commitment. Further-
more, various behavioral outcomes have been linked to high or persistent stress,
including lower job performance, poor decision making, and increased workplace
accidents and aggressive behavior. Most people react to stress through “fight or
flight,” so increased absenteeism is another outcome because it is a form of flight. 78
Job Burnout Job burnout is a particular stress consequence that refers to the pro-
cess of emotional exhaustion, cynicism, and reduced feelings of personal accomplish-
ment. 79 Emotional exhaustion, the first stage, is characterized by a lack of energy,
tiredness, and a feeling that one’s emotional resources are depleted. This is followed by
cynicism (also called depersonalization ), which is characterized by an indifferent attitude
toward work, emotional detachment from clients, a cynical view of the organization,
Source: Adapted from H. Selye, The Stress of Life (New York: McGraw-Hill, 1956).
Stage 1
Alarm reaction
Stage 2
Resistance
Stage 3
Exhaustion
Time
Ability
to cope
High
Normal
state
Low
Exhibit 4.5
General Adaptation
Syndrome
job burnout
The process of emotional
exhaustion, cynicism,
and reduced personal
accomplishment that
results from prolonged
exposure to stressors.
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116 Part Two Individual Behavior and Processes
and a tendency to strictly follow rules and regulations rather than adapt to the needs
of others. The final stage of burnout, called reduced personal accomplishment, entails feel-
ings of diminished confidence in one’s ability to perform the job well. In such situa-
tions, employees develop a sense of learned helplessness as they no longer believe
that their efforts make a difference.
Stressors: The Causes of Stress
Before identifying ways to manage work-related stress, we must first understand its
causes, known as stressors. Stressors include any environmental conditions that place
a physical or emotional demand on a person.80 There are numerous stressors in the
workplace and in life in general. In this section, we’ll highlight three of the most com-
mon stressors: harassment and incivility, workload, and lack of task control.
Harassment and Incivility One of the fastest-growing sources of workplace stress
is psychological harassment . Psychological harassment includes repeated and
hostile or unwanted conduct, verbal comments, actions, and gestures that affect an
employee’s dignity or psychological or physical integrity and that result in a harmful
work environment for the employee. This covers a broad landscape of behaviors,
from threats and bullying to subtle yet persistent forms of incivility. 81 Two-thirds of
Americans think people are less civil today than 20 years ago; 10 percent say they
witness incivility daily in their workplaces and are targets of that abuse at least once
each week. More than half of U.K. human resource managers and Australian lawyers
say they have been bullied or intimidated. 82
Sexual harassment is a type of harassment in which a person’s employment or
job performance is conditional and depends on unwanted sexual relations (called
quid pro quo harassment) and/or the person experiences sexual conduct from others
(such as posting pornographic material) that unreasonably interferes with work
performance or creates an intimidating, hostile, or offensive working environment
(called hostile work environment harassment). The number of charges alleging sexual
harassment in the United States has declined steadily from 16,000 in 2000 to less than
13,000 today. Approximately 15 percent of sexual harassment claims are filed by
men. 83 The Equal Employment Opportunity Commission attributes the improve-
ment to better supervisor training and concerted management action to address
harassment issues before they reach litigation.
Work Overload A half century ago, social scientists predicted that technology
would allow employees to enjoy a 15-hour workweek at full pay by 2030. 84 So far, it
hasn’t turned out that way. As the opening vignette to this section on workplace stress
described, employees at Electronic Arts and many other companies in the video game
industry are experiencing stress due to work overload —working more hours, and more
intensely during those hours, than they can reasonably manage. Surveys by the Families
and Work Institute report that 44 percent of Americans say they are overworked, up
from 28 percent who felt this way three years earlier. Almost 25 percent of Canadian
employees work more than 50 hours per week, compared with only 10 percent a
decade ago. Work overload is an important predictor of job burnout. It is also a major
cause of work–family conflicts, because overworked employees have insufficient time
to satisfy their nonwork roles of being a parent, a spouse, and so forth. 85
Why do employees work such long hours? One explanation is the combined effect
of technology and globalization. “Everyone in this industry is working harder now
because of e-mail, wireless access, and globalization,” says Christopher Lochhead, chief
stressors
Any environmental
conditions that place a
physical or emotional
demand on a person.
psychological
harassment
Repeated and hostile
or unwanted conduct,
verbal comments, ac-
tions, or gestures that
affect an employee’s
dignity or psychological
or physical integrity and
that result in a harmful
work environment for
the employee.
sexual harassment
Unwelcome conduct of
a sexual nature that
detrimentally affects the
work environment or
leads to adverse job-
related consequences
for its victims.
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Chapter 4 Workplace Emotions, Attitudes, and Stress 117
marketing officer of Mercury Interactive, a California-based consulting firm. “You can’t
even get a rest on the weekend.” A second cause, according to a recent study, is that
many people are caught up in consumerism; they want to buy more goods and services,
and doing so requires more income through longer work hours. A third reason, called
the “ideal worker norm,” is that professionals expect themselves and others to work
longer work hours. For many, toiling away far beyond the normal workweek is a badge
of honor, a symbol of their superhuman capacity to perform above others. 87 This badge
of honor is particularly serious in several (but not all) Asian countries, to the point
where “death from overwork” is now part of the common language ( karoshi in Japanese
and guolaosi in Chinese). For example, two young faculty members at China’s top
engineering school died suddenly, apparently from exhaustion and overwork. 88
Low Task Control An increasingly popular model of job burnout suggests that
emotional exhaustion depends on both job demands and job resources. 89 Job demands
are aspects of work that require sustained physical or psychological effort. High work-
load is one of the more significant job demands in the contemporary workplace. At
the same time, the effect of job demands on burnout (or stress in general) depends on
the individual’s job resources. Job resources represent aspects of the job that help em-
ployees to achieve work goals, reduce job demands, and/or stimulate personal growth
and development.
An important job resource is autonomy or control over the pace of work. Low task
control increases employee exposure to the risk of burnout because they face high
workloads without the ability to adjust the pace of the load to their own energy, atten-
tion span, and other resources. Furthermore, the degree to which low task control is
a stressor increases with the burden of responsibility the employee must carry. 90
Assembly-line workers have low task control, but their stress can be fairly low if their
level of responsibility is also low. In contrast, sports coaches are under immense pres-
sure to win games (high responsibility), yet they have little control over what happens
on the playing field (low task control).
BlackBerry Addiction Nick Salaysay (shown in photo) admits that
his work routinely gets mixed in with his personal time. “I have a
BlackBerry, so I check my e-mail a lot when I’m supposed to be on
vacation,” says the lawyer in Calgary, Canada. Salaysay also
acknowledges that having work spill over into his time off “really an-
noys my girlfriend.” Amy Schulman is another dedicated BlackBerry
user. The New York City lawyer recalls that “the BlackBerry was at
first a significant intrusion on family life,” but she can’t resist how
the device helps her to process several hundred e-mails each day.
As a consolation, Schulman says she usually avoids looking at her
e-mail while dining with her family, “and I try not to look at it in
movie theaters.” Although Nick Salaysay and Amy Schulman are
comfortable using their BlackBerries during family time, research
indicates that the increased workload and work preoccupation
caused by these devices can result in the additional stress of rela-
tionship and marital problems. One law report recently warned
that employers who issue BlackBerries could also incur liability
for stress-related illnesses as the devices keep employees on an
“electronic leash.”86
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118 Part Two Individual Behavior and Processes
Individual Differences in Stress
Because of unique personal characteristics, people have different stress experiences
when exposed to the same stressor. One reason for this is that people have different
threshold levels of resistance to the stressor. Those who exercise and have healthy
lifestyles have a larger store of energy to cope with high stress levels. A second reason
for different stress responses is that people use different coping strategies, some of
which are more effective than others. Research suggests that employees who try to
ignore or deny the existence of a stressor suffer more in the long run than those who
try to find ways to weaken the stressor and seek social support. 91
A third reason why some people experience less stress than others is that some
have higher resilience. 92 Resilience is the capability of individuals to cope success-
fully in the face of significant change, adversity, or risk. Those with high resilience are
able to withstand adversity as well as recover more quickly from it. Resilient people
possess personality traits (such as high extroversion and low neuroticism) that generate
more optimism, confidence, and positive emotions. Resilience also involves specific
competencies and behaviors for responding and adapting more effectively to stress-
ors. Research indicates that resilient people have higher emotional intelligence and
good problem-solving skills. They also apply productive coping strategies, such as
analyzing the sources of stress and finding ways to neutralize these problems. 93
While resilience helps people to withstand stress, another personal characteristic—
workaholism—attracts more stressors and weakens the capacity to cope with them. The
classic workaholic (also called work addict ) is highly involved in work, feels compelled or
driven to work because of inner pressures, and has a low enjoyment of work. Workahol-
ics are compulsive and preoccupied with work, often to the exclusion and detriment of
personal health, intimate relationships, and family. 94 Classic workaholics are more prone
to job stress and have significantly higher scores on depression, anxiety, and anger. 95
Managing Work-Related Stress
A few years ago, Koh Ching Hong would dutifully arrive at work around 7:30 in the
morning and stay until 10 at night. The managing director of Fuji Xerox in Singapore
would continue working at home for a few more hours, sending off e-mail messages list-
ing tasks to be completed by employees “first thing in the morning.” Eventually, Koh
realized that the relentless pace was defeating a higher purpose. “It came to a point that
the people whom I worked so hard to provide for, my family, weren’t getting to see me,”
says the father of three children. Today, Koh is out of the office by 6:30 p.m. and shoos
his staff out at the same time. Fuji Xerox also gives staff the opportunity to work from
home as well as flexibility regarding when they want to begin and end their workday. 96
Koh Ching Hong was fortunate. He was able to change his work habits and im-
prove conditions for his 500 employees before matters got worse. Unfortunately,
many of us deny the existence of our stress until it is too late. This avoidance strategy
creates a vicious cycle because the failure to cope with stress becomes another stressor
on top of the one that created the stress in the first place. To prevent this vicious cycle,
employers and employees need to apply one or more of the stress management strate-
gies described below: remove the stressor, withdraw from the stressor, change stress
perceptions, control stress consequences, and receive social support. 97
Remove the Stressor Removing the stressor usually begins by identifying areas of
high stress and determining the main causes of the stress. By identifying the specific
stressors that adversely affect specific areas of the organization, such “stress audits”
resilience
The capability of individ-
uals to cope successfully
in the face of significant
change, adversity, or risk.
workaholic
A person who is highly
involved in work, feels
compelled to work, and
has a low enjoyment
of work.
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Chapter 4 Workplace Emotions, Attitudes, and Stress 119
recognize that a one-size-fits-all approach to stress management is ineffective. Ericsson
conducts this diagnosis in its North American operations through an annual survey
that includes a stress index. Executives at the telecommunications company use the
index to identify departments where stress problems may be developing. “We look at
those scores and if there appears to be a problem in a particular group, we put in
action plans to try and remedy and improve the work situation that may be causing
the stress,” explains an Ericsson executive. 98
There are many ways to remove the stressor, but some of the more common
actions involve assigning employees to jobs that match their skills and preferences,
reducing excessive workplace noise, having a complaint system and taking corrective
action against harassment, and giving employees more control over the work process.
Another important way that companies can remove stressors is by facilitating better
work–life balance. Work–life balance initiatives minimize conflict between the em-
ployee’s work and nonwork demands. Five of the most common work–life balance
initiatives are flexible and limited work time, job sharing, telecommuting, personal
leave, and child care support. 99
• Flexible and limited work time . An important way to improve work–life balance is
limiting the number of hours that employees are expected to work and giving
them flexibility in scheduling those hours. Propaganda Games, which was
described earlier in this chapter, stands out in an overworked industry because
it keeps work hours within reasonable limits. Best Buy has become a role model
in work–life balance by giving employees very flexible work hours.
• Job sharing . Job sharing splits a career position between two people so that they
experience less time-based stress between work and family. They typically work
different parts of the week, with some overlapping work time in the weekly
schedule to coordinate activities. This strategy gives employees the ability to
work part-time in jobs that are naturally designed for full-time responsibilities.
• Telecommuting . Telecommuting, which was described in Chapter 1, reduces the
time and stress of commuting to work and makes it easier to fulfill family obliga-
tions, such as temporarily leaving the home office to pick the kids up from school.
Research suggests that telecommuters tend to experience better work–life
balance. 100 However, telecommuting may increase stress for those who crave
social interaction and who lack the space and privacy necessary to work at home.
• Personal leave . Employers with strong work–life values offer extended maternity,
paternity, and personal leave for employees to care for a new family or take
advantage of a personal experience. The U.S. Family and Medical Leave Act gives
expecting mothers and anyone considered to have an illness 12 weeks of unpaid,
job-protected leave. However, most countries provide 12 to16 weeks of paid leave,
with some offering one year or more of fully or partially paid maternity leave. 101
• Child care support . According to one estimate, almost one-quarter of large American
companies provide on-site or subsidized child care facilities. Child care support
reduces stress because employees are less rushed to drop off children and less
worried during the day about how well their children are doing. 102
Withdraw from the Stressor Removing the stressor may be the ideal solution,
but it is often not feasible. An alternative strategy is to permanently or temporarily
remove employees from the stressor. Permanent withdrawal occurs when employees
are transferred to jobs that better fit their competencies and values. Temporarily
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withdrawing from stressors is the most frequent way that employees manage stress.
Vacations and holidays are important opportunities for employees to recover from
stress and reenergize for future challenges. Approximately 5 percent of U.S. compa-
nies offer paid sabbaticals to some of their employees. McDonald’s Corp. has had
paid sabbaticals for the past 40 years, offering employees eight weeks of paid time off
after every 10 years of service. 104
Some companies have innovative ways to help employees withdraw from stressful
work throughout the day. SAS Institute employees in Cary, North Carolina, enjoy live
piano recitals at lunch. Consulting firms Segal Co. in New York and Vielife in London
have nap rooms where staff can recover with a few winks of sleep. The opening vignette
to this chapter mentioned that Dixon Schwabl, the Rochester-based marketing and public
ROWEing to Better Work–Life Balance Mark Wells’s work space has an odd assortment of objects: a
huge bowl holding 5 pounds of peanuts, an audio turntable, and a trophy with the inscription “Worst
Attendance Record.” Wells (shown in photo) works full time as an e-learning specialist, yet he was
away from the office 42 days last year attending concerts (including four in Europe), festivals, and other
fun events. His employer, Best Buy, didn’t mind because Wells’s productivity increased markedly. Wells
and 3,000 other head-office employees are evaluated by their results, not their face time, through the
Minneapolis-based retailer’s results-only work environment (ROWE) initiative. For example, Steve
Hance is in the office only a few days each month. Most of the time, the Best Buy employee relations
manager works 285 miles away from his home in Cedar Rapids, Iowa. Thanks to ROWE, Best Buy
promotion manager Dawn Paulson was able to work from home during a complicated pregnancy, an
arrange ment that she says “benefited the company . . . and helped keep me from going stir-crazy.” Best
Buy strengths coach Christy Runningen also appreciates ROWE’s benefits. “ROWE has helped me to
find the right balance in my work and home life, and now I actually have a life,” says Runningen. “I know
my family would tell you that I am a lot less stressed out overall than I used to be.”103
120 Part Two Individual Behavior and Processes
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Chapter 4 Workplace Emotions, Attitudes, and Stress 121
relations firm, has a scream room where employees can verbalize their daily frustrations.
Liggett-Stashower, Inc., the Cleveland-based creative agency, has three theme rooms,
including a karaoke room where employees can sing away their stress. “The higher the
stress level, the more singing there is going on,” says the company’s art director. 105
Change Stress Perceptions Earlier, we learned that employees experience
different stress levels because they have different levels of resilience, including self-
confidence and optimism. Consequently, another way to manage stress is to help
employees improve their self-concept so that job challenges are not perceived as
threatening. One study reported that personal goal setting and self-reinforcement can
also reduce the stress that people experience when they enter new work settings.
Other research suggests that some (but not all) forms of humor can improve opti-
mism and create positive emotions by taking some psychological weight off the
situation. 106
Control Stress Consequences Coping with workplace stress also involves con-
trolling its consequences. For this reason, many companies have fitness centers or
subsidize the cost of membership at off-site centers. Research indicates that physical
exercise reduces the physiological consequences of stress by helping employees mod-
erate their breathing and heart rate, muscle tension, and stomach acidity. 107 A few
firms, such as AstraZeneca, encourage employees to practice relaxation and medita-
tion techniques during the workday. Research has found that various forms of medi-
tation reduce anxiety, reduce blood pressure and muscle tension, and moderate
breathing and heart rate. 108
Along with fitness and relaxation/meditation, wellness programs can also help con-
trol the consequences of stress. In the United States, 81 percent of employers with at
least 50 employees have wellness programs. Through education and support, these
programs help employees to develop better nutrition and fitness, regular sleep, and
other good health habits. For example, employees at Pitney Bowes receive up to $200
for completing online wellness surveys three times each year. More than 80 percent of
the Minitab, Inc., employees in State College, Pennsylvania, participate in the software
developer’s wellness program, which includes annual on-site checkups and medita-
tion classes. 109 Many large employers offer employee assistance programs (EAPs) —
counseling services that help employees resolve marital, financial, or work-related
troubles. EAPs also target specific stressors in the industry (e.g., bank robberies).
Receive Social Support Social support occurs when co-workers, supervisors,
family members, friends, and others provide emotional and/or informational support
to buffer an individual’s stress experience. It potentially improves the person’s resil-
ience (particularly her or his optimism and self-confidence) because support makes
people feel valued and worthy. Social support also provides information to help the
person interpret, comprehend, and possibly remove the stressor. For instance, to
reduce a new employee’s stress, co-workers could describe ways to handle difficult
customers. Seeking social support is called a “tend and befriend” response to stress,
and research suggests that women often follow this route rather than the “fight-or-
flight” response mentioned earlier. 110
Employee emotions, attitudes, and stress influence employee behavior mainly
through motivation. Recall, for instance, that behavioral intentions are judgments or
expectations about the motivation to engage in a particular behavior. The next
chapter introduces the prominent theories of employee motivation.
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Emotions are physiological, behavioral, and psychological
episodes experienced toward an object, person, or event
that create a state of readiness. Emotions differ from atti-
tudes, which represent a cluster of beliefs, feelings, and
behavioral intentions toward a person, object, or event.
Beliefs are a person’s established perceptions about the
attitude object. Feelings are positive or negative evalua-
tions of the attitude object. Behavioral intentions repre-
sent a motivation to engage in a particular behavior with
respect to the target.
Attitudes have traditionally been described as a purely
rational process in which beliefs predict feelings, which
predict behavioral intentions, which predict behavior. We
now know that emotions have an influence on behavior
that is equal to or greater than that of cognitions. This dual
process is apparent when we internally experience a con-
flict between what logically seems good or bad and what
we emotionally feel is good or bad in a situation. Emotions
also affect behavior directly. Behavior sometimes influences
our subsequent attitudes through cognitive dissonance.
Emotional labor consists of the effort, planning, and
control needed to express organizationally desired emo-
tions during interpersonal transactions. It is more common
in jobs requiring a variety of emotions and more intense
emotions, as well as in jobs where interaction with clients
is frequent and has a long duration. Cultures also differ
on the norms of displaying or concealing a person’s true
emotions. Emotional dissonance occurs when required
and true emotions are incompatible with each other.
Deep acting can minimize this dissonance, as can the
practice of hiring people with a natural tendency to display
desired emotions.
Emotional intelligence is the ability to perceive and ex-
press emotion, assimilate emotion in thought, understand
Chapter Summary
and reason with emotion, and regulate emotion in oneself
and others. This concept includes four components
arranged in a hierarchy: self-awareness, self-management,
social awareness, and relationship management. Emotional
intelligence can be learned to some extent, particularly
through personal coaching.
Job satisfaction represents a person’s evaluation of his
or her job and work context. The exit-voice-loyalty-neglect
model outlines four possible consequences of job dissatis-
faction. Job satisfaction has a moderate relationship with
job performance and with customer satisfaction. Affective
organizational commitment (loyalty) is the employee’s
emotional attachment to, identification with, and involve-
ment in a particular organization. This contrasts with con-
tinuance commitment, which is a calculative bond with
the organization. Companies build loyalty through justice
and support, shared values, trust, organizational compre-
hension, and employee involvement.
Stress is an adaptive response to a situation that is per-
ceived as challenging or threatening to a person’s well-
being. The stress experience, called the general adaptation
syndrome, involves moving through three stages: alarm,
resistance, and exhaustion. Stressors are the causes of
stress and include any environmental conditions that
place a physical or emotional demand on a person.
Three stressors that have received considerable attention
are harassment and incivility, work overload, and low
task control.
Two people exposed to the same stressor may experi-
ence different stress levels. Many interventions are avail-
able to manage work-related stress, including removing
the stressor, withdrawing from the stressor, changing
stress perceptions, controlling stress consequences, and
receiving social support.
122
attitudes, p. 100
cognitive dissonance, p. 102
continuance commitment, p. 112
emotional dissonance, p. 105
emotional intelligence (EI), p. 105
emotional labor, p. 103
emotions, p. 98
exit-voice-loyalty-neglect (EVLN)
model, p. 109
general adaptation syndrome, p. 114
job burnout, p. 115
job satisfaction, p. 108
organizational (affective)
commitment, p. 112
psychological harassment, p. 116
resilience, p. 118
sexual harassment, p. 116
stress, p. 114
stressors, p. 116
trust, p. 113
workaholic, p. 118
Key Terms
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123
6. Is being a full-time college or university student a
stressful role? Why or why not? Contrast your
response with other students’ perspectives.
7. Two recent college graduates join the same major
newspaper as journalists. Both work long hours and
have tight deadlines for completing their stories.
They are under constant pressure to scout out new
leads and be the first to report new controversies.
One journalist is increasingly fatigued and despon-
dent and has taken several days of sick leave. The
other is getting the work done and seems to enjoy the
challenges. Use your knowledge of stress to explain
why these two journalists are reacting differently to
their jobs.
8. A senior official of a labor union stated: “All stress
management does is help people cope with poor
management. [Employers] should really be into stress
reduction.” Discuss the accuracy of this statement.
1. A recent study reported that instructors at colleges
and universities are frequently required to engage
in emotional labor. Identify the situations in which
emotional labor is required for this job. In your
opinion, is emotional labor more troublesome for
college instructors or for telephone operators work-
ing at an emergency service?
2. “Emotional intelligence is more important than cog-
nitive intelligence in influencing an individual’s suc-
cess.” Do you agree or disagree with this statement?
Support your perspective.
3. Describe a time when you effectively managed some-
one’s emotions. What happened? What was the result?
4. “Happy employees create happy customers.” Explain
why this statement might be true, and identify condi-
tions in which it might not be true.
5. What factors influence an employee’s organizational
loyalty?
Critical Thinking Questions
to the hospital by transforming a visitors’ lounge
into a fiesta-type setting and inviting the patient’s
family, friends, and hospital staff to attend the spe-
cial event.
Lisa Salvatore, a charge nurse at the recently
built Leon S. Peters Burn Center in Fresno, California,
also recognizes that her job involves supporting
patients’ emotional needs, not just their physical
problems. “With burns, you don’t just treat some-
thing on the outside,” she says. “You treat something
on the inside that you can’t see.” Salvatore also
experiences the full range of emotions, including
the urgency of getting burn patients out of emer-
gency within an hour to improve their prospects of
recovery. “I like high stress. I like trauma,” she says.
Still, she acknowledges the emotional challenges
of treating children with burns. “I deal with it and
then I cry all the way home. I just sob on my way
driving home.”
Anil Shandil, a medic from the 328th Combat Sup-
port Hospital in Fort Douglas, Utah, has witnessed
Case Study 4.1 RIDING THE EMOTIONAL ROLLER COASTER
Louise Damiani’s work is an emotional roller coaster
most days. The oncology nurse at CentraState Health-
care System in Freehold Township, New Jersey, soars
with joy as patients beat their cancer into remission.
Then there are the low points when one of her pa-
tients is given grim news about his or her cancer. She
also battles with the frustration of office politics.
But even after a long shift, Damiani doesn’t let her
negative emotions surface until she gets into her car
and heads home. “You have to learn how to pick and
choose and not bring that emotion up,” Damiani ad-
vises. “You say, ‘OK, I can deal with this. I can focus
on the priority, and the priority is the patient.’”
As well as managing her own emotions, Damiani
has mastered the skill of creating positive emotions
in others. She recently received an award in recogni-
tion of her extraordinary sensitivity toward patients’
needs and concerns. For example, one of Damiani’s
patients wanted to return to her native Mexico but,
with an advanced stage of cancer, such a journey
wasn’t possible. Instead, Damiani brought “Mexico”
123
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more severe burns and injuries than most medical
professionals. For two years at the Landstuhl Army
Regional Medical Center in Germany, he aided sol-
diers who had been wounded in Iraq or Afghanistan.
The tour of duty was extremely emotionally taxing.
“You get a lot of severed limbs, a lot of traumatic brain
injuries, a lot of death and dying,” says Shandil. “So
the compassion fatigue is rather high.” People who
work closely with victims of trauma often suffer com-
passion fatigue, also known as secondary traumatic
stress disorder. The main symptom is a decreasing
ability to feel compassion for others.
In spite of the risk of compassion fatigue, Shandil
has volunteered for an even more challenging assign-
ment. He and 85 other soldiers in the 328th are now in
Iraq providing medical care for Iraqi detainees being
held there by the U.S. military. So, along with manag-
ing emotions from constant exposure to trauma cases,
these medics must also show respectful compassion to
those who fought against American comrades. Shandil
knows it will be hard. “Yes, these are people who were
not kind to us. But as a medic, it’s our job to care for
them, no matter if that is your friend or your enemy.”
Discussion Questions
1. To what extent do the three people featured in
this case study manage their own emotions on
the job? How do they accomplish this? To what
extent do you think they effectively manage
emotions under these circumstances?
2. This case study states that nurses and other
medical staff need to manage the emotions of
their patients. Why is emotions management
important in this job? In what ways do medical
staff alter the emotions of their patients?
3. Stress is mentioned throughout this case study.
How does this stress occur? What stress outcomes
occur for people in these types of jobs? How can
these people try to minimize high levels of stress?
Sources: “Providing Emotional Comfort,” Journeys (CentraState
Medical Center Magazine), 4 (Winter 2008), p. 1; M. L. Diamond,
“When Job Stress Bubbles Up, Keep a Lid on Your Emotions,”
Seattle Times, 4 May 2008, p. H2; B. Anderson, “First Stop on a
Long Road,” Fresno Bee, 25 May 2008, p. A1; M. D. LaPlante,
“Medics’ Compassion to Be Tested,” Salt Lake Tribune, 17 Sep-
tember 2008.
Case Study 4.2 DISPATCHES FROM THE WAR ON STRESS
Mark Ostermann had been work-
ing in the Chicago office of
Boston Consulting Group for
less than a year when he attracted the attention of
the Red Zone police. Ostermann’s infraction: work-
ing too hard. He had been putting in 60-plus-hour
weeks for a month and a half straight, and his col-
leagues were worried he was burning out. Now his
bosses were stepping in to get Ostermann the help
he needed.
This BusinessWeek case study discusses the
ongoing battle against workplace stress, including
some of its causes and consequences, as well as cor-
porate strategies to minimize it. Read the full text of
this BusinessWeek article at www.mhhe.com/
mcshane5e, and prepare for the discussion ques-
tions below.
Discussion Questions
1. This case study describes various ways that com-
panies try to manage workplace stress. In terms
of the types of stress management strategies
described in this chapter, which approaches are
applied most and least often?
2. What stress outcomes are mentioned in this case
study? What stressors are noted in association
with these stress outcomes?
3. Some of the stress problems described in this
chapter relate to winning or losing in perfor-
mance management. Why would the risk of
failing to achieve performance goals result in
such serious stress outcomes?
Source: J. Goudreau, “Dispatches from the War on Stress,”
BusinessWeek, 6 August 2007, p. 74.
124
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http://www.mhhe.com/
Class Exercise 4.3 STRENGTH-BASED COACHING
PURPOSE To help students practice a form of
inter personal development built on the dynamics of
positive emotions.
MATERIALS None.
BACKGROUND Several chapters in this book
introduce and apply the emerging philosophy of
positive organizational behavior, which suggests that
focusing on the positive rather than negative aspects
of life will improve organizational success and indi-
vidual well-being. An application of positive OB is
strength-based or appreciative coaching, in which
the coach focuses on the person’s strengths rather
than weaknesses and helps to realize the person’s
potential. As part of any coaching process, the coach
listens to the employee’s story and uses questions
and suggestions to help that person redefine her or
his self-concept and perceptions of the environment.
Two important skills in effective coaching are active
listening and probing for information (rather than
telling the person a solution or direction). The
instructions below identify specific information and
issues that the coach and coachee will discuss.
INSTRUCTIONS (SMALL CLASS)
1. Form teams of four people. One team can have
six people if the class does not have multiples of
four. For odd-numbered class sizes, one pe rson
may be an observer. Divide into pairs in which
one person is coach and the other coachee. Ide-
ally for this exercise, the coach and coachee
should have little knowledge of each other.
2. Coachees will describe something about them-
selves in which they excel and for which they like
to be recognized. This competency might be
work-related, but not necessarily. It would be a
personal achievement or ability that is close to
their self-concept (how they define themselves).
The coach mostly listens, but also prompts more
details from the coachee using “probe” questions
(“Tell me more about that.” “What did you do
next?” “Could you explain that further, please?”
“What else can you remember about that event?”).
As the coachee’s story develops, the coach will
guide the coachee to identify ways to leverage this
strength. For example, the pair would explore
situational barriers to practicing the coachee’s
strength as well as aspects of this strength that
require further development. The strength may
also be discussed as a foundation for the coachee
to develop strengths in other, related ways. The
session should end with some discussion of the
coachee’s goals and action plans. The first coach-
ing session can be any length of time specified by
the instructor, but 15 to 25 minutes is typical for
each coaching session.
3. After completing the first coaching session, re-
group so that each pair consists of different part-
ners than those in the first pair (i.e., if pairs were
A-B and C-D in session 1, pairs are A-C and
B-D in session 2). The coaches become coachees
to their new partners in session 2.
4. The class will debrief regarding the emotional
experience of discussing personal strengths, the
role of self-concept in emotions and attitudes,
the role of managers and co-workers in building
positive emotions in people, and the value and
limitations of strength-based coaching.
Note: For further information about strength-based coaching, see
Sara L. Orem, Jacqueline Binkert, and Ann L. Clancy, Appreciative
Coaching (San Francisco: Jossey-Bass, 2007); Marcus Buckingham
and C. Coffman, First, Break All the Rules (New York: Simon &
Schuster, 1999).
125
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126
Team Exercise 4.4 RANKING JOBS ON THEIR EMOTIONAL LABOR
PURPOSE This exercise is designed to help you
under stand the jobs in which people tend to experi-
ence higher or lower degrees of emotional labor.
INSTRUCTIONS
1. Individually rank-order the extent to which the
jobs listed below require emotional labor. In
other words, assign a “1” to the job you believe
requires the most effort, planning, and control to
express organizationally desired emotions during
interpersonal transactions. Assign a “10” to the
job you believe requires the least amount of emo-
tional labor. Mark your rankings in column 1.
2. The instructor will form teams of four or five
members, and each team will rank-order the
items on the basis of consensus (not simply aver-
aging the individual rankings). These results are
placed in column 2.
3. The instructor will provide expert ranking infor-
mation. This information should be written in
column 3. Then students calculate the differ-
ences in columns 4 and 5.
4. The class will compare the results and discuss
the features of jobs with high emotional labor.
Your score
Bartender
Cashier
Dental hygienist
Insurance adjuster
Lawyer
Librarian
Postal clerk
Registered nurse
Social worker
Television announcer
(The lower the score, the better.)
TOTAL
Team score
Occupational Emotional Labor Scoring Sheet
(1)
Individual
ranking
(2)
Team
ranking
(3)
Expert
ranking
(4)
Absolute
difference
of 1 and 3
(5)
Absolute
difference
of 2 and 3Occupation
Team Exercise 4.5 STAGE FRIGHT!
PURPOSE This exercise is designed to help you
diagnose a common stressful situation and deter-
mine how stress management practices apply to this
situation.
BACKGROUND Stage fright—including the fear of
public speaking—is one of the most stressful experiences
many people have in everyday life. According to some
estimates, nearly three-quarters of us frequently
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Self-Assessment 4.6
SCHOOL COMMITMENT SCALE
PURPOSE This self-assessment is designed to help
you understand the concept of organizational com-
mitment and to assess your commitment to the
college or university you are currently attending.
OVERVIEW The concept of commitment is as rel-
evant to students enrolled in college or university
courses as it is to employees working in various
organizations. This self-assessment adapts a popular
organizational commitment instrument so that it
refers to your commitment as a student to the school
you are attending.
get stage fright, even when speaking or acting in
front of a small audience. Stage fright is an excellent
topic for this team activity on stress management be-
cause the psychological and physiological symptoms
of stage fright are really symptoms of stress. In other
words, stage fright is the stress experience in a spe-
cific context involving a public audience. On the ba-
sis of the personal experiences of team members,
your team will be asked to identify the symptoms of
stage fright and to determine specific stress manage-
ment activities that effectively combat stage fright.
INSTRUCTIONS
1. Students are organized into teams, typically four
to six students per team. Ideally, each team
should have one or more people who acknowl-
edge that they have experienced stage fright.
2. Each team’s first task is to identify the symptoms
of stage fright. The best way to organize these
symptoms is to look at the three categories of
stress outcomes described in this chapter: physi-
ological, psychological, and behavioral. The
specific stage fright symptoms may be different
from the stress outcomes described in the chapter,
but the three broad categories are relevant.
Teams should be prepared to identify several
symptoms and to present one or two specific
examples of stage fright symptoms based on
personal experiences of team members. (Please
remember that individual students are not
required to describe their experiences to the
entire class.)
3. Each team’s second task is to identify specific
strategies people could or have applied to mini-
mize stage fright. The five categories of stress
management presented in the chapter will likely
provide a useful template for organizing the spe-
cific stage fright management activities. Each
team should document several strategies for
minimizing stage fright and be able to present
one or two specific examples to illustrate some
of these strategies.
4. The class will congregate to hear each team’s
analysis of symptoms of and solutions to stage
fright. This information will then be compared
to the stress experience and stress management
practices, respectively.
127
INSTRUCTIONS Read each of the statements below
and circle the response that best fits your personal
belief. Then use the scoring key in Appendix B at
the end of this book to calculate your results. This
self-assessment should be completed alone so that
you can rate yourself honestly without concerns of
social comparison. However, class discussion will fo-
cus on the meaning of the different types of organi-
zational commitment and how well this scale applies
to the commitment of students toward the college or
university they are attending.
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To what extent do you
agree or disagree with
each of these statements?
1. I would be very happy to
complete the rest of my
education at this school.
Moderately
agree
Strongly
agree
Slightly
agree
Slightly
disagree
Moderately
disagree
Strongly
disagree
Neutral
2. One of the difficulties of
leaving this school is that
there are few alternatives.
3. I really feel as if this school’s
problems are my own.
4. Right now, staying enrolled
at this school is a matter of
necessity as much as desire.
5. I do not feel a strong sense
of belonging to this school.
6. It would be very hard for me
to leave this school right now
even if I wanted to.
7. I do not feel emotionally
attached to this school.
8. Too much of my life would be
disrupted if I decided to move
to a different school now.
9. I do not feel like part of the
“family” at this school.
10. I feel that I have too few
options to consider leaving
this school.
11. This school has a great deal
of personal meaning for me.
12. If I had not already put so
much of myself into this school,
I might consider completing
my education elsewhere.
School Commitment Scale
Source: Adapted from J. P. Meyer, N. J. Allen, and C. A. Smith, “Commitment to Organizations and Occupations: Extension and Test of a Three-
Component Model,” Journal of Applied Psychology 78 (1993), pp. 548–551. Copyright © 1993 by the American Psychological Association. Adapted with
permission. No further reproduction or distribution is permitted without written permission from the American Psychological Association.
128
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Self-Assessment 4.7
DISPOSITIONAL MOOD SCALE
This self-assessment is designed to help you under-
stand mood states or personality traits of emotions
and to assess your own mood or emotional personal-
ity. This self-assessment consists of several words
representing various emotions that you might have
experienced. For each word presented, indicate the
extent to which you have felt this way generally
across all situations over the past six months. You need
to be honest with yourself to receive a rea-
sonable estimate of your mood state or per-
sonality trait on these scales. The results
provide an estimate of your level on two emotional
personality scales. This instrument is widely used in
research, but it is only an estimate. You should not
assume that the results are accurate without a more
complete assessment by a trained professional.
Self-Assessment 4.8
WORK ADDICTION RISK TEST
This self-assessment is designed to help you identify
the extent to which you are a workaholic. This instru-
ment presents several statements and asks you to
indicate the extent to which each statement is true
of your work habits. You need to be honest
with yourself for a reasonable estimate of
your level of workaholism.
Self-Assessment 4.9
PERCEIVED STRESS SCALE
This self-assessment is designed to help you estimate
your perceived general level of stress. The items in
this scale ask you about your feelings and thoughts
during the last month. In each case, please indicate
how often you felt or thought a certain way.
You need to be honest with yourself for a reason-
able estimate of your general level of stress.
Self-Assessment 4.10
STRESS COPING PREFERENCE SCALE
This self-assessment is designed to help you iden-
tify the type of coping strategy you prefer to use in
stressful situations. This scale lists a variety of
things you might do when faced with a stressful
situation. You are asked how often you tend
to react in these ways. You need to be honest
with yourself for a reasonable estimate of
your preferred coping strategy.
129
After reading this chapter, if you need additional information, see www.mhhe.com/mcshane5e
for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/mcshane5e
Founded only a decade ago in San Antonio, Texas, Rackspace Hosting, Inc., already
employs more than 2,000 employees and has become one of the best-known brands in
enterprise-level Web hosting and
the information technology services
industry. This success demands
highly motivated employees who
will deliver fast, reliable service. “To
enable us to meet our high service
levels, we have to have a very high
level of employee engagement, so
our staff are extremely important to
us,” says Fabio Torlini, Rackspace’s
marketing director in the United
Kingdom. Rackspace scores in
the top 14 percent on employee
engagement among 100,000
workplaces worldwide.
Rackspace generates this high
level of engagement through rewards
and fulfillment of personal needs.
Rackspace employees—called
“Rackers”—receive quarterly bonuses based on meeting companywide goals. Those who
receive great customer feedback or perform beyond the call of duty are awarded free
restaurant dinners for the entire family, a weekend vacation in the river residence guest
house of cofounder Graham Weston, or the key for a week to one of Weston’s BMWs
(called the “Rackmobile”). “If you gave somebody a $200 bonus, it wouldn’t mean very
much,” observes Weston. “When someone gets to drive my car for a week, they never
forget it.” The top-performing Rackers each month receive special treatment; they are tied
up in a straitjacket and have a photograph of them in the outfit hung on the Wall of Fanatics.
To fulfill their social needs and minimize dysfunctional internal competition, Rackspace
organizes employees into teams and has a healthy social budget that funds monthly
outings such as dinners, theatrical events, boating trips, and scavenger hunts. In
addition, due to plentiful training and career development opportunities, 85 percent of
Rackers say that work fulfills their need for personal growth.
Rackspace also motivates staff through the power of strength-based coaching. In some
offices, every employee’s photograph is posted on a board with a list of his or her five key
strengths. “Each Racker is an individual and has unique strengths,” the company’s three
founders and CEO recently wrote in an annual letter to investors. “We help them develop their
strengths rather than ask them to change who they are. We encourage Rackers to talk about
their strengths and to find positions in the company that leverage their inherent talents. This
approach creates happier, more engaged Rackers who look forward to coming to work.” 1
Rackspace Hosting motivates its employees through recognition and appreciation
of what it takes to make employee engagement central to business operations.
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5
Foundations of
Employee Motivation
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Diagram and discuss the relationship
between human drives, needs, and
behavior.
2. Summarize Maslow’s needs hierarchy and
discuss Maslow’s contribution to the field of
motivation.
3. Summarize McClelland’s learned needs
theory, including the three needs he studied.
4. Describe four-drive theory and discuss its
implications for motivating employees.
5. Diagram the expectancy theory model
and discuss its practical implications for
motivating employees.
6. Describe the characteristics of effective
goal setting and feedback.
7. Summarize equity theory and describe how
to improve procedural justice.
8. Identify the factors that influence
procedural justice, as well as the
consequences of procedural justice.
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132 Part Two Individual Behavior and Processes
Rewards, social events, strength-based feedback, and various celebrations for good
performance are designed to maintain and improve employee motivation at Rack-
space Hosting. This motivation has catapulted the company’s performance in a highly
competitive market. Rackspace is also recognized as one of the best places to work.
Recall from Chapter 2 that motivation refers to the forces within a person that affect
the direction, intensity, and persistence of voluntary behavior. 2 Motivated employees
are willing to exert a particular level of effort (intensity), for a certain amount of time
(persistence), toward a particular goal (direction). Motivation is one of the four essen-
tial drivers of individual behavior and performance.
This chapter introduces the core theories of employee motivation. We begin by
introducing employee engagement, an increasingly popular concept associated with
motivation. Next, we distinguish between drives and needs and explain how needs
are shaped through the individual’s self-concept and other personal factors. Three
theories that focus on drives and needs—Maslow’s needs hierarchy, McClelland’s
learned needs theory, and four-drive theory—are introduced and evaluated. Next, we
turn our attention to the popular rational decision model of employee motivation:
expectancy theory. This is followed by a discussion of the key elements of goal setting
and feedback. In the final section, we look at organizational justice, including the
dimensions and dynamics of equity theory and procedural justice.
Employee Engagement
When Rackspace Hosting executives discuss employee motivation, they are just as likely
to use the phrase employee engagement. This concept, which is closely connected to em-
ployee motivation, has become so popular in everyday language that we introduce it
here. Employee engagement’s popularity far exceeds its conceptual development; its
definition varies across studies, and its distinction from job satisfaction, organizational
commitment, and other variables is unclear. 3 Even so, there are enough threads of simi-
larity that we can cautiously define employee engagement as the employee’s emo-
tional and cognitive motivation, self-efficacy to perform the job, perceived clarity of the
organization’s vision and his or her specific role in that vision, and belief that he or she
has the resources to get the job done. 4 This definition relates to the four cornerstones of
individual behavior and performance identified in the MARS model (see Chapter 2):
motivation, ability, role perceptions, and situational factors. Employee engagement en-
compasses the employee’s beliefs about and emotional responses to these conditions.
Additionally, some writers suggest that employee engagement includes a high level of
absorption in the work—the experience of “getting carried away” while working.
Employee engagement is a hot topic among executives and consultants. One re-
port estimates that one in every four large organizations has a formal employee en-
gagement program, and three out of five intend to develop plans to improve employee
engagement. 5 Some companies even have employee engagement departments or
managers. The popularity of employee engagement is partly due to preliminary evi-
dence that it improves organizational effectiveness. Royal Bank of Scotland calcu-
lated that when its employee engagement scores increase, productivity rises and staff
turnover falls. British retailer Marks & Spencer claims that a 1 percent improvement
in the engagement levels of its workforce produces a 2.9 percent increase in sales per
square foot. JCPenney has calculated that stores with higher employee engagement
produce higher sales. Other research indicates that employee engagement is associ-
ated with higher organizational citizenship and lower turnover intentions. 6
motivation
The forces within a
person that affect the
direction, intensity, and
persistence of voluntary
behavior.
employee engagement
The employee’s emo-
tional and cognitive
motivation, self-efficacy
to perform the job,
perceived clarity of the
organization’s vision
and his or her specific
role in that vision, and
belief that he or she has
the resources to get the
job done.
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Chapter 5 Foundations of Employee Motivation 133
The challenge facing organizational leaders is that most employees aren’t very en-
gaged. Several consulting reports estimate that only about one-quarter of American
employees are highly engaged, which is slightly above the global average. Less than
60 per cent are somewhat engaged, and approximately one-fifth have low engagement
or are actively disengaged. Actively disengaged employees tend to be disruptive at work,
not just disconnected from work. Globally, employees in Mexico and Brazil seem to
have the highest levels of engagement, whereas several Asian countries (notably Japan,
China, and South Korea) and a few European countries (notably Italy, Netherlands,
and France) have the lowest levels. 8 Some writers suggest that globalization, informa-
tion technology, corporate restructuring, and other changes have potentially under-
mined the levels of trust and commitment necessary to motivate employees beyond
minimum standards. 9 Others point out that companies have not adjusted to the chang-
ing needs and expectations of new workforce entrants. 10 Overall, these reports of low
employee engagement imply that many employees are not very motivated to perform
their jobs. To create a more motivated workforce, we first need to understand employee
drives and needs and how these concepts relate to individual goals and behavior.
After reading this section, you should be able to:
1. Diagram and discuss the relationship between human drives, needs,
and behavior.
2. Summarize Maslow’s needs hierarchy and discuss Maslow’s con-
tribution to the field of motivation.
3. Summarize McClelland’s learned needs theory, including the three
needs he studied.
4. Describe four-drive theory and discuss its implications for motivat-
ing employees.
Getting Engaged at JCPenney In the hypercompetitive retail industry,
the number-one ingredient for winning the hearts and pocketbooks of
customers is the quality, style, and price of the merchandise. What’s
the second most important ingredient? It’s employee engagement,
according to executives at JCPenney. “We feel strongly there’s a
correlation between engaged associates and store profitability,” says
Myron “Mike” Ullman, CEO of the Plano, Texas, retailer. In fact, the
company’s internal research revealed that stores with the top-quartile
engagement scores generate about 10 percent more in sales per
square foot and 36 percent greater operating income than similar-size
stores in the lowest quartile. A few years ago, about two-thirds of
JCPenney associates were “engaged.” Thanks to improved training,
career development, and other management practices, more than
three-quarters of employees now are engaged. Per-share earnings
have more than doubled since JCPenney management focused on
improving employee engagement. “We see a 200 basis-point [increase
in] profit when we engage the associates,” Ullman claims. “This isn’t
just warm, fuzzy stuff. It’s solid business logic.”7
Learning
Objectives
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134 Part Two Individual Behavior and Processes
Self-concept, social norms,
and past experience
Drives
(primary needs)
and emotions
Needs
(secondary)
Decisions and
behavior
Exhibit 5.1
Drives, Needs, and
Behavior
drives
Hardwired characteris-
tics of the brain that
correct deficiencies or
maintain an internal
equilibrium by produc-
ing emotions to energize
individuals.
needs
Goal-directed forces
that people experience.
Employee Drives and Needs
To figure out how to create a more engaged and motivated workforce, we first need
to understand the motivational “forces” within people. Unfortunately, many writers
conveniently avoid this topic, and the result is a stream of confusing phrases such as
innate drives, learned needs, motivations, instincts, secondary drives, and primary needs. 11 We
define drives (also called primary needs or innate motives ) as hardwired characteristics
of the brain that correct deficiencies or maintain an internal equilibrium by produc-
ing emotions to energize individuals. 12 Drives are the “prime movers” of behavior
because they generate emotions, which put people in a state of readiness to act on
their environment (see Chapter 4). Although typically overlooked in organizational
behavior, emotions play a central role in motivation. 13 In fact, both words (emotion
and motivation) are derivations of the same Latin word, movere, which means “to
move.” Although there is no clear list of human drives, several are consistently identi-
fied in research, such as the drives for social interaction, understanding of the envi-
ronment, competence or status, and defense of oneself against physiological and
psychological harm. 14
We define needs as goal-directed forces that people experience. Needs are the
motivational forces of emotions channeled toward particular goals to correct deficien-
cies or imbalances. So drives produce emotions, and needs are essentially the emo-
tional experience channeled toward goals believed to address the source of emotion.
Consider the following example: Everyone has a drive to bond—an inherent need to
be associated with other people to some degree. The drive to bond generates nega-
tive emotions when we are rejected by others or lack social interaction over time.
These negative emotions are experienced as unfulfilled needs; they motivate us to do
something that will increase our connectedness to and acceptance by other people.
Individual Differences in Needs
Even though all people have the same drives, they don’t have the same emotional
responses (such as loneliness, curiosity, or anger) or needs in the same situation.
Exhibit 5.1 explains why this difference occurs. The left side of the model shows that
the individual’s self-concept (including personality and values), social norms, and
past experience amplify or suppress drive-based emotions, thereby resulting in stron-
ger or weaker needs. 15 People who define themselves as very sociable typically expe-
rience a strong need for social interaction if alone for a while, whereas people who
view themselves as less sociable would experience a less intense need to socialize
over that time. These individual differences also explain, as you shall discover later in
this chapter, why needs can be “learned” to some extent. Socialization and reinforce-
ment may cause people to alter their self-concept somewhat, resulting in a stronger or
weaker need for social interaction, achievement, and so on.
Self-concept, social norms, and past experience do more than adjust the emotions
generated by our built-in drives. The right side of Exhibit 5.1 shows that these individual
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Chapter 5 Foundations of Employee Motivation 135
Maslow’s needs
hierarchy theory
A motivation theory of
needs arranged in a
hierarchy, whereby
people are motivated
to fulfill a higher need
as a lower one becomes
gratified.
characteristics also regulate a person’s motivated goals and behavior. Even if you have a
strong desire for social interaction, you probably wouldn’t walk up to strangers and start
talking to them; this action is contrary to social norms of behavior in most (but not all)
cultures. Similarly, suppose that you dislike your boss’s decision to assign you to a par-
ticular project. Openly confronting the boss about this assignment is common in some
companies and cultures and much less common in other contexts. People regulate their
goals and behavior on the basis of these social and cultural norms, as well as their self-
concept and reinforcement (or observation of others) in previous situations. Employees
are more likely to direct their emotional energy toward speaking up if they view them-
selves as being forthright, live in a low power distance culture, and work in a company
that encourages constructive debate.
We have presented this detail about needs and drives for a few reasons. 16 First, as
mentioned, motivation theories use the terms needs, drives, and motivations so loosely
that they make it difficult to compare theories, so it is important to settle this confu-
sion at the outset. Second, the field of organizational behavior has been woefully slow
to acknowledge the central role of emotions in employee motivation, as will be ap-
parent when we review most motivation theories in this chapter. Third, Exhibit 5.1
provides a useful template for understanding various motivation theories. In fact, you
will see pieces of this theory when we discuss four-drive theory, expectancy theory,
goal setting, and other concepts in this chapter. The remainder of this section de-
scribes theories that try to explain the dynamics of drives and needs. Later theories
in this chapter explain how experiences—such as expectancies, feedback, and work
experiences—influence the motivation process.
Maslow’s Needs Hierarchy Theory
By far, the most widely known theory of human motivation is Maslow’s needs
hierarchy theory (see Exhibit 5.2 ). Developed by psychologist Abraham Maslow
Exhibit 5.2
Maslow’s Needs
Hierarchy
Belongingness
Safety
Physiological
Source: Based on information in A. H. Maslow, “A Theory of Human Motivation,” Psychological Review 50 (1943),
pp. 370–396.
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136 Part Two Individual Behavior and Processes
in the 1940s, the model condenses and integrates the long list of needs that had
been studied previously into a hierarchy of five basic categories (from lowest to
highest): 17
Physiological. The need for food, air, water, shelter, and the like.
Safety. The need for a secure and stable environment and the absence of pain,
threat, or illness.
Belongingness/love. The need for love, affection, and interaction with other
people.
Esteem. The need for self-esteem through personal achievement as well as social
esteem through recognition and respect from others.
Self-actualization. The need for self-fulfillment, realization of one’s potential.
Along with developing these five categories, Maslow identified the desire to
know and the desire for aesthetic beauty as two innate drives that do not fit within
the hierarchy.
Maslow’s list represents drives (primary needs) because they are described as
innate and universal. According to Maslow, we are motivated simultaneously by
several needs but the strongest source is the lowest unsatisfied need at the time. As
the person satisfies a lower-level need, the next higher need in the hierarchy becomes
the primary motivator and remains so even if never satisfied. Physiological needs are
initially the most important, and people are motivated to satisfy them first. As they
become gratified, the desire for safety emerges as the strongest motivator. As safety
needs are satisfied, belongingness needs become most important, and so forth. The
exception to this need fulfillment process is self-actualization; as people experience
self-actualization, they desire more rather than less of this need. Thus, while the
bottom four groups are deficiency needs because they become activated when unful-
filled, self-actualization is known as a growth need because it continues to develop even
when fulfilled.
Limitations and Contributions of Maslow’s Work In spite of its popularity,
Maslow’s needs hierarchy theory has been dismissed by most motivation experts. 18
Maslow developed the theory from only his professional observations, and he was
later surprised that it was so widely accepted before anyone tested it. Empirical stud-
ies have concluded that people do not progress through the hierarchy as the theory
predicts. For example, some people strive more for self-esteem before their belong-
ingness needs have been satisfied. The theory also assumes that needs priorities shift
over a long time, whereas in reality needs priorities rise and fall far more frequently
with the situation. A person’s needs for status, food, social interaction, and so forth,
change daily or weekly, not every few years. As Global Connections 5.1 describes,
companies around the world routinely motivate all staff through recognition. These
examples illustrate that people regularly need—and are motivated to receive—respect
and belongingness in the workplace.
Although needs hierarchy theory has failed the reality test, Maslow deserves
credit for bringing a more holistic, humanistic, and positive approach to the study of
human motivation. 19 First, Maslow brought a more holistic perspective by explain-
ing that needs and drives should be studied together because human behavior is
typically initiated by more than one of them at the same time. Previously, motiva-
tion experts had splintered needs or drives into dozens of categories, each studied in
isolation. 20
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Shining the Spotlight on
Employee Recognition
David Gachuru lives by a motto that motivates employees with
much more than money: “If an employee’s work calls for a
thumbs-up, I will appreciate him or her as many times as pos-
sible.” Translating this advice into practice is a daily event for
the general manager of Sarova Panafric Hotel in Nairobi, Kenya.
In addition to thanking staff personally and through e-mails,
Gachuru holds bimonthly meetings at which top-performing em-
ployees are congratulated and receive paid holidays with their
family. Employee achievements are also celebrated in the
hotel’s newsletter, which is distributed to guests as well as
to employees.
Sarova Panafric Hotel and other firms are returning to good
old-fashioned praise and recognition to regularly motivate
staff. Good thing, because recent surveys in several countries
identify lack of praise, recognition, or appreciation as a major
reason why employees are demotivated and disengaged and
decide to find work elsewhere. For instance, on the basis of
1,000 exit interviews, Ireland’s Small Firms Association (SMA)
recently reported that lack of recognition was a top reason
why employees in that country quit their jobs. “Increasingly
people need to feel that their contribution is valued,” suggests
SMA director Patricia Callan. “If people do not feel important,
they are not motivated to stay.”
The challenge of recognition is to “catch” employees do-
ing extraordinary work or showing organizational citizenship.
Peer recognition, in which co-workers identify exemplary per-
formers, is an increasingly popular way for companies to iden-
tify employees deserving special recognition and reward. At
the Ritz-Carlton Hotel in Kuala Lumpur, Malaysia, co-workers
write words of appreciation to each other using First Class
Cards. “This serves as a motivational aspect of the work envi-
ronment,” says an executive at Ritz-Carlton Kuala Lumpur,
which is rated as one of the best places to work in Asia.
Amgen, the California-based biotechnology company, re-
cently introduced globally a more intricate peer recognition pro-
gram called Bravo! Tier I recognition is an e-mail–based
thank-you sent by co-workers through a special Bravo Web site.
Tier II peer recognitions are accompanied by an electronic gift
certificate. At Tier III, employees nominate individuals or teams,
and an “award wizard” determines the amount of the reward
(ranging from $100 to $500). A Tier IV recognition is accompanied
by a larger financial reward for those who significantly improved
the company’s operations. The Tier V award, which is reviewed
by the executive team, is received by employees who have made
the highest material impact on company performance.21
Global Connections 5.1
David Gachuru (left in photo) motivates staff at Sarova Panafric Hotel in Nairobi, Kenya, through
plenty of praise and recognition.
137
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138 Part Two Individual Behavior and Processes
Second, Maslow brought a more humanistic perspective to the study of motiva-
tion. In particular, he suggested that higher-order needs are influenced by personal
and social influences, not just instincts. In other words, he was among the first to rec-
ognize that human thoughts (including self-concept, social norms, and past experience)
play a role in motivation. Previous motivation experts had focused almost entirely on
human instincts without considering that motivation could be shaped by human
thought.
Third, Maslow brought a more positive perspective of employee motivation by
focusing on need gratification rather than only on need deprivation. In particular, he
popularized the previously developed concept of self-actualization, suggesting that
people are naturally motivated to reach their potential and that organizations and
societies need to be structured to help people continue and develop this motiva-
tion. 22 Due to his writing on self-actualization and the power of need gratification,
Maslow is a pioneer in positive organizational behavior . Recall from Chapter 3 that
positive OB says that focusing on the positive rather than negative aspects of life
will improve organizational success and individual well-being. In other words, this
approach advocates building positive qualities and traits within individuals or
institutions as opposed to focusing on trying to fix what might be wrong with
them. 23
What’s Wrong with Needs Hierarchy Models?
Maslow’s theory is not the only attempt to map employee needs onto a single hier-
archy. Another hierarchy model, called ERG theory , reorganizes Maslow’s five
groups into three—existence, relatedness, and growth. 24 Unlike Maslow’s theory,
which only explained how people progress up the hierarchy, ERG theory also
describes how people regress down the hierarchy when they fail to fulfill higher
needs. ERG theory seems to explain human motivation somewhat better than
Maslow’s needs hierarchy, but that’s mainly because it is easier to cluster human
needs around ERG’s three categories than Maslow’s five categories. Otherwise,
research studies have found that ERG theory only marginally improves our under-
standing of human needs. 25
Why have Maslow’s needs hierarchy theory, ERG theory, and other needs hierar-
chies largely failed to explain the dynamics of employee needs? The most glaring
explanation is that people don’t fit into a single needs hierarchy. Some people place
social status at the top of their personal hierarchy; others consider personal develop-
ment and growth an ongoing priority over social relations or status. There is increas-
ing evidence that needs hierarchies are unique to each person, not universal, because
needs are strongly influenced by each individual’s self-concept, including personal
values and social identity. If your most important values lean toward stimulation and
self-direction, you probably pay more attention to self-actualization needs. If power
and achievement are at the top of your value system, status needs will likely be at the
top of your needs hierarchy. This connection between values and needs suggests that
a needs hierarchy is unique to each person and can possibly change over time, just as
values change over a lifetime. 26
Learned Needs Theory
Earlier in this chapter we said that drives (primary needs) are innate whereas needs
are shaped, amplified, or suppressed through self-concept, social norms, and past
ERG theory
A needs hierarchy
theory consisting of
three fundamental
needs—existence,
relatedness, and
growth.
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Chapter 5 Foundations of Employee Motivation 139
experience. Maslow noted that individual characteristics influence the strength of
higher-order needs, such as the need to belong. Psychologist David McClelland
further investigated the idea that need strength can be altered through social influ-
ences. In particular, he recognized that a person’s needs can be strengthened
through reinforcement, learning, and social conditions. McClelland examined three
“learned” needs: achievement, power, and affiliation. 27
Need for Achievement People with a strong need for achievement (nAch)
want to accomplish reasonably challenging goals through their own effort. They
prefer working alone rather than in teams, and they choose tasks with a moderate
degree of risk (i.e., neither too easy nor impossible to complete). High-nAch people
also desire unambiguous feedback and recognition for their success. Money is a weak
motivator, except when it provides feedback and recognition. 28 In contrast, employ-
ees with a low nAch perform their work better when money is used as an incentive.
Successful entrepreneurs tend to have a high nAch, possibly because they establish
challenging goals for themselves and thrive on competition. 29
Need for Affiliation Need for affiliation (nAff) refers to a desire to seek approval
from others, conform to their wishes and expectations, and avoid conflict and con-
frontation. People with a strong nAff try to project a favorable image of themselves.
They tend to actively support others and try to smooth out workplace conflicts. High-
nAff employees generally work well in coordinating roles to mediate conflicts and in
sales positions where the main task is cultivating long-term relations. However, they
tend to be less effective at allocating scarce resources and making other decisions that
potentially generate conflict. People in decision-making positions must have a rela-
tively low need for affiliation so that their choices and actions are not biased by a
personal need for approval. 30
Need for Power People with a high need for power (nPow) want to exercise
control over others and are concerned about maintaining their leadership position.
They frequently rely on persuasive communication, make more suggestions in meet-
ings, and publicly evaluate situations more often. McClelland pointed out that there
are two types of nPow. Individuals who enjoy their power for its own sake, use it to
advance personal interests, and wear their power as a status symbol have personalized
power . Others mainly have a high need for socialized power because they desire power
as a means to help others. 31 McClelland argues that effective leaders should have a
high need for socialized rather than personalized power. They must have a high
degree of altruism and social responsibility and be concerned about the consequences
of their own actions on others.
Learning Needs McClelland’s research supported his theory that needs can be
learned (more accurately, strengthened or weakened), so he developed training pro-
grams for this purpose. In his achievement motivation program, trainees write
achievement-oriented stories and practice achievement-oriented behaviors in busi-
ness games. They also complete a detailed achievement plan for the next two years
and form a reference group with other trainees to maintain their newfound achieve-
ment motivation style. 32 These programs seem to work. Participants attending a need-
for-achievement course in India subsequently started more new businesses, had
greater community involvement, invested more in expanding their businesses, and
need for achievement
(nAch)
A need in which people
want to accomplish
reasonably challenging
goals and desire unam-
biguous feedback and
recognition for their
success.
need for affiliation (nAff)
A need in which people
seek approval from
others, conform to their
wishes and ex pectations,
and avoid conflict and
confrontation.
need for power (nPow)
A need in which people
want to control their
environment, including
people and material
resources, to benefit
either themselves
(personalized power)
or others (socialized
power).
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140 Part Two Individual Behavior and Processes
employed twice as many people as nonparticipants did. Research on similar achieve-
ment motivation courses for American small-business owners reported dramatic in-
creases in the profitability of the participants’ businesses. In essence, these programs
attempt to alter the individual’s self-concept or experiences such that they amplify or
suppress related drive-generated emotions.
Four-Drive Theory
One of the central messages of this chapter is that emotions play a significant role
in employee motivation. This view is supported by a groundswell of research in
neuroscience, but it is almost completely absent from contemporary motivation
theories in organizational behavior. Also, social scientists in several fields (psy-
chology, anthropology, etc.) increasingly agree that human beings have several
hardwired drives, including social interaction, learning, and dominance. One of
the few theories to apply this emerging knowledge is four-drive theory . 33 Devel-
oped by Harvard Business School professors Paul Lawrence and Nitin Nohria,
four-drive theory states that everyone has the drive to acquire, bond, learn, and
defend:
• Drive to acquire . This is the drive to seek, take, control, and retain objects and
personal experiences. The drive to acquire extends beyond basic food and
water; it includes enhancing one’s self-concept through relative status and re-
cognition in society. 34 Thus, it is the foundation of competition and the basis
of our need for esteem. Four-drive theory states that the drive to acquire is
insatiable because the purpose of human motivation is to achieve a higher
position than others, not just to fulfill one’s physiological needs.
• Drive to bond . This is the drive to form social relationships and develop mutual
caring commitments with others. It explains why people form social identities
by aligning their self-concept with various social groups (see Chapter 2). It
may also explain why people who lack social contact are more prone to serious
health problems. 35 The drive to bond motivates people to cooperate and, con-
sequently, is a fundamental ingredient in the success of organizations and the
development of societies.
• Drive to learn . This is the drive to satisfy our curiosity, to know and understand
ourselves and the environment around us. 36 When observing something that is
inconsistent with or beyond our current knowledge, we experience a tension
that motivates us to close that information gap. In fact, studies have revealed
that people who are removed from any novel information will crave even
boring information; the drive to learn generated such strong emotions that the
study participants eventually craved month-old stock reports! 37 The drive to
learn is related to the higher-order needs of growth and self-actualization
described earlier.
• Drive to defend . This is the drive to protect ourselves physically and socially.
Probably the first drive to develop, it creates a “fight-or-flight” response in the
face of personal danger. The drive to defend goes beyond protecting our physi-
cal self. It includes defending our relationships, our acquisitions, and our belief
systems.
These four drives are innate and universal, meaning that they are hardwired in our
brains and are found in all human beings. They are also independent of each other.
four-drive theory
A motivation theory that
is based on the innate
drives to acquire, bond,
learn, and defend and
that incorporates both
emotions and rationality.
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Chapter 5 Foundations of Employee Motivation 141
There is no hierarchy of drives, so one drive is neither dependent on nor inherently
inferior or superior to another drive. Four-drive theory also states that these four
drives are a complete set—there are no fundamental drives excluded from the model.
Another key feature is that three of the four drives are proactive—we regularly try to
fulfill them. Only the drive to defend is reactive—it is triggered by threat. Thus, any
notion of fulfilling drives is temporary, at best.
How Drives Influence Employee Motivation Four-drive theory draws from
current neuroscience knowledge to explain how drives translate into goal-directed
effort. To begin with, recall from previous chapters that the information we re-
ceive is quickly and nonconsciously tagged with emotional markers that subse-
quently shape our logical analysis of a situation. 38 According to four-drive theory,
the four drives determine which emotions are tagged to incoming stimuli. If you
arrive at work one day to see a stranger sitting in your office chair, you might
quickly experience worry, curiosity, or both. These emotions are automatically
created by one or more of the four drives. In this example, the emotions produced
are likely strong enough to demand your attention and motivate you to act on this
observation.
Most of the time, we aren’t aware of our emotional experiences because they are
subtle and fleeting. However, emotions do become conscious experiences when they
are sufficiently strong or when we experience conflicting emotions. Under these cir-
cumstances, our mental skill set relies on social norms, past experience, and personal
values to direct the motivational force of our emotions to useful and acceptable goals
that address the source of those emotions (see Exhibit 5.3 ). In other words, the emo-
tions generated by the four drives motivate us to act, and our mental skill set chooses
courses of action that are acceptable to society and our own moral compass. 39 This is
the process described at the beginning of this chapter, namely, that drives produce
emotions; our self-concept, social norms, and past experience translate these emo-
tions into goal-directed needs, and these individual characteristics also translate needs
into decisions and behavior.
Drive to
acquire
Social
norms
Mental skill set
resolves competing
drive demands
Goal-directed
choice and effort
Personal
values
Past
experience
Drive to
bond
Drive to
learn
Drive to
defend
Exhibit 5.3 Four-Drive Theory of Motivation
Source: Based on information in P. R. Lawrence and N. Nohria, Driven: How Human Nature Shapes Our Choices (San Francisco:
Jossey-Bass, 2002).
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142 Part Two Individual Behavior and Processes
Evaluating Four-Drive Theory Although four-drive theory was introduced very
recently, it is based on a deep foundation of research that dates back more than three
decades. The drives have been identified from psychological and anthropological
studies. The translation of drives into goal-directed behavior originates from consid-
erable research on emotions and neural processes. The theory avoids the assumption
that everyone has the same needs hierarchy, and it explains why needs vary from
one person to the next. Notice, too, that four-drive theory is both holistic (it relates to
all drives, not just one or two) and humanistic (it acknowledges the role of human
thought and social influences, not just instinct). Maslow had identified these two
principles as important features of an effective motivation theory. Four-drive theory
also provides a much clearer understanding of the role of emotional intelligence in
employee motivation and behavior. Employees with high emotional intelligence are
more sensitive to competing demands from the four drives, are better able to avoid
impulsive behavior from those drives, and can judge the best way to act to fulfill
those drive demands in a social context.
Even with its well-researched foundations, four-drive theory is far from complete.
First, most experts would argue that one or two other drives exist that should be in-
cluded. Second, social norms, personal values, and past experience probably don’t
represent the full set of individual characteristics that translate emotions into goal-
directed effort. For example, other elements of self-concept beyond personal values,
such as personality and social identity, likely play a significant role in translating
drives into needs and needs into decisions and behavior.
Practical Implications of Four-Drive Theory The main recommendation from four-
drive theory is to ensure that individual jobs and workplaces provide a balanced oppor-
tunity to fulfill the drives to acquire, bond, learn, and defend. 40 There are really two
recommendations here. The first is that the best workplaces for employee motivation
and well-being offer conditions that help employees fulfill all four drives. Employees
continually seek fulfillment of their innate drives, so successful companies provide suffi-
cient rewards, learning opportunities, social interaction, and so forth, for all employees.
The second recommendation is that fulfillment of the four drives must be kept in
balance; that is, organizations should avoid too much or too little opportunity to ful-
fill each drive. The reason for this advice is that the four drives counterbalance each
other. The drive to bond counterbalances the drive to acquire; the drive to defend
counterbalances the drive to learn. An organization that energizes the drive to ac-
quire without the drive to bond may eventually suffer from organizational politics
and dysfunctional conflict. Change and novelty in the workplace will aid the drive to
learn, but too much of it will trigger the drive to defend to such an extent that em-
ployees become territorial and resistant to change. Thus, the workplace should offer
enough opportunity to keep all four drives in balance.
These recommendations help explain why Rackspace Hosting, described at the be-
ginning of this chapter, has a motivated workforce and is rated as one of the best places
to work in America and the United Kingdom. Rackspace has internal competitions that
fulfill the drive to acquire, yet it balances the competitive conditions with generously
funded social events where employees maintain a supportive social environment. The
opening vignette also noted that the Web hosting and IT services company encourages
staff to learn through training and career-enhancing assignments. At the same time,
these are balanced by a nurturing environment that emphasizes employee strengths
rather than faults. The company likely also minimizes the drive to defend because it is
in a growth phase with little probability of layoffs or other risks to personal well-being.
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Chapter 5 Foundations of Employee Motivation 143
expectancy theory
A motivation theory
based on the idea that
work effort is directed
toward behaviors that
people believe will lead
to desired outcomes.
Outcome 1
� or �
Outcome 2
� or �
Outcome 3
� or �
Performance
E-to-P
Expectancy
P-to-O
Expectancy
Outcome
Valence
Effort
Exhibit 5.4
Expectancy Theory
of Motivation
After reading the next three sections, you should be able to:
5. Diagram the expectancy theory model and discuss its practical
implications for motivating employees.
6. Describe the characteristics of effective goal setting and feedback.
7. Summarize equity theory and describe how to improve procedural
justice.
8. Identify the factors that influence procedural justice, as well as the
consequences of procedural justice.
Expectancy Theory of Motivation
The theories described so far mainly explain the internal origins of employee motiva-
tion. But how do these drives and needs translate into specific effort and behavior?
Four-drive theory recognizes that social norms, personal values, and past experience
direct our effort, but it doesn’t offer any more detail. Expectancy theory , on the
other hand, offers an elegant model based on rational logic to predict the chosen
direction, level, and persistence of motivation. Essentially, the theory states that work
effort is directed toward behaviors that people believe will lead to desired outcomes.
In other words, we are motivated to achieve the goals with the highest expected
payoff. 41 As illustrated in Exhibit 5.4 , an individual’s effort level depends on three
factors: effort-to-performance (E-to-P) expectancy, performance-to-outcome (P-to-O)
expectancy, and outcome valences. Employee motivation is influenced by all three
components of the expectancy theory model. If any component weakens, motivation
weakens.
• E-to-P expectancy. This is the individual’s perception that his or her effort will
result in a particular level of performance. In some situations, employees may
believe that they can unquestionably accomplish the task (a probability of 1.0).
In other situations, they expect that even their highest level of effort will not
result in the desired performance level (a probability of 0.0). In most cases, the
E-to-P expectancy falls somewhere between these two extremes.
Learning
Objectives
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144 Part Two Individual Behavior and Processes
• P-to-O expectancy. This is the perceived probability that a specific behavior or perfor-
mance level will lead to a particular outcome. In extreme cases, employees may
believe that accomplishing a particular task (performance) will definitely result in a
particular outcome (a probability of 1.0), or they may believe that successful perfor-
mance will have no effect on this outcome (a probability of 0.0). More often, the
P-to-O expectancy falls somewhere between these two extremes.
• Outcome valences. A valence is the anticipated satisfaction or dissatisfaction that an
individual feels toward an outcome. It ranges from negative to positive. (The
actual range doesn’t matter; it may be from �1 to +1 or from �100 to +100.)
An outcome valence represents a person’s anticipated satisfaction with the out-
come. 42 Outcomes have a positive valence when they are consistent with our
values and satisfy our needs; they have a negative valence when they oppose
our values and inhibit need fulfillment.
Expectancy Theory in Practice
One of the appealing characteristics of expectancy theory is that it provides clear
guidelines for increasing employee motivation. 43 Several practical applications of ex-
pectancy theory are listed in Exhibit 5.5 and described below.
Exhibit 5.5 Practical Applications of Expectancy Theory
Expectancy theory
component Objective Applications
E→P expectancies
P→O expectancies
Outcome valences
To increase the belief that employees
are capable of performing the job
successfully.
To increase the belief that good
performance will result in certain
(valued) outcomes.
To increase the expected value of
outcomes resulting from desired
performance.
• Select people with the required skills and
knowledge.
• Provide required training and clarify job
requirements.
• Provide sufficient time and resources.
• Assign simpler or fewer tasks until employees
can master them.
• Provide examples of similar employees who
have successfully performed the task.
• Provide coaching to employees who lack
self-confidence.
• Measure job performance accurately.
• Clearly explain the outcomes that will result
from successful performance.
• Describe how the employee’s rewards were
based on past performance.
• Provide examples of other employees
whose good performance has resulted in
higher rewards.
• Distribute rewards that employees value.
• Individualize rewards.
• Minimize the presence of countervalent
outcomes.
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Chapter 5 Foundations of Employee Motivation 145
Increasing E-to-P Expectancies E-to-P expectancies are influenced by the indi-
vidual’s belief that he or she can successfully complete the task. Some companies in-
crease this can-do attitude by assuring employees that they have the necessary
competencies, clear role perceptions, and necessary resources to reach the desired
levels of performance. Matching employees to jobs on the basis of their abilities and
clearly communicating the tasks required for the job are important parts of this pro-
cess. Similarly, E-to-P expectancies are learned, so behavioral modeling and support-
ive feedback (positive reinforcement) typically strengthen the individual’s belief that
he or she is able to perform the task.
Increasing P-to-O Expectancies The most obvious ways to improve P-to-O expec-
tancies are to measure employee performance accurately and distribute more valued
rewards to those with higher job performance. P-to-O expectancies are perceptions, so
employees need to know that higher performance will result in higher rewards, and they
need to know how that connection occurs. Companies meet these needs by explaining
how specific rewards are connected to specific past performance and by using examples,
anecdotes, and public ceremonies to illustrate when behavior has been rewarded.
Many companies claim they provide higher rewards to people with higher per-
formance, yet surveys repeatedly find that the performance-to-outcome linkage is
foggy to most staff. Less than half of the 6,000 American employees surveyed in
one study said they know how to increase their base pay or cash bonuses. Another
poll reported that only 32 percent of employees believe that people at their com-
pany are paid more for doing a better job. Less than half of employees in a large-
scale Malaysian survey said they believe their company rewards high performance
or deals appropriately with poor performers. Only one-quarter of 10,000 Canadian
employees recently surveyed said they regularly receive rewards for a job well done.
This is consistent with another survey which reported that only 27 percent of Cana-
dian employees say there is a clear link between their job performance and pay. 44
Increasing Outcome Valences Everyone has unique values and experiences,
which translate into different needs at different times. Consequently, individualizing
rather than standardizing rewards and other performance outcomes is an important
ingredient in employee motivation. At the same time, leaders need to watch for coun-
tervalent outcomes—consequences with negative valences that reduce rather than
enhance employee motivation. For example, peer pressure may cause some employ-
ees to perform their jobs at the minimum standard even though formal rewards and
the job itself would otherwise motivate them to perform at higher levels.
Overall, expectancy theory is a useful model that explains how people rationally
figure out the best direction, intensity, and persistence of effort. It has been tested in
a variety of situations and predicts employee motivation in different cultures. 45 How-
ever, critics have a number of concerns with how the theory has been tested. Another
concern is that expectancy theory ignores the central role of emotion in employee
effort and behavior. The valence element of expectancy theory captures some of this
emotional process, but only peripherally. 46
Goal Setting and Feedback
Walk into almost any customer contact center (i.e., call center)—whether it’s Sitel’s
offices in Albuquerque, New Mexico, or Dell’s contact center in Quezon City in
the Philippines—and you will notice that work activities are dominated by goal
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146 Part Two Individual Behavior and Processes
setting and plenty of feedback. 48 Contact-center performance is judged on several
key performance indicators (KPIs), such as average time to answer the call, length of
time per call, and abandon rates (customers who hang up before the call is handled
by a customer service representative). Some contact centers have large electronic
boards showing how many customers are waiting, the average time they have been
waiting, and the average time before someone talks to them. A few even have
“emotion detection” software, which translates words and voice intonation into
a measure of the customer’s level of happiness or anger during the telephone
conversation. 49
Goal setting is the process of motivating employees and clarifying their role per-
ceptions by establishing performance objectives. It potentially improves employee
performance in two ways: (1) by amplifying the intensity and persistence of effort and
(2) by giving employees clearer role perceptions so that their effort is channeled to-
ward behaviors that will improve work performance. Goal setting is more complex
than simply telling someone to “do your best.” It requires several specific character-
istics. Some consultants refer to these as “SMART goals,” but the acronym doesn’t
quite capture all of the key ingredients identified by goal-setting research. The six key
characteristics are specific goals, relevant goals, challenging goals, goal commitment,
participation in goal formation (sometimes), and goal feedback. 50
• Specific goals. Employees put more effort into a task when they work toward
specific goals rather than “do your best” targets. Specific goals have measurable
levels of change over a specific and relatively short time frame. For example,
New York City mayor Michael Bloomberg has set the goal of replacing 300 gas-
guzzling yellow cabs with fuel-efficient models every month. Specific goals
communicate more precise performance expectations, so employees can direct
their effort more efficiently and reliably.
• Relevant goals. Goals must also be relevant to the individual’s job and be within
his or her control. For example, a goal to reduce waste materials would have
Goal Setting Makes Every Day Count in NYC When New York City
mayor Michael R. Bloomberg gives a speech or writes a memo, he
lets it be known that the time remaining in his second mayoral term is
quickly passing by. The successful entrepreneur-turned- politician
has announced challenging goals to accomplish, and he doesn’t want
any of his remaining tenure wasted. To be sure that New York City
employees also experience this deadline urgency, Bloomberg had
special clocks installed in a dozen city government offices that count
down how many days remain in his mayoral term. Above many of
these countdown clocks is the catchphrase: “Make every day count.”
Bloomberg’s penchant for specific, challenging, measurable goals is
most apparent in PlaNYC, which includes 127 environmental initia-
tives captured in 10 overarching goals. Bloomberg aims to reduce
greenhouse gas emissions citywide by 30 percent by 2030. He
recently announced plans to have 300 new hybrid taxis on the road
each month until the city’s entire fleet of 13,000 taxis is fuel-efficient
by 2012. (Bloomberg is shown here in front of one of the new “green”
hybrid taxis.) Another goal is to plant 1 million trees over the next
decade, including at least 10,000 street trees per year.47
goal setting
The process of motivat-
ing employees and
clarifying their role per-
ceptions by establishing
performance objectives.
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Chapter 5 Foundations of Employee Motivation 147
little value if employees don’t have much control over waste in the production
process.
• Challenging goals. Challenging goals (rather than easy ones) cause people to raise
the intensity and persistence of their work effort and to think through informa-
tion more actively. They also fulfill a person’s achievement or growth needs
when the goal is achieved. General Electric, Goldman Sachs, and many other
organizations emphasize stretch goals . These goals don’t just stretch a person’s
abilities and motivation; they are goals that people don’t even know how to
reach, so they need to be creative to achieve them.
• Goal commitment. Ideally, goals should be challenging without being so difficult
that employees lose their motivation to achieve them. 51 This is the same as the
E-to-P expectancy that you learned about in the section on expectancy theory.
The lower the E-to-P expectancy that the goal can been accomplished, the less
committed (motivated) the employee is to the goal.
• Goal participation (sometimes). Goal setting is usually (but not always) more
effective when employees participate in setting the goals. 52 Participation poten-
tially creates a higher level of goal commitment than is found when goals are
set alone by the supervisor. Participation may also improve goal quality, be-
cause employees have valuable information and knowledge that may not be
known to those who initially formed the goal.
• Goal feedback. Feedback is another necessary condition for effective goal setting. 53
Feedback is any information that lets us know whether we have achieved the goal
or are properly directing our effort toward it. Feedback redirects our effort, but it
potentially also fulfills our growth needs.
Balanced Scorecard
A popular form of organizational-level goal setting is the balanced scorecard
(BSC) . The balanced scorecard translates the organization’s vision and mission
into specific, measurable performance goals related to financial, customer, inter-
nal, and learning/growth (i.e., human capital) processes. The objective of BSC is
to ensure that the full range of organizational performance is captured in the goal-
setting process. Each dimension includes several goals related to specific opera-
tions within the organization, thereby connecting each work unit to the overall
corporate objectives. For example, an airline might include on-time performance
as one of its customer process goals and number of hours of safety training per
employee as a learning and growth process goal. These specific goals are often
weighted and scored to create a composite measure of achievement across the organi-
zation each year.
The Richmond, Virginia, school board implemented a BSC to help it achieve six
goals, including improving student achievement, promoting a safe and nurturing en-
vironment, and providing strong leadership for effective and efficient operations.
Each goal has several outcome measures. For instance, the goal of improving student
achievement includes a dozen measures, such as percentage of students who meet a
state-sanctioned completion rate, percentage of special education students moving to
a higher reading level, and percentage of students enrolling in specific math and sci-
ence courses. “Our BSC lays out a challenging set of process measures and targets for
us, and it holds us accountable for reaching our goals,” explains Yvonne Brandon,
superintendent of Richmond Public Schools. 54
balanced scorecard
(BSC)
A goal-setting and
reward system that
translates the organiza-
tion’s vision and mission
into specific, measur-
able performance goals
related to financial,
customer, internal,
and learning/growth
(i.e., human capital)
processes.
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148 Part Two Individual Behavior and Processes
Characteristics of Effective Feedback
Whirlpool Corp. employees complained that they weren’t getting enough feedback
from their bosses, so the appliance manufacturer asked managers to meet with their
immediate subordinates quarterly rather than the previous schedule’s every six
months. Jeffrey Davidoff, head of marketing for Whirlpool’s North American con-
sumer brands, has taken the feedback frequency even further; he meets with his eight
direct reports for up to 45 minutes every two weeks. “I’m noticing much better re-
sults,” Mr. Davidoff says. 55
Whirlpool managers are discovering that feedback is an important practice in em-
ployee motivation and performance. Along with clarifying role perceptions and im-
proving employee skills and knowledge, feedback motivates when it is constructive
and when employees have strong self-efficacy. 56 As with goal setting, feedback should
be specific and relevant . In other words, the feedback should refer to specific metrics
(e.g., sales increased by 5 percent last month) and to the individual’s behavior or
outcomes within his or her control. Feedback should also be timely; the information
should be available soon after the behavior or results occur so that employees see a
clear association between their actions and the consequences.
Effective feedback is also sufficiently frequent . How frequent is “sufficiently”? The
answer depends on at least two things. One consideration is the employee’s knowl-
edge and experience with the task. Feedback is a form of reinforcement, so em-
ployees working on new tasks should receive more frequent corrective feedback
because they require more behavior guidance and reinforcement (see Chapter 3).
Employees who perform repetitive or familiar tasks can receive less frequent feed-
back. The second factor is how long it takes to complete the task. Feedback is
necessarily less frequent in jobs with a long cycle time (e.g., executives and scien-
tists) than in jobs with a short cycle time (e.g., grocery store cashiers). The final
characteristic of effective feedback is that it should be credible . Employees are more
likely to accept feedback (particularly corrective feedback) from trustworthy and
credible sources.
Feedback through Strength-Based Coaching Forty years ago, Peter Drucker rec-
ognized that leaders are more effective when they focus on strengths rather than weak-
nesses. “The effective executive builds on strengths—their own strengths, the strengths
of superiors, colleagues, subordinates; and on the strength of the situation,” wrote the
late management guru. 57 Rackspace Hosting, Inc., which was described at the begin-
ning of this chapter, has adopted this positive OB approach. It gives employees oppor-
tunities to develop their strengths rather than requiring them to focus on areas where
they have limited interest or talent. This is the essence of strength-based coaching
(also known as appreciative coaching )—maximizing the person’s potential by focusing on
her or his strengths rather than weaknesses. 58 In strength-based coaching, the em-
ployee describes areas of work where he or she excels. The coach guides this discus-
sion by asking exploratory questions and by helping the employee to discover ways
of leveraging his or her strength. For example, the pair would explore situational bar-
riers to practicing the coachee’s strength as well as aspects of this strength that require
further development.
Strength-based coaching is logical because people inherently seek feedback about
their strengths, not their flaws. Recall from Chapter 2 that people engage in self-
enhancement, at least for those domains of self which are most important. Strength-
based coaching also makes sense because personality becomes quite stable before a
person reaches midcareer, and this stability limits the flexibility of the person’s interests,
strength-based
coaching
A positive organizational
behavior approach to
coaching and feedback
that focuses on building
and leveraging the em-
ployee’s strengths rather
than trying to correct his
or her weaknesses.
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Chapter 5 Foundations of Employee Motivation 149
preferences, and competencies. 60 In spite of these research observations, most compa-
nies focus goal setting and feedback on tasks that employees are performing poorly.
After the initial polite compliments, many coaching or performance feedback sessions
analyze the employee’s weaknesses, including determining what went wrong and what
the employee needs to do to improve. These inquisitions sometimes produce so much
negative feedback that employees become defensive; they can also undermine self-
efficacy, thereby making the employee’s performance worse rather than better. By
focusing on weaknesses, companies fail to realize the full potential of the employee’s
strengths. One survey reports that only 20 percent of employees in large organizations
say that they have an opportunity to perform tasks that they do best. 61
Sources of Feedback
Feedback can originate from nonsocial or social sources. Nonsocial sources provide
feedback without someone communicating that information. Employees at contact
centers view electronic displays showing how many callers are waiting and the
Sony Europe Builds on Strengths When competition from Korea and China threatened Sony Europe’s
market position, the electronics and music company decided that its competitive advantage would be to
leverage the power of strengths rather than battle against weaknesses. Employees were asked to iden-
tify activities in which they excel, enjoy the work, and feel at ease. On the basis of this information, Sony
Europe designed jobs around these strengths, instead of molding people to fit into existing, rigid job
structures. For example, the performance of a Sony Europe employee dropped after he moved to
another sales position. Rather than pushing the employee to deliver higher performance in the new job,
Sony compared the individual’s strengths against the job requirements. The company learned that the
employee’s strength was in face-to-face communication, whereas his new job required very little social
interaction. Sony created a new role for the employee that leveraged his strengths. Within a year, the
employee’s team had delivered record sales and increased profits at a lower cost. Strength-based
coaching “ensures that everybody in Sony is focusing on what they do best,” says Ray White, Sony
Europe’s vice president of human resources. “They’re aligning their ‘A’ talents to make their best
contribution to the business and their best contributions are outstanding.”59
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150 Part Two Individual Behavior and Processes
average time they have been waiting. Nova Chemicals operators receive feedback
from a computer screen that monitors in real time the plant’s operational capacity,
depicted as a gently flowing green line, and actual production output, shown as a
red squiggly line. Soon after Nova installed the feedback system, employees en-
gaged in friendly bouts of rivalry to determine who could keep the actual produc-
tion output as close as possible to the plant’s maximum capacity. 62
Corporate intranets allow many executives to receive feedback instantaneously on
their computer, usually in the form of graphic output on an executive dashboard.
Almost half of Microsoft’s employees use a dashboard to monitor project deadlines,
sales, and other metrics. Microsoft CEO Steve Ballmer regularly reviews dashboard
results in one-on-one meetings with his division leaders. “Every time I go to see
Ballmer, it’s an expectation that I bring my dashboard with me,” says the head of the
Microsoft Office division. 63
Multisource (360-Degree) Feedback Erik Djukastein knew that he needed
feedback on his leadership skills, but asking his boss for performance feedback
wasn’t possible because Djukastein owns the company, Contech Electronics. In-
stead, he asked all 20 employees and managers at the company to anonymously
complete a written report about his strengths and weaknesses. “It was illuminating
and scary looking at the results—when your staff say you don’t follow through on
your commitments, that hurts,” Djukastein admits. “But the good news is that it
enabled me to open my eyes to things that were instrumental in changing my men-
tal attitude.” 64
Erik Djukastein relied on multisource (360-degree) feedback to provide him
with meaningful feedback. As the name implies, multisource feedback is informa-
tion about an employee’s performance collected from a full circle of people, includ-
ing subordinates, peers, supervisors, and customers. Almost all the Fortune 500
companies use multisource feedback, typically for managers rather than nonman-
agement employees. 65 Multisource feedback tends to provide more complete and
accurate information than feedback from a supervisor alone. It is particularly useful
when the supervisor is unable to observe the employee’s behavior or performance
throughout the year. Lower-level employees also feel a greater sense of fairness and
open communication when they are able to provide upward feedback about their
boss’s performance. 66
However, multisource feedback also creates challenges. Having several people re-
view so many other people can be expensive and time-consuming. With multiple
opinions, the 360-degree process can also produce ambiguous and conflicting feed-
back, so employees may require guidance to interpret the results. A third concern is
that peers may provide inflated rather than accurate feedback to avoid conflicts dur-
ing the forthcoming year. A final concern is that employees experience a stronger
emotional reaction when they receive critical feedback from many people rather than
from just one person (such as the boss). “Initially you do take it personally,” admits a
manager at software maker Autodesk. “[360-degree feedback] is meant to be con-
structive, but you have to internally battle that.” 67
Choosing Feedback Sources With so many sources of feedback—multisource
feedback, executive dashboards, customer surveys, equipment gauges, nonverbal
communication from your boss—which one works best under which conditions? The
preferred feedback source depends on the purpose of the information. To learn about
their progress toward goal accomplishment, employees usually prefer nonsocial
multisource (360-degree)
feedback
Information about an
employee’s perfor-
mance collected from
a full circle of people,
including subordinates,
peers, supervisors, and
customers.
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Chapter 5 Foundations of Employee Motivation 151
feedback sources, such as computer printouts or feedback directly from the job. This
is because information from nonsocial sources is considered more accurate than in-
formation from social sources. Corrective feedback from nonsocial sources is also less
damaging to self-esteem. In contrast, social sources tend to delay negative informa-
tion, leave some of it out, and distort the bad news in a positive way. 68 When employ-
ees want to improve their self-image, they seek out positive feedback from social
sources. It feels better to have co-workers say that you are performing the job well
than to discover this from a computer screen.
Evaluating Goal Setting and Feedback
Goal setting represents one of the “tried-and-true” theories in organizational behav-
ior, so much so that scholars consider it to be one of the top OB theories in terms of
validity and usefulness. 69 In partnership with goal setting, feedback also has an excel-
lent reputation for improving employee motivation and performance. At the same
time, putting goal setting into practice can create problems. 70 One concern is that
goal setting tends to focus employees on a narrow subset of measurable performance
indicators while ignoring aspects of job performance that are difficult to measure.
The saying, “What gets measured, gets done” applies here. A second problem is that
when goal achievement is tied to financial rewards, many employees are motivated
to set easy goals (while making the boss think they are difficult) so that they have a
higher probability of the bonus or pay increase. As a former CEO at Ford Motor
Company once quipped: “At Ford, we hire very smart people. They quickly learn
how to make relatively easy goals look difficult!” 71 A third problem is that setting
performance goals is effective in established jobs but seems to interfere with the learn-
ing process in new, complex jobs. Thus, we need to be careful not to apply goal setting
where an intense learning process is occurring.
Organizational Justice
The government of Tasmania, Australia’s island state, recently bought the unfinished
Bell Bay power station when the original owners experienced financial problems.
United Group, the construction company hired to finish building the electricity gen-
eration station, brought in crews from other states to work alongside the Tasmanian
workers at the site. It wasn’t long before the Tassie workers discovered a huge gap in
pay rates. The new interstate workers were being paid $31.50 per hour, whereas the
Tasmanian workers were paid $22 for doing the same job at the same work site. “The
situation is basically unfair and the Tasmanian workers are very angry,” says the local
labor union leader. 72
Most organizational leaders know that treating employees fairly is both morally
correct and good for employee motivation, loyalty, and well-being. Yet the feel-
ings of injustice that the Tasmanian workers at the Bell Bay power station site re-
cently experienced are regular occurrences in the workplace. To minimize these
incidents, we need to first understand that there are two forms of organizational
justice: distributive justice and procedural justice. 73 Distributive justice refers to
perceived fairness in the outcomes we receive compared to our contributions and
the outcomes and contributions of others. Procedural justice , on the other hand,
refers to fairness of the procedures used to decide the distribution of resources.
The Tasmanian workers experienced distributive injustice because co-workers
from other parts of Australia earned much bigger paychecks for doing the same
distributive justice
Perceived fairness in
the individual’s ratio of
outcomes to contribu-
tions compared with a
comparison other’s
ratio of outcomes to
contributions.
procedural justice
Perceived fairness of
the procedures used to
decide the distribution
of resources.
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152 Part Two Individual Behavior and Processes
work. Depending on how this pay gap was determined and how the employer,
United Group, addresses these grievances, the workers might also experience pro-
cedural injustice.
Equity Theory
The first thing we usually think about and experience in situations of injustice is
distributive injustice—the belief (and its emotional response) that the pay and
other outcomes we receive in the exchange relationship are unfair. What is con-
sidered “fair” varies with each person and situation. We apply an equality principle
when we believe that everyone in the group should receive the same outcomes
(such as when everyone at Rackspace gets free dinners with teammates). The need
principle is applied when we believe that those with the greatest need should re-
ceive more outcomes than others with less need. The equity principle infers that
people should be paid in proportion to their contribution. The equity principle is
the most common distributive justice rule in organizational settings, so let’s look
at it in more detail.
To explain how the equity principle operates, OB scholars developed equity
theory , which says that employees determine feelings of equity by comparing their
own outcome/input ratio to the outcome/input ratio of some other person. 74 The
outcome/input ratio is the value of the outcomes you receive divided by the value of the
inputs you provide in the exchange relationship. Inputs include such things as skill,
effort, reputation, performance, experience, and hours worked. Outcomes are what
employees receive from the organization in exchange for the inputs, such as pay,
promotions, recognition, preferential treatment, or preferred jobs in the future. In our
example, the Tasmanian workers likely believed that collectively they and the inter-
state workers provided the same skills, effort, and hours of work, but the interstate
workers received much more favorable outcomes—bigger paychecks.
Equity theory states that we compare our outcome/input ratio with that of a com-
parison other. 75 In our example, the Tasmanian workers compared themselves to
other employees in the same job, namely, the interstate workers at the same work
site. In other situations, the comparison other might be another person or group of
people in other jobs (e.g., comparing your pay against how much the CEO is paid) or
another organization. Some research suggests that employees frequently collect infor-
mation on several referents to form a “generalized” comparison other. 76 For the most
part, however, the comparison other varies from one person to the next and is not
easily identifiable.
People develop feelings of equity or inequity by comparing their own outcome/
input ratio with the comparison other’s ratio. Exhibit 5.6 diagrams the three equity
evaluations. In the underreward inequity situation—which the Tasmanian workers
experienced—people believe their outcome/input ratio is lower than the compari-
son other’s ratio. In the equity condition, people believe that their outcome/input
ratio is similar to the ratio of the comparison other. In the overreward inequity
condition, people believe their ratio of outcomes/inputs is higher than the com-
parison other’s ratio. However, overreward inequity isn’t as common as underre-
ward inequity because people often change their perceptions to justify the favorable
outcomes.
Inequity and Employee Motivation How does the equity evaluation relate to em-
ployee motivation? The answer is that feelings of inequity generate negative emotions,
equity theory
A theory explaining
how people develop
perceptions of fairness
in the distribution and
exchange of resources.
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Chapter 5 Foundations of Employee Motivation 153
and as we have pointed out throughout this chapter, emotions are the engines of mo-
tivation. In the case of inequity, people are motivated to reduce the emotional ten-
sion. Consider the plight of the underpaid Tasmanian workers at the Bell Bay power
station construction site. These individuals experienced anger and frustration when
they discovered how much less they earned than co-workers who came in from other
places in Australia. These emotions motivated the workers to contact their labor
union to correct the problem. There are many other ways that people respond to
feelings of underreward inequity. The most common responses (some of which are
unethical) include: 77
• Reduce our inputs. Perform the work more slowly, give fewer helpful suggestions,
engage in less organizational citizenship behavior.
• Increase our outcomes. Ask for a pay increase directly or through a labor union,
make unauthorized use of company resources.
• Increase the comparison other’s inputs. Subtly ask the better-off co-worker to do a
larger share of the work to justify his or her higher pay or other outcomes.
• Reduce the comparison other’s outcomes. Ask the company to reduce the
co-worker’s pay.
• Change our perceptions . Believe that the co-worker really is doing more (e.g.,
working longer hours) or that the higher outcomes (e.g., better office) he or she
receives really aren’t so much better than what you get.
• Change the comparison other. Compare yourself to someone else closer to your
situation (job duties, pay scale).
• Leave the field. Avoid thinking about the inequity by keeping away from the
work site where the overpaid co-worker is located, take more sick leave, move
to another department, or quit your job.
Although the seven responses to inequity remain the same, people who feel
overreward inequity would, of course, act differently. Some overrewarded employ-
ees reduce their feelings of inequity by working harder. “What helps motivate me is
that I look around the office and I see people who are working as hard or harder
than I am. You feel guilty if you’re not pulling your weight,” says a New Jersey
accountant. However, many overrewarded employees don’t work harder. Some
might encourage the underrewarded co-worker to work at a more leisurely pace. A
Effort
Skill
You Comparison
other
(a) Underreward
inequity
Rewards Rewards
Effort
Skill
Effort
Skill
You Comparison
other
(c) Overreward
inequity
RewardsRewards
Effort
Skill
Effort
Skill
You Comparison
other
(b) Equity
RewardsRewards
Effort
Skill
Exhibit 5.6
Equity Theory Model
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154 Part Two Individual Behavior and Processes
common reaction, however, is that the overrewarded employee changes his or her
perceptions to justify the more favorable outcomes. As author Pierre Berton once
said: “I was underpaid for the first half of my life. I don’t mind being overpaid for
the second half.” 78
Individual Differences: Equity Sensitivity Thus far, we have described equity
theory as though everyone has the same feelings of inequity in a particular situation.
The reality, however, is that people vary in their equity sensitivity , that is, their
outcome/input preferences and reaction to various outcome/input ratios. 79 At one
end of the equity sensitivity continuum are the “benevolents”—people who are toler-
ant of situations where they are underrewarded. They might still prefer equal out-
come/input ratios, but they don’t mind if others receive more than they do for the
same inputs. In the middle are people who fit the standard equity theory model.
These “equity sensitives” want their outcome/input ratio to be equal to the outcome/
input ratio of the comparison other. Equity sensitives feel increasing inequity as the
ratios become different. At the other end are the “entitleds.” These people feel more
comfortable in situations where they receive proportionately more than others. They
might accept having the same outcome/input ratio as others, but they would prefer
receiving more than others performing the same work.
Evaluating Equity Theory Equity theory is widely studied and quite successful at
predicting various situations involving feelings of workplace injustice. 80 However,
equity theory isn’t so easy to put into practice because it doesn’t identify the com-
parison other and doesn’t indicate which inputs or outcomes are most valuable to
each employee. The best solution here is for leaders to know their employees well
enough to minimize the risk of inequity feelings. Open communication is also a key,
enabling employees to let decision makers know when they feel decisions are unfair.
A second problem is that equity theory accounts for only some of our feelings of
equity sensitivity
An individual’s outcome/
input preferences and
reaction to various
outcome/input ratios.
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Chapter 5 Foundations of Employee Motivation 155
fairness or justice in the workplace. Experts now say that procedural justice is at least
as important as distributive justice.
Procedural Justice
Recall that procedural justice refers to fairness of the procedures used to decide the
distribution of resources. How do companies improve procedural justice? 82 A good
way to start is by giving employees “voice” in the process; encourage them to present
their facts and perspectives on the issue. Voice also provides a “value-expressive”
function; employees tend to feel better after having an opportunity to speak their
mind. Procedural justice is also higher when the decision maker is perceived as unbi-
ased, relies on complete and accurate information, applies existing policies consis-
tently, and has listened to all sides of the dispute. If employees still feel unfairness in
the allocation of resources, their feelings tend to weaken if the company allows the
employee to appeal the decision to a higher authority.
Finally, people usually feel less inequity when they are given a full explanation of
the decision and their concerns are treated with respect. If employees believe a deci-
sion is unfair, refusing to explain how the decision was made could fuel their feelings
of inequity. For instance, one study found that nonwhite nurses who experienced rac-
ism tended to file grievances only after experiencing disrespectful treatment in their
attempt to resolve the racist situation. Another study reported that employees with
repetitive strain injuries were more likely to file workers’ compensation claims after
experiencing disrespectful behavior from management. A third recent study noted
that employees have stronger feelings of injustice when the manager has a reputation
of treating people unfairly most of the time. 83
Costco Wholesale CEO Keeps Executive Pay Equitable John
Pierpont Morgan, who in the 1800s founded the financial giant now
called J.P. Morgan Chase, warned that no CEO should earn more
than 20 times an average worker’s pay. That advice didn’t stop
James L. Dimon from earning an average of $40 million in total
compensation for each of his first two years as the current CEO of
J.P. Morgan Chase. Dimon took home more than 1,200 times the
pay of the average employee in the United States. Costco Whole-
sale chief executive Jim Sinegal (shown in photo) thinks such a
large wage gap is blatantly unfair and can lead to long-term em-
ployee motivation problems. “Having an individual who is making
100 or 200 or 300 times more than the average person working on
the floor is wrong,” says Sinegal, who cofounded the Issaquah,
Washington, company. Even though Costco is one of the world’s
largest retailers, Sinegal’s annual salary and bonus usually amount
to less than $600,000. Stock options raised his latest total compen-
sation to $3.2 million, which was much less than Costco’s board
wanted to pay him. Sinegal explained that receiving higher pay
would not affect his motivation and performance. At the same time,
Costco employees enjoy some of the highest pay rates in the retail
industry (averaging $17 per hour).81
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156 Part Two Individual Behavior and Processes156 Part Two Individual Behavior and Processes
Consequences of Procedural Injustice Procedural justice has a strong influ-
ence on a person’s emotions and motivation. Employees tend to experience anger
toward the source of the injustice, which generates various response behaviors that
scholars categorize as either withdrawal or aggression. 84 Notice how these response
behaviors are similar to the fight-or-flight responses described earlier in the chap-
ter regarding situations that activate our drive to defend. Research suggests that
being treated unfairly threatens our self-concept and social status, particularly
when others see that we have been unjustly treated. Employees retaliate to restore
their self-concept and reinstate their status and power in the relationship with the
perpetrator of the injustice. Employees also engage in these counterproductive
behaviors to educate the decision maker, thereby trying to minimize the likeli-
hood of future injustices. 85
Chapter Summary
Motivation consists of the forces within a person that
affect his or her direction, intensity, and persistence
of voluntary behavior in the workplace. Drives (also
called primary needs) are neural states that energize
individuals to correct deficiencies or maintain an inter-
nal equilibrium. They are the “prime movers” of be-
havior, activating emotions that put us in a state of
readiness to act. Needs—goal-directed forces that people
experience—are shaped by the individual’s self-concept
(including personality and values), social norms, and
past experience.
Maslow’s needs hierarchy groups needs into a hier-
archy of five levels and states that the lowest needs are
initially most important but higher needs become more
important as the lower ones are satisfied. Although very
popular, the theory lacks research support, as does
ERG theory, which attempted to overcome some of the
limitations in Maslow’s needs hierarchy. Both models
assume that everyone has the same hierarchy, whereas
the emerging evidence suggests that needs hierarchies
vary from one person to the next according to their
personal values.
McClelland’s learned needs theory argues that needs
can be strengthened through learning. The three needs
studied in this respect have been need for achievement,
need for power, and need for affiliation. Four-drive the-
ory states that everyone has four innate drives—the drives
to acquire, bond, learn, and defend. These drives activate
emotions that we regulate through a skill set that consid-
ers social norms, past experience, and personal values.
The main recommendation from four-drive theory is to
ensure that individual jobs and workplaces provide a
balanced opportunity to fulfill the four drives.
Expectancy theory states that work effort is deter-
mined by the perception that effort will result in a par-
ticular level of performance (E-to-P expectancy), the
perception that a specific behavior or performance level
will lead to specific outcomes (P-to-O expectancy), and
the valences that the person feels for those outcomes. The
E-to-P expectancy increases by improving the employee’s
ability and confidence to perform the job. The P-to-O ex-
pectancy increases by measuring performance accurately,
distributing higher rewards to better performers, and
showing employees that rewards are performance-based.
Outcome valences increase by finding out what employ-
ees want and using these resources as rewards.
Goal setting is the process of motivating employees
and clarifying their role perceptions by establishing
performance objectives. Goals are more effective when
they are specific, relevant, and challenging; have em-
ployee commitment; and are accompanied by meaning-
ful feedback. Participative goal setting is important in
some situations. Effective feedback is specific, relevant,
timely, credible, and sufficiently frequent.
Organizational justice consists of distributive justice
(perceived fairness in the outcomes we receive relative to
our contributions and the outcomes and contributions of
others) and procedural justice (fairness of the procedures
used to decide the distribution of resources). Equity the-
ory has four elements: outcome/input ratio, comparison
other, equity evaluation, and consequences of inequity.
The theory also explains what people are motivated to do
when they feel inequitably treated. Companies need to
consider not only equity of the distribution of resources
but also fairness in the process of making resource alloca-
tion decisions.
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potential through self-actualization. What theory are
these friends referring to? How does their statement
differ from what you learned about that theory in
this chapter?
6. Using your knowledge of the characteristics of effec-
tive goals, establish two meaningful goals related to
your performance in this class.
7. Several service representatives are upset that the
newly hired representative with no previous experi-
ence will be paid $3,000 a year above the usual
starting salary in the pay range. The department
manager explained that the new hire would not ac-
cept the entry-level rate, so the company raised the
offer by $3,000. All five reps currently earn salaries
near the top of the scale ($15,000 higher than the
new recruit), although they all started at the mini-
mum starting salary a few years earlier. Use equity
theory to explain why the five service representa-
tives feel inequity in this situation.
8. Organizational injustice can occur in the classroom
as well as in the workplace. Identify classroom situa-
tions in which you experienced feelings of injustice.
What can instructors do to maintain an environment
that fosters both distributive and procedural justice?
1. Four-drive theory is conceptually different from
Maslow’s needs hierarchy (as well as ERG theory)
in several ways. Describe these differences. At the
same time, needs are based on drives, so the four
drives should parallel the seven needs that Maslow
identified (five in the hierarchy and two additional
needs). Map Maslow’s needs onto the four drives in
four-drive theory.
2. Learned needs theory states that needs can be
strengthened or weakened. How might a company
strengthen the achievement needs of its manage-
ment team?
3. Exhibit 5.1 illustrates how a person’s drives and
needs result in decisions and behavior. Explain
where the expectancy theory of motivation fits into
this model.
4. Use all three components of expectancy theory to
explain why some employees are motivated to show
up for work during a severe storm whereas others
make no effort to leave their home.
5. Two friends who have just completed an organiza-
tional behavior course at another college inform you
that employees must fulfill their need for self-esteem
and social esteem before they can reach their full
Critical Thinking Questions
157
balanced scorecard (BSC), p. 147
distributive justice, p. 151
drives, p. 134
employee engagement, p. 132
equity sensitivity, p. 154
equity theory, p. 152
ERG theory, p. 138
expectancy theory, p. 143
four-drive theory, p. 140
goal setting, p. 146
Maslow’s needs hierarchy
theory, p. 135
motivation, p. 132
multisource (360-degree)
feedback, p. 150
need for achievement (nAch), p. 139
need for affiliation (nAff), p. 139
need for power (nPow), p. 139
needs, p. 134
procedural justice, p. 151
strength-based coaching, p. 148
Key Terms
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occasions, stores have faced stock shortages because
merchandise was not stocked or reorder forms were
not completed in a timely manner. Potential sales
have suffered from empty shelves when plenty of
merchandise was available in the back storeroom
or at the warehouse. The company’s new automatic
inventory system could reduce some of these prob-
lems, but employees must still stock shelves and
assist in other aspects of inventory management.
Store managers have tried to correct the inventory
problem by assigning employees to inventory duty,
but this has created resentment among the employees
selected. Other managers have threatened sales staff
with dismissal if they do not do their share of inven-
tory management. This strategy has been somewhat
effective when the manager is in the store, but staff
members sneak back onto the floor when the man-
ager is away. It has also hurt staff morale, particularly
relations with the store manager.
To reduce the tendency of sales staff to hoard
customers at the store entrance, some managers
have assigned employees to specific areas of the
store. This has also created some resentment among
employees stationed in areas with less traffic or
lower-priced merchandise. Some staff have openly
complained of lower paychecks because they have
been placed in a slow area of the store or have been
given more than their share of inventory duties.
Discussion Questions
1. What symptom(s) in this case suggest that some-
thing has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should Vêtements executives take
to correct these problems?
© 1989 Steven L. McShane.
158
Case Study 5.1 VÊTEMENTS LTÉE
Vêtements Ltée is a chain of men’s retail clothing
stores located throughout the province of Quebec,
Canada. Two years ago, the company introduced
new incentive systems for both store managers and
sales employees. Store managers in each store re-
ceive a salary with annual merit increases based on
sales above targeted goals, store appearance, store
inventory management, customer complaints, and
several other performance measures. Some of this
information (e.g., store appearance) is gathered dur-
ing visits by senior management, while other infor-
mation is based on company records (e.g., sales
volume).
Sales employees are paid a fixed salary plus a com-
mission based on the percentage of sales credited to
that employee over the pay period. The commission
represents about 30 percent of a typical paycheck and
is intended to encourage employees to actively serve
customers and to increase sales volume. Because re-
turned merchandise is discounted from commissions,
sales employees are discouraged from selling prod-
ucts that customers do not really want.
Soon after the new incentive systems were intro-
duced, senior management began to receive com-
plaints from store managers regarding the per formance
of their sales staff. They observed that sales employees
tended to stand near the store entrance waiting to
“tag” customers as their own. Occasionally, sales staff
would argue over “ownership” of the customer. Man-
agers were concerned that this aggressive behavior
intimidated some customers. It also tended to leave
some parts of the store unattended by staff.
Many managers were also concerned about in-
ventory duties. Previously, sales staff would share
responsibility for restocking inventory and com-
pleting inventory reorder forms. Under the new
compensation system, however, few employees
were willing to do these essential tasks. On several
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159
Class Exercise 5.3 NEEDS PRIORITY EXERCISE
PURPOSE This class exercise is designed to help
you understand the characteristics and contingencies
of employee needs in the workplace.
INSTRUCTIONS (LARGE CLASS)
1. The table on page 160 lists in alphabetical order
14 characteristics of the job or work environment.
Working alone, use the far-left column to rank-
order these characteristics in terms of how im-
portant they are to you personally. Write in “1”
beside the most important characteristic, “2” for
the second most important, and so on through
to “14” for the least important characteristic on
this list.
2. In the second column, rank-order these charac-
teristics in the order that you think human re-
source managers believe they are important for
their employees.
3. The instructor will ask students, by a show of
hands (or use of classroom technology), to iden-
tify the top-ranked options.
4. The instructor will provide results of a recent
large-scale survey of employees. When these
results are presented, identify the reasons for
any noticeable differences. Relate the differ-
ences to your understanding of the emerging
view of employee needs and drives in work
settings.
Case Study 5.2 MOTIVATING STAFF WHEN THE MONEY IS TIGHT
College grads aren’t exactly
beating a path to the hotel in-
dustry to get rich quick. New
staff would be lucky to earn $40,000 in their first
year. Yet when Marriott International visited the
University of Delaware, it was able to attract re-
cruits with something else that motivates—the
chance to help run a hotel. In industries where the
money is tight, companies are using other incen-
tives to motivate people to join and stay with them.
Many offer the lure of interesting work; others
point out the work—life balance or “cool” work-
place perks. A growing number of employers are
also trying the carrot-and-stick approach by re-
structuring their 401(k) matches and vesting sched-
ules to entice new employees to stay until the
richer benefits kick in.
This BusinessWeek case study describes how com-
panies with limited payroll budgets try to win the
war for talent. Read the full text of this BusinessWeek
article at www.mhhe.com/mcshane5e , and prepare
for the discussion questions below.
Discussion Questions
1. This case study describes several different strate-
gies for attracting and retaining new employees.
On the basis of the four drives described in four-
drive theory and the needs listed in Maslow’s
needs hierarchy, identify the drives and needs as-
sociated with each of these initiatives. Which
needs or drives seem to dominate in this article?
2. If Claire Pignataro and some other recruits earn
less pay than people in other industries, to what
extent would the attraction and retention initia-
tives described in this case study reduce feelings
of inequity?
Source: L. Gerdes, “The Best Places to Launch a Career,” Business-
Week, 15 September 2008, p. 36.
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http://www.mhhe.com/mcshane5e
160160
Team Exercise 5.4 A QUESTION OF FEEDBACK
PURPOSE This exercise is designed to help you
understand the importance of feedback, including
problems that occur with imperfect communication
in the feedback process.
MATERIALS The instructor will distribute a few
pages of exhibits to one person on each team. The
other students will require a pencil with eraser and
blank paper. Movable chairs and tables in a large
area are helpful.
INSTRUCTIONS (SMALL CLASS)
1. The class is divided into pairs of students. Each
pair is ideally located in a private area, where
they are away from other students and one per-
son can write. One student is given the pages of
exhibits from the instructor. The other student
in each pair is not allowed to see these exhibits.
2. The student holding the materials will describe
each of the exhibits and the other student’s task is
to accurately replicate each exhibit. The pair of
INSTRUCTIONS (SMALL CLASS)
Same as above for steps 1 to 4.
5. Students are assigned to teams, where they com-
pare their rank-order results and explain their
ranking. Rationales for different rankings should
be noted and discussed with the entire class.
Students should pay close attention to different
needs, self-concepts, and various forms of diver-
sity (culture, profession, age, etc.) to identify
possible explanations for any variation of results
across students.
Importance to
you
What HR
managers
believe are
important to
employees
Autonomy and independence
Benefits (health care, dental, etc.)
Career development opportunities
Communication between employees and senior
management
Compensation/pay
Feeling safe in the work environment
Flexibility to balance work–life issues
Job security
Job-specific training
Management recognition of employee job
performance
Opportunities to use skills and abilities
Organization’s commitment to professional
development
Relationship with immediate supervisor
The work itself
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161
students can compare the replication with the
original at the end of each drawing. They may
also switch roles for each exhibit, if they wish. If
roles are switched, the instructor must distribute
exhibits separately to each student so that they are
not seen by the other person. Each exhibit has a
different set of limitations, as described below:
• Exhibit 1 . The student describing the exhibit
cannot look at the other student or his or her
diagram. The student drawing the exhibit can-
not speak or otherwise communicate with the
person describing the exhibit.
• Exhibit 2 . The student describing the exhibit may
look at the other student’s diagram. However, he
or she may say only “yes” or “no,” when the stu-
dent drawing the diagram asks a specific ques-
tion. In other words, the person presenting the
information can use only these words for feed-
back and can use them only when asked a ques-
tion by the student doing the drawing.
• Exhibit 3 : (optional, if time permits). The student
describing the exhibit may look at the other stu-
dent’s diagram and may provide any feedback
at any time to the person replicating the exhibit.
3. The class will gather to analyze this exercise.
This may include discussion on the importance
of feedback and the characteristics of effective
feedback for individual motivation and learning.
INSTRUCTIONS (LARGE CLASS)
Some parts of this exercise are possible in large
classes. Here is one variation:
1. Students are asked to prepare for the exercise by
having a pencil and paper ready.
2. One student volunteers to provide instructions
from the front of the class regarding Exhibit 1.
The volunteer receives the first exhibit and de-
scribes it to the class, while other students try to
replicate the exhibit. When finished, the exhibit
is shown to the class on a transparency or com-
puter projection.
3. For Exhibit 2, one student volunteers to provide
instructions and a few other students serve as
feedback helpers. The helpers have a copy of
Exhibit 2, which they may view, but it cannot be
shown to students doing the drawing. The help-
ers are dispersed to various parts of the room to
provide feedback to a group of students under
their care (if the class has 100 students, the exer-
cise might have 5 helpers, each responsible for
feedback to 20 students). Helpers can say only
“yes” or “no,” but they may point to specific lo-
cations of the student’s drawing when uttering
these words (because these helpers provide feed-
back to many students). Throughout this activ-
ity, the student describing the exhibit must not
stop his or her description. After the speaker has
finished and the drawings are completed, the
helpers might be asked to select the most accu-
rate drawing among those within their domain.
The students who drew the accurate depictions
might be asked to discuss their experience with
feedback.
© 2008 Steven L. McShane.
Self-Assessment 5.5
NEED-STRENGTH QUESTIONNAIRE
Although everyone has the same innate drives, our
secondary or learned needs vary on the basis of our
self-concept. This self-assessment provides an esti-
mate of your need strength on selected secondary
needs. Read each of the statements below and check
the response that you believe best reflects your posi-
tion regarding each statement. Then use the scoring
key in Appendix B at the end of the book to calculate
your results. To receive a meaningful estimate of your
need strength, you need to answer each item honestly
and with reflection on your personal experiences.
Class discussion will focus on the meaning of the
needs measured in this self-assessment as well as their
relevance in the workplace.
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162
How accurately do each of
the following statements
describe you?
1. I would rather be myself than
be well thought of.
Very
accurate
description
of me
Moderately
accurate
Moderately
inaccurate
Very
inaccurate
description
of me
Neither
accurate nor
inaccurate
2. I’m the type of person who never
gives up.
3. When the opportunity occurs,
I want to be in charge.
4. I try not to say things that others
don’t like to hear.
5. I find it difficult to talk about my
ideas if they are contrary to
group opinion.
6. I tend to take control of things.
7. I am not highly motivated to
succeed.
8. I usually disagree with others
only if I know my friends will
back me up.
9. I try to be the very best at what
I do.
10. I seldom make excuses or
apologize for my behavior.
11. If anyone criticizes me, I can
take it.
12. I try to outdo others.
13. I seldom change my opinion
when people disagree with
me.
14. I try to achieve more than what
others have accomplished.
15. To get along and be liked, I
tend to be what people expect
me to be.
Personal Needs Questionnaire
Sources: Adapted from instruments described and/or presented in L. R. Goldberg, J. A. Johnson, H. W. Eber, R. Hogan, M. C. Ashton, C. R. Cloninger,
and H. C. Gough, “The International Personality Item Pool and the Future of Public-Domain Personality Measures,” Journal of Research in Personality 40
(2006), pp. 84–96; H. J. Martin, “A Revised Measure of Approval Motivation and Its Relationship to Social Desirability,” Journal of Personality Assessment 48
(1984), pp. 508–519.
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163
Self-Assessment 5.6
MEASURING YOUR GROWTH-NEED STRENGTH
Abraham Maslow’s need hierarchy theory distin-
guished between deficiency needs and growth needs.
Deficiency needs become activated when unfulfilled,
such as the need for food or belongingness. Growth
needs, on the other hand, continue to develop even
when temporarily fulfilled. Maslow identified self-
actualization as the only category of growth needs.
Research has found that Maslow’s needs hierarchy
theory overall doesn’t fit reality but that specific ele-
ments, such as the concept of growth needs, remain
valid concepts. This self-assessment is de-
signed to estimate your level of growth-need
strength. This instrument asks you to con-
sider what it is about a job that is most important to
you. Please indicate which of the two jobs you per-
sonally would prefer if you had to make a choice
between them. In answering each question, assume
that everything else about the jobs is the same. Pay
attention only to the characteristics actually listed.
Self-Assessment 5.7
YOUR EQUITY SENSITIVITY
Some people experience stronger or weaker feelings
of unfairness in specific situations. This self-assessment
estimates your level of equity sensitivity. Read each of
the statements in this questionnaire, and indicate the
response that you believe best reflects your position
regarding each statement. This exercise should be
completed alone so that you assess yourself
honestly, without concerns of social compari-
son. Class discussion will focus on equity
theory and the effect of equity sensitivity on percep-
tions of fairness in the workplace.
After reading this chapter, if you need additional information, see www.mhhe.com/mcshane5e
for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/mcshane5e
Strange as this may seem, one of Europe’s most successful banks doesn’t believe in
budgets or centralized financial targets. Executives at Svenska Handelsbanken AB learned
decades ago that these costly controls from the head office motivate dysfunctional behavior
rather than customer-focused
performance. Therefore, the
Swedish bank gives local managers
and their staff autonomy to run
their local branches as their own.
“Nobody knows the local market
or the customers better than our
branch managers and their staff,”
explains Handelsbanken CEO Pär
Boman.
Even with 10,000 employees
across more than 450 branches
in 21 countries (mostly Nordic
countries and the United Kingdom),
Handelsbanken leaves most
decisions to branch managers
and staff. “We decide which of the
bank’s products to offer and at
what price,” says a Handels banken
branch manager. “My staff are fully involved in the preparation of the work program (the
branch’s action plan).” Branch managers also decide how to advertise products, how
many people to employ and at what salary, and how much to pay for property leases.
Only mutual fund management, high-level risk decisions, office equipment, and the bank’s
computer systems are centralized.
Handelsbanken further motivates staff by distributing a monthly report card on each
branch’s cost-to-income ratio, profit per employee, and total profit. Branch performance
is also compared to that of competing banks in the area. “[We] find that our people are
driven by their urge to show a better result than their competitors—to be above average,”
says Jan Wallander, the former Handelsbanken CEO who transformed the 140-year-old
bank in the 1970s.
This competitive culture apparently does not undermine cooperation because employees
are rewarded through a unique form of profit sharing and employee stock ownership, not
individual or branch performance. In years when Handelsbanken is more profitable than the
average of competing banks, it transfers one-third of the excess profits to an employee fund
(called the Octogonen Foundation). Everyone receives the same number of shares in the
fund for each year of service, which can be cashed out at 60 years of age. About 75 percent
of the fund is invested in Handelsbanken. It currently holds 10 percent of the bank’s stock,
making employees the bank’s largest shareholder.1
Svenska Handelsbanken is one of the most successful banks in Europe, in part
because it engages employees through financial rewards, motivating jobs,
and empowerment.
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Applied Performance
Practices
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Discuss the advantages and disadvantages
of the four reward objectives.
2. Identify several team- and organizational-
level performance-based rewards.
3. Describe five ways to improve reward
effectiveness.
4. Discuss the advantages and disadvantages
of job specialization.
5. Diagram the job characteristics model of job
design.
6. Identify three strategies for improving
employee motivation through job design.
7. Define empowerment and identify
strategies that support empowerment.
8. Describe the five elements of self-leadership.
9. Identify specific personal and work
environ ment influences on self-leadership.
6
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166 Part Two Individual Behavior and Processes
Handelsbanken’s success is a testament to the organizational behavior benefits of
rewards, job design, empowerment, and self-leadership. The company relies on pru-
dent reward systems, offers jobs with high motivating potential, expects staff mem-
bers to manage themselves, and delegates power to branches, resulting in high levels
of employee empowerment. This chapter looks at each of these applied performance
practices. The chapter begins by examining the meaning of money. This is followed
by an overview of financial reward practices, including the different types of rewards
and how to implement rewards effectively. Next, we look at the dynamics of job
design, including specific job design strategies for motivating employees. We then
consider the elements of empowerment, as well as conditions that support empower-
ment. The final part of the chapter explains how employees manage their own per-
formance through self-leadership.
Learning
Objectives
After reading this section, you should be able to:
1. Discuss the advantages and disadvantages of the four reward
objectives.
2. Identify several team- and organizational-level performance-based
rewards.
3. Describe five ways to improve reward effectiveness.
The Meaning of Money in the Workplace
Rewarding people with money is one of the oldest and certainly the most widespread
applied performance practices. At the most basic level, money and other financial re-
wards represent a form of exchange; employees provide their labor, skill, and knowl-
edge in return for money and benefits from the organization. From this perspective,
money and related rewards align employee goals with organizational goals. This concept
of economic exchange can be found across cultures. The word for pay in Malaysian and
Slovak means “to replace a loss”; in Hebrew and Swedish it means “making equal.” 2
However, money is much more than an object of compensation for an employee’s
contribution to organizational objectives. Money relates to our needs, our emotions,
and our self-concept. It is a symbol of achievement and status, a reinforcer and moti-
vator, and a source of enhanced or reduced anxiety. 3 According to one source,
“Money is probably the most emotionally meaningful object in contemporary life:
only food and sex are its close competitors as common carriers of such strong and
diverse feelings, significance, and strivings.” 4
The meaning of money varies considerably from one person to the next. 5 Studies
report that money may be viewed as a symbol of status and prestige, as a source of se-
curity, as a source of evil, or as a source of anxiety or feelings of inadequacy. It is con-
sidered a “taboo” topic in many social settings. It has been described both as a “tool”
(i.e., money is valued because it is an instrument for acquiring other things of value)
and as a “drug” (i.e., money is an object of addictive value in itself). One large-scale
study revealed that money generates a variety of emotions, most of which are negative,
such as anxiety, depression, anger, and helplessness. 6 A widely studied model of money
attitudes suggests that people have a strong “money ethic” when they believe that
money is not evil; that it is a symbol of achievement, respect, and power; and that it
should be budgeted carefully. These attitudes toward money influence an individual’s
ethical conduct, organizational citizenship, and many other behaviors and attitudes. 7
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Chapter 6 Applied Performance Practices 167
The meaning of money seems to differ between men and women. One large-scale
survey revealed that in almost all 43 countries studied men attach more importance or
value to money than do women. Men particularly tend to view money as a symbol of
power and status. 8 Personal and cultural values influence the meaning of money. People
in countries with high power distance (such as China and Japan) tend to have a high
respect and priority for money, whereas people in countries with a strong egalitarian
culture (such as Denmark, Austria, and Israel) are discouraged from openly talking
about money or displaying their personal wealth. One study suggests that Swiss culture
values saving money whereas Italian culture places more value on spending it. 9
Many experts now believe that money is a much more important motivator than
was previously believed, more because of its inherent or symbolic value than because
of what it can buy. 10 Philosopher John Stuart Mill made this observation 150 years ago
when he wrote: “The love of money is not only one of the strongest moving forces of
human life, but money is, in many cases, desired in and for itself.” 11 One recent study
found that people who are more highly paid have higher job performance because the
higher paycheck makes them feel more valued in the organization (i.e., they have a
more positive self-concept). Others have pointed out that the symbolic value of money
and other rewards is particularly motivational when a few people receive more than
others. This is because the higher reward gives beneficiaries a degree of social distinc-
tion, which is consistent with the drive to acquire, introduced in Chapter 5.
Overall, current organizational behavior knowledge indicates that money is much
more than a means of exchange between employer and employee. It fulfills a variety
of needs, influences emotions, and shapes or represents a person’s self-concept. This
is important to remember when the employer is distributing financial rewards in the
workplace. Over the next few pages, we look at various reward practices and how to
improve the implementation of performance-based rewards.
Financial Reward Practices
Financial rewards come in many forms, which can be organized into the four spe-
cific objectives identified in Exhibit 6.1 : membership and seniority, job status, com-
petencies, and performance.
Membership- and Seniority-Based Rewards
Membership-based and seniority-based rewards (sometimes called “pay for pulse”)
represent the largest part of most paychecks. Some employee benefits, such as free or
discounted meals in the company cafeteria, remain the same for everyone, whereas
others increase with seniority. For example, legislative staff in Nevada with eight
years or more service receive an additional $150 annually. This jumps to $2,350 for
those with 30 years or more service. Many Asian companies distribute a “13th month”
bonus, which every employee expects to receive each year no matter how well the
company performed over the previous year. Although many Japanese firms have
shifted to performance-based pay, others have retained or returned to wage scales
based on the employee’s age. “Even during that period [when the employee’s perfor-
mance is below expectations], we raise salaries according to their age,” says the pres-
ident of Tokai Rubber Industries Ltd., which returned to age-based salaries after
discarding a short-lived performance-based pay plan. 12
These membership- and seniority-based rewards potentially attract job applicants
(particularly those who desire predictable income) and reduce turnover. However, they
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168 Part Two Individual Behavior and Processes
do not directly motivate job performance; on the contrary, they discourage poor per-
formers from seeking work better suited to their abilities. Instead, the good performers
are lured to better-paying jobs. Some of these rewards are also “golden handcuffs”—
they discourage employees from quitting because of deferred bonuses or generous ben-
efits that are not available elsewhere. However golden handcuffs potentially weaken
job performance because they generate continuance rather than affective commitment
(see Chapter 4).
Job Status–Based Rewards
Almost every organization rewards employees to some extent on the basis of the
status or worth of the jobs they occupy. Job evaluation is widely used to assess the
Exhibit 6.1 Reward Objectives, Advantages, and Disadvantages
Reward objective Sample rewards Advantages Disadvantages
Task performance
Membership/seniority
Job status
Competencies
• Doesn’t directly motivate
performance
• May discourage poor
performers from leaving
• Golden handcuffs may
undermine performance
• Encourages hierarchy,
which may increase
costs and reduce
responsiveness
• Reinforces status
differences
• Motivates job competition
and exaggerated job
worth
• Subjective measurement
of competencies
• Skill-based pay plans are
expensive
• May weaken job content
motivation
• May distance reward giver
from receiver
• May discourage creativity
• Tends to address
symptoms, not underlying
causes, of behavior
• Motivates task
performance
• Attracts performance-
oriented applicants
• Organizational rewards
create an ownership
culture
• Pay variability may avoid
layoffs during downturns
• May attract applicants
• Minimizes stress of
insecurity
• Reduces turnover
• Tries to maintain internal
equity
• Minimizes pay
discrimination
• Motivates employees to
compete for promotions
• Improves workforce
flexibility
• Tends to improve quality
• Is consistent with
employability
• Commissions
• Merit pay
• Gainsharing
• Profit sharing
• Stock options
• Fixed pay
• Most employee benefits
• Paid time off
• Promotion-based pay
increase
• Status-based benefits
• Pay increase based on
competency
• Skill-based pay
job evaluation
Systematically rating the
worth of jobs within an
organization by measur-
ing their required skill,
effort, responsibility, and
working conditions.
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Chapter 6 Applied Performance Practices 169
worth or status of each job. Most job evaluation methods give higher value to jobs
that require more skill and effort, have more responsibility, and have more difficult
working conditions. 13 Aside from receiving higher pay, employees with more valued
jobs sometimes receive larger offices, company-paid vehicles, and other perks.
Job status–based rewards try to improve feelings of fairness by assigning higher pay to
people working in jobs with higher value to the organization. These rewards also moti-
vate employees to compete for promotions. However, at a time when companies are
trying to be more cost-efficient and responsive to the external environment, job status—
based rewards potentially do the opposite by encouraging a bureaucratic hierarchy. These
rewards also reinforce a status mentality, whereas Generation-X and Generation-Y
employees expect a more egalitarian workplace. Furthermore, status-based pay poten-
tially motivates employees to compete with each other for higher-status jobs and to raise
the value of their own jobs by exaggerating job duties and hoarding resources. 14
Competency-Based Rewards
Over the past two decades, many companies have shifted reward priorities from job
status to skills, knowledge, and other competencies that lead to superior performance.
The most common competency-based reward practices identify a set of competen-
cies (adaptability, team orientation, technical expertise, leadership, etc.) relevant to
all jobs within a broad pay group and give employees within each group higher pay
rates as they improve those competencies. 15 In other words, rather than paying peo-
ple for the specific job that they perform, competency-based plans pay people on the
basis of their assessed skills and knowledge, whether or not they actually use those
competencies in their current job duties. Job status—based pay has not been com-
pletely abandoned, because the broad pay groups reflect job status (e.g., the technical
staff pay range is lower than the senior executive pay range). Within those pay groups,
however, employees are rewarded for skills, knowledge, and other competencies.
This reward system is sometimes known as broadbanding because several jobs with
narrow pay ranges are grouped together into a much broader pay range.
Skill-based pay plans are a more specific variation of competency-based rewards in
which people receive higher pay based on their mastery of measurable skills. For
example, technicians at the City of Flagstaff, Arizona, are paid for the number of skill
blocks they have mastered. New hires must complete the first skill block during pro-
bation, and they can eventually progress through the five other skill blocks to earn
almost twice the base (single skill block) salary. Technicians demonstrate proficiency
in a skill block through in-house or formal certification assessments. 16
Competency-based rewards motivate employees to learn new skills. 17 This tends
to improve organizational effectiveness by creating a more flexible workforce;
more employees are multiskilled for performing a variety of jobs, and they are
more adaptive to embracing new practices in a dynamic environment. Product or
service quality also tends to improve because employees with multiple skills are
more likely to understand the work process and know how to improve it. However,
competency-based pay plans have not always worked out as well as promised by
their advocates. They are often overdesigned, making it difficult to communicate
these plans to employees. Competency definitions are often vague, which raises
questions about fairness when employers are relying on these definitions to award
pay increases. Skill-based pay systems measure specific skills, so they are usually
more objective. However, they are expensive because employees spend more time
learning new tasks. 18
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170 Part Two Individual Behavior and Processes
Performance-Based Rewards
Performance-based rewards have existed since Babylonian days 4,000 years ago, but
their popularity has increased dramatically over the past couple of decades. 19 Here is an
overview of some of the most popular individual, team, and organizational performance-
based rewards.
Individual Rewards Many employees receive individual bonuses or awards for
accomplishing a specific task or exceeding annual performance goals. Real estate
agents and other salespeople typically earn commissions, in which their pay increases
with sales volume. Piece-rate systems reward employees according to the number of
units produced. For example, lawn care staff at The Lawn Mowgul in Dallas, Texas,
earn a form of piece rate (called “piecemeal”) that is based on the number of yards
cut; housekeeping staff in some British hotels earn a piece rate for each room they
clean (about $3 per room). Hong Kong communications company PCCW rewards
employees with up to one month’s pay if they exceed their performance goals. 20
Team Rewards Over the past two decades, many organizations have shifted their
focus from individuals to teams. Consequently, employees in these companies are
finding that a larger part of their total paycheck is determined by team performance.
At Forrest General Hospital in Hattiesburg, Mississippi, for example, all employees
in patient accounts and registration receive a bonus if the team meets its time-of-
service and self-pay collections targets. “[The team incentive] is set up so that either
everyone gets the incentive, or no one gets it,” explains Forrest General Hospital’s
director of revenue cycle. 21 One of the most successful companies to apply team (as
well as organizational) rewards is Nucor, Inc. As Connections 6.1 describes, America’s
largest steelmaker rewards teams for higher output and applies financial penalties if
their output falls below satisfactory quality.
Gainsharing plans are a form of team-based compensation that calculates bonuses
from the work unit’s cost savings and productivity improvement. Whole Foods Mar-
ket uses this form of team incentive. Each department within a store is run by a team
with a monthly payroll budget. If payroll money is unspent at the end of the month,
the surplus is divided among members of that Whole Foods Market team. 22 American
hospitals have cautiously introduced a form of gainsharing whereby physicians and
medical staff in a medical unit (cardiology, orthopedics, etc.) are collectively rewarded
for cost reductions in surgery and patient care. The cost reductions occur in two ways:
(1) by standardizing purchasing decisions so that hospitals can negotiate larger sup-
plier discounts on devices and medicines and (2) by reducing discretionary use of
products. One recent study found that introduction of gainsharing in six hospital car-
diology units reduced costs per patient by more than 7 percent. Almost all of this cost
reduction occurred through lower prices (likely due to standardized purchasing) rather
than reduced use of supplies. 23 More generally, gainsharing plans tend to improve
team dynamics, knowledge sharing, and pay satisfaction. They also create a reason-
ably strong link between effort and performance because much of the cost reduction
and labor efficiency is within the team’s control. 24
Organizational Rewards Along with using individual and team-based rewards,
many firms rely on organizational-level rewards to motivate employees. Some firms
reward all staff members for achieving challenging sales goals or other indicators of
organizational performance. These rewards are usually financial bonuses, but a few firms
reward employees with travel. At Staffing Alternatives, all 25 employees and their
gainsharing plan
A team-based reward
that calculates bonuses
from the work unit’s cost
savings and productivity
improvement.
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Nucor Rewards the Team
Two decades ago, Nucor was an upstart in an industry domi-
nated by Bethlehem Steel, National Steel, and other mega-firms.
Today, battered by global competition, two-thirds of American
steel companies have disappeared or are under bankruptcy
protection. Nucor, on the other hand, has become the largest
steel company in America and the tenth largest in the world.
Although it now employs more than 12,000 people (most in the
United States), Nucor remains nimble, highly competitive, and
profitable.
What’s Nucor’s secret to success? One of the most impor-
tant factors is its performance-based reward system. In recent
years, the average Nucor steelworker has annually earned
more than $80,000, but most of that pay is variable—it depends
on team and organization performance. “We pay a real low
base wage, but high bonuses on a weekly basis,” explains a
Nucor executive. “The bonuses are based on the quality and
tons produced and shipped through a team. The average base
pay is about $9 to $10 an hour, but they could get an additional
$15 to $20 an hour for bonuses.” These bonuses are paid to
everyone on the team, which ranges from 12 to 20 people.
Nucor does not limit the amount of bonus a team can receive,
but it is usually equal or double the base pay.
Nucor’s team bonus system relies on quality of output, not
just quantity. If employees catch a bad batch of steel before it
leaves their work area, that tonnage of product is subtracted
from the team’s weekly bonus calculation. If the bad batch
makes its way to the next internal customer or shipping de-
partment within the minimill, two times the tonnage of bad
product is subtracted from the team’s bonus. And if the bad
product makes its way to the customer, the team loses a bonus
amount equal to three times that amount of product.
Connections 6.1
Production employees have the highest variable pay, but
Nucor’s professional and administrative employees also earn
bonuses representing about one-third of their salary that are
based on their division’s performance. In addition to these
team and division rewards, Nucor employees receive an an-
nual profit-sharing bonus representing 10 percent of the com-
pany’s operating profit. This has been as much as $18,000 per
employee in some recent years.25
Nucor’s high-performance culture is fueled by team and orga-
nizational rewards representing up to two-thirds of annual pay.
spouses or partners were treated to a three-day vacation at Walt Disney World. “We
wanted it to reward everybody for their hard work during the year and make it some-
thing that they would remember,” says Christopher Moyes, CEO of the staffing services
business in North Brunswick, New Jersey. Staffing Alternatives employees also receive
quarterly bonuses based on both organizational and individual performance. 26
Employee stock ownership plans (ESOPs) encourage employees to buy company
stock, usually at a discounted price or through a no-interest loan. The financial incentive
occurs as dividends and market appreciation of the stock. Due to tax concessions in the
United States and a few other countries, most ESOPs are designed as retirement plans.
Sears Roebuck and UPS were two of the earliest companies to introduce ESOPs. Today,
more than 20 percent of Americans working in the private sector hold stock in their
companies. 27 Handelsbanken, the Swedish bank described at the beginning of this chap-
ter, has a unique ESOP in which employees own company stock through an indepen-
dent retirement fund. Phelps County Bank in Rolla, Missouri, operates another form of
ESOP. Each year, the employee-owned bank contributes stock equal to 15 percent of
171
employee stock
ownership plan (ESOP)
A reward system that
encourages employees
to buy company stock.
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172 Part Two Individual Behavior and Processes
each employee’s salary into her or his ESOP account. The stock is vested (legally trans-
ferred) to the employee after seven years of service. “Stock ownership was the vehicle
that really made us focus on what it meant to be an owner,” says Phelps County Bank
CEO Bill Marshall. 28
While ESOPs involve purchasing company shares, stock options give employees
the right to purchase shares from the company at a future date at a predetermined price
up to a fixed expiration date. For example, an employer might offer employees the
right to purchase 100 shares at $50 at any time between two and six years from now. If
the stock price is, say, $60 two years later, employees could earn $10 per share from
these options, or they could wait up to six years for the stock price to rise further. If the
stock never rises above $50 during that time, they are “out of the money” and employ-
ees would just let the options expire. The intention of stock options is to motivate em-
ployees to make the company more profitable, thereby raising the company’s stock
price and enabling them to reap the value above the exercise price of the stock options.
Profit-sharing plans , a fourth organizational-level reward, calculate bonuses from
the previous year’s level of corporate profits. As mentioned in Connections 6.1, Nucor
employees earn a profit-sharing bonus on top of their fixed pay and team bonuses.
Each year, the steelmaker distributes 10 percent of its earnings before taxes to employ-
ees, a percentage that recently amounted to more than $18,000 per employee.
Handelsbanken also has a profit-sharing plan, in which a share of profits above the
average profitability of other banks is deposited into the employees’ retirement plan.
Evaluating Organizational-Level Rewards How effective are organizational-
level rewards? Research indicates that ESOPs and stock options tend to create an
“ownership culture” in which employees feel aligned with the organization’s success. 29
Profit sharing tends to create less ownership culture, but it has the advantage of auto-
matically adjusting employee compensation with the firm’s prosperity, thereby
reducing the need for layoffs or negotiated pay reductions during recessions.
The main problem with ESOPs, stock options, and profit sharing is that employees
often perceive a weak connection between individual effort and corporate profits or
the value of company shares. Even in small firms, the company’s stock price or profit-
ability is influenced by economic conditions, competition, and other factors beyond
the employee’s immediate control. This low individual performance-to-outcome
expectancy weakens employee motivation. Another concern is that some companies
use ESOPs as a replacement for employee pension plans. This is a risky strategy
because the pension funds lack diversification. If the company goes bankrupt, employ-
ees lose both their jobs and a large portion of their retirement nest egg. 30
Improving Reward Effectiveness
Performance-based rewards have come under attack over the years for discouraging
creativity, distancing management from employees, distracting employees from the
meaningfulness of the work itself, and being quick fixes that ignore the true causes of
poor performance. While these issues have kernels of truth under specific circum-
stances, they do not necessarily mean that we should abandon performance-based
pay. On the contrary, as the high-performance work practices perspective of organi-
zational effectiveness advises (see Chapter 1), top-performing companies are more
likely to have performance-based rewards. 31 Reward systems do motivate most
employees, but only under the right conditions. Here are some of the more important
strategies for improving reward effectiveness.
stock option
A reward system that
gives employees the right
to purchase company
stock at a future date at
a predetermined price.
profit-sharing plan
A reward system that
pays bonuses to
employees on the basis
of the previous year’s
level of corporate
profits.
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Chapter 6 Applied Performance Practices 173
Link Rewards to Performance Behavior modification theory (Chapter 3) and
expectancy theory (Chapter 5) both recommend that employees with better perfor-
mance should be rewarded more than those with poorer performance. Unfortunately,
as was noted in Chapter 5, this simple principle seems to be unusually difficult to ap-
ply. Few employees see a relationship between job performance and the amount of
pay they and co-workers receive. A Gallup survey at an American telecommunica-
tions company revealed an equally devastating observation: Management’s evalua-
tion of 5,000 customer service employees was uncorrelated with the performance
ratings that customers gave those employees. “Whatever behaviors the managers
were evaluating were irrelevant to the customers,” concluded Gallup executives.
“The managers might as well have been rating the employees’ shoe sizes, for all the
customers cared.” 32
How can companies improve the pay—performance linkage? Inconsistencies and
bias can be minimized by introducing gainsharing, ESOPs, and other plans that use
objective performance measures. Where subjective measures of performance are
necessary, companies should rely on multiple sources of information. Companies
also need to apply rewards soon after the performance occurs, and in a large-enough
dose (such as a bonus rather than a pay increase), so that employees experience posi-
tive emotions when they receive the reward. 33
Ensure That Rewards Are Relevant Companies need to align rewards with per-
formance within the employee’s control. The more employees see a “line of sight”
between their daily actions and the reward, the more they are motivated to improve
performance. Wal-Mart applies this principle by awarding bonuses to top executives
on the basis of the company’s overall performance, whereas frontline employees earn
bonuses based on the sales volume of the store where they work. Reward systems
also need to correct for situational factors. Salespeople in one region may have higher
sales because the economy is stronger there than elsewhere, so sales bonuses need to
be adjusted for such economic factors.
Use Team Rewards for Interdependent Jobs Team rewards should be used
rather than individual rewards when employees work in highly interdependent jobs
because it is difficult to measure individual performance in these situations. Nucor
relies on team-based bonuses for this reason; steelmaking is a team effort, so employees
earn bonuses based on team performance. Team rewards also encourage coopera-
tion, which is more important when work is highly interdependent. A third benefit of
team rewards is that they tend to support employee preferences for team-based work.
One concern, however, is that employees (particularly the most productive employ-
ees) in the United States and many other low-collectivism cultures prefer rewards
based on their individual performance rather than team performance. 34
Ensure That Rewards Are Valued It seems obvious that rewards work best when
they are valued. Yet companies sometimes make false assumptions about what employ-
ees want, with unfortunate consequences. The solution, of course, is to ask employees
what they value. Campbell Soup did this a few years ago at its distribution centers in
Canada. Executives thought the employees would ask for more money in a special
team reward program. Instead, distribution staff said the most valued reward was a
leather jacket with the Campbell Soup logo on the back. The leather jackets cost much
less yet were worth much more than the financial bonus the company had intended to
distribute. 35
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Watch Out for Unintended Consequences Performance-based reward systems
sometimes have an unexpected—and undesirable—effect on employee behaviors.
Consider the pizza company that decided to reward its drivers for on-time delivery.
The plan got more hot pizzas to customers on time, but it also increased the accident
rates of the company’s drivers because the incentive motivated them to drive reck-
lessly. 41 Global Connections 6.2 describes a few other examples in which reward
systems had unintended consequences. The solution here is to carefully think through
When Rewards Go Wrong
There is an old saying that “what gets rewarded gets done.”
But what companies reward isn’t always what they had
intended their employees to do. Here are a few dramatic
examples of how performance-based rewards produce unin-
tended consequences:
• UBS AG recently lost more than $37 billion (yes, billion) in
one year because of its exposure to high-risk mortgage
securities. The massive loss forced Switzerland’s largest
bank to lay off staff, close down a hedge fund business,
borrow from foreign governments, and suffer an exodus of
clients. Many financial institutions suffered horrendous
losses (and a few went bankrupt) during this subprime
mortgage crisis, but UBS openly acknowledged that a
faulty reward system was partly responsible. Specifically,
its bonus plan motivated its traders to generate short-term
revenue without penalizing them for exposing the bank to
high-risk investments. “Essentially, bonuses were mea-
sured against gross revenue with no formal account taken
of the quality or sustainability of those earnings,” says a
UBS report submitted to the Swiss banking regulator.36
• Stock options are supposed to motivate executives to im-
prove corporate performance. Instead, they seem to moti-
vate some leaders to use dodgy accounting practices to
distort or misrepresent the company’s performance. One
recent study found that financial misrepresentation was
associated with executive stock options but not with bo-
nuses or other forms of executive compensation. Another
report estimated that for every 25 percent increase in stock
options awarded to executives, the risk of fraud rises by
68 percent. Companies with the largest corporate frauds in
recent years have, on average, eight times as many options
as similar companies that did not experience fraud.37
• Donnelly Mirrors (now part of Magna International) intro-
duced a gainsharing plan that motivated employees to reduce
labor but not material costs. Employees at the automobile
parts manufacturer knew they worked faster with sharp
grinding wheels, so they replaced the expensive diamond
wheels more often. This action reduced labor costs, thereby
giving employees the gainsharing bonus. However, the labor
savings were more than offset by much higher costs for dia-
mond grinding wheels.38
• Integrated steel companies often rewarded managers for
increased labor efficiency. The lower the labor-hours re-
quired to produce a ton of steel, the larger the manager’s
bonus. Unfortunately, steel firms usually didn’t count the
work of outside contractors in the formula, so the reward
system motivated managers to hire expensive contractors
in the production process. By employing more contractors,
the true cost of production increased, not decreased.39
• Toyota rewards its dealerships on the basis of customer sat-
isfaction surveys, not just car sales. What Toyota discovered,
however, is that this motivates dealers to increase satisfac-
tion scores, not customer satisfaction. One Toyota dealer-
ship received high ratings because it offered free detailing to
every customer who returned a “Very Satisfied” survey. The
dealership even had a special copy of the survey showing
clients which boxes to check off. This increased customer
ratings, but not customer satisfaction.40
Global Connections 6.2
UBS suffered a $37 billion loss in one year because its bonus
system rewarded staff for short-term revenue without imposing
any penalties for buying high-risk securities to generate that
revenue.
174
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Chapter 6 Applied Performance Practices 175
the consequences of rewards and, where possible, test incentives in a pilot project
before applying them across the organization.
Financial rewards come in many forms and, as mentioned at the outset of this sec-
tion, influence employees in complex ways. But money isn’t the only thing that mo-
tivates people to join an organization and perform effectively. “High performers don’t
go for the money,” warns an executive at Imation Corp. “Good people want to be in
challenging jobs and see a future where they can get even more responsibilities and
challenges.” The director of Xerox’s research center agrees with this assessment.
“Our top stars say they want to make an impact—that’s the most important thing,” he
says. “Feeling they are contributing and making a difference is highly motivational
for them.” 42 In other words, companies motivate employees mainly by designing in-
teresting and challenging jobs, the topic we discuss next.
Learning
Objectives
After reading this section, you should be able to:
4. Discuss the advantages and disadvantages of job specialization.
5. Diagram the job characteristics model of job design.
6. Identify three strategies for improving employee motivation through
job design.
Job Design Practices
How do you build a better job? That question has challenged organizational behavior
experts as well as psychologists, engineers, and economists for a few centuries. Some
jobs have very few tasks and usually require very little skill. Other jobs are immensely
complex and require years of experience and learning to master them. From one
extreme to the other, jobs have different effects on work efficiency and employee
motivation. The challenge, at least from the organization’s perspective, is to find the
right combination so that work is performed efficiently but employees are motivated
and engaged. 43 This challenge requires careful job design —the process of assigning
tasks to a job, including the interdependency of those tasks with other jobs. A job is a
set of tasks performed by one person. To understand this issue more fully, let’s begin
by describing early job design efforts aimed at increasing work efficiency through job
specialization.
Job Design and Work Efficiency
Chrysler Corp. outsources European manufacturing of its minivan to Magna Steyr, a
subsidiary of Magna International. On average, employees assigned to Magna Steyr’s
Chrysler minivan assembly line in Graz, Austria, take three minutes to attach their
assigned pieces to the chassis before repeating their work on the next vehicle. Mean-
while, employees assembling the same vehicle at Chrysler’s own assembly plants in
North America have an average job cycle time of 64.5 seconds. 44 The difference isn’t
that Austrian employees are slower. Rather, Chrysler’s North American employees
are assigned fewer tasks. They have a higher degree of job specialization .
Job specialization occurs when the work required to build an automobile—or any
other product or service—is subdivided into separate jobs assigned to different people.
Each resulting job includes a narrow subset of tasks, usually completed in a short
cycle time. Cycle time is the time required to complete the task before starting over
job design
The process of assigning
tasks to a job, including
the interdependency of
those tasks with other
jobs.
job specialization
The result of division of
labor in which work is
subdivided into separate
jobs assigned to different
people.
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176 Part Two Individual Behavior and Processes
with a new work unit. Employees at Chrysler’s minivan assembly operations in North
America have an average cycle time of 64.5 seconds, which means they repeat the
same set of tasks about 58 times each hour and probably about 230 times before they
take a meal break.
Why would companies divide work into such tiny bits? The simple answer is that
job specialization improves work efficiency. Efficiency is higher because employees
have fewer tasks to juggle and therefore spend less time changing activities. They also
require fewer physical and mental skills to accomplish the assigned work, so less time
and fewer resources are needed for training. A third reason is that employees practice
their tasks more frequently with shorter work cycles, so jobs are mastered quickly. A
fourth reason why work efficiency increases is that employees with specific aptitudes
or skills can be matched more precisely to the jobs for which they are best suited. 45
The efficiency of job specialization was noted more than 2,300 years ago by the
Chinese philosopher Mencius and Greek philosopher Plato. In the 1400s and 1500s,
the Arsenal of Venice employed up to 4,000 people in specialized jobs (caulkers,
paymasters, division managers, carpenters, iron workers, warehouse supervisors, etc.)
to build ships and many accessories such as cannons, ropes, oars, and armor. The
state-owned organization became so efficient that in 1570 it built 100 ships in two
months. After construction, the galleons traveled along a waterway where workers
apportioned food, ammunition, cordage, and other supplies from specially designed
warehouses. This assembly line could outfit 10 galleons in just six hours. 46 The ben-
efits of job specialization were also recorded by Adam Smith 250 years ago. The
Scottish economist described a small factory where 10 pin makers collectively pro-
duced as many as 48,000 pins per day because they performed specialized tasks, such
as straightening, cutting, sharpening, grinding, and whitening the pins. In contrast,
Smith explained that if these 10 people worked alone producing complete pins, they
would collectively manufacture no more than 200 pins per day. 47
Scientific Management One of the strongest advocates of job specialization was
Frederick Winslow Taylor, an American industrial engineer who introduced the prin-
ciples of scientific management in the early 1900s. 48 Scientific management consists
of a toolkit of activities. Some of these interventions—training, goal setting, and work
incentives—are common today but were rare until Taylor popularized them. How-
ever, scientific management is mainly associated with high levels of job specialization
and standardization of tasks to achieve maximum efficiency.
According to Taylor, the most effective companies have detailed procedures and
work practices developed by engineers, enforced by supervisors, and executed by
employees. Even the supervisor’s tasks should be divided: One person manages
operational efficiency, another manages inspection, and another is the disciplinarian.
Taylor and other industrial engineers demonstrated that scientific management
significantly improves work efficiency. No doubt, some of the increased productivity
can be credited to the training, goal setting, and work incentives, but job specializa-
tion quickly became popular in its own right.
Problems with Job Specialization Frederick Taylor and his contemporaries fo-
cused on how job specialization reduces labor “waste” by improving the mechanical
efficiency of work (i.e., matching skills, faster learning, less switchover time). Yet they
didn’t seem to notice how this extreme job specialization adversely affects employee
attitudes and motivation. Some jobs—such as assembling Chrysler minivans—are so
specialized that they may soon become tedious, trivial, and socially isolating.
scientific management
The practice of system-
atically partitioning work
into its smallest elements
and standardizing tasks
to achieve maximum
efficiency.
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Chapter 6 Applied Performance Practices 177
Employee turnover and absenteeism tend to be higher in specialized jobs with very
short cycle times. Companies sometimes have to pay higher wages to attract job ap-
plicants to this dissatisfying, narrowly defined work. 49
Job specialization often reduces work quality because employees see only a small
part of the process. As one observer of an automobile assembly line reports: “Often
[employees] did not know how their jobs related to the total picture. Not knowing,
there was no incentive to strive for quality—what did quality even mean as it related
to a bracket whose function you did not understand?” 50
Equally important, job specialization can undermine the motivational potential of
jobs. As work becomes specialized, it tends to become easier to perform but less in-
teresting. As jobs become more complex, work motivation increases but the ability to
master the job decreases. Maximum job performance occurs somewhere between
these two extremes, where most people can eventually perform the job tasks effi-
ciently yet the work is interesting.
Job Design and Work Motivation
Industrial engineers may have overlooked the motivational effect of job characteris-
tics, but it is now the central focus of many job design changes. Organizational be-
havior scholar Frederick Herzberg is credited with shifting the spotlight when he
introduced motivator-hygiene theory in the 1950s. 51 Motivator-hygiene theory
proposes that employees experience job satisfaction when they fulfill growth and es-
teem needs (called motivators ) and they experience dissatisfaction when they have
poor working conditions, job security, and other factors categorized as lower-order
needs (called hygienes ). Herzberg argued that only characteristics of the job itself
motivate employees, whereas the hygiene factors merely prevent dissatisfaction. It
might seem obvious to us today that the job itself is a source of motivation, but the
concept was radical when Herzberg proposed the idea.
Motivator-hygiene theory has been soundly rejected due to lack of research sup-
port, but Herzberg’s ideas generated new thinking about the motivational potential of
the job itself. 52 Out of subsequent research emerged the job characteristics model ,
shown in Exhibit 6.2 . The job characteristics model identifies five core job dimen-
sions that produce three psychological states. Employees who experience these psy-
chological states tend to have higher levels of internal work motivation (motivation
from the work itself), job satisfaction (particularly satisfaction with the work itself),
and work effectiveness. 53
Core Job Characteristics The job characteristics model identifies five core job
characteristics. Under the right conditions, employees are more motivated and satis-
fied when jobs have higher levels of these characteristics:
• Skill variety . Skill variety refers to the use of different skills and talents to com-
plete a variety of work activities. For example, sales clerks who normally only
serve customers might be assigned the additional duties of stocking inventory
and changing storefront displays.
• Task identity. Task identity is the degree to which a job requires completion of a
whole or identifiable piece of work, such as assembling an entire broadband
modem rather than just soldering in the circuitry.
• Task significance . Task significance is the degree to which the job affects the
organization and/or larger society. For instance, many employees at Medtronic,
the Minneapolis-based maker of pacemakers and other medical equipment,
motivator-hygiene
theory
Herzberg’s theory stating
that employees are
primarily motivated by
growth and esteem
needs, not by lower-level
needs.
job characteristics
model
A job design model that
relates the motivational
properties of jobs to
specific personal and
organizational conse-
quences of those
properties.
skill variety
The extent to which
employees must use
different skills and tal-
ents to perform tasks
within their jobs.
task significance
The degree to which a
job has a substantial
impact on the organiza-
tion and/or larger society.
task identity
The degree to which a
job requires completion
of a whole or an identifi-
able piece of work.
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178 Part Two Individual Behavior and Processes
Work
motivation
Work
effectiveness
General
satisfaction
Growth
satisfaction
Core job
characteristics
Critical
psychological
states
Outcomes
Meaningfulness
Responsibility
Knowledge
of results
• Knowledge and skill
• Context satisfaction
• Growth-need strength
Individual
differences
Autonomy
Skill variety
Task identity
Task significance
Feedback
from job
Source: J. Richard Hackman and Greg R. Oldham, Work Redesign (Prentice Hall Organizational Development
Series), 1st Edition, Copyright © 1980. Reproduced by permission of Pearson Education, Inc., Upper Saddle River,
New Jersey.
have high job specialization, yet 86 percent say their work has special meaning
and 94 percent feel pride in what they accomplish. The reason for their high
task significance is that they attend seminars that show how the products they
manufacture save lives. “We have patients who come in who would be dead if
it wasn’t for us,” says a Medtronic production supervisor. 54
• Autonomy . Jobs with high levels of autonomy provide freedom, independence,
and discretion in scheduling the work and determining the procedures to be
used to complete the work. In autonomous jobs, employees make their own
decisions rather than relying on detailed instructions from supervisors or
procedure manuals.
• Job feedback . Job feedback is the degree to which employees can tell how well
they are doing on the basis of direct sensory information from the job itself.
Airline pilots can tell how well they land their aircraft, and road crews can see
how well they have prepared the roadbed and laid the asphalt.
Critical Psychological States The five core job characteristics affect employee
motivation and satisfaction through three critical psychological states, shown in
Exhibit 6.2. One of these psychological states is experienced meaningfulness —the belief
autonomy
The degree to which a
job gives employees the
freedom, independence,
and discretion to sched-
ule their work and de-
termine the procedures
used in completing it.
Exhibit 6.2
The Job
Characteristics
Model
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Chapter 6 Applied Performance Practices 179
that one’s work is worthwhile or important. Skill variety, task identity, and task
significance directly contribute to the job’s meaningfulness. If the job has high levels
of all three characteristics, employees are likely to feel that their jobs are highly mean-
ingful. The meaningfulness of a job drops as one or more of these characteristics
declines.
Work motivation and performance increase when employees feel personally ac-
countable for the outcomes of their efforts. Autonomy directly contributes to this
feeling of experienced responsibility . Employees must be assigned control of their work
environment to feel responsible for their successes and failures. The third critical
psychological state is knowledge of results . Employees want information about the con-
sequences of their work effort. Knowledge of results can originate from co-workers,
supervisors, or clients. However, job design focuses on knowledge of results from the
work itself.
Individual Differences Job design doesn’t increase work motivation for everyone
in every situation. Employees must have the required skills and knowledge to master
the more challenging work. Otherwise, job design tends to increase stress and reduce
Customer Talks Raise Task Significance and Identity Repairing aircraft engines is a complex business
involving the specialized work of dozens of people. However, employees working in specialized jobs tend
to have lower task identity and task significance. “We work on airplane engines, but individual employees
work on different parts, and don’t necessarily know what the customer uses it for,” says Maurice Carter, a
bearing technician lead hand at the Rolls Royce Engine Services facility in Oakland, California. For this
reason, Rolls Royce introduced “Voice of the Customer,” an initiative in which customer representatives
visit the facility and talk to production staff about why the quality of these engines is important to them.
“[A customer’s visit] allows you to know that your quality is key to the rescue of someone who may be
stranded in a remote area, who relies on your ability to make sure that engine starts and continues to run
in any adverse circumstance,” says Carter. “Voice of the Customer isn’t just a nicety,” explains a Rolls
Royce Engine Services executive. “It gives employees with relatively repetitive jobs the sense that they’re
not just working on a part but rather are key in keeping people safe.”55
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180 Part Two Individual Behavior and Processes
job performance. The original model also suggests that increasing the motivational
potential of jobs will not motivate employees who are dissatisfied with their work
context (e.g., working conditions, job security) or who have a low growth-need
strength. However, research findings have been mixed, suggesting that employees
might be motivated by job design no matter how they feel about their job context or
how high or low they score on growth needs. 56
Job Design Practices That Motivate
Three main strategies can increase the motivational potential of jobs: job rotation, job
enlargement, and job enrichment. This section also identifies several ways to imple-
ment job enrichment.
Job Rotation At the beginning of this section on job design, we mentioned that
assembly-line employees at Chrysler have a high degree of specialization. Chrysler
executives are aware of the motivational and physiological problems that this repeti-
tive work can create, so they have introduced a policy whereby employees work in
teams and rotate to a different workstation within that team every few hours. Job
rotation is the practice of moving employees from one job to another. “The whole
idea of job rotation makes a big difference,” says Chrysler’s vice president of manu-
facturing. “The job naturally gets better, quality improves, throughput improves.”
Chrysler reported significant improvements in productivity and morale within the
first year of its job rotation program. Job rotation offers “important ergonomic bene-
fits to workers, improvements in product quality, and higher employee satisfaction,”
says a senior manager at Chrysler’s plant in Toledo, Ohio. 57
From the experience at Chrysler and many other companies, we can identify
three potential benefits of job rotation. First, it minimizes health risks from repeti-
tive strain and heavy lifting because employees use different muscles and physical
positions in the various jobs. Second, it supports multiskilling (employees learn
several jobs), which increases workforce flexibility in staffing the production pro-
cess and in finding replacements for employees on vacation. A third benefit of job
rotation is that it potentially reduces the boredom of highly repetitive jobs. How-
ever, organizational behavior experts continue to debate whether job rotation really
is a form of job redesign because the jobs remain the same; they are still highly
specialized. Critics argue that job redesign requires changes within the job, such as
job enlargement.
Job Enlargement Job enlargement adds tasks to an existing job. This might in-
volve combining two or more complete jobs into one or just adding one or two more
tasks to an existing job. Either way, skill variety increases because there are more
tasks to perform. Video journalists represent a clear example of an enlarged job. As
Exhibit 6.3 illustrates, a traditional news team consists of a camera operator, a sound
and lighting specialist, and the journalist who writes and presents or narrates the
story. One video journalist performs all of these tasks.
Job enlargement significantly improves work efficiency and flexibility. However,
research suggests that simply giving employees more tasks won’t affect motivation,
performance, or job satisfaction. These benefits result only when skill variety is com-
bined with more autonomy and job knowledge. 58 In other words, employees are
motivated when they perform a variety of tasks and have the freedom and knowledge
to structure their work to achieve the highest satisfaction and performance. These job
characteristics are at the heart of job enrichment.
job rotation
The practice of moving
employees from one job
to another.
job enlargement
The practice of adding
more tasks to an existing
job.
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Chapter 6 Applied Performance Practices 181
Job Enrichment Job enrichment occurs when employees are given more respon-
sibility for scheduling, coordinating, and planning their own work. 59 Generally, peo-
ple in enriched jobs experience higher job satisfaction and work motivation, along
with lower absenteeism and turnover. Productivity is also higher when task identity
and job feedback are improved. Product and service quality tend to improve because
job enrichment increases the jobholder’s felt responsibility and sense of ownership
over the product or service. 60
One way to increase job enrichment is by combining highly interdependent tasks
into one job. This natural grouping approach is reflected in the video journalist job.
Video journalist was earlier described as an enlarged job, but it is also an example of
job enrichment because it naturally groups tasks together to complete an entire prod-
uct (i.e., a news clip). By forming natural work units, jobholders have stronger feelings
of responsibility for an identifiable body of work. They feel a sense of ownership and,
therefore, tend to increase job quality. Forming natural work units increases task iden-
tity and task significance because employees perform a complete product or service
and can more readily see how their work affects others.
A second job enrichment strategy, called establishing client relationships, involves put-
ting employees in direct contact with their clients rather than using the supervisor as a
go-between. By being directly responsible for specific clients, employees have more
information and can make decisions affecting those clients. 61 Establishing client rela-
tionships also increases task significance because employees see a line-of-sight connec-
tion between their work and consequences for customers. This was apparent among
medical secretaries at a large regional hospital in Sweden after the hospital reduced its
workforce by 10 percent and gave the secretaries expanded job duties. Although these
employees experienced more stress from the higher workloads, some of them also felt
more motivated and satisfied because they now had direct interaction with patients.
“Before, I never saw a patient; now they have a face,” says one medical secretary. “I
feel satisfied and pleased with myself; you feel someone needs you.” 62
Forming natural task groups and establishing client relationships are common
ways to enrich jobs, but the heart of the job enrichment philosophy is to give employ-
ees more autonomy over their work. This basic idea is at the core of one of the most
widely mentioned—and often misunderstood—practices, known as empowerment.
Traditional
news team
Video
journalist
Exhibit 6.3
Job Enlargement of
Video Journalists
job enrichment
The practice of giving
employees more respon-
sibility for scheduling,
coordinating, and plan-
ning their own work.
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182 Part Two Individual Behavior and Processes
Learning
Objectives
After reading the next two sections, you should be able to:
7. Define empowerment and identify strategies that support
empowerment.
8. Describe the five elements of self-leadership.
9. Identify specific personal and work environment influences on
self-leadership.
Empowerment Practices
The opening vignette to this chapter described Svenska Handelsbanken’s highly de-
centralized organizational structure, in which branch managers decide which prod-
ucts to offer, what price to charge, how to market products, and so on. Employees are
actively involved with the branch manager in these decisions. “The culture of our
company is based on entrusting employees and allowing those who are closest to the
customer and who know the customer best to take decisions,” says Anders Bouvin,
head of Handelsbanken’s business in Northern Britain. “Being empowered and
having this trust leads to better decisions and higher satisfaction.” Jonathan Watson,
Handelsbanken’s branch manager in Maidstone, United Kingdom, adds: “One prob-
lem we don’t have is motivating our staff. Thanks to the decentralized way Handels-
banken operates and empowers staff with the responsibility to do their jobs to the
best of their ability, motivation is easy and morale remains high.” 63
The word empowerment is often mentioned in writing and conversations about
Handelsbanken because, unlike too many financial institutions, the Swedish bank’s
employees really do experience the feeling of being empowered. Empowerment is a
psychological concept represented by four dimensions: self-determination, meaning,
competence, and impact of the individual’s role in the organization. If any dimension
weakens, the employee’s sense of empowerment will weaken. 64
• Self-determination . Empowered employees feel that they have freedom, indepen-
dence, and discretion over their work activities.
• Meaning . Employees who feel empowered care about their work and believe
that what they do is important.
• Competence . Empowered people are confident about their ability to perform the
work well and have a capacity to grow with new challenges.
• Impact . Empowered employees view themselves as active participants in the orga-
nization; that is, their decisions and actions have an influence on the company’s
success.
Supporting Empowerment
Chances are that you have heard leaders say they are “empowering” the workforce. Yet
empowerment is a state of mind, so what these executives really mean is that they are
changing the work environment to support the feeling of empowerment. 65 Numerous
individual, job design, and organizational or work-context factors support empower-
ment. At the individual level, employees must possess the necessary competencies to
be able to perform the work as well as handle the additional decision-making require-
ments. 66 Job characteristics clearly influence the degree to which people feel empow-
ered. 67 Employees are much more likely to experience self-determination when working
empowerment
A psychological con-
cept in which people
experience more
self-determination,
meaning, competence,
and impact regarding
their role in the
organization.
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Chapter 6 Applied Performance Practices 183
in jobs with a high degree of autonomy and minimal bureaucratic control. They
experience more meaningfulness when working in jobs with high levels of task identity
and task significance. They experience more self-confidence when working in jobs that
allow them to receive feedback about their performance and accomplishments.
Several organizational and work-context factors also influence empowerment.
Employees experience more empowerment in organizations where information
and other resources are easily accessible. Empowerment also requires a learning
orientation culture. In other words, empowerment flourishes in organizations that
appreciate the value of employee learning and that accept reasonable mistakes as a
natural part of the learning process. Furthermore, as mentioned above in describing
Handelsbanken, empowerment requires corporate leaders who trust employees
and are willing to take the risks that empowerment creates.” 69
With the right individuals, job characteristics, and organizational environment,
empowerment can substantially improve motivation and performance. For instance,
a study of bank employees concluded that empowerment improved customer service
and tended to reduce conflict between employees and their supervisors. A study of
nurses reported that empowerment is associated with higher trust in management,
which ultimately influences job satisfaction, belief and acceptance of organizational
goals and values, and effective organizational commitment. Empowerment also tends
to increase personal initiative because employees identify with and assume more
psychological ownership of their work. 70
Self-Leadership Practices
What is the most important characteristic that companies look for in their employ-
ees? Leadership potential, ability to work in a team, and good communication skills
are important, but a survey of 800 British employers concludes that they don’t top
the list. Instead, the most important employee characteristic is self-motivation. Jack
Semco’s Radical Empowerment Most executives like to say they em-
power their workforce, but few come close to the freedom that em-
ployees experience at Semco Corporation, SA. “Can an organization
let people do what they want, when they want, and how they want?”
asks Ricardo Semler, who took over his father’s marine pump business
in Sao Paulo, Brazil, 20 years ago. The answer appears to be yes.
Today, the industrial manufacturing and services company has 3,000
employees who work in teams of 6 to 10 people. Employees choose
their objectives, hire co-workers, calculate budgets, set their own
salaries, decide when to come to work, and elect their own bosses.
The only policy manual is a comic book that introduces newcomers to
Semco’s democratic culture. Semler, shown here with some head of-
fice staff resting in hammocks, complains that too few companies
have tried to liberate employees. “Treating employees like two-
year-olds is a comfortable norm for too many businesses. Perpetuat-
ing this behavior will deal the killing blow to any organization,” Semler
warns. “Treating employees like intelligent adults and allowing them
to manage themselves is a business model that worked at Semco.”68
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184 Part Two Individual Behavior and Processes
Harding can identify with these survey results. The founder of eSilicon Corp., which
designs and manufactures custom chips for electronics companies, believes that the
best-performing businesses prosper when employees manage their own motivation
and performance. “You look for character and experience” when hiring new employees,
Harding suggests. “They need to be smart, team players, and self-motivated—and you
can’t instill that.” 72
Most of the concepts introduced in this chapter and in Chapter 5 have assumed
that leaders do things to motivate employees. Certainly, these theories and practices
are valuable, but they overlook the fact that the most successful employees ultimately
motivate and manage themselves. In other words, they engage in self-leadership.
Self-leadership refers to the process of influencing oneself to establish the self-
direction and self-motivation needed to perform a task. 73 This concept includes a
toolkit of behavioral activities borrowed from social learning theory and goal setting.
It also includes constructive thought processes that have been extensively studied in
sports psychology. Overall, self-leadership takes the view that individuals mostly reg-
ulate their own actions through these behavioral and cognitive (thought) activities.
Self-Leadership Strategies
Although self-leadership consists of several processes, the five main activities are
identified in Exhibit 6.4 . These elements, which generally follow each other in a se-
quence, are personal goal setting, constructive thought patterns, designing natural
rewards, self-monitoring, and self-reinforcement. 74
Personal Goal Setting The first step in self-leadership is to set goals for your own
work effort. This applies the ideas learned in Chapter 5 on goal setting, such as iden-
tifying goals that are specific, relevant, and challenging. The main difference is that
self-leadership involves setting goals alone, rather than having them assigned by or
jointly decided with a supervisor. Research suggests that employees are more focused
and perform better when they set their own goals, particularly in combination with
other self-leadership practices. 75 Personal goal setting also requires a high degree of self-
awareness, because people need to understand their current behavior and performance
before establishing meaningful goals for personal development.
Bayer CropScience Searches for Self-Leaders With production
increasing at its facility in Research Triangle Park, North Carolina,
Bayer CropScience wants to hire two dozen more chemical process
operators. The task won’t be easy, though. Bayer CropScience, a
division of Germany-based conglomerate Bayer AG, is looking for
job applicants with special characteristics. “It’s difficult to fill [these
jobs],” says site leader Nick Crosby. “We’re not in the game these
days of just getting people who can read, write and shovel stuff
around.” Instead, Bayer CropScience wants employees who prac-
tice self-leadership. “We need self-motivated people who work well
with empowered teams—people who can think for themselves, do
basic diagnosis, and keep the plants operating at an optimum,” he
says.71
self-leadership
The process of influenc-
ing oneself to establish
the self-direction and
self-motivation needed
to perform a task.
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Constructive Thought Patterns Before beginning a task and while performing it,
employees should engage in positive (constructive) thoughts about that work and its
accomplishment. In particular, employees are more motivated and better prepared to
accomplish a task after they have engaged in positive self-talk and mental imagery.
Positive Self-Talk Do you ever talk to yourself? Most of us do, according to a major
study of university students. 76 Self-talk refers to any situation in which we talk to
ourselves about our own thoughts or actions. Some of this internal communication
assists the decision-making process, such as weighing the advantages of a particular
choice. Self-leadership is mostly interested in evaluative self-talk, in which you evalu-
ate your capabilities and accomplishments.
The problem is that most evaluative self-talk is negative; we criticize much more than
encourage or congratulate ourselves. Negative self-talk undermines our confidence and
potential to perform a particular task. In contrast, positive self-talk creates a “can-do”
belief and thereby increases motivation by raising our effort-to-performance expectancy.
We often hear that professional athletes “psych” themselves up before an important
event. They tell themselves that they can achieve their goal and that they have practiced
enough to reach that goal. They are motivating themselves through positive self-talk.
Mental Imagery You’ve probably heard the phrase “I’ll cross that bridge when I
come to it!” Self-leadership takes the opposite view. It suggests that we need to men-
tally practice a task and imagine successfully performing it beforehand. This process,
known as mental imagery , has two parts. One part involves mentally practicing the
task, anticipating obstacles to goal accomplishment, and working out solutions to
those obstacles before they occur. By mentally walking through the activities required
to accomplish the task, we begin to see problems that may occur. We can then imagine
what responses would be best for each contingency. 77
While one part of mental imagery helps us to anticipate things that could go wrong,
the other part involves visualizing successful completion of the task. You might imag-
ine the experience of completing the task and the positive results that follow, such as
being promoted, receiving a prestigious award, or taking time off work. This visual-
ization increases goal commitment and motivates people to complete the task effec-
tively. This is the strategy that Tony Wang applies to motivate himself. “Since I am in
sales, I think about the reward I get for closing new business—the commission check—
and the things it will allow me to do that I really enjoy,” explains Wang. “Or I think
about the feeling I get when I am successful at something and how it makes me feel
good, and use that to get me going.” 78
Designing Natural Rewards Self-leadership recognizes that employees actively
craft their jobs. To varying degrees, they can alter tasks and work relationships to
make the work more motivating. 79 One way to build natural rewards into the job is to
alter the way a task is accomplished. People often have enough discretion in their jobs
to make slight changes to suit their needs and preferences. For instance, you might try
mental imagery
The process of mentally
practicing a task and
visualizing its successful
completion.
self-talk
The process of talking to
ourselves about our own
thoughts or actions.
Chapter 6 Applied Performance Practices 185
Personal
goal
setting
Constructive
thought
patterns
Exhibit 6.4 Elements of Self-Leadership
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186 Part Two Individual Behavior and Processes
out a new software program to design an idea, rather than sketch the image with a
pencil. By using the new software, you are making more challenging and appealing a
task that may have otherwise been mundane.
Self-Monitoring Self-monitoring is the process of keeping track at regular inter-
vals of one’s progress toward a goal by using naturally occurring feedback. Some
people can receive feedback from the job itself, such as members of a lawn mainte-
nance crew who can see how they are improving the appearance of their client’s
property. But many of us are unable to observe our work output so readily. Instead,
many people need to design feedback systems. Salespeople might arrange to receive
monthly reports on sales levels in their territory. Production staff might have gauges
or computer feedback systems installed so that they can see how many errors are
made on the production line. Research suggests that people who have control over
the timing of performance feedback perform their tasks better than do those with
feedback assigned by others. 80
Self-Reinforcement Self-leadership includes the social learning theory concept of
self-reinforcement (see Chapter 3). Self-reinforcement occurs whenever an employee
has control over a reinforcer but doesn’t “take” the reinforcer until completing a self-
set goal. 81 A common example is taking a break after reaching a predetermined stage
of your work. The work break is a self-induced form of positive reinforcement. Self-
reinforcement also occurs when you decide to do a more enjoyable task after com-
pleting a task that you dislike. For example, after slogging through a difficult report,
you might decide to spend time doing a more pleasant task, such as catching up on
industry news by scanning Web sites.
Effectiveness of Self-Leadership
Self-leadership is shaping up to be a valuable applied performance practice in or-
ganizational settings. A respectable body of research shows consistent support for
most elements of self-leadership. Self-set goals and self-monitoring increased the
frequency of wearing safety equipment among employees in a mining operation.
Airline employees who received constructive thought training experienced better
mental performance, enthusiasm, and job satisfaction than co-workers who did not
receive this training. Mental imagery helped supervisors and process engineers in
a pulp-and-paper mill to transfer what they learned in an interpersonal communi-
cation skills class back to the job. 82 Studies also indicate that constructive thought
processes improve individual performance in cycling, hockey goaltending, ice
skating, soccer, and other sports. Indeed, studies show that almost all Olympic
athletes rely on mental rehearsal and positive self-talk to achieve their perfor-
mance goals. 83
Self-Leadership Contingencies
As with most other organizational behavior theories, self-leadership is more or less
likely to occur depending on the person and the situation. With respect to individual
differences, preliminary research suggests that self-leadership behaviors are more fre-
quently found in people with higher levels of conscientiousness and extroversion. Some
writers also suggest that people with a positive self-concept evaluation (i.e., self-esteem,
self-efficacy, and internal locus of control) are more likely to apply self-leadership
strategies. 84
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jobs. Job specialization subdivides work into separate
jobs for different people. This increases work efficiency
because employees master the tasks quickly, spend less
time changing tasks, require less training, and can be
matched more closely with the jobs best suited to their
skills. However, job specialization may reduce work
motivation, create mental health problems, lower product
or service quality, and increase costs through discontent-
ment, absenteeism, and turnover.
Contemporary job design strategies reverse job spe-
cialization through job rotation, job enlargement, and job
enrichment. The job characteristics model is a template
for job redesign that specifies core job dimensions, psy-
chological states, and individual differences. Organiza-
tions introduce job rotation to reduce job boredom,
develop a more flexible workforce, and reduce the inci-
dence of repetitive strain injuries. Two ways to enrich jobs
are clustering tasks into natural groups and establishing
client relationships.
Empowerment is a psychological concept represented
by four dimensions: self-determination, meaning, compe-
tence, and impact regarding the individual’s role in the or-
ganization. Individual characteristics seem to have a minor
influence on empowerment. Job design is a major influ-
ence, particularly autonomy, task identity, task signifi-
cance, and job feedback. Empowerment is also supported
at the organizational level through a learning orientation
culture, sufficient information and resources, and corporate
leaders who trust employees.
Self-leadership is the process of influencing oneself to
establish the self-direction and self-motivation needed to
perform a task. This includes personal goal setting, con-
structive thought patterns, designing natural rewards, self-
monitoring, and self-reinforcement. Constructive thought
patterns include self-talk and mental imagery. Self-talk
occurs in any situation in which a person talks to himself
or herself about his or her own thoughts or actions. Mental
imagery involves mentally practicing a task and imagining
successfully performing it beforehand.
Money and other financial rewards are a fundamental
part of the employment relationship, but their value and
meaning vary from one person to the next. Organiza-
tions reward employees for their membership and
seniority, job status, competencies, and performance.
Membership-based rewards may attract job applicants,
and seniority-based rewards reduce turnover, but these
reward objectives tend to discourage turnover among
those with the lowest performance. Rewards based on job
status try to maintain internal equity and motivate em-
ployees to compete for promotions. However, they tend
to encourage a bureaucratic hierarchy, support status dif-
ferences, and motivate employees to compete and hoard
resources. Competency-based rewards are becoming in-
creasingly popular because they improve workforce
flexibility and are consistent with the emerging idea of
employability. However, they tend to be subjectively
measured and can result in higher costs as employees
spend more time learning new skills.
Awards and bonuses, commissions, and other indi-
vidual performance-based rewards have existed for
centuries and are widely used. Many companies are
shifting to team-based rewards such as gainsharing
plans and to organizational rewards such as employee
stock ownership plans (ESOPs), stock options, and
profit sharing. ESOPs and stock options create an own-
ership culture, but employ ees often perceive a weak
connection between individual performance and the
organizational reward.
Financial rewards have a number of limitations, but
reward effectiveness can be improved in several ways.
Organizational leaders should ensure that rewards are
linked to work performance, rewards are aligned with
performance within the employee’s control, team rewards
are used where jobs are interdependent, rewards are
valued by employees, and rewards have no unintended
consequences.
Job design is the process of assigning tasks to a job,
including the interdependency of those tasks with other
Chapter Summary
Although the research is still very sparse, the work environment also seems to in-
fluence the extent to which employees engage in self-leadership strategies. In particu-
lar, employees require sufficient autonomy to engage in some or most aspects of
self-leadership. They probably also feel more confident with self-leadership when
their boss is empowering rather than controlling and where there is a high degree of
trust between them. Employees are also more likely to engage in self-monitoring in
companies that emphasize continuous measurement of performance. 85 Overall, self-
leadership promises to be an important concept and practice for improving employee
motivation and performance.
Chapter 6 Applied Performance Practices 187
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Case Study 6.1 THE REGENCY GRAND HOTEL
Elizabeth Ho, Prada Singapore under the supervision of Steven L. McShane
The Regency Grand Hotel is a five-star hotel in
Bangkok, Thailand. The hotel was established
15 years ago by a local consortium of investors and
has been operated by a Thai general manager
throughout this time. The hotel is one of Bangkok’s
most prestigious hotels, and its 700 employees
enjoyed the prestige of being associated with the
hotel. The hotel provided good welfare benefits,
above-market-rate salary, and job security. In addi-
tion, a good year-end bonus amounting to four
months’ salary was rewarded to employees regardless
of the hotel’s overall performance during the year.
team-based rather than individual rewards in this
setting.
4. What can organizations do to increase the effective-
ness of fi nancial rewards?
5. Most of us have watched pizzas being made while
waiting in a pizzeria. What level of job specialization
do you usually notice in these operations? Why does
this high or low level of specialization exist? If some
pizzerias have different levels of specialization than
others, identify the contingencies that might explain
these differences.
6. Can a manager or supervisor “empower” an em-
ployee? Discuss fully.
7. Describe a time when you practiced self-leadership
to successfully perform a task. With reference to
each step in the self-leadership process, describe
what you did to achieve this success.
8. Can self-leadership replace formal leadership in an
organizational setting?
1. As a consultant, you have been asked to recommend
either a gainsharing plan or a profit-sharing plan for
employees who work in the four regional distribution
and warehousing facilities of a large retail organiza-
tion. Which reward system would you recommend?
Explain your answer.
2. You are a member of a team responsible for develop-
ing a reward system for your college or university
faculty unit. Assume that the faculty is nonprofit, so
profit sharing is not an option. What other team or
organization-level rewards might work in this situa-
tion? Describe specific measures that could be used
to calculate the amount of bonus.
3. Alaska Tire Corporation redesigned its production
facilities around a team-based system. However,
the company president believes that employees
will not be motivated unless they receive incentives
based on their individual performance. Give three
explanations of why Alaska Tire should introduce
Critical Thinking Questions
188
autonomy, p. 178
employee stock ownership plans
(ESOPs), p. 171
empowerment, p. 182
gainsharing plans, p. 170
job characteristics model, p. 177
job design, p. 175
job enlargement, p. 180
job enrichment, p. 181
job evaluation, p. 168
job rotation, p. 180
job specialization, p. 175
mental imagery, p. 185
motivator-hygiene theory, p. 177
profit-sharing plans, p. 172
scientific management, p. 176
self-leadership, p. 184
self-talk, p. 185
skill variety, p. 177
stock options, p. 172
task identity, p. 177
task significance, p. 177
Key Terms
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Recently, the Regency was sold to a large Ameri-
can hotel chain that was very keen to expand its
operations into Thailand. When the acquisition was
announced, the general manager decided to take
early retirement when the hotel changed ownership.
The American hotel chain kept all of the Regency
employees, although a few were transferred to other
positions. John Becker, an American with 10 years of
management experience with the hotel chain, was
appointed as the new general manager of the
Regency Palace Hotel. Becker was selected as the
new general manager because of his previous
successes in integrating newly acquired hotels in the
United States. In most of the previous acquisitions,
Becker took over operations with poor profitability
and low morale.
Becker is a strong believer in empowerment. He
expects employees to go beyond guidelines and
standards to consider guest needs on a case-by-case
basis. That is, employees must be guest-oriented at
all times to provide excellent customer service.
From his U.S. experience, Becker has found that
empowerment increases employee motivation, per-
formance, and job satisfaction, all of which contrib-
ute to the hotel’s profitability and customer service
ratings. Soon after becoming general manager of
Regency Palace, Becker introduced the practice of
empowerment to replicate the successes that he had
achieved back home.
The Regency Grand Hotel has been very profit-
able since it opened 15 years ago. The employees
have always worked according to management’s in-
structions. Their responsibility was to ensure that
the instructions from their managers were carried
out diligently and conscientiously. Innovation and
creativity were discouraged under the previous
management. Indeed, employees were punished for
their mistakes and discouraged from trying out ideas
that had not been approved by management. As a
result, employees were afraid to be innovative and
to take risks.
Becker met with Regency’s managers and de-
partment heads to explain that empowerment
would be introduced in the hotel. He told them
that employees must be empowered with decision-
making authority so that they can use their initia-
tive, creativity, and judgment to satisfy guest needs
and handle problems effectively and efficiently.
However, he stressed that the more complex issues
and decisions were to be referred to superiors, who
were to coach and assist rather than provide direct
orders. Furthermore, Becker stressed that mistakes
were allowed but that making the same mistakes
more than twice would not be tolerated. He ad-
vised his managers and department heads not to
discuss with him minor issues or problems and not
to consult with him about minor decisions. Never-
theless, he told them that they were to discuss im-
portant, major issues and decisions with him. He
concluded the meeting by asking for feedback.
Several managers and department heads told him
that they liked the idea and would support it, while
others simply nodded their heads. Becker was
pleased with the response and was eager to have
his plan implemented.
In the past, the Regency had emphasized admin-
istrative control, resulting in many bureaucratic pro-
cedures throughout the organization. For example,
the front-counter employees needed to seek ap-
proval from their manager before they could up-
grade guests to another category of room. The
front-counter manager would then have to write and
submit a report to the general manager justifying the
upgrade. Soon after his meeting with the managers,
Becker reduced the number of bureaucratic rules at
the Regency and allocated more decision-making
authority to frontline employees. This action upset
those who previously had decision-making power
over these issues. As a result, several of these em-
ployees left the hotel.
Becker also began spending a large portion of his
time observing and interacting with the employees
at the front desk, lobby, restaurants, and various
departments. This direct interaction with Becker
helped many employees to understand what he
wanted and expected of them. However, the employ-
ees had much difficulty trying to distinguish between
a major and a minor issue or decision. More often
than not, supervisors would reverse employee deci-
sions by stating that they were major issues requiring
management approval. Employees who displayed
initiative and made good decisions in satisfying the
needs of the guests rarely received any positive feed-
back from their supervisors. Eventually, most of these
employees lost confidence in making decisions and
reverted back to relying on their superiors for decision
making.
Not long after the implementation of the practice of
empowerment, Becker realized that his subordinates
were consulting him more frequently than before.
189
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Most of them came to him with minor issues and
consulted with him about minor decisions. He had
to spend most of his time attending to his subordi-
nates. Soon he began to feel highly frustrated and
exhausted, and very often he would tell his secre-
tary that “unless the hotel is on fire, don’t let anyone
disturb me.”
Becker thought that the practice of empower-
ment would benefit the overall performance of the
hotel. However, contrary to his expectation, the
business and overall performance of the hotel began
to deteriorate. There was an increasing number of
guest complaints. In the past, the hotel had mini-
mal guest complaints. Now there was a significant
number of formal written complaints every month.
Many other guests voiced their dissatisfaction ver-
bally to hotel employees. The number of mistakes
made by employees was on the increase. Becker
was very upset when he realized that two of the local
newspapers and an overseas newspaper had pub-
lished negative feedback on the hotel in terms of
service standards. He was most distressed when an
international travel magazine voted the hotel “one
of Asia’s nightmare hotels.”
The stress levels of the employees were continu-
ously mounting since the introduction of the practice
of empowerment. Absenteeism due to illness was
increasing at an alarming rate. In addition, the
employee turnover rate reached an all-time high.
The good working relationships that were estab-
lished under the old management had been se-
verely strained. The employees were no longer
united and supportive of each other. They were quick
to “point fingers” at or to “backstab” one another
when mistakes were made and when problems
occurred.
Discussion Questions
1. Identify the symptoms indicating that problems
exist in this case.
2. Diagnose the problems in this case using organi-
zational behavior concepts.
3. Recommend solutions that overcome or mini-
mize the problems and symptoms in this case.
Note: This case is based on true events, but the industry and
names have been changed. Reprinted with permission.
190
Case Study 6.2 HOW TO MAKE A MICROSERF SMILE
Microsoft CEO Steve Balmer
had an epic morale problem;
the company suffered from
software delays, Google envy, and a stock price that
had been drifting sideways for too long. To help the
world’s largest software company out of this morass,
Balmer asked veteran product manager Lisa Brummel
to become the next human resources chief. Brummel
couldn’t do much about the company’s stock price,
but she did transform many of Microsoft’s perfor-
mance and reward practices.
This BusinessWeek case study describes how Mi-
crosoft is revamping its reward practices and, indi-
rectly, helping employees to feel more empowered.
Read the full text of this BusinessWeek article at www.
mhhe.com/mcshane5e, and prepare for the discus-
sion questions below.
Discussion Questions
1. What changes did Lisa Brummel make to Micro-
soft’s performance and reward practices? Why
did Microsoft have these performance and re-
ward practices in place?
2. In your opinion, are these performance and
reward management changes beneficial, or will
any of them cause long-term problems?
3. In your opinion, which actions, if any, intro-
duced by Lisa Brummel have improved feelings
of empowerment at Microsoft?
Source: M. Conlin and J. Greene, “How to Make a Microserf
Smile,” BusinessWeek, 10 September 2007, pp. 56–59.
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http://www.mhhe.com/mcshane5e
http://www.mhhe.com/mcshane5e
191
Team Exercise 6.3 IS STUDENT WORK ENRICHED?
PURPOSE This exercise is designed to help you
learn how to measure the motivational potential of
jobs and evaluate the extent that jobs should be
further enriched.
INSTRUCTIONS (SMALL CLASS) Being a stu-
dent is like a job in several ways. You have tasks to
perform, and someone (such as your instructor)
oversees your work. Although few people want to be
students most of their lives (the pay rate is too low!),
it may be interesting to determine how enriched
your job is as a student.
1. Students are placed into teams (preferably four
or five people).
2. Working alone, each student completes both
sets of measures in this exercise. Then, using
the guidelines on page 193, they individually
calculate the score for the five core job character-
istics as well as the overall motivating-potential
score for the job.
3. Members of each team compare their individual
results. The group should identify differences of
opinion for each core job characteristic. They
should also note which core job characteristics
have the lowest scores and recommend how
these scores could be increased.
4. The entire class will then meet to discuss the re-
sults of the exercise. The instructor may ask some
teams to present their comparisons and recom-
mendations for a particular core job characteristic.
INSTRUCTIONS (LARGE CLASS)
1. Working alone, each student completes both sets
of measures in this exercise. Then, using the
guidelines on page 193, each student individu-
ally calculates the score for the five core job
characteristics as well as the overall motivating-
potential score for the job.
2. Using a show of hands or classroom technology,
students indicate their results for each core job
characteristic. The instructor will ask for results
for several bands across the range of the scales.
Alternatively, students can complete this activ-
ity prior to class and submit their results through
online classroom technology. Later, the instruc-
tor will provide feedback to the class showing
the collective results (i.e., distribution of results
across the range of scores).
3. Where possible, the instructor might ask stu-
dents with very high or very low results to dis-
cuss their views with the class.
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192 Part Two Individual Behavior and Processes
Circle the number on the right that best describes Very little Moderately Very much
student work. ▼ ▼ ▼
1. To what extent does student work permit you to decide on 1 2 3 4 5 6 7
your own how to go about doing the work?
2. To what extent does student work involve doing a whole or 1 2 3 4 5 6 7
identifiable piece of work, rather than a small portion of the
overall work process?
3. To what extent does student work require you to do many 1 2 3 4 5 6 7
different things, using a variety of your skills and talents?
4. To what extent are the results of your work as a student likely 1 2 3 4 5 6 7
to significantly affect the lives and well-being of other people
(e.g., within your school, your family, or society)?
5. To what extent does working on student activities provide 1 2 3 4 5 6 7
information about your performance?
Circle the number on the right that best describes Very inaccurate Uncertain Very accurate
student work. ▼ ▼ ▼
Job Diagnostic Survey
192
6. Being a student requires me to use a number of complex and 1 2 3 4 5 6 7
high-level skills.
7. Student work is arranged so that I do not have the chance to 7 6 5 4 3 2 1
do an entire piece of work from beginning to end.
8. Doing the work required of students provides many chances 1 2 3 4 5 6 7
for me to figure out how well I am doing.
9. The work students must do is quite simple and repetitive. 7 6 5 4 3 2 1
10. The work of a student is one where a lot of other people can 1 2 3 4 5 6 7
be affected by how well the work gets done.
11. Student work denies me any chance to use my personal 7 6 5 4 3 2 1
initiative or judgment in carrying out the work.
12. Student work provides me the chance to completely finish the 1 2 3 4 5 6 7
pieces of work I begin.
13. Doing student work by itself provides few clues about whether 7 6 5 4 3 2 1
I am performing well.
14. As a student, I have considerable opportunity for independence 1 2 3 4 5 6 7
and freedom in how I do the work.
15. The work I perform as a student is not very significant or 7 6 5 4 3 2 1
important in the broader scheme of things.
Source: Adapted from the Job Diagnostic Survey, developed by J. R. Hackman and G. R. Oldham. The authors have released any copyright ownership
of this scale [see J. R. Hackman and G. Oldham, Work Redesign (Reading, MA: Addison-Wesley, 1980), p. 275].
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Chapter 6 Applied Performance Practices 193
CALCULATING THE MOTIVATING-POTENTIAL SCORE
Calculating Motivating-Potential Score (MPS):
Use the following formula and the results to the left
to calculate the motivating-potential score. Notice
that skill variety, task identity, and task significance
are averaged before being multiplied by the score
for autonomy and job feedback.
�SV + TI + TS
3 � � Autonomy � Job feedback
� � �
3 � � � �
Scoring Core Job Characteristics: Use the follow-
ing set of calculations to estimate the motivating-
potential score for the job of being a student. Use
your answers from the Job Diagnostic Survey that
you completed on page 192.
Skill variety (SV) Questions 3 � 6 � 9
3
�
Task identity (TI) Questions 2 � 7 � 12
3
�
Task significance (TS) Questions 4 � 10 � 15
3
�
Autonomy Questions 1 � 11 � 14
3
�
Job feedback Questions 5 � 8 � 13
3
�
Self-Assessment 6.4
WHAT IS YOUR ATTITUDE TOWARD MONEY?
PURPOSE This exercise is designed to help you
understand the types of attitudes toward money and
assess your attitude toward money.
INSTRUCTIONS Read each of the statements on
page 194 and circle the response that you believe
best reflects your position regarding each statement.
Then use the scoring key in Appendix B at the end
of the book to calculate your results. This exercise
should be completed alone so that you can assess
yourself honestly without concerns of social com-
parison. Class discussion will focus on the meaning
of money, including the dimensions measured here
and other aspects of money that may have an influ-
ence on behavior in the workplace.
193
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Strongly Strongly
To what extent do you agree or agree Agree Neutral Disagree disagree
disagree that . . . ▼ ▼ ▼ ▼ ▼
1. I sometimes purchase things because I know they 5 4 3 2 1
will impress other people.
2. I regularly put money aside for the future. 5 4 3 2 1
3. I tend to get worried about decisions involving money. 5 4 3 2 1
4. I believe that financial wealth is one of the most 5 4 3 2 1
important signs of a person’s success.
5. I keep a close watch on how much money I have. 5 4 3 2 1
6. I feel nervous when I don’t have enough money. 5 4 3 2 1
7. I tend to show more respect to people who are 5 4 3 2 1
wealthier than I am.
8. I follow a careful financial budget. 5 4 3 2 1
9. I worry about being financially secure. 5 4 3 2 1
10. I sometimes boast about my financial wealth or how 5 4 3 2 1
much money I make.
11. I keep track of my investments and financial wealth. 5 4 3 2 1
12. I usually say “I can’t afford it,” even when I can afford 5 4 3 2 1
something.
Money Attitude Scale
Sources: Adapted from J. A. Roberts and C. J. Sepulveda, “Demographics and Money Attitudes: A Test of Yamauchi and Templer’s (1982) Money
Attitude Scale in Mexico,” Personality and Individual Differences, 27 (July 1999), pp. 19–35; K. Yamauchi and D. Templer, “The Development of a Money
Attitude Scale,” Journal of Personality Assessment, 46 (1982), pp. 522–528.
194
Self-Assessment 6.5
ASSESSING YOUR SELF-LEADERSHIP
This exercise is designed to help you understand
self-leadership concepts and assess your self-
leadership tendencies. Self-leadership is the process
of influencing oneself to establish the self-direction
and self-motivation needed to perform a task. Please
indicate the extent to which each statement
in this instrument describes you very well or
does not describe you at all. Complete each
item honestly to get the best estimate of your score
on each self-leadership dimension.
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195
Self-Assessment 6.6
STUDENT EMPOWERMENT SCALE
Empowerment is a concept that applies to people
in a variety of situations. This instrument is specifi-
cally adapted to your position as a student at this
college or university. Indicate the extent to which
you agree or disagree with each statement in this
instrument; then request the results, which
provide an overall score as well as scores on
each of the four dimensions of empower-
ment. Complete each item honestly to get the best
estimate of your level of empowerment.
After reading this chapter, if you need additional information, see www.mhhe.com/mcshane5e
for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/mcshane5e
Google is a hotbed of creativity and innovation in an industry already famed for churning
out new ideas. Among the many conditions that support Google’s creative culture is its
policy of giving engineers 20 percent of their time to develop projects of their choosing.
“Almost everything that is interesting which Google does started out as a 20 percent time
idea,” says Google CEO Eric Schmidt. Google News and the photos linked to Google
Maps were two projects developed from the 20 percent time rule. When an idea gets
developed far enough, Google assigns more people to work on it.
Although Google employees are passionate about their creative
projects, the company also relies on razor-sharp analytic decision
making. “Employees know that decisions about the business are
data-driven,” says Laszlo Bock, Google’s top human resource
executive. Bock’s human resource team carefully analyzes two
dozen performance variables of current staff to make better
decisions about choosing job applicants. Google’s business
product management team has experimented with the placement,
color, and size of ads on Google results pages to decide which
characteristics yield the most clicks and the best revenue.
When a problem or opportunity lacks information, Google tries
to fill in some of the missing pieces through “prediction markets”
in which employees use play money (called Goobles) to cast
their bets on strategic and operational questions. Google has
conducted hundreds of these markets on issues ranging from
whether a particular project will be completed on time to how
many people will use Gmail (Google’s e-mail system) by the end
of the quarter. “Google uses these bets for its own planning.
It helps them make decisions,” says an economist studying
Google’s prediction markets. 1
Google is a hotbed of creativity and innovation
by giving staff 20 percent of their time to work on
pet projects, using evidence-based experiments
to test ideas, and involving employees in
organizational decisions.
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7
Decision Making
and Creativity
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Describe the six stages in the rational
choice decision process.
2. Explain why people have difficulty
identifying problems and opportunities.
3. Explain why people do not follow the
rational choice model when evaluating
alternative choices.
4. Describe three ways in which emotions
influence the selection of alternatives.
5. Outline how intuition operates.
6. Describe four causes of escalation of
commitment.
7. Describe four benefits of employee
involvement in decision making.
8. Identify four contingencies that affect the
optimal level of employee involvement.
9. Outline the four steps in the creative
process.
10. Describe the characteristics of employees
and the workplace that support creativity.
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198 Part Two Individual Behavior and Processes
Many Google watchers claim that the company’s success is largely driven by its su-
perb execution of decision making and creativity. One recent article even “reverse-
engineered” Google’s innovation process as a guide for others to follow. At the same
time, critics point to signs that Google’s rapid growth (it now employs almost 20,000
people) is creating a bureaucracy that undermines its creativity and that Google’s ob-
session with hiring elite engineers has constrained its diversity. 2 Decision making is
the conscious process of making choices among alternatives with the intention of mov-
ing toward some desired state of affairs. 3 This chapter begins by outlining the rational
choice paradigm of decision making. Then we examine this perspective more criti-
cally by recognizing how people identify problems and opportunities, choose among
alternatives, and evaluate the success of their decisions differently from the rational
model. Bounded rationality, escalation of commitment, and intuition are three of the
more prominent topics in this section. Next, we explore the role of employee involve-
ment in decision making, including the benefits of involvement and the factors that
determine the optimal level of involvement. The final section of this chapter examines
the factors that support creativity in decision making, including characteristics of cre-
ative people, work environments that support creativity, and creativity activities.
After reading the next two sections, you should be able to:
1. Describe the six stages in the rational choice decision process.
2. Explain why people have difficulty identifying problems and
opportunities.
Rational Choice Paradigm of Decision Making
How should people make decisions in organizations? Most business leaders would
likely answer this question by saying that effective decision making involves identify-
ing, selecting, and applying the best possible alternative. In other words, the best de-
cisions use pure logic and all available information to choose the alternative with the
highest value—such as highest expected profitability, customer satisfaction, employee
well-being, or some combination of these outcomes. For example, Google relies on
careful analysis to choose the best job applicants, the best way to present its advertise-
ments on the Web page, the best companies to acquire, the best projects to fund, and
so on. These decisions sometimes involve complex calculations of data to produce a
formula that points to the best choice.
In its extreme form, this calculative view of decision making represents the rational
choice paradigm, which has dominated the philosophy and scholarship of de-
cision making in Western societies for most of written history. It was established
2,500 years ago when Plato and his contemporaries in ancient Greece raised logical
debate and reasoning to a fine art. A few centuries later, Greek and Roman Stoics
insisted that one should always “follow where reason leads” rather than fall victim to
passion and emotions. About 400 years ago, Descartes and other European philoso-
phers emphasized that the ability to make logical decisions is one of the most impor-
tant accomplishments of human beings. In the 1700s, Scottish philosophers proposed
that the best choice is the one that offers the “greatest good for the greatest number.”
This eventually evolved into the ethical principle of utilitarianism (described in
Chapter 2), as well as maximization, which is at the heart of contemporary economics.
By the 1900s, social scientists and mathematicians had developed elegant rational
decision making
The conscious process
of making choices
among alternatives with
the intention of moving
toward some desired
state of affairs.
Learning
Objectives
rational choice
paradigm
The view in decision
making that people
should—and typically
do—use logic and all
available information to
choose the alternative
with the highest value.
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Chapter 7 Decision Making and Creativity 199
choice models and formulas that are now embedded in operations research, econom-
ics, and other decision sciences. 4
The ultimate principle of the rational choice paradigm is to choose the alternative
with the highest subjective expected utility. 5 Subjective expected utility is the prob-
ability (expectation) of satisfaction (utility) for each alternative. Rational choice as-
sumes that decision makers should (and do) select the alternative that offers the
greatest level of happiness (i.e., maximization), such as highest returns for stockhold-
ers and highest satisfaction for customers, employees, government, and other stake-
holders. Subjective expected utility involves calculating (1) the probability that each
alternative will cause any of the possible outcomes to occur and (2) the value (or hap-
piness) of those possible outcomes. Consider Google’s hiring process, which involves
screening several hundred thousand applications each year to select a few thousand
of those applicants. The company wants to hire the best people—those who will pro-
vide the greatest value to Google. In other words, it wants to choose applicants with
the highest subjective expected utility. Google estimates the potential of each appli-
cant using a selection formula and selects those with the highest scores.
Along with its principle of making decisions around subjective expected utility, the
rational choice paradigm assumes that decision makers follow the systematic process
illustrated in Exhibit 7.1 . 6 The first step is to identify the problem or recognize an op-
portunity. A problem is a deviation between the current and the desired situation—the
gap between “what is” and “what ought to be.” This deviation is a symptom of more
fundamental root causes that need to be corrected. 7 An opportunity is a deviation be-
tween current expectations and a potentially better situation that was not previously
expected. In other words, decision makers realize that some decisions may produce
results beyond current goals or expectations.
The second step involves deciding how to process the decision. 8 One issue is whether
the decision maker has enough information or needs to involve others in the process.
Later in this chapter, we’ll examine the contingencies of employee involvement in
the decision. Another issue is whether the decision is programmed or nonpro-
grammed. Programmed decisions follow standard operating procedures; they have been
resolved in the past, so the optimal solution has already been identified and docu-
mented. In contrast, nonprogrammed decisions require all steps in the decision model
Exhibit 7.1
Rational Choice
Decision-Making
Process
Rational
Choice
Decision-
Making
Process
subjective expected
utility
The probability (expec-
tation) of satisfaction
(utility) resulting from
choosing a specific
alternative in a decision.
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200 Part Two Individual Behavior and Processes
because the problems are new, complex, or ill-defined. The third step is to identify
and develop a list of possible solutions. This usually begins by searching for ready-
made solutions, such as practices that have worked well on similar problems. If an
acceptable solution cannot be found, then decision makers need to design a custom-
made solution or modify an existing one.
The fourth step in the rational choice decision process is to choose the alternative
with the highest subjective expected utility. This calls for all possible information about
all possible alternatives and their outcomes, but the rational choice paradigm assumes
this can be accomplished with ease. The fifth step in the rational choice decision pro-
cess is to implement the selected alternative. Rational choice experts have little to say
about this step because they assume implementation occurs without any problems.
This is followed by the sixth step, evaluating whether the gap has narrowed between
“what is” and “what ought to be.” Ideally, this information should come from system-
atic benchmarks so that relevant feedback is objective and easily observed.
Problems with the Rational Choice Paradigm
The rational choice paradigm seems so logical, yet it is impossible to apply in reality.
One reason is that the model assumes people are efficient and logical information pro-
cessing machines. But as we will discuss over the next few pages, people have difficulty
recognizing problems; they cannot (or will not) simultaneously process the huge volume
of information needed to identify the best solution; and they have difficulty recognizing
when their choices have failed. The second reason why the rational model doesn’t fit
reality is that it focuses on logical thinking and completely ignores the fact that emotions
also influence—perhaps even dominate—the decision-making process. As we shall dis-
cover in this chapter, emotions both support and interfere with our quest to make better
decisions. 9 With these points in mind, let’s look again at each step in the rational choice
decision-making process, but with more detail about what really happens.
Identifying Problems and Opportunities
When Albert Einstein was asked how he would save the world in one hour, he replied
that the first 55 minutes should be spent defining the problem and the last 5 minutes
solving it. 10 Einstein’s point is that problem identification is not just the first step in deci-
sion making; it is arguably the most important step. But problems and opportunities do
not appear on our desks as well-labeled objects. Instead, they are conclusions that we
form from information that something is wrong or that a higher standard is possible.
You might think that people recognize problems and opportunities on the basis of
systematic analysis of the facts. In reality, this process begins much earlier and with-
out conscious deliberation. Recall from earlier chapters (Chapters 3, 4, and 5) that
preferences are formed as soon as we receive information, not after it has been care-
fully analyzed. 11 Specifically, we evaluate information the moment we perceive it by
attaching emotional markers (anger, caution, delight, etc.) to that information. These
automatic emotional responses shape our perception that something is a problem or
an opportunity or is irrelevant. For example, employees form an opinion of new co-
workers as soon as they first meet them, and this initial impression influences how
quickly new employees are viewed as successes (opportunities) or failures (problems).
If the new employee is viewed negatively, any instances of failure are quickly la-
beled as problems. But if co-workers form a positive initial impression of a new
employee, that newcomer’s failures are less likely to be viewed as problems—they
are ignored or dismissed as temporary setbacks.
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Chapter 7 Decision Making and Creativity 201
Problems with Problem Identification
The problem identification stage is, itself, filled with problems. Below are five of the
most widely recognized concerns. 12
Stakeholder Framing Employees, clients, and other stakeholders with vested in-
terests try to “frame” the situation by persuading decision makers that the available
information points to a problem or an opportunity or does not have any importance
at all. This framing of facts tends to short-circuit the decision maker’s full assessment
of the situation.
Perceptual Defense People sometimes block out bad news as a coping mecha-
nism. Their brain refuses to see information that threatens their self-concept. This
phenomenon is not true for every one. Some people inherently avoid negative infor-
mation, whereas others are more sensitive to it. Recent studies also report that peo-
ple are more likely to disregard danger signals when they have limited control over
the situation. 13 For example, an investigation of the space shuttle Columbia disaster
revealed that NASA managers rejected suggestions and evidence that the shuttle
and its seven crew members were in trouble (see photo below).
Mental Models Mental models are visual or relational images in our mind of the
external world (see Chapter 3); they fill in information that we don’t immediately see,
which helps us understand and navigate in our surrounding environment. Many
mental images are also prototypes—they represent models of how things should be.
Unfortunately, these mental models also blind us from seeing unique problems or
opportunities because they produce a negative evaluation of things that are dissimilar
to the mental model. If an idea doesn’t fit the existing mental model of how things
should work, the idea is dismissed as unworkable or undesirable.
Restrictive mental models explain why many excellent products and creative ideas
are initially rejected by industry veterans. For example, Apple, Inc.’s “1984” television
No Problem, Houston? In February 2003, the NASA space shuttle Columbia
disintegrated during reentry, killing all seven crew members. The disintegra-
tion was technically caused by a hole in the left wing, created when a large
piece of foam debris struck the wing during liftoff. However, a special acci-
dent investigation board concluded that NASA’s middle management con-
tinually resisted attempts to recognize that the Columbia was in trouble and
therefore made no attempt to prevent loss of life. For example, photos from
military satellites would have determined whether the foam caused serious
wing damage. But when a team of engineers requested these photos, NASA
management shot back an e-mail just 26 minutes later rejecting the request
without explanation. Managers also questioned tests suggesting that a
chunk of foam debris could cause wing damage, yet they were quick to accept
a faulty test showing that the foam could not damage the wing. In addition,
the accident board reported that NASA managers criticized those who be-
lieved that a problem existed. One engineer was called “alarmist”; NASA’s
lead flight director said that the “rationale was lousy” in a report submitted
by an engineering team concerned about the wing damage. In one meeting,
Columbia’s lead flight director candidly admitted: “I don’t think there is much
we can do, so you know it’s not really a factor during the flight because
there isn’t much we can do about it.”14
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202 Part Two Individual Behavior and Processes
commercial, which launched the Apple Macintosh during the 1984 Super Bowl, is
considered the best television commercial in history (as rated by Advertising Age ), yet
it almost didn’t see the light of day. Unlike traditional commercials, which name the
product throughout and illustrate its features, the 60-second “1984” ad shows a female
athlete hurling a sledgehammer at a giant TV screen of an Orwellian Big Brother,
liberating thousands of subjugated followers. The Macintosh computer isn’t shown at
all, and its name is revealed only during the last eight seconds. Apple’s external
board members loathed the ad because it was so contrary to their mental prototype
of what a good ad should look like. Some claimed it was the worst commercial in his-
tory; others proposed firing Apple’s ad agency. On the basis of this reaction, Apple
CEO John Sculley asked Jay Chiat (the head of Apple’s ad agency, Chiat-Day) to sell
the company’s only two Super Bowl time slots. Instead, Chiat sold the short 30-second
space but claimed that he could not find a buyer for the 60-second slot. The single
60-second ad shown during the Super Bowl had such a huge effect that it was featured
on evening news broadcasts over the next several days. A month later, Apple’s board
members applauded the Macintosh team for a successful launch and apologized for
their misjudgment of the “1984” commercial. 15
Decisive Leadership Studies report that employees rate leaders as more effective
when they are more decisive. 16 Being decisive includes quickly forming an opinion of
whether an event signals a problem or opportunity. Consequently, eager to look
effective, many leaders quickly announce problems or opportunities before having a
chance to logically assess the situation. The result, according to research, is more
often a poorer decision than would result if more time had been devoted to identifying
the problem and evaluating the alternatives.
Solution-Focused Problems Decision makers have a tendency to define problems
as veiled solutions. 17 For instance, someone might say: “The problem is that we need
more control over our suppliers.” This statement doesn’t describe the problem; it is
really a slightly rephrased presentation of a solution to an ill- defined problem. Deci-
sion makers engage in solution-focused problem identification because it provides
comforting closure to the otherwise ambiguous and uncertain nature of problems.
People with a strong need for cognitive closure (those who feel uncomfortable with
ambiguity) are particularly prone to solution-focused problems. Some decision makers
take this solution focus a step further by seeing all problems as solutions that have
worked well for them in the past, even though
they were applied under different circumstances.
Again, the familiarity of past solutions makes the
current problem less ambiguous or uncertain.
Identifying Problems and
Opportunities More Effectively
Recognizing problems and opportunities will always
be a challenge, but one way to improve the process
is by becoming aware of the five problem identifi-
cation biases described above. For example, by rec-
ognizing that mental models restrict a person’s
perspective of the world, decision makers are more
motivated to consider other perspectives of reality.
Along with increasing their awareness of problem
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Chapter 7 Decision Making and Creativity 203
Learning
Objectives
identification flaws, leaders require considerable willpower to resist the temptation of
looking decisive when a more thoughtful examination of the situation should occur. A
third way to improve problem identification is for leaders to create a norm of “divine
discontent.” They are never satisfied with the status quo, and this aversion to compla-
cency creates a mindset that more actively searches for problems and opportunities. 18
Finally, employees can minimize problem identification blunders by discussing
the situation with colleagues. The logic here is that blind spots in problem identifica-
tion are more easily identified by hearing how others perceive certain information
and diagnose problems. Opportunities also become apparent when outsiders explore
this information from their different mental models. Google, described at the begin-
ning of this chapter, actively applies this practice. The company deliberately puts
employees into teams so that they bounce ideas off each other. In addition, the com-
pany has an online “suggestion box” where employees post their ideas (including
perspectives of a problem or opportunity) so that other Google employees can com-
ment on and rate them. 19
After reading the next two sections, you should be able to:
3. Explain why people do not follow the rational choice model when
evaluating alternative choices.
4. Describe three ways in which emotions influence the selection of
alternatives.
5. Outline how intuition operates.
6. Describe four causes of escalation of commitment.
Evaluating and Choosing Alternatives
According to the rational choice paradigm of decision making, people rely on logic to
evaluate and choose alternatives. This paradigm assumes that decision makers have
well-articulated and agreed-on organizational goals, that they efficiently and simulta-
neously process facts about all alternatives and the consequences of those alterna-
tives, and that they choose the alternative with the highest payoff.
Nobel Prize–winning organizational scholar Herbert Simon questioned these as-
sumptions a half century ago. He argued that people engage in bounded rationality
because they process limited and imperfect information and rarely select the best
choice. 20 Simon and other OB experts report that the rational choice paradigm differs
in several ways from how people actually evaluate and choose alternatives. These dif-
ferences, as shown in Exhibit 7.2, are so significant that even economists have shifted
from rational choice to bounded rationality assumptions in their theories. Let’s look at
these differences in terms of goals, information processing, and maximization.
Problems with Goals
The rational choice paradigm assumes that organizational goals are clear and
agreed-on. In fact, these conditions are necessary to identify “what ought to be”
and, therefore, provide a standard against which each alternative is evaluated. Un-
fortunately, organizational goals are often ambiguous or in conflict with each other.
One survey reported that 25 percent of managers and employees felt decisions are
delayed because of difficulty agreeing on what they want the decision to achieve. 21
bounded rationality
The view that people
are bounded in their
decision-making capa-
bilities, including access
to limited information,
limited information pro-
cessing, and tendency
toward satisficing rather
than maximizing when
making choices.
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204 Part Two Individual Behavior and Processes
Problems with Information Processing
The rational choice paradigm also makes several assumptions about the human ca-
pacity to process information. It assumes that decision makers can process informa-
tion about all alternatives and their consequences, whereas this is not possible in
reality. Instead, people evaluate only a few alternatives and only some of the main
outcomes of those alternatives. 22 For example, there may be dozens of computer
brands to choose from and dozens of features to consider, yet people typically evaluate
only a few brands and a few features.
A related problem is that decision makers typically evaluate alternatives sequen-
tially rather than all at the same time. As a new alternative comes along, it is immedi-
ately compared to an implicit favorite —an alternative that the decision maker prefers
and that is used as a comparison with other choices. When choosing a new computer
system, for example, people typically have an implicit favorite brand or model in
their heads that they use to compare with the others. This sequential process of com-
paring alternatives with an implicit favorite occurs even when decision makers aren’t
consciously aware that they are doing this. 23
Although the implicit-favorite comparison process seems to be hardwired in human
decision making (i.e., we naturally compare things), it often undermines effective deci-
sion making because people distort information to favor their implicit favorite over the
Exhibit 7.2 Rational Choice Assumptions versus Organizational Behavior Findings about Choosing
Alternatives
Goals are clear, compatible, and
agreed-on.
Rational Choice
Paradigm Assumptions
Observations from
Organizational Behavior
Decision makers can calculate all
alternatives and their outcomes.
Decision makers evaluate all
alternatives simultaneously.
Decision makers use absolute
standards to evaluate alternatives.
Decision makers use factual
information to choose alternatives.
Decision makers choose the
alternative with the highest payoff.
Goals are ambiguous, in conflict,
and lack full support.
Decision makers have limited
information processing abilities.
Decision makers evaluate
alternatives sequentially.
Decision makers evaluate
alternatives against an implicit
favorite.
Decision makers process
perceptually distorted information.
Decision makers choose the
alternative that is good enough
(satisficing).
implicit favorite
A preferred alternative
that the decision maker
uses repeatedly as a
comparison with other
choices.
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Chapter 7 Decision Making and Creativity 205
alternative choices. They tend to ignore problems with the implicit favorite and advan-
tages of the alternative. Decision makers also overweight factors on which the implicit
favorite is better and underweight areas in which the alternative is superior. 24
Biased Decision Heuristics According to the rational choice paradigm, the best
choices have the highest subjective expected utility. However, psychologists Amos
Tversky and Daniel Kahneman discovered that human beings have built-in decision
heuristics —unstructured and often nonconscious modes of reasoning or rules of
thumb—that bias an individual’s perceived probabilities that specific outcomes will
occur. Probabilities represent the expectancies in rational choice thinking, so biased
probabilities result in less rational decision making. Three of the most widely studied
heuristic biases are the anchoring and adjustment heuristic, availability heuristic, and
representativeness heuristic: 25
• Anchoring and adjustment heuristic. This heuristic states that we are influ-
enced by an initial anchor point and do not sufficiently move away from that
point as new information is provided. 26 The result is that the initial anchor point
biases our estimate above or below the true value of what we are trying to esti-
mate. The anchoring and adjustment heuristic is used to advantage when nego-
tiators start with a high initial offer. The other party in the negotiation may
initially experience sticker shock but eventually feels more comfortable accept-
ing a high price than he or she would if the initial offer had been lower. Some
experts suggest that the anchoring and adjustment heuristic also partially ex-
plains the primacy effect—people do not adjust their perceptions and attitudes
toward someone after they have formed an initial impression of the person.
• Availability heuristic. Objects or events are assigned higher probabilities of
occurring if they are easier to recall from memory. This makes sense to some
extent, because we generally do have an easier time recalling frequent events.
However, the ease of recalling something is also affected by other factors, which
distort our probability estimates. 27 One biasing influence is that recent events
are easier to recall than are events further in the past. Our estimate of the per-
centage of executives who are greedy is higher soon after hearing news about
high executive salaries than at a time when there is no recent news about execu-
tive salaries. This ease of recall increases our perception that executives are
highly paid and greedy. Another influence on our recall is the emotional
strength of the event. Shark attacks are an example. These attacks on human
beings receive considerable media attention and generate gory images in our
minds, so they are easy to recall. Because of this ease of recollection, we think
the probability of being bitten by sharks is much higher than is true.
• Representativeness heuristic. People tend to evaluate probabilities of events
or objects by the degree to which they resemble (are representative of) other
events or objects rather than on objective probability information. 28 Stereotyp-
ing is one form of this bias. Suppose you are asked to identify a student’s college
major on the basis of only the person’s personality profile and the fact that the
person is in a population of 25 engineers and 75 social science students. If the
personality fits your stereotype of engineers, you would likely identify the stu-
dent as an engineer even though he or she is three times as likely to be a social
science major. Another form of the representativeness heuristic, known as the
clustering illusion, is the tendency to see patterns on the basis of a small sample
of events that, in fact, are random. For example, most players and coaches
believe that players are more likely to have a successful shot on the net when
anchoring and
adjustment heuristic
A natural tendency for
people to be influenced
by an initial anchor point
such that they do not
sufficiently move away
from that point as new
information is provided.
availability heuristic
A natural tendency to
assign higher probabili-
ties to objects or events
that are easier to recall
from memory, even
though ease of recall
is also affected by non-
probability factors (e.g.,
emotional response,
recent events).
representativeness
heuristic
A natural tendency to
evaluate probabilities of
events or objects by the
degree to which they
resemble (are represen-
tative of) other events
or objects rather than
on objective probability
information.
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206 Part Two Individual Behavior and Processes
their previous two or three shots have been successful. The representative-
ness heuristic is at work here because players and coaches believe these
sequences are causally connected (representative) when, in reality, they are
random events.
Problems with Maximization
One of the main assumptions of the rational choice paradigm is that people want to
(and are able to) choose the alternative with the highest payoff (i.e., the highest sub-
jective expected utility). Yet rather than aiming for maximization, people engage in
satisficing —they choose an alternative that is satisfactory or “good enough.” 29 In ef-
fect, they evaluate alternatives sequentially and select the first one perceived to be
above a standard of acceptance for their needs and preferences. One reason why
satisficing occurs is that, as mentioned earlier, decision makers have a natural ten-
dency to evaluate alternatives sequentially, not all at the same time. They evaluate
each alternative against the implicit favorite and eventually select an option that
scores above a subjective minimum point considered to be good enough.
The other reason why people engage in satisficing rather than maximization is that
choosing the best alternative demands more information processing capacity than
people possess or are willing to apply. Studies have found that people like to have
choices, but when exposed to many alternatives, they become cognitive misers by
engaging in less optimal decision making. 30 Such decision-making efficiencies include
discarding alternatives that fail a threshold level on one or two factors (such as color
or size), comparing among only a few alternatives rather than all choices, and choos-
ing the first alternative above a preset standard (i.e., satisficing). One study found
that, compared to people given few alternatives, those given a large number of alter-
natives subsequently experienced less physical stamina, had more difficulty perform-
ing arithmetic calculations, were less resilient in the face of failure, and engaged in
more procrastination. In other words, making the best choice among many alterna-
tives can be cognitively and emotionally draining.
One other observation suggests that people lack information processing capacity
to select the best alternative. Research has found that when people are given more
alternatives, they are less likely to make any choice at all. This problem was high-
lighted in a study of consumer responses to two jam-tasting booths in a grocery store,
one displaying 6 types of jam and the other displaying 24 flavors. Thirty percent of
shoppers who stopped at the 6-jam display bought some jam; only 3 percent of shop-
pers who stopped by the 24-jam display bought jam. The larger number of choices
discouraged customers from making any purchase decision. These results are similar
to those in other studies where people made decisions about chocolates, term essays,
and pension plan investment options. 31 Four decades ago, futurist Alvin Toffler
warned about the increasing risk of choice overload: “People of the future may suffer
not from an absence of choice, but from a paralyzing surfeit of it. They may turn out
to be victims of that peculiarly super-industrial dilemma: overchoice.” 32
Evaluating Opportunities
Opportunities are just as important as problems, but what happens when an opportu-
nity is “discovered” is quite different from when a problem is discovered. According
to a recent study of decision failures, decision makers do not evaluate several alterna-
tives when they find an opportunity; after all, the opportunity is the solution, so why look
for others! An opportunity is usually experienced as an exciting and rare revelation,
satisficing
Selecting an alternative
that is satisfactory or
“good enough,” rather
than the alternative
with the highest value
(maximization).
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Chapter 7 Decision Making and Creativity 207
so decision makers tend to have an emotional attachment to the opportunity. Unfor-
tunately, this emotional preference motivates decision makers to apply the opportu-
nity and short-circuit any detailed evaluation of it. 34
Emotions and Making Choices
Herbert Simon and many other experts have presented plenty of evidence that people
do not evaluate alternatives nearly as well as is assumed by the rational choice paradigm.
However, they neglected to mention another glaring weakness with rational choice: It
completely ignores the effect of emotions in human decision making. Just as both the
rational and emotional brain centers alert us to problems, they also influence our choice
of alternatives. 35 Emotions affect the evaluation of alternatives in three ways.
Emotions Form Early Preferences The emotional marker process described ear-
lier in this chapter as well as in previous chapters (Chapters 3 through 5) determines
our preferences for each alternative. Our brain very quickly attaches specific emo-
tions to information about each alternative, and our preferred alternative is strongly
influenced by those initial emotional markers. Of course, logical analysis also influ-
ences which alternative we choose, but it requires strong logical evidence to change
our initial preferences (initial emotional markers). Yet even logical analysis depends
on emotions to sway our decision. Specifically, neuroscientific evidence says that in-
formation produced from logical analysis is tagged with emotional markers that then
motivate us to choose or avoid a particular alternative. Ultimately, emotions, not ra-
tional logic, energize us to make the preferred choice. In fact, people with damaged
emotional brain centers have difficulty making choices.
Emotions Change the Decision Evaluation Process A considerable body of litera-
ture indicates that moods and specific emotions influence the process of evaluating
Short-Circuited by Choice Overload Companies in many countries typically
offer defined-contribution pension plans [typically 401(k) plans in the United
States]. The employee contributes a fixed amount of pretax earnings into the
plan each year (often with matching employer contributions), and retirement
income depends on the investment performance of those funds. Increas-
ingly, companies are giving employees the responsibility of deciding how
their pension assets should be invested. In some cases, employees are pre-
sented with a list of up to 100 investment alternatives (money market, bal-
anced funds, property funds, ethical funds, growth funds, etc.). However,
studies have found that when presented with a large number of investment
alternatives, employees choose the least cognitively challenging choice—
they don’t make any decision at all. They avoid signing up for the pension
plan, even though participation in the plan offers short-term tax advantages
and long-term retirement financial security. Fortunately, some companies
have found a way to increase pension plan participation rates—they give
staff only a few investment alternatives. In one extreme example, employees
receive a card on which they tick one choice—a small pretax deduction in-
vested in a combination of money market and balanced mutual funds. Com-
panies that have introduced this very simple decision form report a
25 percent increase in employee participation rates in the company’s
pension plan.33
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208 Part Two Individual Behavior and Processes
alternatives. 36 For instance, we pay more attention to details when in a negative mood,
possibly because a negative mood signals that there is something wrong that requires
attention. When in a positive mood, on the other hand, we pay less attention to details
and rely on a more programmed decision routine. Research also suggests that decision
makers rely on stereotypes and other shortcuts to speed up the choice process when
they experience anger. Anger also makes them more optimistic about the success of
risky alternatives, whereas the emotion of fear tends to make them less optimistic.
Overall, emotions shape how we evaluate information, not just which choice we select.
Emotions Serve as Information When We Evaluate Alternatives The third
way that emotions influence the evaluation of alternatives is through a process called
“emotions as information.” Marketing experts have found that we listen in on our
emotions to help identify the preferred option. 37 You might think of this as a tempo-
rary improvement in emotional intelligence. Most emotional experiences remain be-
low the level of conscious awareness, but people actively try to be more sensitive to
these subtle emotions when making a decision.
When buying a new car, for example, you not only logically evaluate each vehi-
cle’s features; you also try to gauge your emotions when visualizing what it would be
like to own each of the alternative cars on your list of choices. Even if you have solid
information about the quality of each vehicle on key features (purchase price, fuel
efficiency, maintenance costs, resale value, etc.), you are swayed by your emotional
reaction to each vehicle and actively try to sense that emotional response when think-
ing about it. Some people pay more attention to these gut feelings, and personality
tests such as the Myers-Briggs Type Indicator (see Chapter 2) identify individuals who
listen in on their emotions more than others. 38 But all of us use our emotions as infor-
mation to some degree. This phenomenon ties directly into our next topic, intuition.
Intuition and Making Choices
Greg McDonald felt uneasy about a suspicious-looking crack in the rock face, so the
veteran miner warned a co-worker to stay away from the area. “There was no indica-
tion there was anything wrong—just a little crack,” McDonald recalled. A few minutes
later, the ceiling in the mine shaft 3,000 feet underground caved in. Fortunately, the
co-worker had heeded McDonald’s advice. “If he had been there, he would be dead,”
McDonald said in an interview following a near-sleepless night after the incident. 39
The gut instinct that helped Greg McDonald save his co-worker’s life is known as
intuition —the ability to know when a problem or opportunity exists and to select the
best course of action without conscious reasoning. 40 Intuition is both an emotional expe-
rience and a rapid nonconscious analytic process. As mentioned in the previous section,
the gut feelings we experience are emotional signals that have enough intensity to make
us consciously aware of them. These signals warn us of impending danger, such as a
dangerous mine wall, or motivate us to take advantage of an opportunity. Some intuition
also directs us to preferred choices relative to other alternatives in the situation.
All gut feelings are emotional signals, but not all emotional signals are intuition.
The key distinction is that intuition involves rapidly comparing our observations with
deeply held patterns learned through experience. 41 These templates represent tacit
knowledge that has been implicitly acquired over time. They are mental models that
help us to understand whether the current situation is good or bad, depending on
how well that situation fits our mental model. When a template fits or doesn’t fit the
current situation, emotions are produced that motivate us to act. Greg McDonald’s
years of experience produced mental templates of unsafe rock faces that matched
what he saw on that fateful day. Studies have also found that chess masters receive
intuition
The ability to know when
a problem or opportunity
exists and to select the
best course of action
without conscious
reasoning.
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Chapter 7 Decision Making and Creativity 209
emotional signals when they sense an opportunity through quick observation of a
chessboard. When given the opportunity to think about the situation, chess masters
can explain why they see a favorable move on the chessboard. However, their intu-
ition signals the opportunity long before this rational analysis takes place.
As mentioned, some emotional signals are not intuition. As a result, some experts
warn that we should not trust our gut feelings. The problem is that emotional responses
are not always based on well-grounded mental models. Instead, they occur when we
compare the current situation to more remote templates, which may or may not be
relevant. A new employee might feel confident about relations with a supplier, whereas
an experienced employee senses potential problems. The difference is that the new
employee relies on templates from other experiences or industries that might not work
well in this situation. Thus, whether the emotions we experience in a situation represent
intuition or not depends largely on our level of experience in that situation.
So far, we have described intuition as an emotional experience (gut feeling) and a
process in which we compare the current situation with well-established templates of the
mind. Intuition also relies on action scripts —programmed decision routines that speed up
our response to pattern matches or mismatches. 42 Action scripts effectively shorten the
decision-making process by jumping from problem identification to selection of a solu-
tion. In other words, action scripting is a form of programmed decision making. Action
scripts are generic, so we need to consciously adapt them to the specific situation.
Making Choices More Effectively
It is very difficult to get around the human limitations of making choices, but a few
strategies help to minimize these concerns. One important discovery is that deci-
sions tend to have a higher failure rate when leaders are decisive rather than con-
templative about the available options. Of course, decisions can also be ineffective
when leaders take too long to make a choice, but research indicates that a lack of
logical evaluation of alternatives is a greater concern. By systematically assessing
alternatives against relevant factors, decision makers minimize the implicit-favorite
and satisficing problems that occur when they rely on general subjective judgments.
This recommendation does not suggest that we ignore intuition; rather, it suggests
that we use it in combination with careful analysis of relevant information. 43
A second piece of advice is that we need to remember that decisions are influenced
by both rational and emotional processes. With this awareness, some decision makers
deliberately revisit important issues so they look at the information in different moods
and have allowed their initial emotions to subside. For example, if you sense that your
team is feeling somewhat too self-confident when making an important competitive
decision, you might decide to have the team members revisit the decision a few days
later when they are thinking more critically. Another strategy is scenario planning,
which is a disciplined method for imagining possible futures. It typically involves
thinking about what would happen if a significant environmental condition changed
and what the organization should do to anticipate and react to such an outcome. 44
Scenario planning is a useful vehicle for choosing the best solutions under possible
scenarios long before they occur, because alternative courses of action are evaluated
without the pressure and emotions that occur during real emergencies.
Implementing Decisions
Implementing decisions is often skipped over in most writing about the decision-making
process. Yet leading business writers emphasize that execution—translating decisions into
action—is one of the most important and challenging tasks of leaders. A survey of 3,600
scenario planning
A systematic process
of thinking about alter-
native futures and
what the organization
should do to anticipate
and react to those
environments.
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210 Part Two Individual Behavior and Processes
managers identified the “drive for results” as one of the five most important competen-
cies of effective managers. This evidence is backed up by Larry Bossidy’s experience
leading thousands of managers. “When assessing candidates, the first thing I looked for
was energy and enthusiasm for execution,” says the former CEO of Honeywell and
Allied Signal. The art and science of implementing decisions will be covered more fully
in later chapters, particularly those on leadership and organizational change. 45
Evaluating Decision Outcomes
Contrary to the rational choice paradigm, decision makers aren’t completely honest
with themselves when evaluating the effectiveness of their decisions. One concern is
that after making a choice, decision makers tend to support their choice by forgetting
or downplaying the negative features of the selected alternative and emphasizing its
positive features. This perceptual distortion, known as postdecisional justification,
results from the need to maintain a positive self-concept. 46 Postdecisional justification
gives people an excessively optimistic evaluation of their decisions, but only until
they receive very clear and undeniable information to the contrary. Unfortunately, it
also inflates the decision maker’s initial evaluation of the decision, so reality often
comes as a painful shock when objective feedback is finally received.
Escalation of Commitment
In addition to postdecisional justification, people poorly evaluate their decision out-
comes due to escalation of commitment —the tendency to repeat an apparently bad
decision or allocate more resources to a failing course of action. 47 Scotland’s new
parliament building is one example of escalation of commitment. Originally esti-
mated at £50 million (US$80 million), the Holyrood building eventually cost £400
million and took twice as long to construct. Another example is the construction of
Denver International Airport, which was delayed because of a badly flawed state-of-
the-art automated baggage-handling system. The airport opened 16 months late and
between $1 and $2 billion overbudget, using mainly an older baggage system; the
new baggage system was put to some use but was abandoned a decade later due to
high costs. A third example is the Darlington nuclear power plant in Ontario, Canada,
which had an estimated cost of $2 billion (some claim the estimate was $5 billion)
and was eventually completed at a cost of more than $14 billion. This huge debacle
prompted the Ontario government to deregulate the electricity industry and split
Ontario Hydro (now called Hydro One) into two operating companies. Ironically, a
former CEO of Ontario Hydro warned that Darlington and other megaprojects invite
escalating commitment because “once you commit to them, there’s very little you can
do to reverse that commitment.” 48
Causes of Escalating Commitment The four main reasons why people are led
deeper and deeper into failing projects are self-justification, prospect theory effect,
perceptual blinders, and closing costs.
• Self-justification. Individuals are motivated to maintain their course of action
when they have a high need to justify their decision. This self-justification is par-
ticularly evident when decision makers are personally identified with the proj-
ect and have staked their reputations to some extent on the project’s success. 49
The Irish government’s PPARS project (see photo) likely experienced escala-
tion to some degree for this reason. The reputations of government politicians
postdecisional
justification
The tendency to support
the selected alternative
in a decision by forget-
ting or downplaying the
negative features of
that alternative, em-
phasizing its positive
features, and doing the
opposite for alternatives
not selected.
escalation of
commitment
The tendency to repeat
an apparently bad deci-
sion or allocate more
resources to a failing
course of action.
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Chapter 7 Decision Making and Creativity 211
and health board officials depended on the success of PPARS, and pouring
more money into the project symbolized their continued support and evidence
that the decision was a wise one.
• Prospect theory effect. You would think that people dislike losing $50 just as much
as they like receiving $50, but that isn’t true for most of us. The negative emo-
tions we experience when losing a particular amount are stronger than the posi-
tive emotions we experience when gaining the same amount. Consequently, we
have a tendency to take more risks to avoid losses. This effect, called prospect
theory, is a second explanation for escalation of commitment. Stopping a proj-
ect is a certain loss, which is more painful to most people than the uncertainty
of success associated with continuing to fund the project. Given the choice, de-
cision makers choose the less painful option. 51
Irish Health under re-PPARS In the mid-1990s, executives at five health boards across Ireland decided
to develop a common payroll system, called PPARS (payroll, payment, and related systems). Using well-
established SAP software, the project would be done in three years at a total estimated cost of US$12 million.
Health department officials were enthusiastic about PPARS’ many benefits, but four years later the system
was still far from completion even though costs had more than doubled to $25 million. Asked in 2002 to
evaluate the project, Hay Associates concluded that PPARS was worth continuing, even if only to recoup
the funds spent so far. The catch, however, was that the government needed to fork over another $120 million,
which it agreed to do. By 2005, Ireland’s finance department was sounding alarm bells that PPARS costs
had spiraled out of control and the operational parts of the system were error-prone. The most embarrass-
ing example was a health department employee who received a $1.5 million paycheck one week. The Irish
government halted the rollout of PPARS, yet senior health officials remained confident in its success, order-
ing staff as late as May 2007 to “realize the benefits” of the system. PPARS was officially axed in July 2007.
The estimated cost of the failed project: somewhere between $250 and $350 million.50
prospect theory
A natural tendency to
feel more dissatis-
faction from losing a
particular amount
than satisfaction from
gaining an equal
amount.
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212 Part Two Individual Behavior and Processes
• Perceptual blinders. Escalation of commitment sometimes occurs because decision
makers do not see the problems soon enough. 52 They nonconsciously screen
out or explain away negative information to protect self-esteem. Serious prob-
lems initially look like random errors along the trend line to success. Even when
decision makers see that something is wrong, the information is sufficiently
ambiguous that it can be misinterpreted or justified.
• Closing costs. Even when a project’s success is in doubt, decision makers will
persist because the costs of ending the project are high or unknown. Terminating
a major project may involve large financial penalties, a bad public image, or
personal political costs.
These four conditions make escalation of commitment look irrational. Usually it is,
but there are exceptions. Studies suggest that throwing more money into a failing
project is sometimes a logical attempt to further understand an ambiguous situation.
This strategy is essentially a variation of testing unknown waters. By adding more
resources, the decision maker gains new information about the effectiveness of these
funds, which provides more feedback about the project’s future success. This strategy
is particularly common where the project has high closing costs. 53
Evaluating Decision Outcomes More Effectively
One of the most effective ways to minimize escalation of commitment and postdeci-
sional justification is to ensure that the people who made the original decision are not
the same people who later evaluate that decision. This separation of roles minimizes
the self-justification effect because the person responsible for evaluating the decision
is not connected to the original decision. A second strategy is to publicly establish a
preset level at which the decision is abandoned or reevaluated. This is similar to a
stop-loss order in the stock market, whereby the stock is sold if it falls below a certain
price. The problem with this solution is that conditions are often so complex that it is
difficult to identify an appropriate point to abandon a project. 54
A third strategy is to find a source of systematic and clear feedback. 55 For exam-
ple, the phenomenally large cost overruns at Scotland’s new parliament building
might have been smaller if the Scottish government had received less ambiguous or
less distorted information from civil servants about the true costs of the project dur-
ing the first few years. (In fact, civil servants hid some of these costs from elected
officials.) 56 A fourth strategy to improve the decision evaluation process is to involve
several people in the evaluation. Co-workers continuously monitor each other and
might notice problems sooner than someone working alone on the project. Em-
ployee involvement offers these and other benefits to the decision-making process,
as we discuss next.
Learning
Objectives
After reading the next two sections, you should be able to:
7. Describe four benefits of employee involvement in decision making.
8. Identify four contingencies that affect the optimal level of employee
involvement.
9. Outline the four steps in the creative process.
10. Describe the characteristics of employees and the workplace that
support creativity.
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Chapter 7 Decision Making and Creativity 213
Employee Involvement in Decision Making
In this world of rapid change and increasing complexity, leaders rarely have enough
information to make the best decision alone. Consequently, they need to rely on the
knowledge and multiple perspectives of employees to more effectively solve prob-
lems or realize opportunities. “The Information Age has brought us into a democratic
age, an age of participation and influence,” says Traci Fenton, founder and CEO of
WorldBlu, a consulting firm that specializes in employee involvement and organiza-
tional democracy. 57
Employee involvement (also called participative management ) refers to the degree
to which employees influence how their work is organized and carried out. 58 Every
organization has some form and various levels of employee involvement. At the low-
est level, participation involves asking employees for information. They do not make
recommendations and might not even know what the problem is about. At a moder-
ate level of involvement, employees are told about the problem and provide recom-
mendations to the decision maker. At the highest level of involvement, the entire
decision-making process is handed over to employees. They identify the problem,
choose the best alternative, and implement their choice.
Benefits of Employee Involvement
For the past half century, organizational behavior scholars have advised that employee
involvement potentially improves decision-making quality and commitment. 59 Involved
employees can help improve decision quality by recognizing problems more quickly
and defining them more accurately. Employees are, in many respects, the sensors of the
organization’s environment. When the organization’s activities misalign with customer
expectations, employees are usually the first to know. Employee involvement ensures
that everyone in the organization is quickly alerted to such problems. 60 Employee in-
volvement can also potentially improve the number and quality of solutions generated.
In a well-managed meeting, team members create synergy by pooling their knowledge
to form new alternatives. In other words, several people working together can poten-
tially generate more and better solutions than the same people working alone.
A third benefit of employee involvement is that, under specific conditions, it im-
proves the evaluation of alternatives. Numerous studies on participative decision mak-
ing, constructive conflict, and team dynamics have found that involvement brings out
employee involvement
The degree to which
employees influence
how their work is
organized and carried
out.
Employee Involvement Keeps Thai Carbon Black in the Black Thai Carbon Black, which
makes the black coloring agent in tires, inks, and many other products, views all of its
employees as problem solvers. “The ‘can do’ attitude of every employee is important,”
says the president of the Thai-Indian joint venture. Each year, the staff submits over 600
productivity improvement suggestions, placing their ideas in one of the little red boxes
located around the site. Participatory management meetings are held every month, at
which employees are encouraged to come up with new ideas on ways to improve day-to-
day operations. For instance, the company cut its transport costs by more than 10 percent
after employees developed a special shipping bag allowing packers to stuff more product
into the same volume. Thanks in part to its emphasis on employee involvement, Thai
Carbon Black is one of the few companies outside Japan to receive the Deming Prize for
total quality management. It has also received the Thailand Quality Class award, Forbes
magazine’s recognition as one of the best-managed companies, and Hewitt Associates’
ranking as one of the best employers in Asia and Thailand.61
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214 Part Two Individual Behavior and Processes
more diverse perspectives, tests ideas, and provides more valuable knowledge, all of
which help the decision maker to select the best alternative. 62 A mathematical theo-
rem introduced in 1785 by the Marquis de Condorcet also supports the view that
many people outshine individuals alone when choosing among two alternatives. 63 To
explain this idea (called Condorcet’s jury theorem ), let’s suppose that you need to choose
one of two firms for your company’s accounting services. Furthermore, you and mem-
bers of your team have, on average, a better than random chance of picking the firm
that will provide superior service. Condorcet’s theory states that the alternative se-
lected by the team’s majority is more likely to be correct than is the alternative se-
lected by you or any other individual team member. Further more, the majority’s
accuracy will increase as you involve more people in the vote. Google applied Con-
dorcet’s theory in its prediction markets, which were described in the opening vignette
to this chapter. By encouraging a large number of employees to vote on various alter-
natives, Google executives get better choices or estimates about future events.
Along with improving decision quality, employee involvement tends to strengthen
employee commitment to the decision. Rather than viewing themselves as agents of
someone else’s decision, staff members feel personally responsible for its success.
Involvement also has positive effects on employee motivation, satisfaction, and turn-
over. A recent study reported that employee involvement also increases skill variety,
feelings of autonomy, and task identity, all of which increase job enrichment and
potentially employee motivation. Participation is also a critical practice in organiza-
tional change because employees are more motivated to implement the decision and
less likely to resist changes resulting from the decision. 64
Contingencies of Employee Involvement
If employee involvement is so wonderful, why don’t leaders leave all decisions to
employees? The answer is that the optimal level of employee involvement depends
on the situation. The employee involvement model shown in Exhibit 7.3 lists four
contingencies: decision structure, source of decision knowledge, decision commit-
ment, and risk of conflict in the decision process.
• Decision structure. At the beginning of this chapter, we described how some decisions
are programmed, whereas others are nonprogrammed. Programmed decisions
are less likely to need employee involvement because the solutions are already
worked out from past incidents. In other words, the benefits of employee involve-
ment increase with the novelty and complexity of the problem or opportunity.
• Source of decision knowledge. Subordinates should be involved in some level of
decision making when the leader lacks sufficient knowledge and sub ordinates
have additional information to improve decision quality. In many cases, em-
ployees are closer to customers and production activities, so they often know
where the company can save money, improve product or service quality, and
realize opportunities. This is particularly true for complex decisions where
employees are more likely to possess relevant information.
• Decision commitment. Participation tends to improve employee commitment to
the decision. If employees are unlikely to accept a decision made without their
involvement, some level of participation is usually necessary.
• Risk of conflict. Two types of conflict undermine the benefits of employee in-
volvement. First, if employee goals and norms conflict with the organization’s
goals, only a low level of employee involvement is advisable. Second, the degree
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Chapter 7 Decision Making and Creativity 215
of involvement depends on whether employees will reach agreement on the
preferred solution. If conflict is likely, high involvement (i.e., employees make
the decision alone) would be difficult to achieve.
Employee involvement is an important component of the decision-making process.
To make the best decisions, we need to involve people who have the most valuable
information and who will increase commitment to implement the decision. Another
important component of decision making is creativity, which we discuss next.
Creativity
The opening vignette to this chapter described how Google actively engages employ-
ees in organizational decisions and relies on their creativity to identify new software
applications and improvements. Creativity is the development of original ideas that
make a socially recognized contribution. 65 Although there are unique conditions for
creativity that we discuss over the next few pages, it is really part of the decision-making
process described earlier in the chapter. We rely on creativity to find problems, identify
alternatives, and implement solutions. Creativity is not something saved for special
occasions. It is an integral part of decision making.
Exhibit 7.4 illustrates one of the earliest and most influential models of creativity. 66
Although there are other models of the creative process, many of them overlap with
the model presented here. The first stage is preparation —the person’s or team’s effort to
acquire knowledge and skills regarding the problem or opportunity. Preparation in-
volves developing a clear understanding of what you are trying to achieve through a
novel solution and then actively studying information seemingly related to the topic.
The second stage, called incubation, is the period of reflective thought. We put the
problem aside, but our mind is still working on it in the background. 67 The important
Exhibit 7.3
Model of Employee
Involvement in
Decision Making
Employee
Involvement
Outcomes of
Employee Involvement
• Better problem
identification
• More/better solutions
generated
• More likely to select
the best alternative
• Stronger commitment
to the decision
Contingencies
of Employee
Involvement
• Decision
structure
• Source of decision
knowledge
• Decision
commitment
• Risk of conflict
creativity
The development of
original ideas that make
a socially recognized
contribution.
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216 Part Two Individual Behavior and Processes
condition here is to maintain a low-level awareness by frequently revisiting the prob-
lem. Incubation does not mean that you forget about the problem or issue. Incubation
assists divergent thinking —reframing the problem in a unique way and generating
different approaches to the issue. This contrasts with convergent thinking —calculating the
conventionally accepted “right answer” to a logical problem. Divergent thinking breaks
us away from existing mental models so that we can apply concepts or processes from
completely different areas of life. Consider the following classic example: Years ago, the
experimental lightbulbs in Thomas Edison’s lab kept falling off their fixtures until a
technician wondered whether the threaded caps that screwed down tightly on kerosene
bottles would work on lightbulbs. They did, and the design remains to this day. 68
Insight, the third stage of creativity, refers to the experience of suddenly becoming
aware of a unique idea. 69 Insight is often visually depicted as a lightbulb, but a better
image would be a brief flash of light or perhaps a briefly flickering candle, because
these bits of inspiration are fleeting and can be quickly lost if not documented. For
this reason, many creative people keep a journal or notebook nearby at all times so
that they can jot down their ideas before they disappear. Also, flickering ideas don’t
keep a particular schedule; they might come to you at any time of day or night.
Insights are merely rough ideas. Their usefulness still requires verification through
detailed logical evaluation, experimentation, and further creative insight. Thus, al-
though verification is labeled the final stage of creativity, it is really the beginning of
a long process of creative decision making toward development of an innovative
product or service. This ongoing process, as well as the conditions and practices that
support creativity, are apparent at Nottingham-Spirk Design Associates, Inc. As
Connections 7.1 describes, the successful Cleveland-based industrial-design firm relies
on divergent and convergent meetings, prototyping, focus groups, and an inspiring
work environment to produce dozens of marketable new ideas every year.
Characteristics of Creative People
Everyone is creative, but some people have a higher potential for creativity. Four of
the main characteristics that give individuals more creative potential are intelligence,
persistence, knowledge and experience, and a cluster of personality traits and values
representing independent imagination. First, creative people have above-average in-
telligence to synthesize information, analyze ideas, and apply their ideas. 70 Like the
fictional sleuth Sherlock Holmes, creative people recognize the significance of small
bits of information and are able to connect them in ways that no one else could imag-
ine. Then they have the capacity to evaluate the potential usefulness of their ideas.
Although intelligence helps people to discover new ideas, an equally (or more) im-
portant characteristic is the person’s persistence to seek out these ideas through trial
and error in the face of resistance. In other words, creative potential includes the persis-
tence of trying out more ideas, whereas less creative people give up sooner. Creative
people have persistence because of a higher need for achievement, a strong motivation
divergent thinking
Reframing a problem
in a unique way and
generating different
approaches to the
issue.
Exhibit 7.4
The Creative
Process Model
Preparation InsightIncubation Verification
Source: Based on Graham Wallas, The Art of Thought (New York: Harcourt Brace Jovanovich, 1926).
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Going for Wow at
Nottingham-Spirk
You might say that creativity is a religious experience at
Nottingham-Spirk Design Associates, Inc. A few years ago,
the industrial-design company moved into an old church in
Cleveland’s university park area. Perched atop an escarp-
ment on 5 acres of property, the 1920s octagon-shaped lime-
stone building looks like a Roman temple. Inside, employees
work in a large rotunda below a domed ceiling supported by
20 columns. Symbols of the original church remain, including
a choir loft and soaring pipe organ. “You can’t help but walk
in here and say, ‘I want to create something new,’” says
John Nottingham, who cofounded Nottingham-Spirk with
John Spirk three decades ago.
Along with having an inspiring church building, Nottingham-
Spirk supports creativity through its risk-tolerant learning ori-
entation culture. “We stick our necks out,” says Nottingham.
“If we fail, we go down the wrong path, we dust ourselves off
and go the other way. We understand that’s innovation.” The
cofounders and their 70 employees also discover ideas by
looking around store shelves. “We’re trying to figure out what
consumers will want two years down the road,” explains
Spirk. “We look and see what’s not there,” Nottingham adds.
“We literally visualize an innovation sitting on the shelf next
to the competition at a price point.”
These activities produce sparks of insight, but they are only
the starting point in the creative process. “Anyone can have a
good idea,” says Nottingham. “The difficult thing is to get it to
market. You’ve got to make the idea work and prove its feasi-
bility as a product.” To transform ideas to profitable products,
Nottingham-Spirk forms teams of up to 10 employees who hold
two types of meetings. In the first meeting, called a diverging
session, team members brainstorm ideas. “We start with a
creative session, people from our team that can complement
each other, and we come up with as many ideas as you can,”
says Nottingham. These ideas are documented as scribbles
and sketches on slips of paper; up to 100 of them plaster the
walls by the end of the session.
In the second round of meetings, called converging ses-
sions, each idea is systematically evaluated by the team. “I
pass around note cards, each with a word or phrase on it that
says, who cares, nice, or wow,” Nottingham explains. The per-
son who introduced an idea can explain it further, and then
each team member judges the idea by selecting one of the
three cards. “If everyone holds up a wow card, you know
you’ve got something,” says Nottingham. The who cares ideas
get tossed out. Some of the nice ideas are developed further by
an idea champion. For example, the SwivelStraight one-minute
Connections 7.1
Christmas tree stand received mainly nice ratings when it
was first proposed, but co-workers gave it wow ratings after
Nottingham-Spirk designer Craig Saunders refined it further.
Almost 1 million SwivelStraight stands were sold in the product’s
first five years on the market.
Diverging and converging sessions are complemented by
focus group meetings and client feedback to improve proto-
types. Nottingham-Spirk’s redesign of the round metal paint
can, which has changed little over the past century, is a case
in point. Employees knew from experience the frustration of
working with traditional paint cans. “We couldn’t think of an-
other consumer product that you need a screwdriver to open
and a hammer to close,” says designer Craig Saunders. So
Saunders and his co-workers created a paint can with a
twist top and built-in no-drip pour spout. When shown an
early prototype, potential users claimed the container
wouldn’t stack well in warehouses and stores, so the revised
prototype was made wider and more stackable. Next, users
were concerned that the plastic container would break if it
was dropped. “So we took a bunch of them up on ladders
and dropped them,” says Nottingham. “They bounced.” This
feedback made the Twist and Pour paint can an instant suc-
cess; Sherwin-Williams tripled sales of its Dutch Boy paint in
the first six months.
Thanks to its creative work environment and innovation
process, Nottingham-Spirk has registered close to 500 patents
and helped clients achieve more than $30 billion sales over the
past three decades. Its most visible innovations include the Crest
SpinBrush, Invacare Corp. wheelchairs, Swiffer SweeperVac,
wide oval-shaped antiperspirant containers, MRI scanner de-
sign, and the Twist and Pour paint can.71
Team members at Nottingham-Spirk Design Associates, Inc.,
give co-worker Craig Saunders (standing) a “WOW” rating for
one of the firm’s creative products, the Swiffer SweeperVac.
217
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218 Part Two Individual Behavior and Processes
from the task itself, and a moderate or high degree of self-esteem. In support of this, a
recent study reported that inventors have higher levels of confidence and optimism
than do people in the general population, and these traits motivate inventors to con-
tinue working on and investing in a project after receiving diagnostic advice to quit. 72
Inventor Thomas Edison highlighted the importance of persistence when he famously
said that genius is 1 percent inspiration and 99 percent perspiration. Edison and his
staff discovered hundreds of ways not to build a lightbulb before they got it right!
A third feature of creative people is that they possess sufficient knowledge and
experience on the subject. 73 Creativity experts explain that discovering new ideas
requires knowledge of the fundamentals. For example, the 1960s rock group The Bea-
tles produced most of their songs only after they had played together for several
years. They developed extensive experience singing and adapting the music of other
people before their creative talents soared.
Although knowledge and experience may be important in one sense, they can also
undermine creativity because people develop mental models that lead to “mindless
behavior,” whereby they stop questioning their assumptions. 74 This relates to the dis-
cussion earlier in this chapter on mental models, namely, that they sometimes restrict
the decision maker’s ability to see different perspectives. To overcome this limitation,
some corporate leaders like to hire people from other industries and areas of exper-
tise. For instance, Geoffrey Ballard, founder of Ballard Power Systems, hired a chem-
ist to develop a better battery. When the chemist protested that he didn’t know
anything about batteries, Ballard replied: “That’s fine. I don’t want someone who
knows batteries. They know what won’t work.” 75 Ballard explained that he wanted to
hire people who would question and investigate avenues that experts had long ago
closed their minds to. The point here is that knowledge and experience is a double-
edged sword. It is an important prerequisite for creativity, but too much routinization
of knowledge and experience can cause people to be less investigative.
The fourth characteristic of creative people is a cluster of personality traits and
values that support an independent imagination: high openness to experience, mod-
erately low need for affiliation, and strong values around self-direction and stimula-
tion. Several studies report that these personal characteristics improve the individual’s
creative potential under some circumstances. 76 Let’s examine each of them:
• High openness to experience. This Big Five personality dimension represents the
extent to which a person is imaginative, curious, sensitive, open-minded, and
original (see Chapter 2).
• Moderately low need for affiliation. People are more creative when they have less
need for social approval and have a somewhat high (but not necessarily very
high) degree of nonconformity. Because of these characteristics, creative people
are less embarrassed when they make mistakes, and they remain motivated to
explore ideas even when others criticize them for their persistence.
• High self-direction and stimulation values. Self-direction includes the values of cre-
ativity and independent thought; stimulation includes the values of excitement
and challenge. Together, these values form openness to change—representing
the motivation to pursue innovative ways (see Chapter 2).
Organizational Conditions Supporting Creativity
Intelligence, persistence, knowledge and experience, and independent imagination
represent a person’s creative potential, but the extent to which the person has more
creative output depends on a work environment that supports the creative process. 77
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Chapter 7 Decision Making and Creativity 219
Before describing the contextual influences on creativity, we need to point out that
different combinations of situations can equally support creativity; there isn’t one
best work environment. 78 With this caveat in mind, let’s consider some of the condi-
tions that seem to unleash creative potential.
One of the most important conditions that supports creative practice is that the
organization has a learning orientation; that is, leaders recognize that employees
make reasonable mistakes as part of the creative process. “Creativity comes from
failure,” Samsung Electronics CEO and vice chairman Yun Jong-yong recently ad-
vised employees. “We should reform our corporate culture to forgive failure if work-
ers did their best.” 79 Motivation from the job itself is another important condition for
creativity. 80 Employees tend to be more creative when they believe their work bene-
fits the organization and/or larger society (i.e., task significance) and when they have
the freedom to pursue novel ideas without bureaucratic delays (i.e., autonomy). Cre-
ativity is about changing things, and change is possible only when employees have
the authority to experiment. More generally, jobs encourage creativity when they are
challenging and aligned with the employee’s competencies.
Along with supporting a learning orientation and intrinsically motivating jobs, com-
panies foster creativity through open communication and sufficient resources. They also
provide a reasonable level of job security, which explains why creativity suffers during
times of downsizing and corporate restructuring. 81 Some companies support the reflec-
tion stage of creativity by designing nontraditional workspaces. 82 Google is one exam-
ple. The Internet innovator has funky offices in several countries that include hammocks,
gondola- and hive-shaped privacy spaces, slides, and brightly painted walls.
To some degree, creativity also improves with support from leaders and co-workers.
One study reported that effective product champions provide enthusiastic support for
new ideas. Other studies suggest that co-worker support can improve creativity in
some situations whereas competition among co-workers improves creativity in other
situations. 83 Similarly, it isn’t clear how much pressure should be exerted on employees
to produce creative ideas. Extreme time pressure is a well-known creativity inhibitor,
but lack of pressure doesn’t seem to produce the highest creativity, either.
Activities That Encourage Creativity
Hiring people with strong creative potential and providing a work environment that
supports creativity are two cornerstones of a creative workplace. The third cornerstone
consists of various activities that help employees think more creatively. One set of ac-
tivities involves redefining the problem. Employees might be encouraged to revisit old
projects that have been set aside. After a few months of neglect, these projects might be
seen in new ways. 84 Another strategy involves asking people unfamiliar with the issue
(preferably with different expertise) to explore the problem with you. You would state
the objectives and give some facts and then let the other person ask questions to further
understand the situation. By verbalizing the problem, listening to questions, and hear-
ing what others think, you are more likely to form new perspectives on the issue. 85
A second set of creativity activities, known as associative play, ranges from art
classes to impromptu storytelling and acting. For example, British media giant OMD
sends employees to two-day retreats in the countryside, where they play grapefruit
croquet, chant like medieval monks, and pretend to be dog collars. “Being creative
is a bit like an emotion; we need to be stimulated,” explains Harriet Frost, one of
OMD’s specialists in building creativity. “The same is true for our imagination and
its ability to come up with new ideas. You can’t just sit in a room and devise hun-
dreds of ideas.” 86
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220 Part Two Individual Behavior and Processes
Another associative play activity, called morphological analysis, involves listing dif-
ferent dimensions of a system and the elements of each dimension and then looking
at each combination. This encourages people to carefully examine combinations that
initially seem nonsensical. Tyson Foods, the world’s largest poultry producer, applied
this activity to identify new ways to serve chicken for lunch. The marketing and re-
search team assigned to this task focused on three categories: occasion, packaging,
and taste. Next, the team worked through numerous combinations of items in the
three categories. This created unusual ideas, such as cheese chicken pasta (taste) in
pizza boxes (packaging) for concessions at baseball games (occasion). Later, the team
looked more closely at the feasibility of these combinations and sent them to cus-
tomer focus groups for further testing. 87
A third set of activities that promote creative thinking falls under the category of
cross-pollination . 88 Cross-pollination occurs when people from different areas of the
organization exchange ideas. “Creativity comes out of people bumping into each
other and not knowing where to go,” claims Laszlo Bock, Google’s top human re-
source executive. IDEO, the California-based product design company, engages in
Mother’s Creative Cross-Pollination Mother is an unusual creative agency with an equally unusual
name, located in a converted warehouse in an artsy district of London. All of this quirkiness fuels cre-
ativity, but the ad agency’s most creative practice is its workspace arrangement. The company’s 100 or
so employees perform their daily work around one monster-size table—an 8-foot-wide reinforced-
concrete slab that extends 300 feet like a skateboard ramp around the entire floor. If that image isn’t
sufficiently unusual, consider this: Every three weeks, employees are asked to relocate their laptop,
portable telephone, and trolley to another area around the table. “At the end of every three weeks we
have a tidy Friday, which helps keep the mess down, and then we move the following Monday,” ex-
plains Stef Calcraft, one of Mother’s founding partners. “One week, you may be sitting next to a fi-
nance person and opposite a creative. The next, you’ll be sitting between one of the partners and
someone from production.” Why the musical-chairs exercise? “It encourages cross-pollination of
ideas,” Calcraft answers. “You have people working on the same problem from different perspectives.
It makes problem-solving much more organic.”89
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the prospect theory effect, perceptual blinders, and clos-
ing costs. These problems are minimized by separating
decision choosers from decision evaluators, establishing a
preset level at which the decision is abandoned or reeval-
uated, relying on more systematic and clear feedback
about the project’s success, and involving several people
in decision making.
Employee involvement (or participation) is the
degree to which employees influence how their work
is organized and carried out. The level of participa-
tion may range from low (an employee providing
specific information to management without knowing
the problem or issue) to high (complete involvement
in all phases of the decision process). Employee in-
volvement may lead to higher decision quality and
commitment, but several contingencies need to be
considered, including the decision structure, source
of decision knowledge, decision commitment, and risk
of conflict.
Creativity is the development of original ideas
that make a socially recognized contribution. The
four creativity stages are preparation, incubation, in-
sight, and verification. Incubation assists divergent
thinking, which involves reframing the problem in a
unique way and generating different approaches to
the issue.
Four of the main features of creative people are
intelligence, persistence, knowledge and experience,
and independent imagination personality traits and
values. Creativity is also strengthened for everyone when
the work environment supports a learning orientation,
the job has high intrinsic motivation, the organization
provides a reasonable level of job security, and project
leaders provide appropriate goals, time pressure, and
resources. Three types of activities that encourage cre-
ativity are redefining the problem, associative play, and
cross-pollination.
Decision making is a conscious process of making choices
among one or more alternatives with the intention of
moving toward some desired state of affairs. The rational
choice paradigm of decision making includes identifying
problems and opportunities, choosing the best decision
style, developing alternative solutions, choosing the best
solution, implementing the selected alternative, and eval-
uating decision outcomes.
Stakeholder framing, perceptual defense, mental
models, decisive leadership, and solution-oriented focus
affect our ability to identify problems and opportuni-
ties. We can minimize these challenges by being aware
of the human limitations and discussing the situation
with colleagues.
Evaluating and choosing alternatives is often
challenging because organizational goals are ambiguous
or in conflict, human information processing is incom-
plete and subjective, and people tend to satisfice rather
than maximize. Decision makers also short-circuit the
evaluation process when faced with an opportunity
rather than a problem. Emotions shape our preferences
for alternatives and the process we follow to evaluate
alternatives. We also listen to our emotions for guid-
ance when making decisions. This activity relates to
intuition—the ability to know when a problem or
opportunity exists and to select the best course of ac-
tion without conscious reasoning. Intuition is both
an emotional experience and a rapid nonconscious
analytic process that involves both pattern matching
and action scripts.
People generally make better choices by systemati-
cally evaluating alternatives. Scenario planning can help
to make future decisions without the pressure and emo-
tions that occur during real emergencies.
Postdecisional justification and escalation of commit-
ment make it difficult to accurately evaluate decision out-
comes. Escalation is mainly caused by self-justification,
Chapter Summary
Chapter 7 Decision Making and Creativity 221
cross-pollination by mixing together employees from different past projects so that
they share new knowledge with each other.
Cross-pollination highlights the fact that creativity rarely occurs alone. Some cre-
ative people may be individualistic, but most creative ideas are generated through
teams and informal social interaction. This probably explains why Jonathan Ive, the
award-winning designer of Apple computer products, always refers to his team’s
creativity rather than his own. “The only time you’ll hear [ Jonathan Ive] use the word
‘I’ is when he’s naming some of the products he helped make famous: iMac, iBook,
iPod,” says one writer. 90 The next chapter turns our attention to the main concepts in
team effectiveness, as well as ways to improve team decision making and creativity.
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stitutions. Interest from potential tenants was much
lower than initially predicted, and the city did not
build transportation systems as quickly as expected.
Still, the builder proceeded with the original plans.
Only after financial support was curtailed did the de-
veloper reconsider the project. Using your knowledge
of escalation of commitment, discuss three possible
reasons why the developer was motivated to continue
with the project.
5. Ancient Book Company has a problem with new
book projects. Even when others are aware that a
book is far behind schedule and may engender little
public interest, sponsoring editors are reluctant to
terminate contracts with authors whom they have
signed. The result is that editors invest more time
with these projects than on more fruitful projects.
Describe two methods that Ancient Book Company
can use to minimize this problem, which is a form of
escalation of commitment.
6. Employee involvement applies just as well to the
classroom as to the office or factory floor. Explain
how student involvement in classroom decisions
typically made by the instructor alone might im-
prove decision quality. What potential problems
may occur in this process?
7. Think of a time when you experienced the cre-
ative process. Maybe you woke up with a brilliant
(but usually sketchy and incomplete) idea or you
solved a baffling problem while doing something
else. Describe the incident to your class and ex-
plain how the experience followed the creative
process.
8. Two characteristics of creative people are that
they have relevant experience and are persistent
in their quest. Does this mean that people with
the most experience and the highest need for
achievement are the most creative? Explain
your answer.
1. A management consultant is hired by a manu-
facturing firm to determine the best site for its next
production facility. The consultant has had several
meetings with the company’s senior executives re-
garding the factors to consider when making the
recommendation. Discuss the decision-making
problems that might prevent the consultant from
choosing the best site location.
2. You have been asked to personally recommend a
new travel agency to handle all airfare, accommo-
dation, and related travel needs for your organi-
zation of 500 employees. One of your colleagues,
who is responsible for the company’s economic
planning, suggests that the best travel agent could
be selected mathematically by inputting the relevant
factors for each agency and the weight (importance)
of each factor. What decision-making approach
is your colleague recommending? Is this recom-
mendation a good idea in this situation? Why or
why not?
3. Intuition is both an emotional experience and
an nonconscious analytic process. One problem,
however, is that not all emotions signaling that
there is a problem or opportunity represent
intuition. Explain how we would know if our
“gut feelings” are intuition or not, and if they
are not intuition, suggest what might be causing
them.
4. A developer received financial backing for a new
business financial center along a derelict section of
the waterfront, a few miles from the current down-
town area of a large European city. The idea was to
build several high-rise structures, attract to those sites
prestigious tenants requiring large leases, and have
the city extend transportation systems out to the new
center. Over the next decade, the developer believed
that others would build in the area, thereby attracting
the regional or national offices of many financial in-
Critical Thinking Questions
222
anchoring and adjustment
heuristic , p. 205
availability heuristic, p. 205
bounded rationality, p. 203
creativity, p. 215
decision making, p. 198
divergent thinking, p. 216
employee involvement, p. 213
escalation of commitment, p. 210
implicit favorite, p. 204
intuition, p. 208
postdecisional justification, p. 210
prospect theory, p. 211
rational choice paradigm, p. 198
representativeness heuristic, p. 205
satisficing, p. 206
scenario planning, p. 209
subjective expected utility, p. 199
Key Terms
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crashed 60 miles offshore. You obtained all the avail-
able information concerning the location of the crash,
informed your crew of the mission, and set a new
course at maximum speed for the scene to com-
mence a search for survivors and wreckage.
You have now been searching for 20 hours. Your
search operation has been increasingly impaired by
rough seas, and there is evidence of a severe storm
building. The atmospherics associated with the dete-
riorating weather have made communications with
the Coast Guard station impossible. A decision must
be made shortly about whether to abandon the
search and place your vessel on a course that would
ride out the storm (thereby protecting the vessel and
your crew, but relegating any possible survivors to
almost certain death from exposure) or to continue a
potentially futile search and the risks it would entail.
Before losing communications, you received an
updated weather advisory concerning the severity
and duration of the storm. Although your crew mem-
bers are extremely conscientious about their respon-
sibility, you believe that they would be divided on
the decision to leave or stay.
Discussion Questions (for both cases)
1. To what extent should your subordinates be in-
volved in this decision? Select one of the following
levels of involvement:
• No involvement. You make the decision alone
without any participation from subordinates.
• Low involvement. You ask one or more sub-
ordinates for information relating to the
problem, but you don’t ask for their re-
commen dations and might not mention
the problem to them.
• Medium involvement. You describe the prob-
lem to one or more subordinates (alone or
in a meeting) and ask for any relevant infor-
mation as well as their recommendations
on the issue. However, you make the final
decision, which might or might not reflect
their advice.
223
Case Study 7.1 EMPLOYEE INVOLVEMENT CASES
Case 1: The Sugar Substitute
Research Decision
You are the head of research and development (R&D)
for a major beer company. While working on a new
beer product, one of the scientists in your unit seems to
have tentatively identified a new chemical compound
that has few calories but tastes closer to sugar than cur-
rent sugar substitutes. The company has no foresee-
able need for this product, but it could be patented
and licensed to manufacturers in the food industry.
The sugar-substitute discovery is in its prelimi-
nary stages and would require considerable time and
resources before it would be commercially viable.
This means that it would necessarily take some re-
sources away from other projects in the lab. The
sugar-substitute project is beyond your technical ex-
pertise, but some of the R&D lab researchers are fa-
miliar with that field of chemistry. As with most
forms of research, it is difficult to determine the
amount of research required to further identify and
perfect the sugar substitute. You do not know how
much demand is expected for this product. Your de-
partment has a decision process for funding projects
that are behind schedule. However, there are no
rules or precedents about funding projects that
would be licensed but not used by the organization.
The company’s R&D budget is limited, and other
scientists in your work group have recently com-
plained that they require more resources and finan-
cial support to get their projects completed. Some of
these R&D projects hold promise for future beer
sales. You believe that most researchers in the R&D
unit are committed to ensuring that the company’s
interests are achieved.
Case 2: Coast Guard Cutter
Decision Problem
You are the captain of a 200-foot Coast Guard cutter,
with a crew of 16, including officers. Your mission is
general at-sea search and rescue. At 2:00 a.m. this
morning, while en route to your home port after a
routine 28-day patrol, you received word from the
nearest Coast Guard station that a small plane had
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224
• High involvement. You describe the problem
to subordinates. They discuss the matter,
identify a solution without your involvement
(unless they invite your ideas), and implement
that solution. You have agreed to support
their decision.
2. What factors led you to choose this level of em-
ployee involvement rather than the others?
3. What problems might occur if less or more in-
volvement occurred in this case (where possible)?
Sources: The Sugar Substitute Research Decision: © 2002 Steven
L. McShane. The Coast Guard cutter case is adapted from V. H.
Vroom and A. G. Jago, The New Leadership: Managing Participation
in Organizations, Copyright © 1988. Reproduced by permission
of Pearson Education, Inc., Upper Saddle River, NJ.
Case Study 7.2 P&G’S DESIGN THINKING
To transform Procter & Gamble
into an innovation colossus, CEO
A. G. Lafley asked vice-president
for design Claudia Kotchka to “get design into the
DNA of the company.” Kotchka asked several promi-
nent business and design schools: “How do we teach
people what design thinking is and how to use it in a
way that it could scale across a company with 130,000
employees?” After an initial stumble, P&G refined its
workshops so leaders can more easily apply a different
way to see problems and opportunities. “Once busi-
ness leaders see they can use design thinking to re-
frame problems, they are transformed,” says Cindy
Tripp, marketing director at P&G Global Design.
This BusinessWeek case study describes “design
thinking” and how P&G is encouraging its key deci-
sion makers to make decisions from this different
perspective. Read the full text of this BusinessWeek
article at www.mhhe.com/mcshane5e, and prepare
for the discussion questions below.
Discussion Questions
1. What is design thinking? How does it differ from
traditional models of decision making?
2. In your opinion, should most organizations adopt
a design-thinking perspective? Why or why not?
3. Prototyping is a central element in design think-
ing, yet it is not explicitly mentioned in the ratio-
nal choice decision-making process. How is
prototyping inherent in this process, or how does
it differ from rational choice decision making?
Source: J. Rae, “P&G Changes Its Game,” BusinessWeek, 29 July
2008.
Team Exercise 7.3 WHERE IN THE WORLD ARE WE?
PURPOSE This exercise is designed to help you un-
derstand the potential advantages of involving others
in decisions rather than making decisions alone.
MATERIALS Students require an unmarked copy
of the map of the United States with grid marks
( Exhibit 2 ). Students are not allowed to look at any
other maps or use any other materials. The instruc-
tor will provide a list of communities located some-
where on Exhibit 2 . The instructor will also
provide copies of the answer sheet after students
have individually and in teams estimated the loca-
tions of communities.
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http://www.mhhe.com/mcshane5e
225
INSTRUCTIONS
1. Write down in Exhibit 1 the list of communities
identified by your instructor. Then, working
alone, estimate the location in Exhibit 2 of these
communities, all of which are in the United
States. For example, mark a small “1” in Exhibit 2
on the spot where you believe the first commu-
nity is located. Mark a small “2” where you think
the second community is located, and so on.
Please be sure to number each location clearly
and with numbers small enough to fit within one
grid space.
2. The instructor will organize students into ap-
proximately equal-size teams (typically five or
six people per team). Working with your team
members, reach a consensus on the location of
each community listed in Exhibit 1 . The instruc-
tor might provide teams with a separate copy of
the map, or each member can identify the team’s
numbers using a different-color pen on their
individual maps. The team’s decision for each
location should occur by consensus, not voting
or averaging.
3. The instructor will provide or display an answer
sheet, showing the correct locations of the com-
munities. Using the answer sheet, students will
count the minimum number of grid squares be-
tween the location they individually marked and
the true location of each community. Write the
number of grid squares in the second column of
Exhibit 1 , and then add up the total. Next, count
the minimum number of grid squares between
the location the team marked and the true loca-
tion of each community. Write the number of
grid squares in the third column of Exhibit 1 ,
and then add up the total.
4. The instructor will ask for information about the
totals, and the class will discuss the implication
of these results for employee involvement and
decision making.
Exhibit 1 List of Selected Communities in the United States
© 2002 Steven L. McShane.
Number Community
Individual distance
in grid units from
the true location
Team distance in
grid units from
the true location
1
2
3
4
5
6
7
8
Total: Total:
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226
E
x
h
ib
it
2
M
ap
o
f
th
e
U
ni
te
d
S
ta
te
s
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227
Team Exercise 7.4 WINTER SURVIVAL EXERCISE
PURPOSE This exercise is designed to help you un-
derstand the potential advantages of involving others
in decisions rather than making decisions alone.
INSTRUCTIONS
1. Read the “Situation” section in the next column.
Then, working alone, rank-order the 12 items
shown in the chart on page 228 according to
their importance to your survival. In the “indi-
vidual ranking” column, indicate the most
important item with “1,” going through to “12”
for the least important. Keep in mind the rea-
sons why each item is or is not important.
2. The instructor will divide the class into small
teams (four to six people). Each team will rank-
order the items in the second column. Team
rankings should be based on consensus, not sim-
ply averaging the individual rankings.
3. When the teams have completed their rankings,
the instructor will provide the expert’s ranking,
which can be entered in the third column.
4. Each student will compute the absolute differ-
ence (i.e., ignore minus signs) between the
individual ranking and the expert’s ranking,
record this information in column 4, and sum
the absolute values at the bottom of column 4.
5. In column 5, record the absolute difference be-
tween the team’s ranking and the expert’s rank-
ing, and sum these absolute scores at the bottom.
A class discussion will follow regarding the im-
plications of these results for employee involve-
ment and decision making.
SITUATION You have just crash-landed some-
where in the woods of southern Manitoba or possibly
northern Minnesota. It is 11:32 a.m. in mid-January.
The small plane in which you were traveling crashed
on a small lake. The pilot and copilot were killed.
Shortly after the crash, the plane sank completely
into the lake with the pilot’s and copilot’s bodies in-
side. Everyone else on the flight escaped to land dry
and without serious injury.
The crash came suddenly before the pilot had
time to radio for help or inform anyone of your posi-
tion. Since your pilot was trying to avoid the storm,
you know the plane was considerably off course.
The pilot announced shortly before the crash that
you were 45 miles northwest of a small town that is
the nearest known habitation.
You are in a wilderness area made up of thick
woods broken by many lakes and rivers. The snow
depth varies from above the ankles in windswept ar-
eas to more than knee-deep where it has drifted. The
last weather report indicated that the temperature
would reach minus 15 degrees Celsius in the day-
time and minus 26 degrees at night. There are plenty
of dead wood pieces and twigs in the area around
the lake. You and the other surviving passengers are
dressed in winter clothing appropriate for city wear—
suits, pantsuits, street shoes, and overcoats. While
escaping from the plane, your group salvaged the 12
items listed in the chart below. You may assume that
the number of persons in the group is the same as
the number in your group and that you have agreed
to stay together.
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228
Winter Survival Tally Sheet
Ball of steel wool
Newspaper
Compass
Hand ax
Cigarette lighter
45-caliber pistol
Section air map
Canvas
Shirt and pants
Can of shortening
Whiskey
Chocolate bars
(The lower the score, the better)
Your scoreTotal Team score
Items
Step 1
Your
individual
ranking
Step 2
Your
team’s
ranking
Step 3
Survival
expert’s
ranking
Step 4
Difference
between
steps 1 and 3
Step 5
Difference
between
steps 2 and 3
Source: Adapted from “Winter Survival” in D. Johnson and F. Johnson, Joining Together, 3d ed. (Englewood Cliffs, NJ: Prentice Hall, 1984).
Class Exercise 7.5 THE HOPPING ORANGE
PURPOSE This exercise is designed to help stu-
dents understand the dynamics of creativity and
team problem solving.
INSTRUCTIONS
You will be placed in teams of six students. One stu-
dent serves as the official timer for the team and must
have a watch, preferably with a stopwatch timer. The
instructor will give each team an orange (or similar
object) with a specific task involving use of the or-
ange. The objective is easily understood and non-
threatening, and it will be described by the instructor
at the beginning of the exercise. Each team will have
a few opportunities to achieve the objective more ef-
ficiently. To maximize the effectiveness of this exer-
cise, no other information is provided here.
PURPOSE This exercise is designed to help stu-
dents understand the dynamics of creativity and
team problem solving.
INSTRUCTIONS
The instructor describes the problem, and students
are asked to figure out the solution working alone.
When enough time has passed, the instructor may
Class Exercise 7.6 CREATIVITY BRAINBUSTERS
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3. Nine-dot problem revisited. Referring to the nine-dot
exhibit above, describe how, without lifting your
pencil, you could pass a pencil line through all
dots with three or fewer straight lines.
4. Word search. In the following line of letters, cross
out five letters so that the remaining letters,
without altering their sequence, spell a familiar
English word.
CFRIVEELATETITEVRSE
5. Burning ropes. You have two pieces of rope of un-
equal lengths and a box of matches. In spite of
their different lengths, each piece of rope takes
one hour to burn; however, parts of each rope
burn at unequal speeds. For example, the first
half of one piece might burn in 10 minutes. Use
these materials to accurately determine when 45
minutes has elapsed.
229
Self-Assessment 7.7
MEASURING YOUR CREATIVE PERSONALITY
PURPOSE This self-assessment is designed to help
you measure the extent to which you have a creative
personality.
INSTRUCTIONS Presented on page 230 is an ad-
jective check list with 30 words that may or may not
describe you. Put a mark in the box beside each word
that you think accurately describes you. Please do not
mark the boxes for words that do not describe you.
When finished, you can score the test using the scor-
ing key in Appendix B at the end of the book. This
exercise should be completed alone so that you can
assess yourself without concerns of social comparison.
Class discussion will focus on how this scale might be
applied in organizations and on the limitations of
measuring creativity in work settings.
then ask specific students who think they have the
solution to describe (or show using overhead trans-
parency) their answer. The instructor will review the
solutions and discuss the implications of this exercise.
In particular, be prepared to discuss what you needed
to solve these puzzles and what may have prevented
you from solving them more quickly (or at all).
1. Double-circle problem. Draw two circles, one in-
side the other, with a single line and with nei-
ther circle touching the other (as shown below).
In other words, you must draw both of these
circles without lifting your pen (or other writing
instrument).
2. Nine-dot problem. The next column contains nine
dots. Without lifting your pencil, draw no more than
four straight lines that pass through all nine dots.
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230
Adjective Checklist
Affected
Capable
Cautious
Clever
Commonplace
Confident
Conservative
Conventional
Dissatisfied
Egotistical
Honest
Humorous
Individualistic
Informal
Insightful
Intelligent
Inventive
Mannerly
Narrow interests
Original
Reflective
Resourceful
Self-confident
Sexy
Sincere
Snobbish
Submissive
Suspicious
Unconventional
Wide interests
Source: Adapted from and based on information in H. G. Gough and A. B. Heilbrun, Jr., The Adjective Check List Manual (Palo Alto, CA: Consulting
Psychologists Press, 1965).
After reading this chapter, if you need additional information, see www.mhhe.com/mcshane5e
for more in-depth information and interactivities that correspond to this chapter.
Self-Assessment 7.8
TESTING YOUR CREATIVE BENCH STRENGTH
This self-assessment takes the form of a self-scoring
quiz. It consists of 12 questions that require diver-
gent thinking to identify the correct answers. For
each question, type your answer in the space pro-
vided. When finished, look at the correct
answer for each question, along with the ex-
planation for that answer.
Self-Assessment 7.9
DECISION-MAKING STYLE INVENTORY
People have different styles of decision making that
are reflected in how they identify problems or op-
portunities and make choices. This self-assessment
estimates your decision-making style through a se-
ries of statements describing how individuals go
about making important decisions. Please indicate
whether you agree or disagree with each statement.
Answer each item as truthfully as possible
so that you get an accurate estimate of your
decision-making style. This exercise should
be completed alone so that you can assess yourself
honestly without concerns of social comparison.
Class discussion will focus on the decision-making
style that people prefer in organizational settings.
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http://www.mhhe.com/mcshane5e
Part Three
Team Processes
Chapter 8 Team Dynamics
Chapter 9 Communicating in Teams and Organizations
Chapter 10 Power and Influence in the Workplace
Chapter 11 Conflict and Negotiation in the Workplace
Chapter 12 Leadership in Organizational Settings
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When Whole Foods Market opens new stores, the organic food retailer isn’t just looking
for staff with good customer service skills. It is looking for people who also work well in
teams. Every Whole Foods Market store is divided into about 10 teams, such as the
prepared-foods team, the cashier/
front-end team, and the seafood
team. Teams are “self-directed”
because team members make the
decisions about their work unit
with minimal interference from
management.
“Each team is . . . responsible
for managing its own business,”
explains Whole Foods Market
cofounder John Mackey. “It gets
a profit-and-loss statement, it’s
responsible for managing inventory,
labor productivity, gross margins;
and its members are responsible
for many of the product-placement
decisions.” Whole Foods Market
introduced a team-based structure
when it was founded in Austin,
Texas, in 1980. The idea came from the then-popular Japanese management books,
which espoused the value of teamwork. Even today, with almost 200 stores employing
40,000 people in the United States, the United Kingdom, and Canada, Whole Foods Market
remains true to its team-based structure.
Along with making departmental decisions, Whole Foods Market teams decide on
whether new hires get to remain on the team. After a recruit is temporarily employed
for 30 to 45 days, team members vote on whether the individual should become a
permanent member; at least two-thirds must vote in favor for the recruit to join the team
permanently. Team members take these hiring decisions seriously because their monthly
bonuses are based on team performance. Every four weeks, the company calculates each
team’s performance against goals and cost efficiencies. When the team finds ways to work
more effectively, the unused budget is divided among the team members. This team bonus
can add up to hundreds of extra dollars in each paycheck. 1
Whole Foods Market relies on teams to more effectively serve customers and fulfill
employee needs.
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Team Dynamics
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Define teams and discuss their benefits and
limitations.
2. Explain why people are motivated to join
informal groups.
3. Diagram the team effectiveness model.
4. Discuss how task characteristics, team
size, and team composition influence team
effectiveness.
5. Summarize the team development process.
6. Discuss how team norms develop and how
they may be altered.
7. List six factors that influence team
cohesion.
8. Describe the three foundations of trust in
teams and other interpersonal relationships.
9. Discuss the characteristics and factors
required for success of self-directed teams
and virtual teams.
10. Identify four constraints on team decision
making.
11. Discuss the advantages and disadvantages
of four structures that potentially improve
team decision making.
8
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234 Part Three Team Processes
Several factors explain why Whole Foods Market has become a retail success story
and one of the best places to work in America; the company’s focus on teams is clearly
one of those factors. Teamwork has become an important practice in most industries
and countries. A cross-functional team of employees at the City of Indianapolis
conducted a “chuckhole kaizen response” to identify more efficient ways to repair
potholes. The team found ways to address pothole complaints in 48 hours rather
than the previous average of 19 days. Hong Kong–based Regal Printing relies on
advanced technology to print up to 40,000 softcover books per day, but it also created
a special team of 20 staff members to handle urgent jobs. Ford Motor Company’s
legal department is rated as one of the best in North America, partly because almost
everything the department does is achieved through project teams. Rackspace
Hosting, Inc., physically organizes most of its 1,900 employees into teams of 14 to 20
people. The San Antonio, Texas, provider of enterprise-level Web infrastructure
assigns every customer to one of these dedicated teams, which provides around-the-
clock service. 2
This chapter begins by defining teams and examining the reasons why organiza-
tions rely on teams and why people join informal groups in organizational settings. A
large segment of this chapter examines a model of team effectiveness, which includes
team and organizational environment, team design, and the team processes of devel-
opment, norms, cohesion, and trust. We then turn our attention to two specific types
of teams: self-directed teams and virtual teams. The final section of this chapter looks
at the challenges and strategies for making better decisions in teams.
Learning
Objectives
After reading the next two sections, you should be able to:
1. Define teams and discuss their benefits and limitations.
2. Explain why people are motivated to join informal groups.
Teams and Informal Groups
Teams are groups of two or more people who interact and influence each other, are
mutually accountable for achieving common goals associated with organizational ob-
jectives, and perceive themselves as a social entity within an organization. 3 This defi-
nition has a few important components worth repeating. First, all teams exist to fulfill
some purpose, such as assembling a product, providing a service, designing a new
manufacturing facility, or making an important decision. Second, team members are
held together by their interdependence and need for collaboration to achieve com-
mon goals. All teams require some form of communication so that members can
coordinate and share common objectives. Third, team members influence each other,
although some members may be more influential than others regarding the team’s
goals and activities. Finally, a team exists when its members perceive themselves to
be a team.
Exhibit 8.1 briefly describes various types of teams in organizations. Some
teams are permanent, while others are temporary; some are responsible for mak-
ing products or providing services, while others exist to make decisions or share
knowledge. Each type of team has been created deliberately to serve an organiza-
tional purpose. Some teams, such as skunkworks teams, are not initially sanctioned
by management, yet are called “teams” because members work toward an organi-
zational objective.
teams
Groups of two or more
people who interact and
influence each other, are
mutually accountable
for achieving common
goals associated with
organizational objectives,
and perceive themselves
as a social entity within
an organization.
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Chapter 8 Team Dynamics 235
Informal Groups
Although most of our attention in this chapter is on formal teams, employees also
belong to informal groups. All teams are groups, but many groups do not satisfy our
definition of teams. Groups include people assembled together, whether or not they
have any interdependence or organizationally focused objective. The friends you
meet for lunch are an informal group, but they wouldn’t be called a team because they
have little or no interdependence (each person could just as easily eat lunch alone)
and no organizationally mandated purpose. Instead, they exist primarily for the ben-
efit of their members. Although the terms are used interchangeably, teams has largely
replaced groups in the language of business when referring to employees who work
together to complete organizational tasks. 4
Why do informal groups exist? One reason is that human beings are social animals.
Our drive to bond is hardwired through evolutionary development, creating a need to
belong to informal groups. 5 This is evidenced by the fact that people invest consider-
able time and effort forming and maintaining social relationships without any special
circumstances or ulterior motives. A second explanation is provided by social identity
theory, which states that individuals define themselves by their group affiliations.
Thus, we join groups—particularly those that are viewed favorably by others and that
have values similar to our own—because they shape and reinforce our self-concept. 6
Team type Description
Departmental teams Teams that consist of employees who have similar or complementary skills and are
located in the same unit of a functional structure; usually minimal task interdependence
because each person works with employees in other departments.
Production/service/leadership
teams
Typically multiskilled (employees have diverse competencies), team members collectively
produce a common product/service or make ongoing decisions; production/service teams
typically have an assembly-line type of interdependence, whereas leadership teams tend
to have tight interactive (reciprocal) interdependence.
Self-directed teams Similar to production/service teams except (1) they are organized around work processes
that complete an entire piece of work requiring several interdependent tasks and (2) they
have substantial autonomy over the execution of those tasks (i.e., they usually control
inputs, flow, and outputs with little or no supervision).
Advisory teams Teams that provide recommendations to decision makers; include committees, advisory
councils, work councils, and review panels; may be temporary, but often are permanent,
some with frequent rotation of members.
Task force (project) teams Usually multiskilled, temporary teams whose assignment is to solve a problem, realize an
opportunity, or design a product or service.
Skunkworks Multiskilled teams that are usually located away from the organization and are relatively
free of its hierarchy; often initiated by an entrepreneurial team leader who borrows people
and resources (bootlegging) to design a product or service.
Virtual teams Teams whose members operate across space, time, and organizational boundaries and
are linked through information technologies to achieve organizational tasks; may be a
temporary task force or permanent service team.
Communities of practice Teams (but often informal groups) bound together by shared expertise and passion for a
particular activity or interest; main purpose is to share information; often rely on information
technologies as the main source of interaction.
Exhibit 8.1 Types of Teams in Organizations
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236 Part Three Team Processes
A third reason why people are motivated to form informal groups is that such
groups accomplish goals that cannot be achieved by individuals working alone. For
example, employees will sometimes create a group to oppose organizational changes
because the group collectively has more power than individuals complaining alone.
A fourth explanation for informal groups is that in stressful situations we are com-
forted by the mere presence of other people and are therefore motivated to be near
them. When in danger, people congregate near each other even though doing so
serves no protective purpose. Similarly, employees tend to mingle more often after
hearing rumors that the company might be acquired by a competitor. As you learned
in Chapter 4, this social support minimizes stress by providing emotional and/or infor-
mational support to buffer the stress experience. 7
Informal Groups and Organizational Outcomes Although informal groups
are not created to serve organizational objectives, they have a profound influence on
organizations and individual employees. Informal groups are the backbone of social
networks, which are important sources of trust building, information sharing, power,
influence, and employee well-being in the workplace. 8 As you will learn in Chapter 9,
some companies have established social networking sites similar to Facebook and
MySpace to encourage the formation of informal groups and associated communica-
tion. These companies recognize that informal groups build trust and mutual under-
standing, which transfers tacit knowledge more effectively through these informal
networks than through formal reporting relationships.
Social networks also play an important role in employee power and influence. As
you will learn in Chapter 10, informal groups tend to increase an employee’s social
capital —the knowledge and other resources available to people from a durable net-
work that connects them to others. Employees with strong informal networks tend to
have more power and influence because they receive better information and prefer-
ential treatment from others and their talent is more visible to key decision makers.
Finally, informal groups potentially minimize employee stress because, as mentioned
above, group members provide emotional and informational social support. This
stress-reducing capability of informal groups improves employee well-being, thereby
improving organizational effectiveness.
Advantages and Disadvantages of Teams
When 1,760 professionals were recently asked about their work, 86 percent agreed
that working in teams is more important to business success today than it was five
years ago. This is certainly true in scientific research. A study of almost 20 million
research publications reported that the percentage of journal articles written by teams
rather than individuals has increased substantially over the past five decades. Further-
more, team-based articles had a much higher number of subsequent citations, which
indicates that the quality of these publications is higher when they are written by
teams rather than individuals. 9 “One of the things I think people overlook is the qual-
ity of the team,” says Rose Marie Bravo, the American executive who engineered the
remarkable turnaround of Burberry, the London fashion house. “It isn’t one person,
and it isn’t two people. It is a whole group of people—a team that works cohesively
towards a goal—that makes something happen or not.” 10
Why is teamwork so important? The answer to this question has a long history,
dating back to research on British coal mining in the 1940s and the Japanese economic
miracle of the 1970s. 11 These early studies and a huge number of investigations since
social capital
The knowledge and
other resources available
to people from a durable
network that connects
them to others.
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then have revealed that under the right conditions, teams make better decisions, develop
better products and services, and create a more engaged workforce than do employ-
ees working alone. 12 Similarly, team members can quickly share information and
coordinate tasks, whereas these processes are slower and prone to more errors in
traditional departments led by supervisors. Teams typically provide superior cus-
tomer service because they offer more breadth of knowledge and expertise to cus-
tomers than individual “stars” can offer.
In many situations, people are potentially more motivated when working in teams
than when working alone. 13 One reason for this motivation is that, as we mentioned a few
paragraphs ago, employees have a drive to bond and are motivated to fulfill the goals of
groups to which they belong. This motivation is particularly strong when the team is part
of the employee’s social identity. Second, people are more motivated in teams because
they are accountable to fellow team members, who monitor performance more closely
than a traditional supervisor. This is particularly true where the team’s performance de-
pends on the worst performer, such as on an assembly line, where how fast the product
is assembled depends on the speed of the slowest employee. Third, under some circum-
stances, performance improves when employees work near others because co-workers
become benchmarks of comparison. Employees are also motivated to work harder be-
cause of apprehension that their performance will be compared to others’ performance.
The Challenges of Teams
In spite of the many benefits of teams, they are not always as effective as individuals
working alone. 14 Teams are usually better suited to complex work, such as designing a
building or auditing a company’s financial records. Under these circumstances, one
person rarely has all the necessary knowledge and skills. Instead, the work is per-
formed better by dividing its tasks into more specialized roles, with people in those
specialized jobs coordinating with each other. In contrast, work is typically performed
more effectively by individuals alone when they have all the necessary knowledge and
skills and the work cannot be divided into specialized tasks or is not complex enough
to benefit from specialization. Even where the work can and should be specialized, a
team structure might not be necessary if the tasks performed by several people require
minimal coordination.
The main problem with teams is that they have additional costs called process
losses —resources (including time and energy) expended toward team development
and maintenance rather than the task. 15 It is much more efficient for an individual to
work out an issue alone than to resolve differences of opinion with other people. For
a team to perform well, team members need to agree and have mutual understanding
of their goals, the strategy for accomplishing those goals, their specific roles, and
informal rules of conduct. 16 Developing and maintaining these team requirements
divert time and energy away from performing the work.
The process-loss problem is particularly apparent when more staff are added or
replace others on the team. Team performance suffers when a team adds members,
because those employees need to learn how the team operates and how to coordinate
efficiently with other team members. The software industry even has a name for this:
Brooks’s law (also called the “mythical man-month”) says that adding more people
to a late software project only makes it later! According to some sources, Apple Com-
puter may have fallen into this trap in the recent development of its professional
photography software program, called Aperture. When the project started to fall
behind schedule, the manager in charge of the Aperture project increased the size of
Brooks’s law
The principle that adding
more people to a late
software project only
makes it later. Also
called the mythical
man-month.
process losses
Resources (including
time and energy)
expended toward team
development and
maintenance rather
than the task.
Chapter 8 Team Dynamics 237
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238 Part Three Team Processes
the team—some sources say it ballooned from 20 to almost 150 engineers and quality
assurance staff within a few weeks. Unfortunately, adding so many people further
bogged down the project. The result? When Aperture was finally released, it was
nine months late and considered one of Apple’s buggier software offerings. 17
Social Loafing Perhaps the best-known limitation of teams is the risk of productiv-
ity loss due to social loafing. Social loafing occurs when people exert less effort (and
usually perform at a lower level) when working in teams than when working alone. 18
It is most likely to occur in large teams where individual output is difficult to identify.
In particular, employees tend to put out less effort when the team produces a single
output, such as solving a customer’s problem. Under these conditions, employees
aren’t as worried that their individual performance will be noticed. There is less so-
cial loafing when each team member’s contribution is more noticeable; this can be
achieved by reducing the size of the team, for example, or measuring each team
member’s performance. Social loafing is also less likely to occur when the task is
interesting, because individuals are more motivated by the work itself to perform
their duties. Social loafing is also less common when the team’s objective is important,
possibly because individuals experience more pressure from co-workers to perform
well. Finally, social loafing occurs less frequently among members who value team
membership and believe in working toward the team’s objectives. 19
In summary, teams can be very powerful forces for competitive advantage, or they
can be much more trouble than they are worth, so much so that job performance and
morale decline when employees are placed in teams. To understand when teams are
better than individuals working alone, we need to more closely examine the condi-
tions that make teams effective or ineffective. The next few sections of this chapter
discuss the model of team effectiveness.
social loafing
The problem that occurs
when people exert less
effort (and usually per-
form at a lower level)
when working in teams
than when working
alone.
Learning
Objectives
After reading the next two sections, you should be able to:
3. Diagram the team effectiveness model.
4. Discuss how task characteristics, team size, and team composition
influence team effectiveness.
A Model of Team Effectiveness
Let’s begin by clarifying the meaning of team effectiveness. A team is effective when it
benefits the organization, its members, and its own survival. 20 First, most teams exist to
serve some organizational purpose, so effectiveness is partly measured by the achieve-
ment of those objectives. Second, a team’s effectiveness relies on the satisfaction and
well-being of its members. People join groups to fulfill their personal needs, so effec-
tiveness is partly measured by this need fulfillment. Finally, team effectiveness includes
the team’s viability—its ability to survive. It must be able to maintain the commitment
of its members, particularly during the turbulence of the team’s development. Without
this commitment, people leave and the team will fall apart. The team must also secure
sufficient resources and find a benevolent environment in which to operate.
Why are some teams effective while others fail? This question has challenged
organi zational researchers for some time, and as you might expect, numerous models
of team effectiveness have been proposed over the years. 21 Exhibit 8.2 presents a
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model that integrates the main components of team effectiveness, each of which will
be examined closely over the next several pages. This model is best viewed as a
template of several theories because each component (team development, team cohe-
sion, etc.) includes its own set of theories and models to explain how that component
operates.
Organizational and Team Environment
The organizational and team environment represents all conditions beyond the
team’s boundaries that influence its effectiveness. Team members tend to work
together more effectively when they are at least partly rewarded for team perfor-
mance. 22 For instance, part of an employee’s paycheck at Whole Foods Market is
determined by the team’s productivity. Communication systems can influence team
effectiveness, particularly in virtual teams, which are highly dependent on informa-
tion technologies to coordinate work. Another environmental factor is the organiza-
tional structure; teams flourish when organized around work processes because this
structure increases interaction and interdependence among team members and
reduces interaction with people outside the team. High-performance teams also
depend on organizational leaders who provide support and strategic direction while
team members focus on operational efficiency and flexibility. 23
The physical layout of the team’s workspace can also make a difference. Medrad,
Inc., reorganized its production workspace so that teams now work in U-shaped
“cells” rather than along a straight assembly line. The Indianola, Pennsylvania, med-
ical device manufacturer discovered that this cellular layout improved team perfor-
mance by making it easier for team members to observe and assist each other. Toyota
Motor Corporation also recognizes the importance of physical layout in team effec-
tiveness by congregating people in a large open-space room (called an obeya ). In some
projects, such as development of the Prius hybrid vehicle, department managers are
Exhibit 8.2 Team Effectiveness Model
• Accomplish tasks
• Satisfy member
needs
• Maintain team
survival
Team Effectiveness
• Team development
• Team norms
• Team cohesion
• Team trust
• Rewards
• Communication
• Organizational structure
• Organizational leadership
• Physical space
• Task characteristics
• Team size
• Team composition
Organizational and
Team Environment
Team Design
Team Processes
Chapter 8 Team Dynamics 239
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240 Part Three Team Processes
brought together into the obeya to resolve issues and improve collaboration across
functions. In other projects, a few dozen development staff from engineering, design,
production, marketing, and other areas spend several weeks or longer working
together in the obeya. Toyota claims the obeya arrangement has significantly cut
product development time and costs. “The reason obeya works so well is that it’s all
about immediate face-to-face human contact,” explains an executive at Toyota’s
North American headquarters. 25
Team Design Elements
Along with setting up a team-friendly environment, leaders need to carefully design the
team itself, including task characteristics, team size, team composition, and team roles.
Task Characteristics
What type of work is best for teams? As we noted earlier, teams operate better than
individuals working alone on work that is sufficiently complex, such as launching the
business in a new market, developing a computer operating system, or constructing a
bridge. Complex work requires skills and knowledge beyond the competencies of
La-Z-Boy Teams Get Their Own Space La-Z-Boy Inc. has adopted a cellular manufacturing model of
production by organizing employees into teams responsible for building complete pieces of furniture. To
strengthen team dynamics, the five to seven cross-functional members of each team work side by side
rather than in specialized departments. This new configuration is a sharp contrast to the traditional
assembly line previously adopted at the Michigan-based company’s four production facilities. “The
process here used to be very departmentalized,” explains Jovie Dabu, general manager of La-Z-Boy’s
manufacturing facility in Redlands, California. “You would have a group of upholsterers in one place, the
sewing people in another section, the framing people in another area, and everyone would just work in
the same place all day.” La-Z-Boy executives say the new team structure has improved coordination,
communication, and team bonding. “The idea is to help make workers accountable, but also to give
them a sense of ownership of what they do,” said Greg Bachman, Redlands’ production manager.24
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Shared
resource
Pooled
interdependence
Employee Employee Employee
Sequential
interdependence
Employee Employee Employee
Reciprocal
interdependence
Employee
Employee
Employee
Employee
Exhibit 8.3
Levels of Task
Interdependence
one person. Teams are particularly well suited when the complex work can be di-
vided into more specialized roles and the people in the specialized roles require fre-
quent coordination with each other. Some evidence also suggests that teams work
best with well-structured tasks because it is easier to coordinate such work among
several people. 26 The challenge, however, is to find tasks with the uncommon combi-
nation of being both well structured and complex.
One task characteristic that is particularly important for teams is task interdepen-
dence —the extent to which team members must share materials, information, or ex-
pertise to perform their jobs. 27 Aside from complete independence, there are three
levels of task interdependence, as illustrated in Exhibit 8.3 . The lowest level of in-
terdependence, called pooled interdependence, occurs when an employee or work unit
shares a common resource, such as machinery, administrative support, or a budget,
with other employees or work units. This would occur in a team setting where each
member works alone but shares raw materials or machinery to perform her or his
otherwise independent tasks. Interdependence is higher under sequential interdepen-
dence , in which the output of one person becomes the direct input for another person
or unit. Sequential interdependence occurs where team members are organized in an
assembly line.
Reciprocal interdependence, in which work output is exchanged back and forth among
individuals, produces the highest degree of interdependence. People who design a new
product or service would typically have reciprocal interdependence because their
design decisions affect others involved in the design process. Any decision made by the
design engineers would influence the work of the manufacturing engineer and purchas-
ing specialist, and vice versa. Employees with reciprocal interdependence should be
organized into teams to facilitate coordination in their interwoven relationship.
As a rule, the higher the level of task interdependence, the greater the need to
organize people into teams rather than have them work alone. A team structure
improves interpersonal communication and thus results in better coordination. High
task interdependence also motivates most people to be part of the team. However,
task interdependence
The extent to which
team members must
share materials, infor-
mation, or expertise
in order to perform
their jobs.
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242 Part Three Team Processes
the rule that a team should be formed when employees have high interdependence
applies when team members have the same task goals, such as serving the same
clients or collectively assembling the same product. When team members have dif-
ferent goals (such as serving different clients) but must depend on other team mem-
bers to achieve those unique goals, teamwork might create excessive conflict. Under
these circumstances, the company should try to reduce the level of interdependence
or rely on supervision as a buffer or mediator among employees.
Team Size
What is the ideal size for a team? One popular (but untested) rule is that the optimal
team size is between five and seven people. Yet some observers have recently argued
that tasks are getting so complex that many teams need to have more than 100 mem-
bers. 28 Unfortunately, the former piece of advice is overly simplistic, and the latter
seems to have lost sight of the meaning and dynamics of real teams. Generally, teams
should be large enough to provide the necessary competencies and perspectives to
perform the work, yet small enough to maintain efficient coordination and meaning-
ful involvement of each member. 29 As a Sun Microsystems executive explains: “You
need to have a balance between having enough people to do all the things that need
to be done, while keeping the team small enough so that it is cohesive and can make
decisions effectively and speedily.” 30 Small teams (say, less than a dozen members)
operate effectively because they have less process loss. Members of smaller teams
also tend to feel more engaged because they get to know their teammates (which
improves trust), have more influence on the group’s norms and goals, and feel more
responsible for the team’s successes and failures.
Should companies have 100-person teams if the task is highly complex? The
answer is that a group this large probably isn’t a team, even if management calls it
one. A team exists when its members interact and influence each other, are mutually
accountable for achieving common goals associated with organizational objectives,
and perceive themselves as a social entity within an organization. It is very difficult
for everyone in a 100-person work unit to influence each other and experience
enough cohesion to perceive themselves as team members. Executives at Whole
Foods Market were aware that real teams are much smaller than 100 people when the
company opened its huge store in New York City’s Columbus Circle. The store had
140 cashiers—far too many people for one cashier team—so Whole Foods Market
divided the group into teams with a dozen employees each. All cashiers meet as one
massive group every month to discuss production issues, but the smaller teams work
effectively on a day-to-day basis. 31
Team Composition
Choosing a new team member is too important a decision at Whole Foods Market to
be left to management. Instead, as this chapter’s opening vignette noted, new hires
are approved for permanent employment by their teammates. Royal Dutch/Shell is
also serious about selecting job applicants who have excellent team skills. As Global
Connections 8.1 describes, the global energy giant hosts a special five-day exercise in
Europe, North America, Asia, and the Middle East to observe how well participants
work under pressure with others from diverse backgrounds.
To work effectively in a team, employees must have more than technical skills and
self-leadership to perform their own work; they must also be able and willing to per-
form that work in a team environment. The most frequently mentioned characteristics
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Chapter 8 Team Dynamics 243
Global Connections 8.1
Royal Dutch Shell Finds Team
Players in Gourami
Royal Dutch Shell (Shell) discovered long ago that a job inter-
view isn’t the best way to determine a job applicant’s technical
skills or how well he or she works in a team environment. That’s
why the global energy company launched the Shell Gourami
Business Challenge a decade ago in Europe and very recently
in the United States, Asia, and the Middle East. The five-day
event involves several dozen engineering and business univer-
sity students who are split into several teams representing
different departments (exploration, refining, manufacturing,
finance, etc.). Teams initially develop a business plan for their
own department; later, they must merge the departmental plans
into an organizationwide business strategy. On the final day,
the multiteam’s strategy is presented to Gourami’s board of
directors, which consists of several Shell senior executives.
Shell leaders emphasize that the Gourami event is more like
an audition than a competition because the company hires as
many participants as it thinks are qualified. Throughout the
event, Shell assessors evaluate students’ technical knowledge
and skills, but they equally observe how effectively the students
work in diverse teams. The need for team skills is quickly appar-
ent to most participants. “Working with people from all sorts of
disciplines and cultures has taught me the importance of ex-
panding my knowledge to beyond my field,” acknowledges
Yoganathan Periasamy, a geology student at Universiti Malaysia
Sabah. “You need to be able to combine your expertise with
everyone else’s in order to make a project work.”
Arpan Shah, a University of Texas finance student who
attended the Gourami exercise in the United States, also rec-
ognized that team skills were vital to help him work with people
from different specializations. “Coming from a business back-
ground, it’s most difficult to understand the engineering aspect
of the oil industry,” says Shah. “We have to work together so
that both sides understand each other.”
Team cooperation isn’t easy, however, due to the chal-
lenges created in the Gourami exercise. “Having to come up
with the proposal, and then integrate all our ideas into one plan
was definitely not easy,” admits Angela Bong, a mechanical
engineering student at Universiti Teknologi Malaysia. “Initially,
we did have conflict. But we soon realized that everyone oper-
ates differently, and that if we are to function well as a whole,
we have to understand how others work.”
Claire Gould, a mechanical engineering student at Impe-
rial College, London, who attended the European event, also
noticed the challenges and potential of teamwork with
people from other disciplines. “Dealing with the ‘real-life’
challenges of Gourami made us all aware of the value of
other skills and aptitudes and the need to work as a team,”
says Gould.32
Royal Dutch/Shell has found a better way to identify the team
skills of prospective job applicants by observing business and
engineering students in the Shell Gourami Business Challenge.
or behaviors of effective team members are the “five C’s” illustrated in Exhibit 8.4 :
cooperating, coordinating, communicating, comforting, and conflict resolving. The
first three competencies are mainly (but not entirely) task-related, while the last two
mostly assist team maintenance: 33
• Cooperating. Effective team members are willing and able to work together
rather than alone. This includes sharing resources and being sufficiently adaptive
or flexible to accommodate the needs and preferences of other team members,
such as rescheduling use of machinery so that another team member with a
tighter deadline can use it.
243
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244 Part Three Team Processes
• Coordinating. Effective team members actively manage the team’s work so that it
is performed efficiently and harmoniously. For example, effective team members
keep the team on track and help to integrate the work performed by different
members. This typically requires that effective team members know the work
of other team members, not just their own.
• Communicating. Effective team members transmit information freely (rather than
hoarding), efficiently (using the best channel and language), and respectfully (min-
imizing arousal of negative emotions). They also listen actively to co-workers.
• Comforting. Effective team members help co-workers to maintain a positive and
healthy psychological state. They show empathy, provide psychological comfort,
and build co-worker feelings of confidence and self-worth.
• Conflict resolving. Conflict is inevitable in social settings, so effective team mem-
bers have the skills and motivation to resolve dysfunctional disagreements
among team members. This requires effective use of various conflict-handling
styles as well as diagnostic skills to identify and resolve the structural sources of
conflict.
These characteristics of effective team members are associated with conscientious-
ness and extroversion personality traits, as well as with emotional intelligence. Fur-
thermore, the old saying “One bad apple spoils the barrel” seems to apply to teams;
one team member who lacks these teamwork competencies may undermine the
dynamics of the entire team. 34
Coordinating
• Align work with
others
• Keep team on
track
Communicating
• Share information
freely, efficiently,
respectfully
• Listen actively
Comforting
• Show empathy
• Provide
psychological
comfort
• Build confidence
Conflict
resolving
• Diagnose conflict
sources
• Use best conflict-
handling style
Cooperating
• Share resources
• Accommodate others
Team Member
Competencies
Sources: Based on information in V. Rousseau, C. Aubé, and A. Savoie, “Teamwork Behaviors: A Review and an
Integration of Frameworks,” Small Group Research 37, no. 5 (2006), pp. 540–570; M. L. Loughry, M. W. Ohland, and
D. D. Moore, “Development of a Theory-Based Assessment of Team Member Effectiveness,” Educational and
Psychological Measurement 67, no. 3 (2007), pp. 505–524.
Exhibit 8.4
Five C’s of
Team Member
Competency
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Team Diversity Another important dimension of team composition is diversity.
There are two distinct and sometimes opposing issues relating to team diversity. 35
One issue is the notion that diverse teams possess better resources for tackling com-
plex or novel problems. One reason why diverse teams are more effective under
these conditions is that people from different backgrounds see a problem or opportu-
nity from different angles. Team members have different mental models, so they are
more likely to identify viable solutions to difficult problems. A second reason is that
diverse teams have a broader pool of technical competencies. For example, each
team at Rackspace, the San Antonio, Texas, provider of enterprise-level Web infra-
structure, consists of more than a dozen people with diverse skills such as account
management, systems engineering, technical support, billing expertise, and data cen-
ter support. Rackspace teams require these diverse technical competencies to serve
the needs of customers assigned to the team. A third reason favoring teams with
diverse members is that they provide better representation of the team’s constituents,
such as other departments or clients from similarly diverse backgrounds. A team
responsible for designing and launching a new service, for instance, should have
representation from the organization’s various specializations so that people in those
work units will support the team’s decisions.
The second issue regarding diverse teams is that diversity often creates challenges
to the internal functioning of the team. 36 One problem is that diverse employees take
longer to become a high-performing team. This partly occurs because team members
take longer to bond with people who are different from them, particularly when others
hold different perspectives and values (i.e., deep diversity). Diverse teams are suscep-
tible to “fault lines”—hypothetical dividing lines that may split a team into subgroups
along gender, ethnic, professional, or other dimensions. These fault lines reduce team
effectiveness by reducing the motivation to communicate and coordinate with team-
mates on the other side of the hypothetical divisions. In contrast, members of teams
with minimal diversity experience higher satisfaction, less conflict, and better inter-
personal relations. Consequently, homogeneous teams tend to be more effective on
tasks requiring a high degree of cooperation and coordination, such as emergency
response teams.
Learning
Objectives
After reading this section, you should be able to:
5. Summarize the team development process.
6. Discuss how team norms develop and how they may be altered.
7. List six factors that influence team cohesion.
8. Describe the three foundations of trust in teams and other interper-
sonal relationships.
Team Processes
The third set of elements in the team effectiveness model, collectively known as team
processes, includes team development, norms, cohesion, and trust. These elements
represent characteristics of the team that continuously evolve.
Team Development
A few years ago, the National Transportation Safety Board (NTSB) studied the cir-
cumstances under which airplane cockpit crews were most likely to have accidents
Chapter 8 Team Dynamics 245
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246 Part Three Team Processes
Adjourning
• Task-oriented, committed
• Efficient coordination
• High cooperation and trust
• Conflicts resolved quickly
Performing
• Establish roles
• Agree on team objectives
• Form team mental models
• Develop cohesion
Norming
• Interpersonal conflict
• Compete for team roles
• Influence goals and means
• Establish norms
Storming
• Discover expectations
• Evaluate value of membership
• Defer to existing authority
• Test boundaries of behavior
Forming
Exhibit 8.5 Stages of Team Development
and related problems. What the NTSB discovered was startling: 73 percent of all
incidents took place on the crew’s first day, and 44 percent occurred on the crew’s
very first flight together. This isn’t an isolated example. NASA studied fatigue of
pilots after returning from multiple-day trips. Fatigued pilots made more errors in the
NASA flight simulator, as one would expect. But the NASA researchers didn’t expect
the discovery that fatigued crews who had worked together made fewer errors than
did rested crews who had not yet flown together. 37
The NTSB and NASA studies reveal that team members must resolve several
issues and pass through several stages of development before emerging as an effec-
tive work unit. They need to get to know and trust each other, understand and agree
on their respective roles, discover appropriate and inappropriate behaviors, and learn
how to coordinate with each other. The longer team members work together, the bet-
ter they develop common or complementary mental models, mutual understanding,
and effective performance routines to complete the work.
A popular model that captures many team development activities is shown in
Exhibit 8.5 . 38 The model shows teams moving systematically from one stage to the
next, while the dashed lines illustrate that teams might fall back to an earlier stage of
development as new members join or other conditions disrupt the team’s maturity.
Forming, the first stage of team development, is a period of testing and orientation in
which members learn about each other and evaluate the benefits and costs of contin-
ued membership. People tend to be polite, will defer to authority, and try to find out
what is expected of them and how they will fit into the team. The storming stage is
marked by interpersonal conflict as members become more proactive and compete
for various team roles. Members try to establish norms of appropriate behavior and
performance standards.
During the norming stage, the team develops its first real sense of cohesion as roles
are established and a consensus forms around group objectives and a common or
complementary team-based mental model. By the performing stage, team members
have learned to efficiently coordinate and resolve conflicts. In high-performance
teams, members are highly cooperative, have a high level of trust in each other, are
committed to group objectives, and identify with the team. Finally, the adjourning
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Sky-High Team Development Reaching the performing stage of team development isn’t just a goal for
the Blue Angels; it’s an absolute necessity to ensure the U.S. Navy’s aerial demonstration team com-
pletes its maneuvers with near-perfect timing. Although highly experienced before joining the squad,
the pilots put in long hours of practice to reach the pinnacle of team development. The F/A-18A Hornets
initially fly with a large space between them, but the team gradually tightens up the formation over the
10-week training program until the fighter jets are at times only 18 inches apart. Lieutenant Commander
John Saccomando, who flies the No. 2 position, explains that the training improves trust and common
mental models about each maneuver. “I know exactly what [the lead] jet is going to do, and when,” he
says. “It takes awhile to build that confidence.” Team development is also sped up through candid de-
briefings after every practice. “We close the door, and there’s no rank,” says Saccomando, who is ex-
pected to offer frank feedback to commanding officer and flight leader Commander Stephen R. Foley.
Foley points out that the safety and success of the Blue Angels depends on how well the team develop-
ment process works. “The team concept is what makes [everything] here click,” Foley emphasizes.42
stage occurs when the team is about to disband. Team members shift their attention
away from task orientation to a relationship focus.
The five-stage model is consistent with what students experience on team projects,
but it is far from a perfect representation of the team development process. 39 For
instance, it does not show that some teams remain in a particular stage longer than
others. It also masks two distinct processes during team development: (1) developing
team identity and (2) developing team competence. 40 Developing team identity refers to
the transition that individuals make from viewing the team as something “out there”
to something that is part of themselves. In other words, team development occurs
when employees shift their view of the team from “them” to “us.” This relates to
becoming familiar with the team, making it part of their social identity, and shaping
the team to better fit their prototype of an ideal team.
The other process— developing team competence —includes several changes related to
team learning. Team members develop habitual routines that increase work efficiency.
They also form shared or complementary mental models regarding team resources,
goals and tasks, social interaction, and characteristics of other team members. 41 Team
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248 Part Three Team Processes
mental models are visual or relational mental images that are shared by team mem-
bers. For example, members of a newly formed team might have different views
about customer service (quality of interaction, speed of service, technical expertise
provided, etc.). As the team develops, these views converge into more of a shared
mental model of customer service.
Team Roles An important part of the team development process is forming and
reinforcing team roles. A role is a set of behaviors that people are expected to per-
form because they hold certain positions in a team and organization. 43 In a team set-
ting, some roles help the team achieve its goals; other roles maintain relationships
within the team. Some team roles are formally assigned to specific people. For ex-
ample, team leaders are usually expected to initiate discussion, ensure that everyone
has an opportunity to present his or her views, and help the team reach agreement on
the issues discussed.
Team members are typically assigned specific roles as their formal job responsi-
bilities. Yet, throughout the continuous team development process, people vary
their formal roles to suit their personality and values as well as the wishes of other
team members. Furthermore, many roles exist informally, such as being a cheer-
leader, initiator of new ideas, or an adviser who encourages the group to soberly
rethink their actions. The informal roles are shared among team members, but
many are eventually associated with specific team members. Again, the informal
role assignment process is influenced by each team member’s personal preferences
(personality and values) as well as through negotiated dynamics with other team
members. 44
Accelerating Team Development through Team Building Team develop-
ment, including sorting out team roles, takes time, so many companies try to speed
up the process through team-building activities. Team building consists of formal
activities intended to improve the development and functioning of a work team. 45 It
can help new teams, but it is more commonly applied to existing teams that have
regressed to earlier stages of team development due to membership turnover or loss
of focus. Some team-building interventions clarify the team’s performance goals,
increase the team’s motivation to accomplish these goals, and establish a mechanism
for systematic feedback on the team’s goal performance. Others try to improve the
team’s problem-solving skills. A third category of team building clarifies and recon-
structs each member’s perceptions of her or his role as well as the role expectations
that member has of other team members. Role definition team building also helps
the team to develop shared mental models—common internal representations of the
external world, such as how to interact with clients, maintain machinery, and engage
in meetings. Research studies indicate that team processes and performance depend
on how well teammates share common mental models about how they should work
together. 46
A popular form of team building is aimed at improving relations among team
members. This includes activities that help team members learn more about each
other, build trust in each other, and develop ways to manage conflict within the team.
Popular interventions such as wilderness team activities, paintball wars, and obstacle-
course challenges are typically offered to build trust. “If two colleagues hold the rope
for you while you’re climbing 10 meters up, that is truly team-building,” suggests a
partner in a German communications consulting firm who participated in that team-
building event. 47
role
A set of behaviors that
people are expected to
perform because of the
positions they hold in a
team and organization.
team building
A process that consists
of formal activities
intended to improve
the development and
functioning of a work
team.
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Although team-building activities are popular, their success is less certain than
many claim. 48 One problem is that team-building activities are used as general solu-
tions to general team problems. A better approach is to begin with a sound diagnosis
of the team’s health and then select team-building interventions that address weak-
nesses. 49 Another problem is that team building is applied as a one-shot medical in-
oculation that every team should receive when it is formed. In truth, team building is
an ongoing process, not a three-day jump start. 50 Finally, we must remember that
team building occurs on the job, not just on an obstacle course or in a national park.
Organizations should encourage team members to reflect on their work experiences
and to experiment with just-in-time learning for team development.
Team Norms
Norms are the informal rules and shared expectations that groups establish to regu-
late the behavior of their members. Norms apply only to behavior, not to private
thoughts or feelings. Furthermore, norms exist only for behaviors that are important
to the team. 51 Norms are enforced in various ways. Co-workers grimace if we are late
for a meeting, or they make sarcastic comments if we don’t have our part of the proj-
ect completed on time. Norms are also directly reinforced through praise from high-
status members, more access to valued resources, or other rewards available to the
team. But team members often conform to prevailing norms without direct reinforce-
ment or punishment because they identify with the group and want to align their
behavior with the team’s values. The more closely the person’s social identity is
connected to the group, the more the individual is motivated to avoid negative sanc-
tions from that group. 52
How Team Norms Develop Norms develop as soon as teams form because
people need to anticipate or predict how others will act. Even subtle events during
the team’s formation, such as how team members initially greet each other and
where they sit in the first meetings, can initiate norms that are later difficult to
change. Norms also form as team members discover behaviors that help them
function more effectively (such as the need to respond quickly to e-mail). In par-
ticular, a critical event in the team’s history can trigger formation of a norm or
sharpen a previously vague one. A third influence on team norms is the past expe-
riences and values that members bring to the team. If members of a new team
value work–life balance, norms are likely to develop that discourage long hours
and work overload. 53
Preventing and Changing Dysfunctional Team Norms Team norms often
become deeply anchored, so the best way to avoid norms that undermine organiza-
tional success or employee well-being is to establish desirable norms when the team
is first formed. One way to do this is to clearly state desirable norms as soon as the
team is created. Another approach is to select people with appropriate values. If
organizational leaders want their teams to have strong safety norms, they should hire
people who already value safety and who clearly identify the importance of safety
when the team is formed.
The suggestions so far refer to new teams, but how can organizational leaders
maintain desirable norms in older teams? First, as one recent study affirmed, leaders
often have the capacity to alter existing norms. 54 By speaking up or actively coaching
the team, they can often subdue dysfunctional norms while developing useful norms.
norms
The informal rules and
shared expectations
that groups establish
to regulate the behavior
of their members.
Chapter 8 Team Dynamics 249
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250 Part Three Team Processes
Team-based reward systems can also weaken counterproductive norms; however,
studies report that employees might continue to adhere to a dysfunctional team norm
(such as limiting output) even though this behavior reduces their paycheck. Finally, if
dysfunctional norms are deeply ingrained and the previous solutions don’t work, it
may be necessary to disband the group and replace it with people having more favor-
able norms.
Team Cohesion
Team cohesion refers to the degree of attraction people feel toward the team and
their motivation to remain members. It is a characteristic of the team, including the
extent to which its members are attracted to the team, are committed to the team’s
goals or tasks, and feel a collective sense of team pride. 55 Thus, team cohesion is an
emotional experience, not just a calculation of whether to stay or leave the team. It
exists when team members make the team part of their social identity. Team cohesion
is therefore associated with team development because, as mentioned earlier, team
members develop a team identity as part of the team development process.
Influences on Team Cohesion Several factors influence team cohesion: member
similarity, team size, member interaction, difficult entry, team success, and external
competition or challenges. For the most part, these factors reflect the individual’s
social identity with the group and beliefs about how team membership will fulfill
personal needs.
• Member similarity. For more than 2,000 years, philosophers and researchers have
observed that people with similar backgrounds and values are more comfortable
with and attractive to each other. In team settings, this similarity-attraction effect
means that teams have higher cohesion—or become cohesive more quickly—when
members are similar to each other. Diversity tends to undermine cohesion, but
this depends on the type of diversity. For example, teams consisting of people
from different job groups seem to gel together just as well as teams of people
from the same job. 56
• Team size. Smaller teams tend to have more cohesion than larger teams because
it is easier for a few people to agree on goals and coordinate work activities.
However, small teams have less cohesion when they lack enough members to
perform the required tasks.
• Member interaction. Teams tend to have more cohesion when team members in-
teract with each other fairly regularly. This occurs when team members perform
highly interdependent tasks and work in the same physical area.
• Somewhat difficult entry. Teams tend to have more cohesion when entry to the
team is restricted. The more elite the team, the more prestige it confers on its
members, and the more they tend to value their membership in the unit. At the
same time, research suggests that severe initiations can weaken team cohesion
because of the adverse effects of humiliation, even for those who successfully
endure the initiation. 57
• Team success. Cohesion is both emotional and instrumental, with the latter referring
to the notion that people feel more cohesion to teams that fulfill their needs and
goals. Consequently, cohesion increases with the team’s level of success. 58 Fur-
thermore, individuals are more likely to attach their social identity to successful
teams than to those with a string of failures.
team cohesion
The degree of attraction
people feel toward
the team and their
motivation to remain
members.
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Chapter 8 Team Dynamics 251
• External competition and challenges. Team cohesion tends to increase when members
face external competition or a valued objective that is challenging. This might
include a threat from an external competitor or friendly competition from other
teams. Employees value their membership on the team because of its ability to
overcome the threat or competition and as a form of social support. However,
cohesion can dissipate when external threats are severe because these threats are
stressful and cause teams to make less effective decisions. 59
Consequences of Team Cohesion Every team must have some minimal level
of cohesion to maintain its existence. People who belong to high-cohesion teams
are motivated to maintain their membership and to help the team perform effec-
tively. Compared to low-cohesion teams, high-cohesion team members spend
more time together, share information more frequently, and are more satisfied
with each other. They provide each other with better social support in stressful
situations. 60
Members of high-cohesion teams are generally more sensitive to each other’s needs
and develop better interpersonal relationships, thereby reducing dysfunctional con-
flict. When conflict does arise, members tend to resolve their differences swiftly and
effectively. With better cooperation and more conformity to norms, high-cohesion
teams usually perform better than low-cohesion teams. 61 However, as Exhibit 8.6
illustrates, this relationship holds true only when team norms are compatible with
organizational values and objectives. Cohesion motivates employees to perform at a
level more consistent with team norms, so when those norms conflict with the orga-
nization’s success (such as when norms support high absenteeism or acting unethi-
cally), high cohesion will reduce team performance. 62
Team Trust
Any relationship—including the relationship among team members—depends on a
certain degree of trust. 63 Trust refers to positive expectations one person has to-
ward another person in situations involving risk. A high level of trust occurs when
Team norms
support
company
goals
Low
Team
cohesiveness
High
Team norms
conflict with
company
goals
Moderately
high task
performance
Moderately
low task
performance
High task
performance
Low task
performance
Exhibit 8.6
Effect of Team
Cohesion on Task
Performance
trust
Positive expectations
one person has toward
another person in situa-
tions involving risk.
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252 Part Three Team Processes
others affect you in situations where you are at risk but you believe they will not
harm you. Trust includes both your beliefs and conscious feelings about the rela-
tionship with other team members. In other words, a person both logically evaluates
the situation as trustworthy and feels that it is trustworthy. 64 Trust can also be un-
derstood in terms of the foundation of the trust. From this perspective, people trust
others on the basis of three foundations: calculus, knowledge, and identification
(see Exhibit 8.7 ).
Calculus-based trust represents a logical calculation that other team members will
act appropriately because they face sanctions if their actions violate reasonable
expectations. 65 It offers the lowest potential trust and is easily broken by a violation
of expectations. Generally, calculus-based trust alone cannot sustain a team’s rela-
tionship, because it relies on deterrence. Knowledge-based trust is based on the pre-
dictability of another team member’s behavior. Even if we don’t agree with a
particular team member’s actions, his or her consistency generates some level of
trust. Knowledge-based trust also relates to confidence in the other person’s ability
or competence, such as the confidence that exists when we trust a physician. 66
Knowledge-based trust offers a higher potential level of trust and is more stable because
it develops over time.
Identification-based trust is based on mutual understanding and an emotional bond
among team members. It occurs when team members think, feel, and act like each
other. High-performance teams exhibit this level of trust because they share the same
values and mental models. Identification-based trust is potentially the strongest and
most robust of all three types of trust. The individual’s self-concept is based partly on
membership in the team, and he or she believes the members’ values highly overlap,
so any transgressions by other team members are quickly forgiven. People are more
reluctant to acknowledge a violation of this high-level trust because it strikes at the
heart of their self-concept.
Dynamics of Team Trust Employees typically join a team with a moderate or
high level—not a low level—of trust in their new co-workers. The main explanation for
the initially high trust (called swift trust ) in organizational settings is that people usu-
ally believe their teammates are reasonably competent (knowledge-based trust) and
Exhibit 8.7
Three Foundations
of Trust in Teams Identification-
based trust
High
Type of trust Description
Low
Potential
level of
trust
• Based on common mental models and values.
• Increases with person’s social identity with
team.
Knowledge-
based trust
• Based on predictability and competence.
• Fairly robust.
• Based on common mental models and values.
• Increases with person’s social identity
with team.
Calculus-
based trust
• Based on deterrence.
• Fragile and limited potential because
dependent on punishment.
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Chapter 8 Team Dynamics 253
they tend to develop some degree of social identity with the team (identification-
based trust). Even when working with strangers, most of us display some level of
trust, if only because it supports our self-concept of being a nice person. 67 However,
trust is fragile in new relationships because it is based on assumptions rather than
well-established experience. Consequently, recent studies report that trust tends to
decrease rather than increase over time. This is unfortunate because employees be-
come less forgiving and less cooperative toward others as their level of trust decreases,
and this undermines team and organizational effectiveness. 68
The team effectiveness model is a useful template for understanding how teams
work—and don’t work—in organizations. With this knowledge in hand, let’s briefly
investigate two types of teams that have received considerable attention among OB
experts and practitioners: self-directed teams and virtual teams.
self-directed teams
(SDTs)
Cross-functional work
groups that are orga-
nized around work
processes, complete
an entire piece of work
requiring several inter-
dependent tasks, and
have substantial auton-
omy over the execution
of those tasks.
Learning
Objectives
After reading the next three sections, you should be able to:
9. Discuss the characteristics and factors required for success of self-
directed teams and virtual teams.
10. Identify four constraints on team decision making.
11. Discuss the advantages and disadvantages of four structures that
potentially improve team decision making.
Self-Directed Teams
Chrysler believes that one of the key success factors for the automaker’s future is
“smart manufacturing,” which includes applying lean manufacturing principles in
plants operated by self-directed teams (SDTs) . The automaker introduced SDTs a
decade ago at its operations in Mexico. Today, employees at Chrysler’s plant in
Saltillo, Mexico, are organized into teams of a dozen people responsible for a specific
set of integrated tasks, including maintenance, quality control, safety, and productiv-
ity in their work area. Some of Chrysler’s Mexican operations already exceed the ef-
ficiency levels of Toyota, which pioneered lean manufacturing. 69
Self-directed teams are defined by two distinctive features. 70 First, the team com-
pletes an entire piece of work requiring several interdependent tasks. This type of
work arrangement clusters the team members together while minimizing interde-
pendence and interaction with employees outside the team. The result is a close-
knit group of employees who depend on each other to accomplish their individual
tasks. For example, Chrysler employees responsible for assembling engines would
naturally work more closely with each other than with members of other teams.
La-Z-Boy also recently shifted from a traditional assembly line to self-directed
teams. As described earlier in this chapter, the furniture manufacturer reorganized
production employees into teams responsible for constructing an entire product.
Members of each team work closely with each other and minimally with members
of other teams.
The second distinctive feature of SDTs is that they have substantial autonomy
over the execution of their tasks. In particular, these teams plan, organize, and
control work activities with little or no direct involvement of a higher-status super-
visor. The teams at Whole Foods Market, which was described at the beginning of
this chapter, are considered self-directed because of their autonomy: Every team
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254 Part Three Team Processes
“gets a profit-and-loss statement, it’s responsible for managing inventory, labor
productivity, gross margins; and its members are responsible for many of the
product-placement decisions,” says Whole Foods Market cofounder and CEO
John Mackey. 71
Self-directed teams are found in many industries, ranging from petrochemical
plants to aircraft parts manufacturing. Almost all the top-rated manufacturing firms in
North America rely on SDTs. 72 The popularity of SDTs is consistent with research
indicating that they potentially increase both productivity and job satisfaction. For
instance, one study found that car dealership service shops that organize employees
into SDTs are significantly more profitable than shops where employees work without
a team structure. Another study reported that both short- and long-term measures of
customer satisfaction increased after street cleaners in a German city were organized
into SDTs. 73
Success Factors for Self-Directed Teams
Self-directed teams probably would add value in most organizations, but several con-
ditions must be in place to realize their benefits. 74 In addition to managing the team
dynamics issues described earlier in this chapter, SDTs operate best when they are
Reckitt Benckiser’s Prescription for Productivity: Self- Directed Teams Through teamwork and lean
manufacturing practices, Reckitt Benckiser Healthcare has become one of the most productive phar-
maceutical operations in Europe. In fact, teamwork is one of the company’s four core values. At its
facility in Hull, United Kingdom, for example, every line is operated by a dedicated self-directed team.
“The people on the lines decide how they are going to run over the next three to four weeks,” says Lisa
Adams, team leader of the area that packages products in sachets and tubes. Mark Smith, a crew
leader of one line, proudly notes that his team has become “one of the most efficient in northern Europe”
because “we were given the opportunity to take ownership of the line.” The benefits of self-directed
teams were apparent when the team responsible for producing Gaviscon antacid tablets tackled a
problem with the delivery of tablets in the production process. The team changed the tablet-feed angle
and, after a few trials, found a solution. That production line hasn’t experienced any tablet-feed problems,
and this has significantly reduced costs and improved efficiency due to fewer downtimes and less
wasted product.75
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Chapter 8 Team Dynamics 255
responsible for an entire work process, such as making an entire product or providing
a service. Organization around a work process keeps each team sufficiently indepen-
dent from other teams, yet it demands a relatively high degree of interdependence
among employees within the team. 76 SDTs should also have sufficient autonomy to
organize and coordinate their work. Autonomy allows them to respond more quickly
and effectively to client and stakeholder demands. It also motivates team members
through feelings of empowerment. Finally, SDTs are more successful when the work
site and technology support coordination and communication among team members
and increase job enrichment. 77 Too often, management calls a group of employees a
“team,” yet the work layout, assembly-line structure, and other technologies isolate
the employees from each other.
Virtual Teams
PricewaterhouseCoopers (PwC) employs 190 training professionals in 70 offices
across the United States. These professionals, along with many more consultants and
academics who provide employee development services, routinely form virtual teams
for new projects. “Virtual teaming is the norm for us,” says Peter Nicolas, PwC’s
learning solutions manager in Florham Park, New Jersey. 78
PwC has had plenty of experience with the growing trend toward virtual teams .
Virtual teams are teams whose members operate across space, time, and organiza-
tional boundaries and are linked through information technologies to achieve organi-
zational tasks. 79 Virtual teams differ from traditional teams in two ways: (1) They are
not usually colocated (do not work in the same physical area), and (2) due to their
lack of colocation, members of virtual teams depend primarily on information
technologies rather than face-to-face interaction to communicate and coordinate their
work effort.
According to one estimate, more than 60 percent of employees in professions are
members of a virtual team at some point during the year. In global companies such as
IBM, almost everyone in knowledge work is part of a virtual team. One reason why
virtual teams have become so widespread is that information technologies have made it
easier than ever before to communicate and coordinate with people at a distance. 80 The
shift from production-based to knowledge-based work is a second reason why virtual
teamwork is feasible. It isn’t yet possible to make a physical product when team mem-
bers are located apart, but most of us are now in jobs that mainly process knowledge.
Information technologies and knowledge-based work make virtual teams possible,
but organizational learning and globalization are two reasons why they are increas-
ingly necessary . Virtual teams represent a natural part of the organizational learning
process because they encourage employees to share and use knowledge where geog-
raphy limits more direct forms of collaboration. Globalization makes virtual teams
increasingly necessary because employees are spread around the planet rather than
around one city. Thus, global businesses depend on virtual teamwork to leverage
their human capital.
Success Factors for Virtual Teams
Virtual teams have all the challenges of traditional teams, along with the complica-
tions of distance and time. Fortunately, OB researchers have been keenly interested
in virtual teams, and their studies are now yielding ways to improve virtual-team ef-
fectiveness. 81 First, along with having the team competencies described earlier in this
chapter, members of successful virtual teams must have the ability to communicate
virtual teams
Teams whose members
operate across space,
time, and organizational
boundaries and are
linked through informa-
tion technologies to
achieve organizational
tasks.
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256 Part Three Team Processes
easily through technology, strong self-leadership skills to motivate and guide their
behavior without peers or bosses nearby, and higher emotional intelligence so that
they can decipher the feelings of teammates from e-mail and other limited communi-
cation media. Second, studies have found that leaders typically impose technology on
virtual teams rather than allow them to adopt technology that suits their needs at a
particular time. The best situation occurs when virtual teams have a toolkit of com-
munication vehicles (e-mail, virtual whiteboards, videoconferencing, etc.), which gain
and lose importance over different parts of the project.
The final recommendation is that virtual-team members should meet face-to-face
fairly early in the team development process. This idea may seem contradictory to the
entire notion of virtual teams, but so far, no technology has replaced face-to-face inter-
action for high-level bonding and mutual understanding. “I always try to do the kickoff
meeting face-to-face,” says Scott Patterson, PwC’s e-learning manager in Atlanta. “We
also try to bring the group back together for major milestones in a project.” Similarly,
when IBM formed a virtual team to build an electronic customer-access system for
Shell, employees from both firms began with an “all hands” face-to-face gathering to
assist the team development process. The two firms also made a rule that the dispersed
team members should have face-to-face contact at least once every six weeks through-
out the project. Without this, “after about five or six weeks we found some of that com-
munication would start to break down,” says the IBM comanager for the project. 83
Team Decision Making
Self-directed teams, virtual teams, and practically all other groups are expected to
make decisions. Under certain conditions, teams are more effective than individuals at
identifying problems, choosing alternatives, and evaluating their decisions. To lever-
age these benefits, however, we first need to understand the constraints on effective
team decision making. Then, we look at specific team structures that try to overcome
these constraints.
Constraints on Team Decision Making
Anyone who has spent enough time in the workplace can reel off several ways in
which teams stumble in decision making. The four most common problems are time
constraints, evaluation apprehension, pressure to conform, and groupthink.
Leading CulturalConnect with a Virtual Connect As social media
manager at Sun Microsystems, Sumaya Kazi (shown in photo) gets
plenty of experience working in virtual teams, but her virtual-team skills
are really put to the test in her moonlighting job as executive director and
founder of CulturalConnect. CulturalConnect is an online media company
Kazi created a few years ago to highlight young people of ethnic back-
grounds who are making their mark in the world. CulturalConnect’s five
online magazines (each representing a different ethnic group) operate
entirely with a virtual team of two dozen volunteer staff spread across
18 cities in eight states and two other countries. Although the dispersed
workforce presents challenges, Kazi says she is proud of her ability to
form a team “and energize it, even though it’s virtual.”82
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Chapter 8 Team Dynamics 257
Time Constraints There’s a saying that “committees keep minutes and waste
hours.” This reflects the fact that teams take longer than individuals to make deci-
sions. 84 Unlike individuals, teams require extra time to organize, coordinate, and
maintain relationships. The larger the group, the more time is required to make a
decision. Team members need time to learn about each other and build rapport.
They need to manage an imperfect communication process so that there is sufficient
understanding of each other’s ideas. They also need to coordinate roles and rules of
order within the decision process.
Another time-related constraint found in most team structures is that only one
person can speak at a time. 85 This problem, known as production blocking , under-
mines idea generation in several ways. First, team members need to listen in on the
conversation to find an opportune time to speak up, and this monitoring makes it dif-
ficult for them to concentrate on their own ideas. Second, ideas are fleeting, so the
longer they wait to speak up, the more likely these flickering ideas will die out. Third,
team members might remember their fleeting thoughts by concentrating on them,
but this causes them to pay less attention to the conversation. By ignoring what others
are saying, team members miss other potentially good ideas as well as the opportu-
nity to convey their ideas to others in the group.
Evaluation Apprehension Individuals are reluctant to mention ideas that seem
silly because they believe (often correctly) that other team members are silently eval-
uating them. 86 This evaluation apprehension is based on the individual’s desire to
create a favorable self-presentation and need to protect self-esteem. It is most com-
mon when meetings are attended by people with different levels of status or expertise
or when members formally evaluate each other’s performance throughout the year
(as in 360-degree feedback). Creative ideas often sound bizarre or illogical when first
presented, so evaluation apprehension tends to discourage employees from mention-
ing them in front of co-workers.
Pressure to Conform Team cohesion leads employees to conform to the team’s
norms. This control keeps the group organized around common goals, but it may also
cause team members to suppress their dissenting opinions, particularly when a strong
team norm is related to the issue. When someone does state a point of view that violates
the majority opinion, other members might punish the violator or try to persuade him or
her that the opinion is incorrect. Conformity can also be subtle. To some extent, we de-
pend on the opinions that others hold to validate our own views. If co-workers don’t
agree with us, we begin to question our own opinions even without overt peer pressure.
Groupthink Groupthink is the tendency of highly cohesive groups to value con-
sensus at the price of decision quality. 87 The concept includes the dysfunctional ef-
fects of conformity on team decision making, which were described above. It also
includes the dysfunctional consequences of trying to maintain harmony within the
team. This desire for harmony exists as a group norm and is most apparent when
team members have a strong social identity with the group. Groupthink supposedly
occurs most often when the team is isolated from outsiders, the team leader is opin-
ionated (rather than impartial), the team is under stress due to an external threat, the
team has experienced recent failures or other decision-making problems, and the
team lacks clear guidance from corporate policies or procedures.
The term groupthink is now part of everyday language, so much so that some ex-
perts worry that it commonly refers to almost any problem in team decision making.
evaluation apprehension
A decision-making
problem that occurs
when individuals are
reluctant to mention
ideas that seem silly
because they believe
(often correctly) that
other team members
are silently evaluating
them.
groupthink
The tendency of highly
cohesive groups to
value consensus at the
price of decision quality.
production blocking
A time constraint in
team decision making
due to the procedural
requirement that only
one person may speak
at a time.
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Meanwhile, scholarly studies have found that the symptoms of groupthink do not
cluster together as the concept assumes; some of these characteristics actually tend to
improve rather than undermine decision making in some situations. Although many
cases of groupthink have been documented, a recent study found that this evidence is
illusory because observers retrospectively make sense of bad decisions by incorrectly
perceiving evidence of groupthink. 88
In spite of the problems with the groupthink concept, some of its specific elements
continue to be relevant because they explain specific problems with team decision
making. One of these elements, conformity, was described above as a concern.
Another important element is the team’s overconfidence. Studies consistently report
that highly confident teams have a false sense of invulnerability, which makes them
less attentive in decision making than are moderately confident teams. 89
Team Structures to Improve Decision Making
There is plenty of research revealing problems with team decision making, but
several solutions also emerge from these bad-news studies. Team members need to
be confident in their decision making but not so confident that they collectively
feel invulnerable. This calls for team norms that encourage critical thinking as well
as team membership with sufficient diversity. Checks and balances need to be in
place to prevent one or two people from dominating the discussion. The team
should also be large enough to possess the collective knowledge to resolve the
problem yet small enough that the team doesn’t consume too much time or restrict
individual input.
Team structures also help to minimize the problems described over the previous
few pages. Four structures potentially improve team decision making in team set-
tings: constructive conflict, brainstorming, electronic brainstorming, and nominal
group technique.
Constructive Conflict A popular way to improve team decision making at Corning
Inc. is to assign promising ideas to two-person teams, who spend up to four months ana-
lyzing the feasibility of their assigned idea. The unique feature about this process is that
the team is deliberately designed so that one person is from marketing and the other has
technical expertise. This oil-and-water combination sometimes ruffles feathers, but it
seems to generate better ideas and evaluations. “We find great constructive conflict this
way,” says Deborah Mills, who leads Corning’s early-stage marketing team. 90
Constructive conflict occurs when people focus their discussion on the issue while
maintaining respect for people having other points of view. This conflict is called “con-
structive” because different viewpoints are encouraged so that ideas and recommenda-
tions can be clarified, redesigned, and tested for logical soundness. The main advantage
of this debate is that it presents different points of view and thus encourages all
participants to reexamine their assumptions and logic. The main challenge with con-
structive conflict is that healthy debate too often slides into personal attacks, a problem
that may explain why the evidence of constructive conflict on team decision making is
inconsistent. 91 We explore this issue further in Chapter 11, along with specific strate-
gies for minimizing the emotional effects of conflict while maintaining constructive
debate.
Brainstorming Brainstorming tries to leverage the creative potential of teams by es-
tablishing four simple rules: (1) Speak freely—describe even the craziest ideas; (2) don’t
criticize others or their ideas; (3) provide as many ideas as possible—the quality of ideas
brainstorming
A freewheeling, face-
to-face meeting where
team members aren’t
allowed to criticize but
are encouraged to speak
freely, generate as many
ideas as possible, and
build on the ideas of
others.
constructive conflict
The type of conflict that
occurs when people
focus their discussion
on the issue while
maintaining respect
for people having other
points of view.
258 Part Three Team Processes
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Chapter 8 Team Dynamics 259
increases with the quantity of ideas; and (4) build on the ideas that others have presented.
These rules are supposed to encourage divergent thinking while minimizing evaluation
apprehension and other team dynamics problems. Lab studies using university students
concluded many years ago that brainstorming isn’t very effective, largely because pro-
duction blocking and evaluation apprehension still interfere with team dynamics. 93
However, brainstorming may be more beneficial than the earlier studies indicated. 94
The earlier lab studies measured the number of ideas generated, whereas recent inves-
tigations within companies using brainstorming indicate that this team structure results
in more creative ideas, which is the main reason why companies use brainstorming.
Also, evaluation apprehension is less of a problem in high-performing teams that
embrace a learning orientation culture than it is for students brainstorming in lab
experiments. Another overlooked advantage of brainstorming is that participants in-
teract and participate directly, thereby increasing decision acceptance and team cohe-
sion. Finally, brainstorming sessions often spread enthusiasm, which tends to generate
more creativity. Overall, while brainstorming might not always be the best team struc-
ture, it seems to be more valuable than some of the earlier research studies indicated.
Electronic Brainstorming Electronic brainstorming is a more recent form of
brainstorming that relies on networked computers for submitting and sharing creative
ideas. After receiving the question or issue, participants enter their ideas using special
electronic brainstorming
A recent form of brain-
storming that relies on
networked computers
for submitting and
sharing creative ideas.
NASA’s Constructive Conflict Room The ill-fated flight of the space shuttle Columbia in 2003 was a
wake-up call for how NASA’s mission management team makes decisions. The Columbia accident in-
vestigation team concluded that concerns raised by engineers were either deflected or watered down
because the mission management team appeared to be “immersed in a culture of invincibility” and hi-
erarchical authority discouraged constructive debate. If top decision makers had more fully considered
the extent of damage during takeoff, they might have been able to save Columbia’s seven crew mem-
bers. To foster more open communications and constructive conflict, the mission management team’s
assigned-seating rectangular table has been replaced by a C-shaped arrangement where people sit
wherever they want (shown in photo). None of the 24 members stands out above the others in the new
setup. Around the walls of the room are pearls of wisdom reminding everyone of the pitfalls of team
decision making. “People in groups tend to agree on courses of action which, as individuals, they know
are stupid,” warns one poster.92
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Teams are groups of two or more people who interact
and influence each other, are mutually accountable for
achieving common goals associated with organizational
objectives, and perceive themselves as a social entity
within an organization. All teams are groups, because
they consist of people with a unifying relationship; not
all groups are teams, because some groups do not exist
to serve organizational objectives.
People join informal groups (and are motivated to be
on formal teams) for four reasons: (1) People have an in-
nate drive to bond, (2) group membership is an inherent
ingredient in a person’s self-concept, (3) some personal
goals are accomplished better in groups, and (4) individu-
als are comforted in stressful situations by the mere pres-
ence of other people. Teams have become popular because
they tend to make better decisions, support the organiza-
tional learning process, and provide superior customer ser-
vice. People also tend to be more motivated working in
teams. However, teams are not always as effective as indi-
viduals working alone. Process losses and social loafing are
two particular concerns that drag down team performance.
Team effectiveness includes the team’s ability to achieve
its objectives, fulfill the needs of its members, and maintain
Chapter Summary
its survival. The model of team effectiveness considers the
team and organizational environment, team design, and
team processes. Three team design elements are task char-
acteristics, team size, and team composition. Teams tend
to be better suited for situations in which the work is com-
plex and the tasks among employees have high interdepen-
dence. Teams should be large enough to perform the work
yet small enough for efficient coordination and meaningful
involvement. Effective teams are composed of people with
the competencies and motivation to perform tasks in a
team environment. Team member diversity has advan-
tages and disadvantages for team performance.
Teams develop through the stages of forming, storm-
ing, norming, performing, and eventually adjourning.
Within these stages are two distinct team development
processes: developing team identity and developing team
competence. Team development can be accelerated
through team building—any formal activity intended to
improve the development and functioning of a work
team. Teams develop norms to regulate and guide mem-
ber behavior. These norms may be influenced by initial
experiences, critical events, and the values and experi-
ences that team members bring to the group.
computer software. The ideas are distributed anonymously to other participants, who
are encouraged to piggyback on those ideas. Team members eventually vote electroni-
cally on the ideas presented. Face-to-face discussion usually follows. Electronic brain-
storming can be quite effective at generating creative ideas with minimal production
blocking, evaluation apprehension, or conformity problems. 95 Despite these numerous
advantages, electronic brainstorming seems to be too structured and technology-bound
for some executives. Some leaders may also feel threatened by the honesty of statements
generated through this process and by their limited ability to control the discussion.
Nominal Group Technique Nominal group technique is a variation of tradi-
tional brainstorming that tries to combine the benefits of team decision making with-
out the problems mentioned earlier. 96 The method is called “nominal” because
participants form a group in name only during two of its three stages. After the prob-
lem is described, team members silently and independently write down as many
solutions as they can. In the second stage, participants describe their solutions to the
other team members, usually in a round-robin format. As with brainstorming, there
is no criticism or debate, although members are encouraged to ask for clarification of
the ideas presented. In the third stage, participants silently and independently rank-
order or vote on each proposed solution. Nominal group technique tends to generate
a higher number of ideas and better-quality ideas than do traditional interacting and
possibly brainstorming groups. 97 Due to its high degree of structure, nominal group
technique usually maintains a high task orientation and relatively low potential for
conflict within the team. However, production blocking and evaluation apprehension
still occur to some extent.
260 Part Three Team Processes
nominal group technique
A variation of brain-
storming consisting of
three stages: Partici-
pants (1) silently and
independently docu-
ment their ideas,
(2) collectively describe
these ideas to the other
team members without
critique, and then
(3) silently and inde-
pendently evaluate the
ideas presented.
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brainstorming, p. 258
Brooks’s law, p. 237
constructive conflict, p. 258
electronic brainstorming, p. 259
evaluation apprehension, p. 257
groupthink, p. 257
nominal group technique, p. 260
norms, p. 249
process losses, p. 237
production blocking, p. 257
role, p. 248
self-directed teams (SDTs), p. 253
social capital, p. 236
social loafing, p. 238
task interdependence, p. 241
team building, p. 248
team cohesion, p. 250
teams, p. 234
trust, p. 251
virtual teams, p. 255
Key Terms
developers and contractors. In Kansas, team mem-
bers regularly called customers after a sale to ask
whether the products arrived on time and whether
they are satisfied. But when you moved to the Denver
office, no one seemed to make these follow-up
calls. A recently hired co-worker explained that
other co-workers discouraged her from making
those calls. Later, another co-worker suggested that
your follow-up calls were making everyone else look
lazy. Give three possible reasons why the norms in
Denver might be different from those in the Kansas
office, even though the customers, products, sales
commissions, and other characteristics of the work-
place are almost identical.
5. You have been assigned to a class project with five
other students, none of whom you have met before.
To what extent would team cohesion improve your
team’s performance on this project? What actions
would you recommend to build team cohesion
among student team members in this situation?
1. Informal groups exist in almost every form of social
organization. What types of informal groups exist in
your classroom? Why are students motivated to be-
long to these informal groups?
2. The late management guru Peter Drucker said: “The
now-fashionable team in which everybody works
with everybody on everything from the beginning
rapidly is becoming a disappointment.” Discuss
three problems associated with teams.
3. You have been put in charge of a cross-functional
task force that will develop enhanced Internet bank-
ing services for retail customers. The team includes
representatives from marketing, information services,
customer service, and accounting, all of whom will
move to the same location at headquarters for three
months. Describe the behaviors you might observe
during each stage of the team’s development.
4. You have just been transferred from the Kansas
office to the Denver office of your company, a
national sales organization of electrical products for
Critical Thinking Questions
Team cohesion—the degree of attraction people feel to-
ward the team and their motivation to remain members—
increases with member similarity, smaller team size, higher
degree of interaction, somewhat difficult entry, team suc-
cess, and external challenges. Cohesion increases team
performance when the team’s norms are congruent with
organizational goals. Trust is a psychological state compris-
ing the intention to accept vulnerability on the basis of
positive expectations of the intent or behavior of another
person. People trust others on the basis of three founda-
tions: calculus, knowledge, and identification.
Self-directed teams (SDTs) complete an entire piece of
work requiring several interdependent tasks, and they
have substantial autonomy over the execution of their
tasks. Members of virtual teams operate across space,
time, and organizational boundaries and are linked
through information technologies to achieve organiza-
tional tasks. Virtual teams are more effective when the
team members have certain competencies, the team has
the freedom to choose the preferred communication
channels, and the members meet face-to-face fairly early
in the team development process.
Team decisions are impeded by time constraints, eval-
uation apprehension, conformity to peer pressure, and
groupthink (specifically overconfidence). Four structures
potentially improve decision making in team settings:
constructive conflict, brainstorming, electronic brain-
storming, and nominal group technique.
261
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262
Case Study 8.1 THE SHIPPING INDUSTRY ACCOUNTING TEAM
For the past five years, I have been working at
McKay, Sanderson, and Smith Associates, a midsize
accounting firm in Boston that specializes in com-
mercial accounting and audits. My particular spe-
cialty is accounting practices for shipping companies,
ranging from small fishing fleets to a couple of the
big firms with ships along the East Coast.
About 18 months ago, McKay, Sanderson, and
Smith Associates became part of a large merger in-
volving two other accounting firms. These firms have
offices in Miami, Seattle, Baton Rouge, and Los
Angeles. Although the other two accounting firms
were much larger than McKay, all three firms agreed
to avoid centralizing the business around one office in
Los Angeles. Instead, the new firm—called Goldberg,
Choo, and McKay Associates—would rely on teams
across the country to “leverage the synergies of our
collective knowledge” (an often-cited statement from
the managing partner soon after the merger).
The merger first affected me a year ago when my
boss (a senior partner and vice president of the
merger firm) announced that I would be working
more closely with three people from the other two
firms to become the firm’s new shipping industry ac-
counting team. The other team members were Elias
in Miami, Susan in Seattle, and Brad in Los Angeles.
I had met Elias briefly at a meeting in New York
City during the merger, but had never met Susan
or Brad, although I knew that they were shipping
accounting professionals at the other firms.
Initially, the shipping team activities involved
e-mailing each other about new contracts and pro-
spective clients. Later, we were asked to submit joint
monthly reports on accounting statements and issues.
Normally, I submitted my own monthly reports, which
summarized activities involving my own clients.
Coordinating the monthly report with three other
people took much more time, particularly since differ-
ent accounting documentation procedures across the
three firms were still being resolved. It took numer-
ous e-mails and a few telephone calls to work out a
reasonable monthly report style.
During this aggravating process, it became appar-
ent—to me at least—that this team business was costing
me more time than it was worth. Moreover, Brad in
Los Angeles didn’t have a clue about how to commu-
nicate with the rest of us. He rarely replied to e-mails.
Instead, he often used the telephone voice mail sys-
tem, which resulted in lots of telephone tag. Brad
arrives at work at 9:30 a.m. in Los Angeles (and is of-
ten late), which is early afternoon in Boston. I typi-
cally have a flexible work schedule from 7:30 a.m. to
3:30 p.m. so that I can chauffeur my kids after school
to sports and music lessons. So Brad and I have a win-
dow of less than three hours to share information.
The biggest nuisance with the shipping specialist
accounting team started two weeks ago when the
firm asked the four of us to develop a new strategy
for attracting more shipping firm business. This new
strategic plan is a messy business. Somehow, we
have to share our thoughts on various approaches,
agree on a new plan, and write a unified submission
to the managing partner. Already, the project is tak-
ing most of my time just writing and responding to
e-mails and talking in conference calls (which none
of us did much before the team formed).
6. Suppose that you were put in charge of a virtual
team whose members are located in different cities
around the country or region. What tactics could you
use to build and maintain team trust, as well as mini-
mize the decline in trust that often occurs in teams?
7. You are responsible for convening a major event
in which senior officials from several state govern-
ments will try to come to an agreement on environ-
mental issues. It is well known that some officials
posture so that they appear superior, whereas others
are highly motivated to solve the environmental
prob lems that cross adjacent states. What team de-
cision-making problems are likely to be apparent
in this government forum, and what actions can
you take to minimize these problems?
8. Bangalore Technologies wants to use brainstorming
with its employees and customers to identify new
uses for its technology. Advise Bangalore’s presi-
dent about the potential benefits of brainstorming,
as well as its potential limitations.
262
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Case Study 8.2 PHILANTHROPIC TEAM BUILDING
The top dozen executives from Adolph Coors and
Molson breweries wanted to accelerate their team
development to kick off the postmerger integration
of the two companies. But rather than doing the
usual team building in the woods or at a friendly
game of golf, the Molson Coors leaders spent a full
day helping to build a house for Habitat for Human-
ity. “We quickly got past the idea of a ropes course
or golf outing,” recalls Samuel D. Walker, Molson
Coors’ chief legal officer. “We really wanted some-
thing where we would give back to one of the com-
munities where we do business.” According to Walker,
the volunteering experience exceeded everyone’s
expectations. “We had to unload this truck full of
cement roof tiles. We actually had to figure out how
to have kind of a bucket line, handing these very
heavy tiles from one person to the next. That’s the
ultimate team-building exercise.”
Molson Coors and other companies are discover-
ing that volunteering is just as successful as a team-
building event as it is as a form of corporate social
responsibility. Credit Suisse held a team-building ses-
sion in New Orleans that included a day working on a
home damaged by Hurricane Katrina. “I think people
learned a lot about each other,” says Glenn W. Welling,
a Credit Suisse managing director who participated in
the event. “It was not uncommon seeing a managing
director trying to tear down some mold-damaged
wall and to watch a 25-year-old analyst come over to
help him.”
Kimberly Senter, director for category manage-
ment at Unilever U.S., believes that volunteering
events help her to know her colleagues better without
the pressure of formal networking. “You’re connecting
on a very personal level,” she suggests. “There’s not a
lot of talking shop. It’s more, ‘Pass me the hammer.’”
Timberland is a pioneer in donating employee
time to community events. Since 1992, the New
Hampshire–based outdoor clothing and accessories
company has granted employees 40 hours of paid
leave each year to work on community projects. This
paid volunteering time includes Earth Day, when
Timberland shuts its entire operation so that employ-
ees can participate in community projects. It doesn’t
take long for employees to realize that Timberland is
doing more than giving back to the community; it is
also developing team skills and cohesion within the
company.
“It is a team-building event,” says Lisa Rakaseder,
a Timberland employee who participated in an
Earth Day project at a YMCA camp where she and
co-workers built canoe racks and raked leaves. “It gets
you to interact with other people at the company.”
Fabienne Verschoor, who organized the YMCA
project, explains further: “You have senior staff, the
loading dock crew, customer service, all working
263
Susan and Brad have already had two or three
misunderstandings via e-mail about their different
perspectives on delicate matters in the strategic plan.
The worst of these disagreements required a confer-
ence call with all of us to resolve it. Except for the
most basic matters, it seems that we can’t understand
each other, let alone agree on key issues. I have
come to the conclusion that I would never want
Brad to work in my Boston office (thank goodness
he’s on the other side of the country). While Elias
and I seem to agree on most points, the overall team
can’t form a common vision or strategy. I don’t know
how Elias, Susan, or Brad feel, but I would be quite
happy to work somewhere that did not require any
of these long-distance team headaches.
Discussion Questions
1. What type of team was formed here? Was it
necessary, in your opinion?
2. Use the team effectiveness model and related
information in this chapter to identify the
strengths and weaknesses of this team’s envi-
ronment, design, and processes.
3. Assuming that these four people must continue
to work as a team, recommend ways to improve
the team’s effectiveness.
© 2004 Steven L. McShane.
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Case Study 8.3 SEAGATE’S MORALE-ATHON
Team-building activities come
in many forms and are widely
practiced, but few companies go
as far as Seagate Technology. Each year, the giant
American computer storage hardware manufacturer
has been sending hundreds of employees from a
dozen countries to a weeklong team-building
program called Eco-Seagate. CEO Bill Watkins
championed the event to break down barriers, boost
confidence, and make staffers better team players.
“Some of you will learn about teamwork because
you have a great team,” Watson advised one group
of participants. “Some of you will learn because your
team is a disaster.”
This BusinessWeek case study details the team-
building events that “tribes” of employees participated
in throughout a recent Eco-Seagate program in New
Zealand. It describes how employees reacted to
these activities, including the marathon race on the
final day. Read the full text of this BusinessWeek
article at www.mhhe.com/mcshane5e, and prepare
for the discussion questions below.
Discussion Questions
1. What type(s) of team building best represent the
Eco-Seagate event? In your opinion, is this type
of event effective for team building? Why or
why not?
2. What practices in the Eco-Seagate program help
team members to become more cohesive?
Source: S. Max, “Seagate’s Morale-athon,” BusinessWeek, 3 April
2006, p. 110.
264
together. And you won’t know the difference when
you see a team working. They are all putting heart
and soul into it.”
UPS, the package delivery company, is another
organization that endorses volunteering as an activ-
ity to improve team dynamics as well as employee
leadership skills. Along with supporting voluntary
work throughout the year, UPS funds an annual
Global Volunteer Week, which takes place in 200 coun-
tries and most recently involved 23,000 UPS em-
ployees. UPS staff in each country coordinate local
projects that address issues relevant to their commu-
nities. UPS Hong Kong, for example, has worked
with the Hong Kong Red Cross, the Hong Kong
Society for the Protection of Children, and the Hong
Kong Blind Union.
“Giving back to the community is one of the core
values of UPS,” says David Cheung Yu-hok, human
re sources manager of UPS Hong Kong. “This builds
team work across departments because in the
workplace, staff might not find the time to get along.
Through these projects, they get a chance to know
each other better, and sometimes they even get to
meet each other’s families.”
Discussion Questions
1. What type of team building best describes these
volunteering activities?
2. Explain how the corporate social responsibility
element of volunteering contributes to team
building.
3. Along with team building, in what other ways
do these volunteering activities improve
organizations?
Sources: M. C. White, “Doing Good on Company Time,” New York
Times, 8 May 2007; R. Notarianni, “Voluntary Work Boosts Pro-
ductivity, Loyalty,” South China Morning Post, 28 June 2008, p. 4;
A. Hall, “Timberland Shows Up,” Corporate Meetings & Incentives
27 ( July) 2008, pp. 16–21.
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http://www.mhhe.com/mcshane5e
Self-Assessment 8.5
WHAT TEAM ROLES DO YOU PREFER?
PURPOSE This self-assessment is designed to help
you identify your preferred roles in meetings and
similar team activities.
INSTRUCTIONS Read each of the statements on
page 266 and circle the response that you believe
best reflects your position regarding each statement.
Then use the scoring key in Appendix B at the end
of the book to calculate your results for each team
role. This exercise should be completed alone so that
you can assess yourself honestly without concerns of
social comparison. Class discussion will focus on the
roles that people assume in team settings. This scale
assesses only a few team roles.
265
Team Exercise 8.4 TEAM TOWER POWER
PURPOSE This exercise is designed to help you
understand team roles, team development, and other
issues in the development and maintenance of effec-
tive teams.
MATERIALS The instructor will provide enough
Lego pieces or similar materials for each team to
complete the assigned task. All teams should have
identical (or very similar) amounts and types of
pieces. The instructor will need a measuring tape and
stopwatch. Students may use writing materials during
the design stage (step 2, below). The instructor will
distribute a “Team Objectives Sheet” and “Tower
Specifications Effectiveness Sheet” to all teams.
INSTRUCTIONS
1. The instructor will divide the class into teams.
Depending on class size and space availability,
teams may have between four and seven mem-
bers, but all should be approximately equal size.
2. Each team is given 20 minutes to design a tower
that uses only the materials provided, is free-
standing, and provides an optimal return on
i nvestment. Team members may wish to draw
their tower on paper or a flipchart to facilitate the
tower’s design. Teams are free to practice build-
ing their tower during this stage. Preferably,
teams are assigned to their own rooms so that the
design can be created privately. During this stage,
each team will complete the Team Objectives
Sheet distributed by the instructor. This sheet re-
quires the Tower Specifications Effectiveness
Sheet, also distributed by the instructor.
3. Each team will show the instructor that it has
completed its Team Objectives Sheet. Then,
with all teams in the same room, the instructor
will announce the start of the construction phase.
The time allowed for construction will be closely
monitored, and the instructor will occasionally
call out the time elapsed (particularly if there is
no clock in the room).
4. Each team will advise the instructor as soon as it
has completed its tower. The team will write
down the time elapsed that the instructor has de-
termined. It may be asked to assist the instructor
by counting the number of blocks used and mea-
suring the height of the tower. This information
is also written on the Team Objectives Sheet.
Then the team calculates its profit.
5. After presenting the results, the class will discuss
the team dynamics elements that contribute to
team effectiveness. Team members will discuss
their strategy, division of labor (team roles), ex-
pertise within the team, and other elements of
team dynamics.
Source: Several published and online sources describe variations
of this exercise, but there is no known origin to this activity.
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266
Does not Does not Describes Describes Describes
Circle the number that best reflects describe describe me me me me very
your position regarding each of me at all very well somewhat well well
these statements. ▼ ▼ ▼ ▼ ▼
1. I usually take responsibility for getting 1 2 3 4 5
the team to agree on what the meeting
should accomplish.
2. I tend to summarize to other team 1 2 3 4 5
members what the team has
accomplished so far.
3. I’m usually the person who helps other 1 2 3 4 5
team members overcome their
disagreements.
4. I try to ensure that everyone gets heard 1 2 3 4 5
on issues.
5. I’m usually the person who helps the 1 2 3 4 5
team determine how to organize the
discussion.
6. I praise other team members for their 1 2 3 4 5
ideas more than do others in the
meetings.
7. People tend to rely on me to keep track 1 2 3 4 5
of what has been said in meetings.
8. The team typically counts on me to 1 2 3 4 5
prevent debates from getting out of hand.
9. I tend to say things that make the group 1 2 3 4 5
feel optimistic about its accomplishments.
10. Team members usually count on me to 1 2 3 4 5
give everyone a chance to speak.
11. In most meetings, I am less likely than 1 2 3 4 5
others to criticize the ideas of teammates.
12. I actively help teammates to resolve 1 2 3 4 5
their differences in meetings.
13. I actively encourage quiet team members 1 2 3 4 5
to describe their ideas about each issue.
14. People tend to rely on me to clarify the 1 2 3 4 5
purpose of the meeting.
15. I like to be the person who takes notes 1 2 3 4 5
or minutes of the meeting.
Team Roles Preferences Scale
© 2000 Steven L. McShane.
266
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Self-Assessment 8.6
ARE YOU A TEAM PLAYER?
How much do you like working in teams? Some of us
avoid teams whenever possible; others tolerate team-
work; still others thrive in team environments. This
exercise is designed to help you estimate the extent to
which you are positively predisposed to work in teams.
Read each statement in the scale and indicate the ex-
tent to which you agree or disagree with the
statement. This exercise should be completed
alone so that you can assess yourself honestly
without concerns of social comparison. Class discus-
sion will focus on the characteristics of individuals who
are more or less compatible with working in teams.
Self-Assessment 8.7
HOW TRUSTING ARE YOU?
Trust refers to positive expectations one person has
toward another person in situations involving risk.
While trust varies from one situation to the next,
some people have a higher or lower propensity
to trust. In other words, some people are highly
trusting of others, even when first meeting them,
whereas others have difficulty trusting anyone, even
over a long time. This self-assessment provides
an estimate of your propensity to trust.
Indicate your preferred response to each
statement, being honest with yourself for
each item. This self-assessment should be com-
pleted alone, although class discussion will focus
on the meaning of propensity to trust, why it varies
from one person to the next, and how it affects
teamwork.
After reading this chapter, if you feel that you need additional information, see www.mhhe.com/
mcshane5e for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/
Imagine IBM chief executive Samuel Palmisano speaking to a throng of 7,000 employees
with Beijing’s famous Forbidden City towering behind him. Does this scenario sound a bit
too fantastic to be real? Well, Palmisano was in Beijing speaking face-to-face to about 2,000
staff members in an auditorium,
but he also communicated part of
his talk to another 5,000 IBMers
globally through his avatar (graphic
character representing a person)
in front of a virtual version of the
Forbidden City on the Second Life
Web site.
Second Life, an online world
where individuals can cruise around
various islands, is becoming one
of IBM’s locations for sharing
information. Along with participating
in Palmisano’s virtual town hall
meeting, IBMers have held
hundreds of virtual meetings at a
large boardroom that IBM created
on its Second Life islands. “It’s
just a very powerful way of meeting,
interacting, and doing work with
other people,” says IBM executive
consultant Doug McDavid. Labor unions have also discovered the communication value
of Second Life. More than 1,000 people from 30 countries picketed IBM’s islands in support
of the company’s Italian workers, who had their annual performance bonus forfeited.
Although Second Life accommodates voice and visual media, most communication
around IBM’s virtual islands—whether formal meetings or union protests—occurs through
written text messages. Unlike instant-messaging text chats, however, each person’s
avatar adds a personal touch that improves the communication experience. “There’s a
sense that you’re actually at the meeting,” explains Chuck Hamilton, director of IBM’s
center for advanced learning. “If I stop moving my mouse, eventually my avatar will slump
forward, and the other people in the room will say, ‘Hey, Chuck, are you still there?’ ”1
Standing in front of Beijing’s Forbidden City, IBM chief executive Sam Palmisano
communicates through his Second Life avatar to several thousand employees
worldwide.
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9
Communicating in Teams
and Organizations
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Explain why communication is important in
organizations.
2. Diagram the communication process and
identify four ways to improve this process.
3. Discuss problems with communicating
through electronic mail.
4. Identify two ways in which nonverbal
communication differs from verbal
communication.
5. Appraise the appropriateness of a
communication medium for a particular
situation on the basis of social acceptance
and media-richness factors.
6. Identify four common communication
barriers.
7. Discuss the degree to which men and
women communicate differently.
8. Outline the key strategies for getting your
message across and engaging in active
listening.
9. Summarize three communication strategies
in organizational hierarchies.
10. Debate the benefits and limitations of the
organizational grapevine.
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270 Part Three Team Processes
Learning
Objectives
Information technologies have transformed how we communicate in organizations, yet
we may still be at the beginning of this revolution. Wire cablegrams and telephones
introduced a century ago are giving way to e-mail, instant messaging, Weblogs, pod-
casting, and virtual reality social networking. Each of these inventions creates fascinat-
ing changes in how people communicate with each other in the workplace, as well as
new opportunities to improve organizational effectiveness and employee well-being.
Communication refers to the process by which information is transmitted and
understood between two or more people. We emphasize the word understood because
transmitting the sender’s intended meaning is the essence of good communication.
This chapter begins by discussing the importance of effective communication and
outlining a model of the communication process. Next, we identify types of commu-
nication channels, including computer-mediated communication, followed by factors
to consider when choosing a communication medium. This chapter then identifies
barriers to effective communication. This is followed by an overview of ways to com-
municate in organizational hierarchies and the pervasive organizational grapevine.
After reading the next two sections, you should be able to:
1. Explain why communication is important in organizations.
2. Diagram the communication process and identify four ways to
improve this process.
The Importance of Communication
Effective communication is vital to all organizations, so much so that no company could
exist without it. The reason? In Chapter 1 we defined organizations as groups of people
who work interdependently toward some purpose. People can work interdependently
only through communication. Communication is the vehicle through which people clar-
ify their expectations and coordinate work, which allows them to achieve organizational
objectives more efficiently and effectively. Chester Barnard, a telecommunications CEO
and a respected pioneer in organizational behavior theory, stated this point back in 1938:
“An organization is born when there are individuals who are able to communicate.” 2
Communication is also an important instrument for organizational learning and deci-
sion making. Chapter 1 explained that one perspective of organizational effectiveness is
organizational learning, which is the firm’s capacity to acquire, share, use, and store valu-
able knowledge. These processes depend on various forms of communication. Effective
communication minimizes “silos of knowledge,” the situation in which knowledge is
cloistered or hoarded rather than distributed to others throughout the organization. 3
IBM improves organizational learning through various informal and computer-
mediated communication media. For instance, when IBM employees need to find
expertise for a client, they tap into the company’s “Small Blue” search engine, which
quickly identifies people with various forms of expertise throughout the company. 4
Communication also aids employee well-being. 5 Information communicated from
co-workers helps employees manage their work environment, telling them, for in-
stance, how to complete work procedures correctly or handle difficult customers.
Equally important, employee well-being benefits from the communication experience
itself, so much so that people who experience social isolation are much more suscep-
tible to colds, cardiovascular disease, and other physical and mental illnesses. 6 Why?
As we learned in Chapter 5, people have an inherent drive to bond, and communica-
tion is the means through which that drive is fulfilled. Communicating with others is
an important means through which individuals validate their self-worth and maintain
communication
The process by which
information is transmit-
ted and understood
between two or more
people.
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Chapter 9 Communicating in Teams and Organizations 271
their social identity. This occurs even in the virtual world of Second Life. “In Second
Life we gather and mingle before the meeting, and when it finishes, some people stop
and talk again,” explains Ian Hughes, an IBM employee who attends the virtual
meetings as a pudgy avatar with spiky green hair. “We start to form social networks
and the kinds of bonds you make in real life.” 7
A Model of Communication
The communication process model presented in Exhibit 9.1 provides a useful “con-
duit” metaphor for thinking about the communication process. 8 According to this
model, communication flows through channels between the sender and the receiver.
The sender forms a message and encodes it into words, gestures, voice intonations,
and other symbols or signs. Next, the encoded message is transmitted to the intended
receiver through one or more communication channels (media). The receiver senses
the incoming message and decodes it into something meaningful. Ideally, the de-
coded meaning is what the sender had intended.
In most situations, the sender looks for evidence that the other person received and
understood the transmitted message. This feedback may be a formal acknowledgment,
such as “Yes, I know what you mean,” or indirect evidence from the receiver’s subse-
quent actions. Notice that feedback repeats the communication process. Intended feed-
back is encoded, transmitted, received, and decoded from the receiver to the sender of
the original message. This model recognizes that communication is not a free-flowing
conduit. Rather, the transmission of meaning from one person to another is hampered
by noise —the psychological, social, and structural barriers that distort and obscure the
sender’s intended message. If any part of the communication process is distorted or bro-
ken, the sender and receiver will not have a common understanding of the message.
Influences on Effective Encoding and Decoding
The communication process model suggests that communication effectiveness de-
pends on the ability of sender and receiver to efficiently and accurately encode and
decode information. Experts have identified four factors that influence the effectiveness
Sender
Transmit
message
Transmit
feedback
Receive
encoded
message
Encode
feedback
Decode
message
Form
feedback
Decode
feedback
Receive
encoded
feedback
Receiver
Noise
Form
message
Encode
message
Exhibit 9.1
The Communication
Process Model
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272 Part Three Team Processes
Learning
Objectives
of the encoding-decoding process. 9 One factor is the sender’s and receiver’s ability
and motivation to communicate through the communication channel. Some people
communicate better through face-to-face conversation and prefer using this commu-
nication channel. Others are awkward in conversations, yet are quite good at com-
municating via BlackBerry or similar text message technologies. Generally, the
encoding-decoding process is more effective when both parties are skilled at using
the selected communication channel and enjoy using that channel. 10
A second factor is the extent to which both parties have similar “codebooks”—
dictionaries of symbols, language, gestures, idioms, and other tools used to convey
information. With similar codebooks, the communication participants are able to
encode and decode more accurately because they both have tools with the same or
similar meanings. Communication efficiency also improves because there is less need
for redundancy (such as saying the same thing in different ways) and less need for
confirmation feedback (“So, you are saying that . . . ?”).
A third factor influencing encoding-decoding process effectiveness is the extent to
which both parties have shared mental models about the topic’s context. Mental
models are internal representations of the external world that allow us to visualize
elements of a setting and relationships among those elements (see Chapter 3). When
sender and receiver have shared mental models, they have a common understanding
of the environment relating to the information, so less communication is necessary to
clarify meaning about that context. Notice that sharing the same codebook differs
from sharing the same mental models of the topic context. Codebooks are symbols
used to convey message content, whereas mental models are knowledge structures of
the communication topic setting. For example, a Russian cosmonaut and American
astronaut might have excellent knowledge (i.e., shared mental models) about the in-
ternational space station, yet they experience poor communication because of lan-
guage differences (i.e., different codebooks).
A fourth factor influencing encoding-decoding process effectiveness is the
sender’s experience at communicating the message. As people become more
familiar with the subject matter, they develop more efficient or colorful language
to describe the subject. In other words, they become more proficient at using the
codebook of symbols to convey the message. This is similar to the effect of job
training or sports practice. The more experience and practice gained at commu-
nicating a subject, the more people learn how to effectively transmit that informa-
tion to others.
After reading the next two sections, you should be able to:
3. Discuss problems with communicating through electronic mail.
4. Identify two ways in which nonverbal communication differs from
verbal communication.
5. Appraise the appropriateness of a communication medium for a
particular situation on the basis of social acceptance and media-
richness factors.
Communication Channels
A critical part of the communication model is the channel or medium through which
information is transmitted. There are two main types of channels: verbal and nonver-
bal. Verbal communication uses words and occurs through either spoken or written
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Chapter 9 Communicating in Teams and Organizations 273
channels. Nonverbal communication is any part of communication that does not use
words. Although spoken and written communication are both verbal (i.e., they both
use words), you will learn in this section that they are quite different from each other
and have different strengths and weaknesses in communication effectiveness. Also,
written communication has traditionally been a much slower means than spoken
communication for transmitting messages, but electronic mail, Weblogs, and other
computer-mediated communication channels have significantly improved written
communication efficiency.
Computer-Mediated Communication
Two decades ago, computer-mediated communication was a novel development. To-
day, it seems that many of us rely more on computer channels than on the old-
fashioned options. By far, the most widely used of these is electronic mail (e-mail),
which has revolutionized the way we communicate in organizational settings. E-mail
has become the medium of choice in most workplaces because messages are quickly
written, edited, and transmitted. Information can be appended and conveyed to
many people with a simple click of a mouse. E-mail is asynchronous (messages are
sent and received at different times), so there is no need to coordinate a communica-
tion session. E-mail software has also become an efficient filing cabinet. 11 Employees
increasingly rely on e-mail to filter, store, sort, and search messages and attachments
far more quickly than is possible with paper-based memos.
E-mail tends to be the preferred medium for coordinating work (e.g., confirm-
ing deadlines with a co-worker’s schedule) and for sending well-defined informa-
tion for decision making. It often increases the volume of communication and
significantly alters the flow of information within groups and throughout the orga-
nization. 12 Specifically, it reduces some face-to-face and telephone communication
but increases communication with people further up the hierarchy. Some social
and organizational status differences still exist with e-mail, 13 but they are some-
what less apparent than is the case in face-to-face communication. By hiding age,
race, and other features, e-mail reduces stereotype biases. However, it also tends
to increase reliance on stereotypes when we are already aware of the other per-
son’s personal characteristics. 14
Problems with E-mail E-mail is wonderful in many ways, but it does have limi-
tations. In fact, as Connections 9.1 describes, some companies are trying to reduce
employee dependence on e-mail. Here are the top four complaints about e-mail:
1. Is a poor medium for communicating emotions. People rely on facial expressions and
other nonverbal cues to interpret the emotional meaning of words; e-mail lacks
this parallel communication channel. Senders try to clarify the emotional tone of
their messages by using expressive language (“Wonderful to hear from you!”),
highlighting phrases in boldface or quotation marks, and inserting graphic faces
(called emoticons or “smileys”) representing the desired emotion. These actions
help, but they do not replace the full complexity of real facial expressions, voice
intonations, and hand movements. 15
2. Reduces politeness and respect. E-mail messages are often less diplomatic than writ-
ten letters because individuals can post e-mail messages before their emotions
subside. Also, e-mail has low social presence (it’s more impersonal), so people are
more likely to write things that would never be spoken in face-to-face conversa-
tion. “It is much easier to have a row by email than it is face to face, and people
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About-Face on Workplace E-mail
A few years ago, Jay Ellison concluded that his employees
were relying too much on e-mail and not enough on spoken
communication. The vice president of operations at Chicago-
based U.S. Cellular had a simple solution: Ban e-mail on
Fridays. “Get out to meet your teams face to face,” Ellison
wrote to staff in the original announcement. “Pick up the
phone and give someone a call.” Ellison’s Friday e-mail ban
was unpopular at first, but most of Cellular’s 8,000 staff mem-
bers now appreciate its benefits. “While e-mail is quick and
convenient it may not be the best way to communicate,”
Ellison suggests. “The e-mail ban has been very valuable for
team-building and encouraging associates to improve their
communication skills.”
John Coyle, a Cellular executive, is one of the many con-
verts. For some time, Coyle and a colleague from another de-
partment whom he had never met were e-mailing each other
regarding financial reports. But when Coyle had to exchange
information on an e-mail-free Friday, he picked up the phone
instead. Both immediately realized from their similar phone
numbers that they were located not only in the same city but in
the same building. After exchanging more details, Coyle dis-
covered that the colleague worked just a few yards away. “I
literally got up, walked around the corner and there he was,”
says Coyle.
U.S. Cellular wasn’t the first company to introduce e-mail–
free days, but its success has enticed other companies. For
example, Intel recently introduced “zero e-mail Fridays” for
300 engineers and other staff at its chip design operations in
Austin, Texas, and Chandler, Arizona. “We’re trying to address
the problem that people get so addicted to e-mail that they will
send an e-mail across an aisle, across a partition, and that’s
not a good thing,” explains Brad Beavers, Intel’s Austin site
manager. Admiral Insurance introduced a similar initiative to
wean staff from e-mail dependence. “We hold ‘no email days’
Connections 9.1
to encourage people to get off their backsides and visit people
face to face,” says Justin Beddows, a spokesperson at the
Welsh insurance company.
HiWired took a different approach to increasing face-to-face
communication. Executives at the Needham, Massachusetts,
technology support start-up company realized that e-mail was
popular because managers were traveling throughout the
month. HiWired now has one “Home Week” each month, dur-
ing which managers are expected to be around the office
rather than on the road. Home Week includes meetings for the
management team as well as social events for all 60 employ-
ees. “We embrace chat and e-mail and collaboration tools,”
says HiWired copresident Singu Srinivas. “Those are additives
to face-to-face relationship building, but they can’t be a
replacement for it.”16
HiWired executives introduced “Home Week,” a week in
each month during which they must not travel. This initiative
has helped them rediscover the benefits of face-to-face
rather than e-mail communication.
are often ruder as a result,” says Justin Beddows, a spokesperson at Welsh-based
Admiral Insurance. “Orders can be issued out and people can be quite abrupt
because they feel protected by the distance the email provides.” 17 These “flaming”
e-mails are aggravated by misinterpretation of the emotional tone of the message.
Fortunately, research has found that flaming decreases as teams move to later
stages of development and when explicit norms and rules of communication are
established. 18
3. Is a poor medium for ambiguous, complex, and novel situations . E-mail is usually fine
for well-defined situations, such as giving basic instructions or presenting a meet-
ing agenda, but it can be cumbersome in ambiguous, complex, and novel situa-
tions. As we will describe later in this section, these circumstances require
communication channels that transmit a larger volume of information with more
274
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Chapter 9 Communicating in Teams and Organizations 275
rapid feedback. “I’ve stopped using email volleys where you just keep going back
and forth and back and forth and nothing is going in the right direction,” says a
manager at an oil refinery. By talking face-to-face or by telephone in complex
situations, the manager has discovered that he is “coming up with much better
outcomes and a much better understanding of an issue.” 19 In other words, when
the issue gets messy, stop e-mailing and start talking, preferably face-to-face.
4. Contributes to information overload . E-mail contributes to information overload. 20
An estimated 22.3 trillion e-mails are now transmitted annually, up from just 1.1
trillion in 1998. According to one survey, professionals spend an average of two
hours per day processing e-mail. The e-mail glut occurs because messages are
created and copied to many people without much effort. The number of e-mail
messages will probably decrease as people become more familiar with it, but to
date e-mail volume continues to rise. To reduce e-mail overload and encourage
more face-to-face interaction, some firms now have days when e-mail is banned
(see Connections 9.1).
Social Networking Communication The opening vignette in this chapter de-
scribed how IBM is experimenting with innovative forms of computer-mediated
communication. In fact, while e-mail likely remains the most popular medium,
IBMers have flocked to computer-mediated technologies that support social network-
ing. 21 Social networking sites such as Facebook, MySpace, and LinkedIn are rapidly
becoming part of popular culture. University students rate Facebook as the second
most “in” thing (iPods are number one). These technologies allow people to form
communities around friendships, common interests, expertise, and other themes, re-
sulting in closer interaction in the communication experience. Indeed, many social
networking technologies (from Facebook to online forums) gain value as more people
participate in the technology. 22
Yet just as corporate leaders stumbled their way through Web 1.0 (the Internet’s first
stage) over the past two decades, many are fighting rather than leveraging the poten-
tial of the more socially interactive second stage (called Web 2.0). A large number of
companies have banned employee access to social networking sites after discovering
that staff spend too much work time looking at these sites. Yet recognizing the popular-
ity of social networking technology, a few organizational leaders are experimenting
with ways to use it as a conduit for employees to communicate productively with each
other, as well as with customers and other external stakeholders. Procter & Gamble
employees use Facebook to keep in touch with summer intern students. Serena Soft-
ware has made Facebook its new corporate intranet. The Redwood City, California,
company introduced “Facebook Fridays” sessions in which teenagers are hired to
teach older staff how to use Facebook. IBM developed Beehive, a corporate version of
Facebook, where employees can post their profiles, photos, interests, and comments
about work or other aspects of their lives. 23
IBM has also been at the forefront of another form of social networking commu-
nication, called wikis . Wikis are collaborative Web spaces in which anyone in a
group can write, edit, or remove material from the site. Wikipedia, the popular
online encyclopedia, is a massive public example of a wiki. Wikis hold considerable
promise for communicating in organizational settings because they are democratic,
collaborative social networking spaces that rapidly document new knowledge. IBM
introduced wiki technology a few years ago in the form of WikiCentral, which now
hosts more than 20,000 wiki projects involving 100,000 employees. One of IBM’s
many wiki projects involved gathering from staff ideas and issues about a new patent
wikis
Collaborative Web
spaces at which anyone
in a group can write,
edit, or remove material
from the Web site.
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276 Part Three Team Processes
policy within IBM. “Wikis are good for project management, for to do’s, status re-
ports, creating an issues log—you’re always up to date,” explains Brad Kasell, an
IBM manager for emerging technologies. “There’s no collating reports from every-
one at the end of the week for an update.” The accuracy of wikis depends on the
quality of participants, but Kasell says that errors are quickly identified by IBM’s
online community. 24
Nonverbal Communication
Nonverbal communication includes facial gestures, voice intonation, physical distance,
and even silence. This communication channel is necessary when noise or physical
distance prevents effective verbal exchanges and the need for immediate feedback
precludes written communication. But even in quiet face-to-face meetings, most
BlueShirt Nation Communication How can employees communicate with each other and feel
connected when their company employs 150,000 people in the United States, Canada, United Kingdom,
and China? For Best Buy, part of the answer is a social networking Web site called blueshirtnation.com.
The site, which now boasts 22,000 members, gives staff the opportunity to create their own Facebook-like
Web pages and to host forums on topics that interest them. These features have dramatically improved
the rapid exchange of ideas. “Now, [employees] have the means to connect with people they’ve never
met before,” says Steve Bendt, shown in the photo with Gary Koelling, both of whom are senior managers
of social technology and founders of blueshirtnation.com. The social networking site also serves as an
important conduit of employee opinions to management. For example, Best Buy management canceled
proposed changes to its employee discount rates after feedback from blueshirtnation.com forums
revealed the depth of employee opposition to the proposal. Bendt acknowledges that this open forum for
discussion requires courage from management. “It says a lot about Best Buy culture that people here are
willing to take risks,” says Bendt.25
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Chapter 9 Communicating in Teams and Organizations 277
information is communicated nonverbally. Rather like a parallel conversation, non-
verbal cues signal subtle information to both parties, such as reinforcing their interest
in the verbal conversation or demonstrating their relative status in the relationship. 26
Nonverbal communication differs from verbal (i.e., written and spoken) commu-
nication in a couple of ways. First, it is less rule-bound than verbal communication.
We receive plenty of formal training on how to understand spoken words but very
little on understanding the nonverbal signals that accompany those words. Conse-
quently, nonverbal cues are generally more ambiguous and susceptible to misinter-
pretation. At the same time, many facial expressions (such as smiling) are hardwired
and universal, thereby providing the only reliable means of communicating across
cultures.
The other difference between verbal and nonverbal communication is that the
former is typically conscious, whereas most nonverbal communication is automatic
and nonconscious. We normally plan the words we say or write, but we rarely plan
every blink, smile, or other gesture during a conversation. Indeed, as we just men-
tioned, many facial expressions communicate the same meaning across cultures
because they are hardwired nonconscious responses to human emotions. 27 For
example, pleasant emotions cause the brain center to widen the mouth, whereas nega-
tive emotions produce constricted facial expressions (squinting eyes, pursed lips, etc.).
Emotional Contagion One of the most fascinating effects of emotions on nonver-
bal communication is the phenomenon called emotional contagion , which is the
automatic process of “catching” or sharing another person’s emotions by mimicking
that person’s facial expressions and other nonverbal behavior. Consider what happens
when you see a co-worker accidentally bang his or her head against a filing cabinet.
Chances are, you wince and put your hand on your own head as if you had hit the
cabinet. Similarly, while listening to someone describe a positive event, you tend to
smile and exhibit other emotional displays of happiness. While some of our nonverbal
communication is planned, emotional contagion represents nonconscious behavior—we
automatically mimic and synchronize our nonverbal behaviors with other people. 28
Emotional contagion serves three purposes. First, mimicry provides continuous
feedback, communicating that we understand and empathize with the sender. To con-
sider the significance of this, imagine employees remaining expressionless after
watching a co-worker bang his or her head! The lack of parallel behavior conveys a
lack of understanding or caring. Second, mimicking the nonverbal behaviors of other
people seems to be a way of receiving emotional meaning from those people. If a co-
worker is angry with a client, your tendency to frown and show anger while listening
helps you share that emotion more fully. In other words, we receive meaning by ex-
pressing the sender’s emotions as well as by listening to the sender’s words.
The third function of emotional contagion is to fulfill the drive to bond that was
described in Chapter 5. Social solidarity is built out of each member’s awareness of a
collective sentiment. Through nonverbal expressions of emotional contagion, people
see others share the same emotions that they feel. This strengthens relations among
team members, as well as between leaders and followers, by providing evidence of
their similarity. 29
Choosing the Best Communication Channel
Which communication channel is most appropriate in a particular situation? Two
important elements to consider are social acceptance and media richness.
emotional contagion
The nonconscious pro-
cess of “catching” or
sharing another person’s
emotions by mimicking
that person’s facial
expressions and other
nonverbal behavior.
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278 Part Three Team Processes
Social Acceptance
Social acceptance refers to how well the communication medium is approved and sup-
ported by the organization, teams, and individuals. 30 One factor in social acceptance
is the organization’s and team’s norms regarding the use of specific communication
channels. Norms partly explain why telephone conversations are more common
among staff in some firms, whereas e-mail or instant messaging is the medium of
choice in other organizations. Some companies expect employees to meet face-to-
face, whereas meetings and similar conversations are rare events elsewhere. Norms
also shape the use of communication media for people in specific positions. For in-
stance, frontline employees are more likely to write an e-mail and less likely to tele-
phone or personally visit the company’s CEO.
A second social acceptance factor is individual preferences for specific communica-
tion channels. 31 You may have discovered that a co-worker prefers e-mail rather than
voice mail or wants to meet in person more than you think is necessary. These prefer-
ences are due to personality traits as well as previous experience and reinforcement
with particular channels. A third social acceptance factor to consider is the symbolic
meaning of a channel. Some communication channels are viewed as impersonal,
whereas others are more personal; some are considered professional, whereas others
are casual; some are “cool,” whereas others are not. To illustrate the importance of a
channel’s symbolic meaning, consider stories about corporate leaders who use e-mails
or cell phone text messages to tell employees that they are fired or laid off. Such
actions make front-page headlines because e-mail and text messages are considered
inappropriate (too impersonal) for transmission of that particular information. 32
Media Richness
Along with social acceptance, people select communication media on the basis of
their media richness . Media richness is the medium’s data-carrying capacity—the
volume and variety of information that can be transmitted during a specific
time. 33 Exhibit 9.2 illustrates various communication channels arranged in a hierar-
chy of richness, with face-to-face interaction at the top and lean data-only reports at
the bottom. A communication channel has high richness when it is able to convey
multiple cues (such as both verbal and nonverbal information), allows timely feed-
back from receiver to sender, allows the sender to customize the message to the re-
ceiver, and makes use of complex symbols (such as words and phrases with multiple
meanings). Face-to-face communication is at the top of media richness because it
allows us to communicate both verbally and nonverbally at the same time, to re-
ceive feedback almost immediately from the receiver, to quickly adjust our message
and style, and to use complex language such as metaphors and idioms (e.g., “spilling
the beans”).
According to media-richness theory, rich media are better than lean media when the
communication situation is nonroutine and ambiguous. In nonroutine situations (such
as an unexpected and unusual emergency), the sender and receiver have little common
experience, so they need to transmit a large volume of information with immediate
feedback. Lean media work well in routine situations because the sender and receiver
have common expectations through shared mental models. Ambiguous situations also
require rich media because the parties must share large amounts of information with
immediate feedback to resolve multiple and conflicting interpretations of their observa-
tions and experiences. 34 Choosing the wrong medium reduces communication
effectiveness. When the situation is routine or clear, using a rich medium—such as
media richness
A medium’s data- carrying
capacity, that is, the
volume and variety of
information that can be
transmitted during a
specific time.
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Chapter 9 Communicating in Teams and Organizations 279
holding a special meeting—would seem like a waste of time. On the other hand, if a
unique and ambiguous issue is handled through e-mail or another lean medium, issues
take longer to resolve and misunderstandings are more likely to occur.
Evaluating Media-Richness Theory Research generally supports the relevance
of media richness for traditional channels (face-to-face, written memos, etc.). How-
ever, the evidence is mixed when computer-mediated communication channels are
studied. Three factors seem to override or blur the medium’s richness:
1. The ability to multicommunicate. It is usually difficult (as well as rude) to communi-
cate face-to-face with someone while simultaneously transmitting messages to
someone else by using another medium. Most computer-mediated technologies,
on the other hand, require less sensory demand, so employees can easily engage
in two or more communication events at the same time. In other words, they can
multicommunicate. 35 For example, people routinely scan Web pages while carry-
ing on telephone conversations. Some write text messages to a client while simul-
taneously listening to a discussion at a large meeting. Although people do not
multitask as efficiently as is often believed, some employees have become good
enough at multicommunicating that they likely exchange as much information
through two or more lean-media-richness channels as through one high-media-
richness channel during the same time period.
Rich
medium
Communication
channel
richness
Communication environment
Lean
medium
Routine,
clear
Nonroutine,
ambiguous
Overloaded zone
(medium provides too much
data-carrying capacity)
Oversimplified zone
(medium provides too little
data-carrying capacity)Financial
statements
Newsletters
Weblogs
Telephone
Instant
messaging
Video-
conference
Face-to-face
Exhibit 9.2 Media-Richness Hierarchy
Sources: Based on R. Lengel and R. Daft, “The Selection of Communication Media as an Executive Skill,” Academy of Management Executive 2, no. 3
(August 1988), p. 226; R. L. Daft and R. H. Lengel, “Information Richness: A New Approach to Managerial Behavior and Organization Design,”
Research in Organizational Behavior, 1984, p. 199.
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280 Part Three Team Processes
2. More varied proficiency levels. Earlier in this chapter we explained that communication
effectiveness is partially determined by the sender’s competency with the
communication channel. People with higher proficiency can “push” more informa-
tion through the channel, thereby increasing the channel’s information flow. Experi-
enced BlackBerry users, for instance, can whip through messages in a flash, whereas
new users struggle to type notes and organize incoming messages. In contrast, there
is less variation in the ability to communicate through casual conversation and other
natural channels because most of us develop good levels of proficiency throughout
life and possibly through hardwired evolutionary development. 37
3. Social distractions of rich channels. Channels with high media richness tend to in-
volve more direct social interaction. However, social presence sensitizes both
parties to their relative status and self-presentation, and this diverts their attention
from the message. 38 In other words, the benefits of media-richness channels such
as face-to-face communication may be offset by social distractions from the mes-
sage content, whereas lean media have much less social presence.
I Love Rewards Gets Media Rich Quick Every day at 11:15 a.m., I Love Rewards Inc. employees meet
face-to-face for 10 minutes to communicate priorities and coordinate their efforts. Although each meeting
at the Toronto-based incentive marketing company is brief and highly structured, verbal communication
allows the team to receive immediate feedback on daily issues such as “Today’s Must-Do” and “Red
Flags.” For two minutes of each 10-minute meeting, each employee shares a “Headline” summary of
something important to her or him, ranging from the results of a client meeting to ultrasound photos of a
pregnant employee’s baby. Each week a new meeting facilitator is announced, giving employees the
chance to enhance their communication and facilitation skills. I Love Rewards CEO Razor Suleman says
these quick meetings provide a personal connection and highly interactive feedback. Suleman also
values other opportunities for media-rich communication, such as coaching employees on work-related
issues and hosting a book club in which staff get a chance to chat about new books.36
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Chapter 9 Communicating in Teams and Organizations 281
Learning
Objectives
Communication Channels and Persuasion
Media richness and social acceptance lay the foundation for understanding which
communication channels are more effective for persuasion , that is, changing another
person’s beliefs and attitudes. Recent studies support the long-held view that spoken
communication, particularly face-to-face interaction, is more persuasive than e-mails,
Web sites, and other forms of written communication. There are three main reasons
for this persuasive effect. 39 First, spoken communication is typically accompanied by
nonverbal communication. People are often persuaded more when they receive both
emotional and logical messages, and the combination of spoken and nonverbal com-
munication provides this dual punch. A lengthy pause, raised voice tone, and (in
face-to-face interaction) animated hand gestures can amplify the emotional tone of
the message, thereby signaling the vitality of the issue.
Second, spoken communication offers the sender high-quality immediate feed-
back on whether the receiver understands and accepts the message (i.e., is being
persuaded). This feedback allows the sender to adjust the content and emotional
tone of the message more quickly than is possible with written communication.
Third, people are persuaded more under conditions of high social presence than
under those of low social presence. In face-to-face conversations (high social pres-
ence), people are more sensitive to how they are perceived by others in that social
setting, so they pay attention to the sender’s message and are more willing to actively
consider that viewpoint. This is particularly true when the sender is a member of the
receiver’s social identity group. In contrast, when people receive persuasion at-
tempts through a Web site, e-mail, or other source of written communication, they
experience a higher degree of anonymity and psychological distance from the
persuader. These conditions reduce the motivation to think about and accept the
persuasive message.
Although spoken communication tends to be more persuasive, written communi-
cation can also persuade others to some extent. Written messages have the advantage
of presenting more technical detail than can occur through conversation. This factual
information is valuable when the issue is important to the receiver. Also, people ex-
perience a moderate degree of social presence in written communication when they
are exchanging messages with close associates, so messages from friends and co-
workers can be persuasive.
After reading the next two sections, you should be able to:
6. Identify four common communication barriers.
7. Discuss the degree to which men and women communicate differently.
Communication Barriers (Noise)
In spite of the best intentions of sender and receiver to communicate, several barriers
(called “noise” in Exhibit 9.1 ) inhibit the effective exchange of information. As author
George Bernard Shaw wrote, “The greatest problem with communication is the illu-
sion that it has been accomplished.” One barrier is the imperfect perceptual process
of both sender and receiver. As receivers, we don’t listen as well as senders assume we
do, and our needs and expectations influence what signals get noticed and ignored.
We aren’t any better as senders, either. Some studies suggest that we have difficulty
stepping out of our own perspectives and stepping into the perspectives of others, so
persuasion
The use of facts, logical
arguments, and emo-
tional appeals to change
another person’s beliefs
and attitudes, usually for
the purpose of changing
the person’s behavior.
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282 Part Three Team Processes
we overestimate how well other people under-
stand the message we are communicating. 40
Even if the perceptual process is well tuned,
messages sometimes get filtered on their way up
or down the corporate hierarchy. Filtering may
involve deleting or delaying negative information
or using less harsh words so that the message
sounds more favorable. 41 Filtering is most com-
mon in organizations that reward employees who
communicate mainly positive information and
among employees who have strong career mobil-
ity aspirations. Language differences represent a
third source of communication noise. But even if
two people speak the same language, they might
have different meanings for particular words and
phrases. For example, a French executive might
call an event a “catastrophe” as a casual exaggera-
tion, whereas someone in Germany usually inter-
prets this word literally as an earth-shaking
event. 42
Jargon, which includes specialized words and phrases for specific occupations or
groups, is designed to improve communication efficiency. However, it has the oppo-
site effect when senders transmit jargon to people who do not possess the jargon code-
book. Furthermore, people who use jargon to excess put themselves in an unflattering
light. For example, soon after Robert Nardelli became Chrysler’s new CEO, he
proudly announced: “I’m blessed to have individuals with me who can take areas of
responsibility and do vertical dives to really get the granularity and make sure that
we’re coupling horizontally across those functions so that we have a pure line of sight
toward the customer.” Business journalists weren’t impressed, even if they did figure
out what Nardelli meant. 43
No matter how well we know a language, words and phrases have enough ambi-
guity to create confusion. Consider the question “Can you close the door?” You might
assume the sender is asking whether shutting the door is permitted. But the question
might be asking whether you are physically able to shut the door or whether the door
is designed such that it can be shut. In fact, this question might not be a question at
all; the person could be politely telling you to shut the door. 44
The ambiguity of language isn’t always dysfunctional noise. 45 Corporate leaders
sometimes rely on metaphors and other vague language to describe ill-defined or
complex ideas. Ambiguity is also used to avoid conveying or creating undesirable
emotions. For example, one study reported that people rely on more ambiguous lan-
guage when communicating with people who have different values and beliefs. In
these situations, ambiguity minimizes the risk of conflict.
Information Overload
Start with a daily avalanche of e-mail, and then add in voice mail, cell phone text mes-
sages, PDF file downloads, Web pages, hard-copy documents, instant messages, blogs,
wikis, and other sources of incoming information. Together, you have created a per-
fect recipe for information overload . 46 As Exhibit 9.3 illustrates, information overload
occurs whenever the job’s information load exceeds the individual’s capacity to get
information overload
A condition in which the
volume of information
received exceeds the
person’s capacity to
process it.
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Chapter 9 Communicating in Teams and Organizations 283
through it. Employees have a certain information processing capacity —the amount of in-
formation that they are able to process in a fixed unit of time. At the same time, jobs
have a varying information load —the amount of information to be processed per unit of
time. Information overload creates noise in the communication system because infor-
mation gets overlooked or misinterpreted when people can’t process it fast enough.
The result is poorer-quality decisions as well as higher stress. 47
Information overload problems can be minimized by increasing our informa-
tion processing capacity, reducing the job’s information load, or doing a combina-
tion of both. Studies suggest that employees often increase their information
processing capacity by temporarily reading faster, scanning through documents
more efficiently, and removing distractions that slow information processing
speed. Time management also increases information processing capacity. When
information overload is temporary, information processing capacity can increase
by working longer hours. Information load can be reduced by buffering, omitting,
and summarizing. Buffering involves having incoming communication filtered,
usually by an assistant. Omitting occurs when we decide to overlook messages,
such as using software rules to redirect e-mails from distribution lists to folders that
we never look at. An example of summarizing is reading executive summaries
rather than the full reports.
Cross-Cultural and Cross-Gender Communication
As globalization and cultural diversity increase, you can be sure that cross-cultural
communication problems will also increase. 48 Language is the most obvious cross-
cultural communication challenge. Words are easily misunderstood in verbal com-
munication, either because the receiver has a limited vocabulary or the sender’s
accent distorts the usual sound of some words. Voice intonation is another cross-
cultural communication barrier. How loudly, deeply, and quickly people speak varies
Time
Employee’s
information
processing
capacity
Episodes of
information
overload
Information
load
Exhibit 9.3
Dynamics of
Information
Overload
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284 Part Three Team Processes
across cultures, and these voice intonations send secondary messages that have differ-
ent meanings in different cultures.
Communication includes silence, but the use and meaning of silence varies from
one culture to another. 49 One study estimated that silence and pauses represented
30 percent of conversation time between Japanese doctors and patients, compared
with only 8 percent of the time between American doctors and patients. Why is there
more silence in Japanese conversations? In Japan, silence symbolizes respect and
indicates that the listener is thoughtfully contemplating what has just been said. 50
Empathy is very important in Japan, and this shared understanding is demonstrated
without using words. In contrast, most people in the United States and many other
cultures view silence as a lack of communication and often interpret long breaks as a
sign of disagreement.
Conversational overlaps also send different messages in different cultures. Japanese
people usually stop talking when they are interrupted, whereas talking over the other
person’s speech is more common in Brazil, France, and some other countries. The
difference in communication behavior is, again, due to interpretations. Talking while
someone is speaking to you is considered quite rude in Japan, whereas Brazilians and
the French are more likely to interpret this as the person’s interest and involvement
in the conversation.
Nonverbal Differences across Cultures
Nonverbal communication represents another potential area for misunderstanding
across cultures. Many nonconscious or involuntary nonverbal cues (such as smiling)
have the same meaning around the world, but deliberate gestures often have different
interpretations. For example, most of us shake our head from side to side to say “No,”
but a variation of head shaking means “I understand” to many people in India.
Filipinos raise their eyebrows to give an affirmative answer, yet Arabs interpret this
expression (along with clicking one’s tongue) as a negative response. Most Americans
are taught to maintain eye contact with the speaker to show interest and respect,
Thumbs-Up for Cross-Cultural (Mis)com –
munication Patricia Oliveira made
several cultural adjustments when she
moved from Brazil to Australia. One of
the more humorous incidents occurred
in the Melbourne office where she
works. A co-worker would stick his
thumbs up when asked about some-
thing, signaling that everything was OK.
But the gesture had a totally different
meaning to Oliveira and other people
from Brazil. “He asked me why I was
laughing and I had to explain that in
Brazil, that sign means something not
very nice,” recalls Oliveira. “After that,
everyone started doing it to the boss. It
was really funny.”51
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Chapter 9 Communicating in Teams and Organizations 285
Learning
Objectives
whereas some North American native groups and Australian Aborigines learn at an
early age to show respect by looking down when an older or more senior person is
talking to them. 52
Gender Differences in Communication
Men and women have similar communication practices, but there are subtle dis-
tinctions that can occasionally lead to misunderstanding and conflict. 53 One
distinction is that men are more likely than women to view conversations as nego-
tiations of relative status and power. They assert their power by directly giving
advice to others (e.g., “You should do the following”) and using combative
language. There is also evidence that men dominate the talk time in conversations
with women, as well as interrupt more and adjust their speaking style less than do
women.
Men engage in more “report talk,” in which the primary function of the conversa-
tion is impersonal and efficient information exchange. Women also do report talk,
particularly when conversing with men, but conversations among women have a
higher incidence of relationship building through “rapport talk.” Women make more
use of indirect requests (“Do you think you should . . .”), apologize more often, and
seek advice from others more quickly than do men. Finally, research fairly consis-
tently indicates that women are more sensitive than men to nonverbal cues in face-to-
face meetings. 54 Together, these conditions can create communication conflicts.
Women who describe problems get frustrated that men offer advice rather than rap-
port, whereas men become frustrated because they can’t understand why women
don’t appreciate their advice.
After reading the next three sections, you should be able to:
8. Outline the key strategies for getting your message across and
engaging in active listening.
9. Summarize three communication strategies in organizational
hierarchies.
10. Debate the benefits and limitations of the organizational grapevine.
Improving Interpersonal Communication
Effective interpersonal communication depends on the sender’s ability to get the
message across and the receiver’s performance as an active listener. In this section,
we outline these two essential features of effective interpersonal communication.
Getting Your Message Across
This chapter began with the statement that effective communication occurs when
the other person receives and understands the message. To accomplish this difficult
task, the sender must learn to empathize with the receiver, repeat the message,
choose an appropriate time for the conversation, and be descriptive rather than
evaluative:
• Empathize. Recall from earlier chapters that empathy is a person’s ability to un-
derstand and be sensitive to the feelings, thoughts, and situations of others. In
conversations, this involves putting yourself in the receiver’s shoes when encoding
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286 Part Three Team Processes
the message. For instance, be sensitive to words that may be ambiguous or trig-
ger the wrong emotional response.
• Repeat the message. Rephrase the key points a couple of times. The saying “Tell
them what you’re going to tell them; tell them; then tell them what you’ve told
them” reflects this need for redundancy.
• Use timing effectively. Your message competes with other messages and noise, so
find a time when the receiver is less likely to be distracted by these other matters.
• Be descriptive. Focus on the problem, not the person, if you have negative in-
formation to convey. People stop listening when the information attacks their
self-esteem. Also, suggest things the listener can do to improve, rather than
point to him or her as a problem.
Active Listening
“Nature gave people two ears but only one tongue, which is a gentle hint that they
should listen more than they talk.” 55 To follow this advice, we need to recognize that
listening is a process of actively sensing the sender’s signals, evaluating them accurately,
and responding appropriately. These three components of listening—sensing, evaluat-
ing, and responding—reflect the listener’s side of the communication model described
at the beginning of this chapter. Listeners receive the sender’s signals, decode them as
intended, and provide appropriate and timely feedback to the sender (see Exhibit 9.4 ).
Active listeners constantly cycle through sensing, evaluating, and responding during
the conversation and engage in various activities to improve these processes. 56
Sensing Sensing is the process of receiving signals from the sender and paying at-
tention to them. Active listeners improve sensing in three ways. First, they postpone
evaluation by not forming an opinion until the speaker has finished. Second, they
avoid interrupting the speaker’s conversation. Third, they remain motivated to listen
to the speaker.
• Postpone evaluation.
• Avoid interruptions.
• Maintain interest.
Active
listening
Sensing
• Empathize.
• Organize information.
Evaluating
• Show interest.
• Clarify the message.
Responding
Exhibit 9.4
Active Listening
Process and
Strategies
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Chapter 9 Communicating in Teams and Organizations 287
Evaluating The evaluating component of listening includes understanding the
message’s meaning, evaluating the message, and remembering the message. To im-
prove their evaluation of the conversation, active listeners empathize with the
speaker—they try to understand and be sensitive to the speaker’s feelings, thoughts,
and situation. Evaluation also improves by organizing the speaker’s ideas during the
communication episode.
Responding Responding, the third component of listening, is giving feedback to
the sender, thereby motivating and directing the speaker’s communication. Active
listeners accomplish this by maintaining sufficient eye contact and sending back
channel signals (e.g., “I see”), both of which show interest. They also respond by
clarifying the message—rephrasing the speaker’s ideas at appropriate breaks (“So
you’re saying that . . . ?”).
Improving Communication throughout the Hierarchy
So far, we have focused on “micro-level” issues in the communication process,
namely, the dynamics of sending and receiving information between two employees
or the informal exchanges of information across several people. But in this era where
knowledge is a competitive advantage, corporate leaders also need to maintain an
open flow of communication up, down, and across the organization. In this section,
we discuss three communication strategies: workspace design, Web-based communi-
cation, and direct communication with top management.
Workspace Design
Executives at Japan Airlines decided that knocking down a few walls might reverse
the airline’s recent financial woes. The airline’s board members and senior executive
team moved out of individual offices into a single large room, where it is easier for
them to spontaneously share information. The new space also includes an elliptical
conference table at which they can hold meetings. 57 Japan Airlines executives have
discovered that people communicate more with each other when there are no walls
between them. 58 The location and design of hallways, offices, cubicles, and commu-
nal areas (cafeterias, elevators) all shape to whom we speak as well as the frequency
of such communication.
Japan Airlines has applied a widely adopted workspace strategy of replacing tradi-
tional offices with an open space where all employees (including management) work
together. One recent convert to open space is Continuum, the Boston-based design
and innovation firm. “We do not have doors,” explains a Continuum executive. “It’s
structured that way to stimulate conversation and to allow people to work collabora-
tively. Anyone from the chief operating officer to our interns shares space and sits
next to each other. You can stop in and have a conversation with anyone, anytime
you want.” 59 Although these open-space arrangements increase communication, they
also potentially increase noise, distractions, and loss of privacy. 60 The challenge is to
increase social interaction without these stressors.
Another workspace strategy is to cloister employees into team spaces but also en-
courage sufficient interaction with people from other teams. Pixar Animation Studios
constructed its campus in Emeryville, California, with these principles in mind. The
buildings encourage communication among team members. At the same time, the
campus encourages happenstance interactions with people on other teams. Pixar
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288 Part Three Team Processes
executives call this the “bathroom effect,” because team members must leave their
isolated pods to fetch their mail, have lunch, or visit the restroom. 61
Web-Based Organizational Communication
For decades, employees received official company news through hard-copy newslet-
ters and magazines. Many firms still use these communication devices, but most have
supplemented or replaced them completely with Web-based sources of information.
The traditional company magazine is now typically published on Web pages or dis-
tributed in PDF format. The advantage of such e-zines is that company news can be
prepared and distributed quickly.
However, employees are increasingly skeptical of information that has been screened
and packaged by management. In response, Children’s Hospital and Regional Medical
Center in Seattle keeps employees up to date through staff members who volunteer to
write news about their departments on the hospital’s central Weblog site. “The distrib-
uted authorship of people from different departments means the content is fresher” than
the hospital’s previous newsletter or e-zine, says the Children’s Hospital manager re-
sponsible for the Web site. IBM relies on e-zines, but employees increasingly rely on
BlogCentral, an inward-facing (i.e., for IBM employees’ eyes only) blog-hosting service,
where several thousands employees write about their own news of the week. A search
engine helps staff find important information on any of the several thousand blogs. 62
Direct Communication with Top Management
“The best fertilizer in any field is that of the farmer’s footsteps!” This old Chinese say-
ing suggests that farmers will be more successful by spending more time in the fields
Kowloon Shangri-La’s “State of the
Hotel” Meetings Communicating with
employees can be a challenge when
the organization is a large hotel that
operates around the clock. But these
conditions haven’t prevented senior
management at Kowloon Shangri-La
from holding “state of the hotel” meetings
with all 700 staff members twice each
year. Two sessions are held—one in the
morning, the other in the afternoon—so
that all employees at the Hong Kong hotel
can attend without leaving the hotel short-
staffed. “It was clear from the outset that
it is a very good way of communicating
with staff from top to bottom,” says
Kowloon Shangri-La general manager
Mark Heywood. During these sessions,
Heywood updates employees on the
hotel’s financial performance, upcoming
events, and renovations. “It’s a chance
to communicate about the good, the bad
and the ugly,” he explains.63
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Chapter 9 Communicating in Teams and Organizations 289
directly observing the crop’s development. Translated into an organizational context,
this means that senior executives will understand their business better if they meet
directly with employees and other stakeholders. Nearly 40 years ago, people at
Hewlett-Packard coined a phrase for this communication strategy: management by
walking around (MBWA) . At 1-800-Got-Junk?, founder and CEO Brian Scudamore
takes this practice further. “I don’t have my own office, and I very often move around
to different departments for a day at a time,” says Scudamore. 64
Along with practicing MBWA, executives communicate more directly with em-
ployees through “town hall meetings.” For example, soon after becoming chief ex-
ecutive of McDonald’s in the United Kingdom, Peter Beresford instituted a monthly
online town hall event where board members answer questions from any McDonald’s
staff. 65 Some executives also conduct employee roundtable forums to hear opinions
from a small representation of staff about various issues. At the departmental level,
some companies hold daily or weekly “huddles”—brief stand-up meetings in which
staff and their manager discuss goals and hear good-news stories. These direct com-
munication strategies potentially minimize filtering because executives listen directly
to employees. They also help executives acquire a deeper meaning and quicker un-
derstanding of internal organizational problems. A third benefit of direct communi-
cation is that employees might have more empathy for decisions made further up the
corporate hierarchy.
Communicating through the Grapevine
No matter how much corporate leaders try to communicate through e-zines, blogs,
wikis, MBWA, and other means, employees will still rely on the oldest communica-
tion channel: the corporate grapevine . The grapevine is an unstructured and infor-
mal network founded on social relationships rather than organizational charts or job
descriptions. What do employees think about the grapevine? Surveys of employees
in two firms—one in Florida, the other in California—found that almost all employ-
ees use the grapevine but very few of them prefer this source of information. The
California survey also reported that only one-third of employees believe grapevine
information is credible. In other words, employees turn to the grapevine when they
have few other options. 66
Grapevine Characteristics
Research conducted several decades ago reported that the grapevine transmits infor-
mation very rapidly in all directions throughout the organization. The typical pattern
is a cluster chain, whereby a few people actively transmit rumors to many others. The
grapevine works through informal social networks, so it is more active where em-
ployees have similar backgrounds and are able to communicate easily. Many rumors
seem to have at least a kernel of truth, possibly because they are transmitted through
media-rich communication channels (e.g., face-to-face) and employees are motivated
to communicate effectively. Nevertheless, the grapevine distorts information by delet-
ing fine details and exaggerating key points of the story. 67
Some of these characteristics might still be true, but other features of the grapevine
almost certainly have changed as e-mail, social networking sites, and blogs have re-
placed the traditional watercooler as sources of gossip. For example, several Face-
book sites are themed around specific companies, allowing employees and customers
to vent their complaints about the organization. Along with altering the speed and
grapevine
An unstructured and in-
formal network founded
on social relationships
rather than organiza-
tional charts or job
descriptions.
management by walking
around (MBWA)
A communication prac-
tice in which executives
get out of their offices
and learn from others in
the organization through
face-to-face dialogue.
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Communication is the process by which information is
transmitted and understood between two or more people.
Communication supports work coordination, organiza-
tional learning, decision making, and employee well-
being. The communication process involves forming,
encoding, and transmitting the intended message to a
receiver, who then decodes the message and provides
feedback to the sender. Effective communication occurs
when the sender’s thoughts are transmitted to and un-
derstood by the intended receiver. To improve this pro-
cess, both sender and receiver should have common
codebooks, share common mental models, be familiar
with the message topic, and be proficient with the com-
munication channel.
The two main types of communication channels are
verbal and nonverbal. Various forms of computer-mediated
Chapter Summary
communication are widely used in organizations, with
e-mail being the most popular. Although it is efficient
and serves as a useful filing cabinet, e-mail is relatively
poor at communicating emotions; it tends to reduce po-
liteness and respect; it is an inefficient medium for com-
municating in ambiguous, complex, and novel situations;
and it contributes to information overload. Facebook-like
Web sites, wikis, virtual reality platforms, and other forms
of virtual social networking are also gaining popularity as
forms of communication. Nonverbal communication in-
cludes facial gestures, voice intonation, physical distance,
and even silence. Unlike verbal communication, nonverbal
communication is less rule-bound and is mostly auto-
matic and nonconscious.
The most appropriate communication medium partly
depends on social acceptance factors, including organiza-
network of corporate grapevines, information technologies have expanded the net-
works around the globe, not just around the next cubicle.
Grapevine Benefits and Limitations
Should the grapevine be encouraged, tolerated, or quashed? The difficulty in
answering this question is that the grapevine has both benefits and limitations. 68
One benefit, as mentioned earlier, is that employees rely on the grapevine when
information is not available through formal channels. It is also the main conduit
through which organizational stories and other symbols of the organization’s culture
are communicated. A third benefit of the grapevine is that this social interaction re-
lieves anxiety. This explains why rumor mills are most active during times of uncer-
tainty. 69 Finally, the grapevine is associated with the drive to bond. Being a recipient
of gossip is a sign of inclusion, according to evolutionary psychologists. Trying to
quash the grapevine is, in some respects, an attempt to undermine the natural human
drive for social interaction. 70
While the grapevine offers these benefits, it is not a preferred communication
medium. Grapevine information is sometimes so distorted that it escalates rather
than reduces employee anxiety. Furthermore, employees develop more negative
attitudes toward the organization when management is slower than the grapevine
in communicating information. What should corporate leaders do with the grape-
vine? The best advice seems to be to listen to the grapevine as a signal of em-
ployee anxiety and then correct the cause of this anxiety. Some companies also
listen to the grapevine and step in to correct blatant errors and fabrications. Most
important, corporate leaders need to view the grapevine as a competitor and meet
this challenge by directly informing employees of news before it spreads through-
out the grapevine.
290 Part Three Team Processes
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rapport talk and are more sensitive than are men to
nonverbal cues.
To get a message across, the sender must learn to
empathize with the receiver, repeat the message, choose
an appropriate time for the conversation, and be de-
scriptive rather than evaluative. Listening includes
sensing, evaluating, and responding. Active listeners
support these processes by postponing evaluation,
avoiding interruptions, maintaining interest, empathiz-
ing, organizing information, showing interest, and
clarifying the message.
Some companies try to encourage communication
through workspace design, as well as through Web-
based sites. Some executives also meet directly with
employees, such as through management by walking
around (MBWA), to facilitate communication across
the organization.
In any organization, employees rely on the grapevine,
particularly during times of uncertainty. The grapevine is
an unstructured and informal net work founded on social
relationships rather than or ganizational charts or job de-
scriptions. Although early research identified several
unique features of the grapevine, some of these features
may be changing as the Internet plays an increasing role
in grapevine communication.
tion and team norms, individual preferences for specific
communication channels, and the symbolic meaning of
a channel. A communication medium should also be
chosen for its data-carrying capacity (media richness).
Nonroutine and ambiguous situations require rich media.
However, we also need to recognize that lean media
allow people to multicommunicate, that the capacity of
computer-mediated communication is varied due to the
proficiency of individual users, and that social distrac-
tions can reduce the efficient processing of information
in high-media-richness channels.
Several barriers create noise in the communication
process. People misinterpret messages because of per-
ceptual biases. Some information is filtered out as it
gets passed up the hierarchy. Jargon and ambiguous
language are barriers when the sender and receiver
have different interpretations of the words and symbols
used. People also screen out or misinterpret messages
due to information overload. These problems are
often amplified in cross-cultural settings because of
language barriers and differences in meanings of
nonverbal cues. There are also some communication
differences between men and women, such as the
tendency for men to exert status and engage in re-
port talk in conversations whereas women use more
communication, p. 270
emotional contagion, p. 277
grapevine, p. 289
information overload, p. 282
management by walking around
(MBWA), p. 289
media richness, p. 278
persuasion, p. 281
wikis, p. 275
Key Terms
3. Senior management at a consumer goods company
wants you to investigate the feasibility of using a
virtual reality platform (such as Second Life) for
monthly online meetings involving its three-dozen
sales managers located in several cities and coun-
tries. Use the social acceptance and media-richness
factors described in this chapter to identify infor-
mation you need to consider when conducting
this evaluation.
4. Wikis are collaborative Web sites where anyone in
the group can post, edit, or delete any information.
Where might this communication technology be
most useful in organizations?
1. You have been hired as a consultant to improve
communication between engineering and marketing
employees in a large high-technology company. Use
the communication model and the four ways to im-
prove that process to devise strategies to improve
communication effectiveness among employees in
these two work units.
2. A company in a country that is just entering the in-
formation age intends to introduce e-mail for office
staff at its three buildings located throughout the
city. Describe two benefits as well as two potential
problems that employees will likely experience with
this medium.
Critical Thinking Questions
291
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Case Study 9.1 COMMUNICATING WITH THE MILLENNIALS
The Millennials (Generation Y, born between 1980
and 1995) have arrived in the workplace, and they
are bringing new ways to communicate. Surveys re-
port that this generation lives by computer and cell
phone communication. Three out of four Gen Y’s
use instant messaging (IM); 15 percent of them are
logged on to IM 24/7! Most Gen Y’s either have a
space on a social network site such as Facebook or
frequent such sites where they have friends. These
digital natives also get most of their news from the
Internet rather than from TV or newspapers.
“Employers are going to find this generation com-
municates differently. They IM (instant message), send
text messages, and can’t live without a cell phone,” says
Dave O’Brien, regional manager of Berbee, a company
that helps businesses with their information techno-
logy needs. Frank Albi, president of Inacom, a technol-
ogy and business consulting firm, agrees. “The way they
(Millennials) exchange information is vastly different.
It’s all about IMs and text messages—nice and short.”
Albi also notes that Millennials are much more ac-
tive in multicommunicating. “You can be on the
phone with someone and easily instant message
someone who you see is online to answer a question
or share an idea with,” Albi says. However, managers
also worry that too much of this multicommunication
isn’t work-related. “There’s a fine line about what can
be allowed at work and what can’t,” suggests Steve
Hoeft, a recruiting manager at Time Warner Cable.
“Instant messaging is very popular, but if it’s affecting
their work, that’s when there’s a problem.”
Corporate leaders at BT, Britain’s largest telecom-
munications company, are also aware that Millenni-
als (and to some extent Gen-X employees) live in
different communication channels from baby boom-
ers. “Young people in BT communicate much more
informally and in real-time,” says Richard Dennison,
BT’s intranet and channel strategy manager. “They’re
not intimidated by hierarchy or status; to them BT is
flat.” Dennison adds that Generation-Y employees
want bit-size information, not long treatises.
Dennison also emphasizes that, more than previous
generations, Millennials demand authentic communi-
cation, not marketing hype. “Corporate speak won’t
cut it anymore,” Dennison warns. “First, people won’t
read it—if they ever did—and second, people won’t be-
lieve it—if they ever did.” Dennison also notices that if
Gen Y’s get corporate babble, they find ways to let the
source know that it lacks authenticity. Remember, this
is the generation that has always had a place to write
comments after reading the original message.
From these observations, you might think that ex-
ecutive blogs are the answer to Gen-Y communication
needs. Not so, argues Dennison. “Force all our senior
managers to blog? My experience is that the more se-
nior a manager is, the less likely they’ll be able to blog
successfully.” He adds that executives have too little
time to nurture a blog and that they tend to have com-
munication experts who want to meddle (thereby un-
dermining the blog’s authenticity).
So how can the company’s top dogs communicate
effectively with Millennial employees? At BT, the
chief executive has held 90-minute online Web chats
with staff every six weeks. This medium works well
for young BT employees because the communication
is in real time and is authentic—the questions aren’t
these people in person, what can you do to maxi-
mize your persuasiveness?
7. Explain why men and women are sometimes frus-
trated with each other’s communication behaviors.
8. In your opinion, has the introduction of e-mail
and other information technologies increased or
decreased the amount of information flowing
through the corporate grapevine? Explain your
answer.
292
5. Under what conditions, if any, do you think it is
appropriate to use e-mail to notify an employee that
he or she has been laid off or fired? Why is e-mail
usually considered an inappropriate channel to
convey this information?
6. Suppose that you are part of a virtual team and must
persuade other team members about an important
matter (such as switching suppliers or altering the
project deadline). Assuming that you cannot visit
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screened and the CEO’s answers aren’t edited.
“Thousands of people participate in these chats and it
has helped to build up a significant amount of trust”
in the CEO, says Dennison. These online Web chats
also work well with BT executives because they repre-
sent a fixed chunk of time and provide direct contact
with the concerns and issues facing employees through-
out the hierarchy.
Discussion Questions
1. Take a poll of your class (at least, the Gen-X and
Gen-Y members). At school or work, how many
regularly (e.g., daily or every few days) send or
receive information (not entertainment) using
(a) e-mail, (b) instant messages (such as MSN),
(c) cell phone text messages, (d) blogs, (e) social
network sites (e.g., Facebook), (f) online videos
(e.g., YouTube)?
2. Even within each generation, there are differ-
ent preferences for communication media. Af-
ter conducting the poll above, ask students who
don’t regularly use one or more of the listed
methods why they don’t like that particular
communication medium. Ask those who very of-
ten use these sources to give their point of view.
3. Companies have been slow and reluctant to
adopt social networking sites, online videos,
and similar forms of communication. If you
were a senior manager, how would you intro-
duce these communication technologies in the
workplace to share information and knowledge
more effectively?
Sources: MaryBeth Matzek, “R U on 2 Gen Y?” Marketplace, 4 Sep-
tember 2007, p. 10; Richard Dennison, “Encouraging BT’s Au-
thentic Voice of Leadership,” Strategic Communication Management
12, no. 2 (2008), p. 12.
Case Study 9.2 IT’S ALL ABOUT THE FACE-TO-FACE
If there is one thing corporate
globetrotters agree on, it’s that
there is no substitute for face
time. “I don’t want to sound like a whirling dervish,”
says Paul Calello, Credit Suisse’s investment bank-
ing chief. “But in a global world you have to get in
front of your employees, spend time with your cli-
ents, and show commitment when it comes to joint
ventures, mergers, and alliances. The key is thought-
ful travel—traveling when necessary.”
Many predicted that technology and globaliza-
tion would bring the end of face time. Instead, these
conditions have made personal interaction all the
more important. Executives increasingly feel the in-
human pull of having to be in two, three, four places
around the world at the same time. Those who mas-
ter this new reality are able to strategically identify
their face-to-face priorities and finesse tight travel
schedules to make these events happen with a rea-
sonably sane schedule.
This BusinessWeek case study relates stories and
advice from executives who tolerate outlandish
travel schedules to meet others eyeball to eyeball
rather than from a distance. Read the full text of
this BusinessWeek article at www.mhhe.com/
mcshane5e , and prepare for the discussion ques-
tions below.
Discussion Questions
1. Identify the main reasons raised in this article
why executives meet employees and clients face-
to-face rather than through other communica-
tion channels. Are all of these reasons logical, or
are some overstated?
2. In this world of globalization and information
technology, discuss the skills and knowledge that
these world-traveling executives require to make
face-to-face communication work effectively.
Source: T. Lowry, F. Belfour, D. Foust, J. McGregor, and M. Conlin,
“It’s All about the Face-to-Face,” BusinessWeek , 28 January 2008,
pp. 48–51.
293
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http://www.mhhe.com/
294
Team Exercise 9.4 ACTIVE LISTENING EXERCISE
Mary Gander, Winona State University
PURPOSE This exercise is designed to help you
understand the dynamics of active listening in con-
versations and develop active listening skills.
INSTRUCTIONS For each of the four vignettes
presented below, student teams (or students working
individually) will compose three statements that
demonstrate active listening. Specifically, one state-
ment will indicate that you show empathy for the
situation; the second will ask for clarification and de-
tail in a nonjudgmental way; and the third statement
will provide nonevaluative feedback to the speaker.
Here are details about each of these three types of
responses:
• Showing empathy: Acknowledge feelings . Sometimes
it sounds like a speaker wants you to agree with
him or her, but in reality the speaker mainly
wants you to understand how he or she feels.
“Acknowledging feelings” involves taking in
the speaker’s statements while looking at the
“whole message,” including body language,
tone of voice, and level of arousal, and trying
to determine what emotion the speaker is
conveying. Then you let the speaker know
that you realize what he or she is feeling by
acknowledging it in a sentence.
• Asking for clarification and detail while withhold-
ing your judgment and own opinions . This con-
veys that you are trying to understand and
not just trying to push your opinions onto the
speaker. To formulate a relevant question in
asking for more clarification, you will have
to listen carefully to what the speaker says.
Frame your question as someone trying to
understand in more detail; often asking for a
specific example is useful. This also helps the
speaker evaluate his or her own opinions and
perspective.
• Providing nonevaluative feedback: Feeding back the
message you heard . This will allow the speaker
to determine whether he or she conveyed the
message to you and will help prevent trouble-
some miscommunication. It will also help the
speaker become more aware of how he or she
is coming across to another person (self-
evaluation). Just think about what the speaker
Team Exercise 9.3 ANALYZING THE BLOGOSPHERE
PURPOSE This exercise is designed to help you
understand the dynamics of corporate blogs as a
way to communicate within organizations.
INSTRUCTIONS This activity is usually con-
ducted in between classes as a homework assign-
ment. The instructor will divide the class into
teams (although the exercise can also be conducted
individually). Each team will identify a corporate
blog (written by a company or government execu-
tive and meant for customers, employees, or the
wider community). The team will analyze content
on the selected blog and answer the following
questions for class (preferably with brief samples
where applicable):
1. Who is the main intended audience of the selected
blog?
2. To what extent do you think this blog attracts
the interest of its intended audience? Please
explain.
3. What are the main topics in recent postings
about this organization? Are they mostly good
or bad news? Why?
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295
is conveying; paraphrase it in your own words,
and say it back to the speaker (without judging
the correctness or merit of what was said), ask-
ing him or her if that is what was meant.
After teams (or individual students) have pre-
pared the three statements for each vignette, the in-
structor will ask them to present their statements and
explain how these statements satisfy the active lis-
tening criteria.
VIGNETTE 1 A colleague stops by your desk
and says, “I am tired of the lack of leadership
around here. The boss is so wishy-washy, he can’t
get tough with some of the slackers around here.
They just keep milking the company, living off the
rest of us. Why doesn’t management do something
about these guys? And you are always so support-
ive of the boss; he’s not as good as you make him
out to be.”
Develop three statements that respond to the
speaker in this vignette by (a) showing empathy,
(b) seeking clarification, and (c) providing nonevalu-
ative feedback.
VIGNETTE 2 Your co-worker stops by your cubi-
cle; her voice and body language show stress, frus-
tration, and even some fear. You know she has been
working hard and has a strong need to get her work
done on time and done well. You are trying to con-
centrate on some work and have had a number of
interruptions already. She abruptly interrupts you
and says, “This project is turning out to be a mess.
Why can’t the other three people on my team quit
fighting with each other?”
Develop three statements that respond to the
speaker in this vignette by (a) showing empathy,
(b) seeking clarification, and (c) providing nonevalu-
ative feedback.
VIGNETTE 3 One of your subordinates is work-
ing on an important project. He is an engineer who
has good technical skills and knowledge and was
selected for the project team for this reason. He
stops by your office and appears to be quite agi-
tated: His voice is loud and strained, and his face
has a look of bewilderment. He says, “I’m supposed
to be working with four other people from four
other departments on this new project, but they
never listen to my ideas and seem to hardly know
I’m at the meeting!”
Develop three statements that respond to the
speaker in this vignette by (a) showing empathy,
(b) seeking clarification, and (c) providing nonevalu-
ative feedback.
VIGNETTE 4 Your subordinate comes into your
office in a state of agitation, asking if she can talk
to you. She is polite and sits down. She seems calm
and does not have an angry look on her face. How-
ever, she says, “It seems like you consistently make
up lousy schedules; you are unfair and unrealistic
in the kinds of assignments you give certain peo-
ple, me included. Everyone else is so intimidated
they don’t complain, but I think you need to know
that this isn’t right and it’s got to change.”
Develop three statements that respond to the
speaker in this vignette by (a) showing empathy,
(b) seeking clarification, and (c) providing nonevalu-
ative feedback.
Copyright © 2002, Mary J. Gander. Adapted from “Case of the
Excellent Worker,” a paper presented at the 2002 Annual Meeting
of the Decision Science Institute. This short case is based on actual
events but names have been changed to maintain anonymity.
Team Exercise 9.5 CROSS-CULTURAL COMMUNICATION GAME
PURPOSE This exercise is designed to develop
and test your knowledge of cross-cultural differences
in communication and etiquette.
MATERIALS The instructor will provide one set of
question-and-answer cards to each pair of teams.
INSTRUCTIONS
1. The class is divided into an even number of
teams. Ideally, each team would have three stu-
dents. (Two- or four-student teams are possible
if matched with an equal-size team.) Each team
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296 Part Three Team Processes
incorrect, however, team A earns that point.
Correct answers to each question are indicated
on the card and, of course, should not be re-
vealed until the question is correctly answered
or time is up. Whether or not team B answers
correctly, team B picks up the next card on the
pile and reads it to members of team A. In other
words, cards are read alternately to each team.
This procedure is repeated until all the cards
have been read or time has expired. The team
receiving the most points wins.
Important note: The textbook provides very little in-
formation pertaining to the questions in this exer-
cise. Rather, you must rely on past learning, logic,
and luck to win.
© 2001 Steven L. McShane.
is then paired with another team, and the paired
teams (team “A” and team “B”) are assigned a
private space away from other matched teams.
2. The instructor will hand each pair of teams a
stack of cards with the multiple-choice questions
face down. These cards have questions and an-
swers about cross-cultural differences in com-
munication and etiquette. No books or other
aids are allowed.
3. The exercise begins with a member of team A
picking up one card from the top of the pile and
asking the question on that card to the members
of team B. The information given to team B in-
cludes the question and all alternative answers
listed on the card. Team B has 30 seconds after
the question and alternatives have been read to
give an answer. Team B earns one point if the
correct answer is given. If team B’s answer is
Self-Assessment 9.6
ACTIVE LISTENING SKILLS INVENTORY
PURPOSE This self-assessment is designed to help
you estimate your strengths and weaknesses on vari-
ous dimensions of active listening.
INSTRUCTIONS Think back to face-to-face con-
versations you have had with a co-worker or client
in the office, hallway, factory, or other setting. Indi-
cate the extent to which each item on page 297
describes your behavior during those conversations.
Answer each item as truthfully as possible so that
you get an accurate estimate of where your active
listening skills need improvement. Then use the
scoring key in Appendix B at the end of the book to
calculate your results for each scale. This exercise
should be completed alone so that you can assess
yourself honestly without concerns of social com-
parison. Class discussion will focus on the important
elements of active listening.
296
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1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Active Listening Skills Inventory
Not at all
Some-
what
Very
much
I keep an open mind about the speaker’s point of view until he
or she has finished talking.
While listening, I mentally sort out the speaker’s ideas in a way
that makes sense to me.
I stop the speaker and give my opinion when I disagree with
something he or she has said.
People can often tell when I’m not concentrating on what they
are saying.
I don’t evaluate what a person is saying until he or she has
finished talking.
When someone takes a long time to present a simple idea,
I let my mind wander to other things.
I jump into conversations to present my views rather than
wait and risk forgetting what I wanted to say.
I nod my head and make other gestures to show I’m
interested in the conversation.
I can usually keep focused on what people are saying to me
even when they don’t sound interesting.
Rather than organizing the speaker’s ideas, I usually expect
the person to summarize them for me.
I always say things like “I see” or “uh-huh” so that people know
I’m really listening to them.
While listening, I concentrate on what is being said and
regularly organize the information.
While a speaker is talking, I quickly determine whether I like
or dislike his or her ideas.
I pay close attention to what people are saying even when they
are explaining something I already know.
I don’t give my opinion until I’m sure the other person has
finished talking.
Circle the response to the right that best indicates the extent to
which each statement describes you when listening to others. A little
© 2000 Steven L. McShane.
After reading this chapter, if you feel that you need additional information, see www.mhhe.com/
mcshane5e for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/
Denise Revine’s review was supposed to uncover more efficient uses of the human
resource budget within the Royal Canadian Mounted Police (RCMP). Instead, the human
resource director discovered misappropriations that would shake the foundations of the
law enforcement agency: pension funds were being siphoned off for questionable and
unrelated operating expenses, including excessive payments to family members. Two
auditor reports later confirmed Revine’s findings.
Revine informed her boss, Chief Superintendent
Fraser Macaulay, who reported the preliminary evidence
to the RCMP’s ethics adviser. Macaulay was then asked
to brief the RCMP commissioner (the organization’s
chief executive), Giuliano Zaccardelli, on this matter. To
Macaulay’s surprise, the RCMP commissioner accused
Macaulay of hiding this wrongdoing and, soon after,
transferred him to the Department of National Defence
“so he could learn from his mistake.” A Canadian
government investigation into the RCMP pension affair
concluded that Zaccardelli’s claims against Macaulay
were unfounded. Equally important, it concluded that the
transfer scuttled Macaulay’s career and sent “a message
throughout the organization that one brings bad news to
the Commissioner at one’s peril.”
Revine submitted her final report a few months after
her boss’s fateful meeting with the RCMP commissioner.
Soon after, Revine’s position was declared surplus during
a human resource department restructuring. When an HR
staff member tried to find work in other departments for
Revine, his boss warned: “No, don’t touch her!” After
33 years with the RCMP, Revine was suddenly out of a job.
The Canadian government investigation concluded
that some members of the RCMP executive were “using
the restructuring process in the Human Resources Branch
to try to force [Revine] out of the organization.” According to the Canadian government
report, at least three other RCMP officers apparently suffered career setbacks or were
forced into retirement due to pressure from the RCMP’s top brass.
The Canadian government’s independent investigator noted, significantly, that the
RCMP commissioner “enjoyed the status and privileges of his office,” often “reminding
people that ‘I am the Commissioner.’” The investigation concluded that the RCMP
suffered from this “absolute power exercised by the Commissioner” and that the best
way to prevent similar problems in the future is restructuring “aimed at whittling down the
power of the Commissioner.” 1
Subversive power, influence, and politics derailed the
careers of Royal Canadian Mounted Police (RCMP) human
resource director Denise Revine and her boss, Chief
Superintendent Fraser Macaulay (both shown here), as well
as other RCMP staff who tried to discover and report
wrongdoing in RCMP pension fund expenditures.
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10
Power and Influence in
the Workplace
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Define power and countervailing power.
2. Describe the five sources of power in
organizations.
3. Explain how information relates to power in
organizations.
4. Discuss the four contingencies of power.
5. Summarize the effects of power on the
power holder’s own performance and
well-being.
6. Summarize the eight types of influence
tactics.
7. Discuss three contingencies to consider
when deciding which influence tactic to
use.
8. Distinguish influence from organizational
politics.
9. Describe the organizational conditions and
personal characteristics that support
organizational politics.
10. Identify ways to minimize organizational
politics.
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300 Part Three Team Processes
The Canadian government’s independent investigation, along with separate parlia-
mentary committee meetings, reveals the extent to which some members of the
RCMP’s senior executive abused their power, used assertive influence tactics, and
engaged in organizational politics to suppress or subvert evidence of wrongdoing.
Some RCMP executives may have taken these actions to hide their own inappropri-
ate actions; others likely used their power and influence in a perverse attempt to
protect the RCMP’s public image. Although this story illustrates the dark side of
power and influence, these concepts are equally relevant to ethical conduct and orga-
nizational performance. In fact, some OB experts point out that power and influence
are inherent in all organizations. They exist in every business and in every decision
and action.
This chapter unfolds as follows: First, we define power and present a basic model
depicting the dynamics of power in organizational settings. The chapter then dis-
cusses the five sources of power, as well as information as a power base. Next, we
look at the contingencies necessary to translate those sources into meaningful power.
The latter part of this chapter examines the various types of influence in organiza-
tional settings as well as the contingencies of effective influence strategies. The final
section of this chapter looks at situations in which influence becomes organizational
politics, as well as ways of minimizing dysfunctional politics.
power
The capacity of a
person, team, or or-
ganization to influence
others.
Learning
Objectives
After reading the next three sections, you should be able to:
1. Define power and countervailing power.
2. Describe the five sources of power in organizations.
3. Explain how information relates to power in organizations.
4. Discuss the four contingencies of power.
5. Summarize the effects of power on the power holder’s own
performance and well-being.
The Meaning of Power
Power is the capacity of a person, team, or organization to influence others. 2 Power
is not the act of changing someone’s attitudes or behavior; it is only the potential to
do so. People frequently have power they do not use; they might not even know they
have power. Also, power is not a personal feeling of power. You might feel powerful
or think you have power over someone else, but this is not power unless you truly
have the capacity to influence that person. The most basic prerequisite of power is
that one person (or group) believes he or she is dependent on another person (or
group) for a resource of value. 3 This relationship, shown in Exhibit 10.1 , occurs when
Person A has power over Person B by controlling something that Person B wants.
You might have power over others by controlling a desired job assignment, useful
information, important resources, or even the privilege of being associated with you.
However, power requires the perception of dependence, so people might gain power
by convincing others that they have something of value, whether or not they actually
control that resource. Thus, power exists when others believe that you control re-
sources they want.
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Chapter 10 Power and Influence in the Workplace 301
Although dependence is a key element of power relationships, it is really more
accurate to say that the parties are interdependent . 4 In Exhibit 10.1, Person A domi-
nates in the power relationship, but Person B also has some countervailing
power —enough power to keep Person A in the exchange relationship and ensure
that Person A uses her or his dominant power judiciously. For example, executives
have power over subordinates by controlling their job security and promotional
opportunities. At the same time, employees have countervailing power by possess-
ing skills and knowledge that keep production humming and customers happy,
something that executives can’t accomplish alone. Finally, the power relationship
depends on some minimum level of trust. Trust indicates a level of expectation that
the more powerful party will deliver the resource. For example, you trust your
employer to give you a paycheck at the end of each pay period. Even those in
extremely dependent situations will usually walk away from the relationship if they
lack a minimum level of trust in the more powerful party.
A Model of Power in Organizations
Power involves more than just dependence or interdependence. As Exhibit 10.2
illustrates, power is derived from five sources: legitimate, reward, coercive, expert,
and referent. The model also indicates that these sources yield power only under
certain conditions. The four contingencies of power include the employee’s or de-
partment’s substitutability, centrality, discretion, and visibility. Finally, as you will
read later in this chapter, the type of power applied affects the type of influence the
power holder has over the other person or work unit.
Sources of Power in Organizations
Power derives from several sources and a few contingencies that determine the poten tial
of those power sources. 5 Three sources of power—legitimate, reward, and coercive—
originate mostly from the power holder’s formal position or informal role. In other
words, the person is granted these sources of power formally by the organization or
informally by co-workers. Two other sources of power—expert and referent—originate
from the power holder’s own characteristics; that is, the person brings these power
bases to the organization. Sources of power are resources that help the dependent
person directly or indirectly achieve his or her goals. For example, your expertise is a
source of power when others need that expertise to accomplish their objectives.
Exhibit 10.1
Dependence in the
Power Relationship
Resource
desired by
Person B
Person B
Countervailing
power Person A’s
control over
resourcePower
Person A
countervailing power
The capacity of a per-
son, team, or organiza-
tion to keep a more
powerful person or
group in the exchange
relationship.
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302 Part Three Team Processes
Legitimate Power
Legitimate power is an agreement among organizational members that people in
certain roles can request certain behaviors of others. This perceived right originates
from formal job descriptions as well as informal rules of conduct. Legitimate power
extends to employees, not just managers. For example, an organization might give
employees the right to receive customer files held by the boss if this information is
required for their jobs. Legitimate power depends on more than job descriptions. It
also depends on mutual agreement from those expected to abide by this authority.
Your boss’s power to make you work overtime partly depends on your agreement to
this authority. Thus, legitimate power operates within a “zone of indifference”—the
range within which people are willing to accept someone else’s authority. 6
The size of this zone of indifference (and, consequently, the magnitude of legiti-
mate power) increases with the extent to which the power holder is trusted and makes
fair decisions. Some people are also more obedient than others to authority, particu-
larly those who value conformity and tradition. People in high power distance cul-
tures (i.e., those who accept an unequal distribution of power) also tend to have
higher obedience to authority compared with people in low power distance cultures.
The organization’s culture represents a third factor. A 3M scientist might continue to
work on a project after being told by superiors to stop working on it because the 3M
culture supports an entrepreneurial spirit, which includes ignoring the boss’s authority
from time to time. 7
Reward Power
Reward power is derived from the person’s ability to control the allocation of rewards
valued by others and to remove negative sanctions (i.e., negative reinforcement).
Managers have formal authority that gives them power over the distribution of
Exhibit 10.2
A Model of Power
within Organizations
legitimate power
An agreement among
organizational members
that people in certain
roles can request
certain behaviors of
others.
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Chapter 10 Power and Influence in the Workplace 303
organizational rewards such as pay, promotions, time off, vacation schedules, and
work assignments. Likewise, employees have reward power over their bosses through
the use of 360-degree feedback systems. Employee feedback affects supervisors’ pro-
motions and other rewards, so supervisors tend to behave differently toward employees
after 360-degree feedback is introduced.
Coercive Power
Coercive power is the ability to apply punishment. The opening story to this chapter
described how the RCMP commissioner and likely other senior RCMP executives
used coercive power to suppress and remove employees who may have spread word
of the financial wrongdoing. Employees also have coercive power, ranging from sar-
casm to ostracism, to ensure that co-workers conform to team norms. Many firms
rely on this coercive power to control co-worker behavior in team settings. Nucor is
one such example: “If you’re not contributing with the team, they certainly will let
you know about it,” says Dan Krug, manager of HR and organizational development
at the Charlotte, North Carolina, steelmaker. “The few poor players get weeded out
by their peers.” Similarly, when asked how AirAsia maintained attendance and pro-
ductivity after the Malaysian discount airline removed its time clocks, Chief Executive
Tony Fernandes replied: “Simple. Peer pressure sees to that. The fellow employees,
who are putting their shoulders to the wheel, will see to that.” 8
Expert Power
For the most part, legitimate, reward, and coercive power originate from the posi-
tion. 9 In contrast, expert power originates from within the person. It is an individual’s
or work unit’s capacity to influence others by possessing knowledge or skills that others
value. Employees are gaining expert power as our society moves from an industrial
to a knowledge-based economy. 10 The reason is that employee knowledge becomes
the means of production and is ultimately outside the control of those who own the
company. And without this control over production, owners are more dependent on
employees to achieve their corporate objectives.
The power of expertise is most apparent when observing how people respond to
authority figures. 11 In one classic study, a researcher posing as a hospital physician
telephoned on-duty nurses to prescribe a specific dosage of medicine to a hospital-
ized patient. None of the nurses knew the person calling, and hospital policy prohib-
ited them from accepting treatment orders by telephone. Furthermore, the medication
was unauthorized, and the prescription was twice the maximum daily dose. Yet al-
most all 22 nurses who received the telephone call followed the “doctor’s” orders
until stopped by the researchers. 12
Referent Power
People have referent power when others identify with them, like them, or otherwise
respect them. Like expert power, referent power comes from within the person. It is
largely a function of the person’s interpersonal skills and tends to develop slowly.
Referent power is usually associated with charismatic leadership. Experts have diffi-
culty agreeing on the meaning of charisma, but it is most often described as a form of
interpersonal attraction whereby followers ascribe almost magical powers to the char-
ismatic individual. 13 Some experts describe charisma as a special “gift” or trait within
the charismatic person, while others say it is mainly in the eyes of the beholder.
referent power
The capacity to influ-
ence others on the ba-
sis of an identification
with and respect for the
power holder.
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304 Part Three Team Processes
However, all agree that charisma produces a high degree of trust, respect, and devo-
tion toward the charismatic individual.
Information and Power
Information is power. 14 In one form, people gain information power when they con-
trol (through legitimate power) the flow of information to others. Employees are ulti-
mately dependent on these information gatekeepers to release the information
required to perform their jobs. Furthermore, by deciding what information is distrib-
uted to whom, those who control information flow also control perceptions of the
situation by releasing information favoring one perspective more than another. 15 This
right to control information flow is a form of legitimate power and is most common
in highly bureaucratic firms. The wheel formation in Exhibit 10.3 depicts this highly
centralized control over information flow. The all-channels structure, on the other
hand, depicts a situation where no one has control over the flow of information. The
former would occur when information must flow through your boss to you, whereas
the latter occurs when information is distributed to many people, such as co-workers
in a self-directed team.
The other form of information power occurs when a person or work unit has the
ability—or is believed to have the ability—to manage environmental uncertainties.
This capability, which is a derivative of expert power, is valued because organiza-
tions are more effective when they can operate in predictable environments. A
groundbreaking study of breweries and container companies identified three general
strategies to help organizations cope with uncertainty. These coping strategies are
arranged in a hierarchy of importance, with the first being the most powerful: 16
• Prevention. The most effective strategy is to prevent environmental changes from
occurring. For example, financial experts acquire power by preventing the orga-
nization from experiencing a cash shortage or defaulting on loans.
• Forecasting. The next best strategy is to predict environmental changes or varia-
tions. In this respect, trendspotters and other marketing specialists gain power
by predicting changes in consumer preferences.
Wheel formation
(centralized information flow)
All-channels formation
(decentralized information flow)
High information control Low information control
Exhibit 10.3
Power through
the Control of
Information
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Chapter 10 Power and Influence in the Workplace 305
• Absorption. People and work units also gain power by absorbing or neutralizing
the impact of environmental shifts as they occur. An example is the ability of
maintenance crews to come to the rescue when machines break down and the
production process stops.
Contingencies of Power
Let’s say that you have expert power because of your ability to forecast and pos-
sibly even prevent dramatic changes in the organization’s environment. Does this
expertise mean that you are influential? Not necessarily. As we saw earlier in Ex-
hibit 10.2, sources of power generate power only under certain conditions. Four
important contingencies of power are substitutability, centrality, discretion, and
visibility. 18
Substitutability
Substitutability refers to the availability of alternatives. Power is strongest when
someone has a monopoly over a valued resource. Conversely, power decreases as
the number of alternative sources of the critical resource increases. If you—and no
one else—have expertise across the organization on an important issue, you will be
more powerful than you would be if several people in your company possess this
valued knowledge. Substitutability refers not only to other sources that offer the
DeCourcy’s Trendspotting Power Colleen DeCourcy has seen
the future of digital marketing . . . and we’re definitely not there
yet. “I think we have a long way to go before we’re really using
technology in marketing,” says the chief digital officer at advertis-
ing agency TBWA. “We’re all in this very sophomoric stage, trying
to figure out a new medium.” Digital media may be new, but many
people in the creative business say DeCourcy is better than most
people at predicting digital trends and helping clients to benefit
from them. “Her knowledge of the digital landscape, grounded in
creativity, makes her an invaluable addition to TBWA,” says
DeCourcy’s boss, TBWA Worldwide CEO Tom Carroll. Ty Montague,
copresident of JWT in New York and DeCourcy’s former em-
ployer, agrees: “It’s hard to overstate the impact she’s had.” For
example, DeCourcy was an early adopter of marketing to the
younger generation through cell phone ringtones and social
network media (e.g., Facebook). Her ability to predict and manage
the volatile digital marketing landscape has given her consider-
able power in the industry. For example, sportswear company
Adidas recently picked TBWA to handle its global digital market-
ing work; TBWA put DeCourcy in charge of a new company in
Amsterdam (called Riot) to exclusively handle this account. Also,
DeCourcy was selected as president of the jury that picks the best
digital advertising entries at the Cannes Lions International
Advertising Festival.17
substitutability
A contingency of
power pertaining to
the availability of
alternatives.
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306 Part Three Team Processes
resource but also to substitutions of the resource itself. For instance, labor unions are
weakened when companies introduce technologies that replace the need for their
union members. Technology is potentially a substitute for production employees and,
consequently, reduces union power.
Controlling access to valued resources increases nonsubstitutability. Professions
and labor unions gain power by controlling the knowledge, tasks, or labor needed to
perform important activities. For instance, the medical profession is powerful because
it controls who can perform specific medical procedures. Labor unions that dominate
an industry effectively control access to the labor needed to perform key jobs. Em-
ployees become nonsubstitutable when they possess knowledge (such as how to oper-
ate equipment or serve clients) that is not documented or readily available to others.
Nonsubstitutability also occurs when people differentiate their resource from the
alternatives. Some people claim that consultants use this tactic. They take skills and
knowledge that many other consulting firms can provide and wrap them in a package
(with the latest buzzwords, of course) so that it looks like they provide a service that
no one else can offer.
Centrality
Centrality refers to the degree and nature of interdependence between the power
holder and others. 19 Think about your own centrality for a moment: If you decided
not to show up for work or school tomorrow, how many people would be affected,
and how much time would pass before they were affected? If you have high centrality,
most people in the organization would be adversely affected by your absence, and
they would be affected quickly.
The effect of centrality on power is apparent in well-timed labor disputes. When
Boeing workers recently walked off the job in Seattle, they immediately shut down
final assembly of the aerospace company’s commercial jets. Analysts estimate that
the resulting delivery delays cost Boeing $2.8 billion in revenue for every month that
the strike continued. 20 The New York City transit strike during the busy Christmas
shopping season a few years ago also displayed centrality. The illegal three-day work
stoppage immediately clogged roads and prevented most city workers from showing
up to work on time or at all. “[The Metropolitan Transit Authority] told us we got no
power, but we got power,” said one striking transit worker. “We got the power to stop
the city.” 21
Discretion
The freedom to exercise judgment—to make decisions without referring to a spe-
cific rule or receiving permission from someone else—is another important contin-
gency of power in organizations. Consider the plight of first-line supervisors. It
may seem that they have legitimate, reward, and coercive power over employees,
but this power is often curtailed by specific rules. The lack of discretion makes
supervisors less powerful than their positions would indicate. “Middle managers
are very much ‘piggy-in-the-middle,’” complains a middle manager at Britain’s
National Health System. “They have little power, only what senior managers are
allowed to give them.” 22 More generally, research indicates that managerial discre-
tion varies considerably across industries and that managers with an internal locus
of control are viewed as more powerful because they act like they have plenty of
discretion in their jobs. 23
centrality
A contingency of power
pertaining to the degree
and nature of interde-
pendence between the
power holder and others.
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Chapter 10 Power and Influence in the Workplace 307
Visibility
Several years ago, as a junior copywriter at advertising agency Chiat/Day, Mimi
Cook submitted an idea for a potential client to her boss, who then presented it to
cofounder Jay Chiat. Chiat was thrilled with the concept, but Cook’s boss “never
mentioned the idea came from me,” recalls Cook. Cook confronted her boss, who
claimed the oversight was unintentional. But when a similar incident occurred a few
months later, Cook left the agency for another firm. 24
Mimi Cook, who has since progressed to associate creative director at another ad
agency, knows that power does not flow to unknown people in the organization.
Those who control valued resources or knowledge will yield power only when others
are aware of these sources of power, in other words, when they are visible. One way
to increase visibility is to take people-oriented jobs and work on projects that require
frequent interaction with senior executives. “You can take visibility in steps,” advises
a pharmaceutical industry executive. “You can start by making yourself visible in a
small group, such as a staff meeting. Then when you’re comfortable with that, seek
out larger arenas.” 25
Employees also gain visibility by being, quite literally, visible. Some people strategi-
cally locate themselves in more visible offices, such as those closest to the elevator or
staff coffee room. People often use public symbols as subtle (and not-so-subtle) cues to
make their power sources known to others. Many professionals display their educa-
tional diplomas and awards on office walls to remind visitors of their expertise. Medical
professionals wear white coats with a stethoscope around their neck to symbolize their
legitimate and expert power in hospital settings. Other people play the game of “face
time”—spending more time at work and showing that they are working productively.
Social Networking and Power
“It’s not what you know, but whom you know that counts!” This often-heard state-
ment reflects the idea that employees get ahead not just by developing their com-
petencies but by social networking —cultivating social relationships with others to
accomplish one’s goals. Networking increases a person’s power in three ways.
First, as we noted in Chapter 8, networks represent a critical component of social
capital —the knowledge and other resources available to people or social units
(teams, organizations) from a durable network that connects them to others. Net-
works consist of people who trust each other, and this increases the flow of knowl-
edge among those within the network. The more you network, the more likely it
is that you will receive valuable information that increases your expert power in
the organization. 26
Second, people tend to identify more with partners within their own networks, and
this identification increases referent power among people within each network. Network-
based referent power may lead to more favorable decisions by others in the network.
Finally, effective networkers are better known by others in the organization, so their
talents are more readily recognized. This power increases when networkers place
themselves in strategic positions in the network, thereby gaining centrality. 27 For ex-
ample, an individual might be regarded as the main person who distributes informa-
tion in the network or who keeps the network connected through informal gatherings.
Social networks are important foundations of power for individuals and, as Global
Connections 10.1 describes, companies are applying social network analysis tools to
discover who has this power. By identifying who is the most connected, leaders know
social capital
The knowledge and
other resources avail-
able to people or social
units (teams, organiza-
tions) from a durable
network that connects
them to others.
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308
Powered by the Social Network
Engineering and environmental consulting firm MWH Global
reorganized its information technology (IT) operations into a
single global division and located its main service center in
New Zealand. Ken Loughridge was transferred from England
to manage the new service center, but he didn’t know who the
key players were on his New Zealand team. “By and large, the
staff I’d adopted were strangers,” he says. Fortunately,
Loughridge was able to consult a report displaying the infor-
mal social network of relationships among his staff. MWH
Global had surveyed its IT employees a few months earlier
about whom they communicated with most often for informa-
tion. The data produced a weblike diagram of nodes (people)
connected by a maze of lines (relationships). From this picture,
Loughridge could identify the “go-to” people in the work unit.
“It’s as if you took the top off an ant hill and could see where
there’s a hive of activity,” he says of the map. “It really helped
me understand who the players were.”
For the past half century, sociologists have mapped infor-
mal power relationships in organizations. Now, social network
analysis is becoming a powerful management tool as practi-
tioners discover that visual displays of relationships and infor-
mation flows can help them to tap into employees with
expertise and influence. “You look at an org chart within a
company and you see the distribution of power that should
be,” says Eran Barak, global head of marketing strategies at
Thomson Reuters. “You look at the dynamics in the social net-
works [to] see the distribution of power that is. It reflects
where information is flowing—who is really driving things.”
Karl Arunski, director of Raytheon’s engineering center in
Colorado, can appreciate these words. The defense and technol-
ogy company’s organizational chart didn’t show how mission
management specialists influenced people across departmental
boundaries. So Arunski asked two executives to name up to 10
experts who didn’t fit squarely in a particular department, and
then he conducted social network analysis to see how these
people collaborated with engineers throughout the organization.
The resulting maps (one of which is shown here), showed
Arunski the influence and knowledge flow of various experts.
It also highlighted problems where a cluster of employees is
almost completely disconnected from the rest of the engineer-
ing group (such as the top left side of this diagram). One team’s
isolation was worrisome because its members were experts in
systems architecture, an important growth area for Raytheon.
To increase the team’s network power, Arunski encouraged
the team leader to hold meetings at which engineers could
share information about systems architecture. The number of
people attending eventually grew to 75, reducing the team’s
isolation from others. “Social Network Analysis helped Rocky
Mountain Engineering understand how organizations develop
architectures, and it enabled us to know how engineers be-
come architects,” says Arunski.28
Global Connections 10.1
This is one of several social network analysis diagrams that
helped Raytheon engineering director Karl Arunski determine
who has the most social network power.
whom to approach for information, who might be the most influential over other em-
ployees, and who would be the most costly if he or she left the company.
Social networks are natural elements of all organizations, yet a network can create
a formidable barrier to those who are not actively connected to it. 29 Women are often
excluded from informal management networks because they usually do not partici-
pate in golf games and other male-dominated social events. Nina Smith, who leads
Sage Software’s Business Management Division, has had several conversations with
female executives about these power dynamics. “I’m still trying to knock down the
Boys Club and I still have women at Sage coming to me and saying, ‘Nina, that’s the
boys’ network and I can’t get in.’” 30 Several years ago, executives at Deloitte
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Chapter 10 Power and Influence in the Workplace 309
Touche Tohmatsu discovered that inaccessibility to powerful social networks partly
explained why many junior female employees left the accounting and consulting
firm before reaching partnership level. The Swiss-based firm now relies on mentor-
ing, formal women’s network groups, and measurement of career progress to en-
sure that female staff members have the same career development opportunities as
their male colleagues. 31
Consequences of Power
How does power affect the power holder? We partly answered this question ear-
lier in this book when describing empowerment—an individual’s feelings of self-
determination, meaning, competence, and impact in the organization. Under the
right conditions, employees who receive more power feel more empowered, and
this tends to increase their motivation, job satisfaction, organizational commit-
ment, and job performance. In addition, research suggests that as people become
more powerful, they are more goal-directed and tend to act on their environment
rather than hide from it.
At the same time, increasing power over others can potentially undermine an
individual’s effectiveness and interpersonal relations. Some studies have found
that people who have (or believe they have) more power over others are more
likely to cling to stereotypes, have more difficulty empathizing, and generally have
less accurate perceptions compared with people who have less power. They also
engage in more automatic rather than mindful thinking, possibly because powerful
people are less concerned about the consequences of their actions. 32 These find-
ings may explain the widely criticized decisions and actions of the former RCMP
commissioner, including his response to the pension fund abuses described at the
beginning of this chapter. 33
Learning
Objectives
After reading this section, you should be able to:
6. Summarize the eight types of influence tactics.
7. Discuss three contingencies to consider when deciding which
influence tactic to use.
Influencing Others
Up to this point, we have focused on the sources and contingencies of power. But
power is only the capacity to influence others. It represents the potential to change
someone’s attitudes and behavior. Influence , on the other hand, refers to any behavior
that attempts to alter someone’s attitudes or behavior. 34 Influence is power in motion.
It applies one or more sources of power to get people to alter their beliefs, feelings,
and activities. Consequently, our interest in the remainder of this chapter is in how
people use power to influence others.
Influence tactics are woven throughout the social fabric of all organizations. This is
because influence is an essential process through which people coordinate their effort
and act in concert to achieve organizational objectives. Indeed, influence is central to
the definition of leadership. Influence operates down, across, and up the corporate
hierarchy. Executives ensure that subordinates complete required tasks. Employees
influence co-workers to help them with their job assignments. Subordinates engage in
influence
Any behavior that at-
tempts to alter some-
one’s attitudes or
behavior.
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310 Part Three Team Processes
upward influence tactics so that corporate leaders make decisions compatible with
subordinates’ needs and expectations.
Types of Influence Tactics
Organizational behavior researchers have devoted considerable attention to the
various types of influence tactics found in organizational settings. They do not agree
on a definitive list of influence tactics, but the most commonly identified are listed in
Exhibit 10.4 and described over the next few pages. 35 The first five are known as
“hard” influence tactics because they force behavior change through position power
(legitimate, reward, and coercion). The last three—persuasion, ingratiation and im-
pression management, and exchange—are called “soft” tactics because they rely
more on personal sources of power (referent, expert) and appeal to the target person’s
attitudes and needs.
Silent Authority The silent application of authority occurs when someone com-
plies with a request because of the requester’s legitimate power as well as the target
person’s role expectations. This condition is known as deference to authority . 36 This
deference occurs when you comply with your boss’s request to complete a particular
task. If the task is within your job scope and your boss has the right to make the re-
quest, then this influence strategy operates without negotiation, threats, persuasion,
or other tactics. Silent authority is the most common form of influence in high power
distance cultures. 37
Assertiveness In contrast to silent authority, assertiveness might be called “vocal
authority” because it involves actively applying legitimate and coercive power to in-
fluence others. Assertiveness includes persistently reminding the target of his or her
obligations, frequently checking the target’s work, confronting the target, and using
threats of sanctions to force compliance. Assertiveness typically applies or threatens
to apply punishment if the target does not comply. Explicit or implicit threats range
from losing one’s job to losing face by letting down the team. Extreme forms of as-
sertiveness include blackmailing colleagues, such as by threatening to reveal the other
person’s previously unknown failures unless he or she complies with your request. In
reference to the opening story to this chapter, evidence suggests that senior RCMP
executives relied on various forms of assertiveness to suppress investigation of pension
fund abuses.
Information Control Information control involves explicitly manipulating others’
access to information for the purpose of changing their attitudes and/or behavior.
With limited access to potentially valuable information, others are at a disadvantage.
The opening story on RCMP pension fund abuses suggests that information control
was used as an influence tactic. One investigator told a parliamentary committee:
“I was met with inaction, delays, roadblocks, obstruction and lies.” He pointed to the
RCMP’s top leaders as the source of this information control. 38 According to one ma-
jor survey, almost half of employees believe that co-workers keep others in the dark
about work issues if doing so helps their own cause. Employees also influence execu-
tive decisions by screening out (filtering) information flowing up the hierarchy. One
study found that CEOs influence their board of directors by selectively feeding and
withholding information. 39
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Chapter 10 Power and Influence in the Workplace 311
Coalition Formation When people lack sufficient power alone to influence others
in the organization, they might form a coalition of people who support the proposed
change. A coalition is influential in three ways. 40 First, it pools the power and re-
sources of many people, so the coalition potentially has more influence than any
number of people operating alone. Second, the coalition’s mere existence can be a
source of power by symbolizing the legitimacy of the issue. In other words, a coali-
tion creates a sense that the issue deserves attention because it has broad support.
Third, coalitions tap into the power of the social identity process introduced in Chap-
ter 2. A coalition is essentially an informal group that advocates a new set of norms
and behaviors. If the coalition has a broad-based membership (i.e., its members come
from various parts of the organization), other employees are more likely to identify
with that group and, consequently, accept the ideas the coalition is proposing.
Upward Appeal The opening vignette to this chapter mentions that other RCMP
officers left the force because of their efforts to uncover pension fund wrongdoing.
One of these people was Staff Sergeant Ron Lewis. As the RCMP staff relations repre-
sentative for headquarters, Lewis had received information before most other people
about suspicious activity in human resources, including nepotism and pension fund
mismanagement. When RCMP top brass failed to launch an investigation, Lewis
threatened to take his information to political leaders and to the public. This tactic,
called upward appeal, involves calling on people with higher authority or expertise
or symbolically relying on these sources to support the influencer’s position. Lewis’s
threat of upward appeal influenced RCMP leaders enough to fire two human resource
managers linked to the pension fund scheme, but not enough to investigate further.
Unfortunately for Lewis, when he did take the case to political leaders (including the
minister responsible for the RCMP), they apparently took no action. 41
Along with seeking support from higher sources, another aspect of upward appeal
is relying on the authority of the firm’s policies or values. By reminding others that
coalition
A group that attempts to
influence people outside
the group by pooling the
resources and power of
its members.
upward appeal
A type of influence in
which someone with
higher authority or exper-
tise is called on in reality
or symbolically to support
the influencer’s position.
Influence tactic Description
Silent authority Influencing behavior through legitimate power without explicitly
referring to that power base
Assertiveness Actively applying legitimate and coercive power by applying
pressure or threats
Information control Explicitly manipulating someone else’s access to information
for the purpose of changing their attitudes and/or behavior
Coalition formation Forming a group that attempts to influence others by pooling
the resources and power of its members
Upward appeal Gaining support from one or more people with higher authority
or expertise
Persuasion Using logical arguments, factual evidence, and emotional
appeals to convince people of the value of a request
Ingratiation and impression
management
Attempting to increase liking by, or perceived similarity to, some
targeted person
Exchange Promising benefits or resources in exchange for the target
person’s compliance
Exhibit 10.4 Types of Influence Tactics in Organizations
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312 Part Three Team Processes
your request is consistent with the organization’s overarching goals, you are implying
support from senior executives without formally involving them.
Persuasion Persuasion is one of the most effective influence strategies for career
success. The ability to present facts, logical arguments, and emotional appeals to
change another person’s attitudes and behavior is not just an acceptable way to influ-
ence others; in many societies, it is a noble art and a quality of effective leaders. The
effectiveness of persuasion as an influence tactic depends on characteristics of the
persuader, message content, communication medium, and the audience being per-
suaded. 43 People are more persuasive when listeners believe they have expertise and
credibility, such as when the persuader does not seem to profit from the persuasion
attempt and states a few points against the position.
The message is more important than the messenger when the issue is important
to the audience. Persuasive message content acknowledges several points of view so
that the audience does not feel cornered by the speaker. The message should also be
limited to a few strong arguments, which are repeated a few times but not too fre-
quently. The message should use emotional appeals (such as graphically showing the
unfortunate consequences of a bad decision), but only in combination with logical
arguments and specific recommendations to overcome the threat. Finally, message
content is more persuasive when the audience is warned about opposing arguments.
This inoculation effect causes listeners to generate counterarguments to the antici-
pated persuasion attempts, which makes the opponent’s subsequent persuasion at-
tempts less effective. 44
Two other considerations when persuading people are the medium of communica-
tion and characteristics of the audience. Generally, persuasion works best in face-to-
face conversations and through other media-rich communication channels. The
personal nature of face-to-face communication increases the persuader’s credibility,
and the richness of this channel provides faster feedback that the influence strategy is
working. With respect to audience characteristics, it is more difficult to persuade peo-
ple who have high self-esteem and intelligence, as well as those whose targeted atti-
tudes are strongly connected to their self-identity. 45
Ingratiation and Impression Management Silent authority, assertiveness, infor-
mation control, coalitions, and upward appeals are somewhat (or very!) forceful ways
Entering the Reality Distortion Field Wearing his trademark black turtleneck
and faded blue jeans, Apple Computer cofounder and CEO Steve Jobs is famous
for drawing crowds into his reality distortion field. “In his presence, reality is
malleable,” said Guy “Bud” Tribble (currently Apple’s vice president of software
technology) to newly hired Andy Hertzfeld in 1981 when Tribble was manager of
the original Macintosh development team. “He [Steve Jobs] can convince any-
one of practically anything. It wears off when he’s not around, but it makes it
hard to have realistic schedules.” Tribble borrowed the phrase from the TV se-
ries Star Trek to describe Jobs’s overwhelming persuasiveness. More recently,
one journalist wrote: “[Reality distortion field] refers, of course, to Jobs’s incred-
ible ability to turn anyone—even skeptical reporters—into near-mindless fan-
boys. Reality distortion wears off, but not before a blizzard of uncritical media
coverage of what frequently are routine announcements.”42
persuasion
The presentation of facts,
logical arguments, and
emotional appeals to
change another person’s
attitudes and behavior.
inoculation effect
A persuasive communi-
cation strategy of warn-
ing listeners that others
will try to influence them
in the future and that they
should be wary about the
opponent’s arguments.
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Chapter 10 Power and Influence in the Workplace 313
to influence other people. In contrast, a very soft influence tactic is ingratiation —any
attempt to increase liking by, or perceived similarity to, some targeted person. 46 In-
gratiation comes in several flavors. Employees might flatter their boss in front of oth-
ers, demonstrate that they have similar attitudes to those of their boss (e.g., agreeing
with the boss’s proposal), or ask their boss for advice. Ingratiation is one of the more
effective influence tactics at boosting a person’s career success (i.e., performance ap-
praisal feedback, salaries, and promotions). 47 However, people who engage in high
levels of ingratiation are less (not more) influential and less likely to get promoted. 48
The explanation for the contrasting evidence is that those who engage in too much
ingratiation are viewed as insincere and self-serving. The terms “apple polishing” and
“brown-nosing” are applied to those who ingratiate to excess or in ways that suggest
selfish motives for the ingratiation.
Ingratiation is part of a larger influence tactic known as impression management.
Impression management is the practice of actively shaping our public images. 49
These public images might be crafted as being important, vulnerable, threatening, or
pleasant. For the most part, employees routinely engage in pleasant impression man-
agement behaviors to satisfy the basic norms of social behavior, such as the way they
dress and how they behave toward colleagues and customers. Impression manage-
ment is a common strategy for people trying to get ahead in the workplace. In fact,
career professionals encourage people to develop a personal “brand,” that is, to dem-
onstrate and symbolize a distinctive competitive advantage. 50 Just as running shoes
and soft drinks have brand images that represent an expectation, successful individu-
als build a personal brand in which they deliver valued knowledge or skills. Further-
more, people who are adept at personal branding rely on impression management
through distinctive personal characteristics. You can more easily recall people who
wear distinctive clothing or accoutrements.
Unfortunately, a few individuals carry impression management beyond ethical
boundaries by exaggerating their credentials and accomplishments on their résumé.
For instance, a Lucent Technologies executive lied about having a PhD from Stanford
University and hid his criminal past involving forgery and embezzlement. Ironically,
the executive was Lucent’s director of recruiting! 51 One of the most elaborate misrep-
resentations occurred a few years ago when a Singa-
porean entrepreneur sent out news releases claiming
to be a renowned artificial-intelligence researcher,
the author of several books, and the recipient of nu-
merous awards from MIT and Stanford University
(one of the awards was illustrated on his Web site).
These falsehoods were so convincing that the entre-
preneur almost received a real award, the “Internet
Visionary of the Year,” at the Internet World Asia
Industry Awards. 52
Exchange Exchange activities involve the prom-
ise of benefits or resources in exchange for the target
person’s compliance with your request. This tactic
also includes reminding the target of past benefits or
favors, with the expectation that the target will now
make up for that debt. The norm of reciprocity is a
central and explicit theme in exchange strategies.
According to the norm of reciprocity, individuals
ingratiation
Any attempt to increase
liking by, or perceived
similarity to, some
targeted person.
impression management
The practice of actively
shaping our public
images.
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314 Part Three Team Processes
are expected to help those who have helped them. 53 Negotiation is also an integral part
of exchange influence activities. For instance, you might negotiate with your boss for a
day off in return for working a less desirable shift at a future date. Networking is another
form of exchange as an influence strategy. Active networkers build up “exchange credits”
by helping colleagues in the short term for reciprocal benefits in the long term.
Networking as an influence strategy is a deeply ingrained practice in several cul-
tures. The Chinese term guanxi refers to special relationships and active interpersonal
connectedness. Guanxi is based on traditional Confucian values of helping others
without expecting future repayment. However, some writers suggest that the original
interpretation and practice of guanxi has shifted to include implicit long-term reci-
procity, which can slip into cronyism. As a result, some Asian governments are dis-
couraging guanxi -based decisions, preferring more arm’s-length transactions in
business and government decisions. 54
Consequences and Contingencies of Influence Tactics
Now that the main influence strategies have been described, you are probably asking,
Which ones are best? The best way to answer this question is to identify the three ways
that people react when others try to influence them: resistance, compliance, and
commitment. 55 Resistance occurs when people or work units oppose the behavior desired
by the influencer and, consequently, refuse, argue, or delay engaging in the behavior.
Compliance occurs when people are motivated to implement the influencer’s request at a
minimal level of effort and for purely instrumental reasons. Without external sources to
motivate the desired behavior, it would not occur. Commitment is the strongest form of
influence, whereby people identify with the influencer’s request and are highly moti-
vated to implement it even when extrinsic sources of motivation are no longer present.
Generally, people react more favorably to soft tactics than to hard tactics (see Ex-
hibit 10.5 ). Soft influence tactics rely on personal sources of power (expert and refer-
ent power), which tend to build commitment to the influencer’s request. In contrast,
hard tactics rely on position power (legitimate, reward, and coercion), so they tend to
produce compliance or, worse, resistance. Hard tactics also tend to undermine trust
and thus can hurt future relationships.
Apart from the general preference for soft rather than hard tactics, the most appro-
priate influence strategy depends on a few contingencies. One obvious contingency is
which sources of power are strongest. People with expertise tend to have more influ-
ence using persuasion, whereas those with a strong legitimate power base are usually
more successful applying silent authority. 56 A second contingency is whether, com-
pared to the influencer, the person being influenced is higher, lower, or at the same
level in the organization. As an example, employees may face adverse career conse-
quences by being too assertive with their boss. Meanwhile, supervisors who engage in
ingratiation and impression management tend to lose the respect of their staff.
Finally, the most appropriate influence tactic depends on personal, organizational,
and cultural values. 57 People with a strong power orientation might feel more com-
fortable using assertiveness, whereas those who value conformity might feel more
comfortable with upward appeals. At an organizational level, firms with a competi-
tive culture might instigate more use of information control and coalition formation,
whereas companies with a learning orientation would likely encourage more influ-
ence through persuasion. The preferred influence tactics also vary across societal
cultures. Research indicates that ingratiation is much more common among managers
in the United States than in Hong Kong, possibly because this tactic disrupts the more
distant roles that managers and employees expect in high power distance cultures.
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Chapter 10 Power and Influence in the Workplace 315
Persuasion
Ingratiation and
impression management
Exchange
Upward appeal
Coalition formation
Information control
Assertiveness
Commitment
Soft
influence
tactics
Hard
influence
tactics
Compliance
Resistance
Silent authority
Exhibit 10.5
Consequences of
Hard and Soft
Influence Tactics
Learning
Objectives
After reading this section, you should be able to:
8. Distinguish influence from organizational politics.
9. Describe the organizational conditions and personal characteristics
that support organizational politics.
10. Identify ways to minimize organizational politics.
Influence Tactics and Organizational Politics
You might have noticed that organizational politics has not been mentioned yet, even
though some of the practices or examples described over the past few pages are usu-
ally considered political tactics. The phrase was carefully avoided because, for the
most part, organizational politics is in the eye of the beholder. You might perceive a
co-worker’s attempt to influence the boss as normal behavior, whereas someone else
might perceive the co-worker’s tactic as brazen organizational politics.
This perceptual issue explains why OB experts increasingly discuss influence tac-
tics as behaviors and organizational politics as perceptions. 58 The influence tactics
described earlier are perceived as organizational politics when observers view the
tactics as self-serving behaviors at the expense of others and sometimes contrary to
the interests of the entire organization or work unit. Of course, some tactics are so
organizational politics
Behaviors that others
perceive as self-serving
tactics for personal gain
at the expense of other
people and possibly the
organization.
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316 Part Three Team Processes
blatantly selfish that almost everyone views them as political. But, in most situations,
there is no consensus that a person is engaging in organizational politics. When em-
ployees perceive many incidents of organizational politics, the result is lower job
satisfaction, organizational commitment, and organizational citizenship, as well as
high levels of work-related stress. 59 And because political tactics serve individuals
rather than organizations, they potentially divert resources away from the organiza-
tion’s effective functioning and potentially threaten its survival.
Conditions Supporting Organizational Politics
Organizational politics flourishes under the right conditions. 60 One of those condi-
tions is scarce resources. When budgets are slashed, people rely on political tactics
to safeguard their resources and maintain the status quo. Office politics also flour-
ishes when resource allocation decisions are ambiguous or complex or lack formal
rules. This is because decision makers are given more discretion over resource allo-
cation, so potential recipients of the resources use political tactics to influence the
factors that should be considered in the decision. Organizational change encourages
political behaviors for this reason. Change creates uncertainty and ambiguity as the
company moves from an old set of rules and practices to a new set. During such
times, employees apply political strategies to protect their valued resources, posi-
tion, and self-concept. 61
Personal Characteristics
Several personal characteristics affect a person’s motivation to engage in self-serving
behavior. 62 One such characteristic is a strong need for personal as opposed to social-
ized power. People with a need for personal power seek power for its own sake and
try to acquire more power. Some individuals have strong Machiavellian values .
Machiavellianism is named after Niccolò Machiavelli, the 16th-century Italian phi-
losopher who wrote The Prince, a famous treatise about political behavior. People with
high Machiavellian values are comfortable with getting more than they deserve, and
they believe that deceit is a natural and acceptable way to achieve this goal. They
seldom trust co-workers, and they tend to use cruder influence tactics, such as bypass-
ing one’s boss or being assertive, to get their own way. 63
Minimizing Organizational Politics and Its Consequences The conditions that
fuel organizational politics also give us some clues about how to control dysfunctional
political activities. 64 One strategy to keep organizational politics in check is to introduce
clear rules and regulations to specify the use of scarce resources. Organizational politics
can become a problem during times of organizational change, so politics can be mini-
mized through effective organizational change practices. Leaders also need to actively
manage group norms to curtail self-serving influence activities. In particular, they can
support organizational values that oppose political tactics, such as altruism and customer
focus. One of the most important strategies is for leaders to become role models of orga-
nizational citizenship rather than symbols of successful organizational politicians.
Along with minimizing organizational politics, companies can limit the adverse
effects of political perceptions by giving employees more control over their work and
keeping them informed of organizational events. Research has found that employees
who are kept informed of what is going on in the organization and who are involved
in organizational decisions are less likely to experience organizational politics, which
results in less stress, job dissatisfaction, and absenteeism.
Machiavellian values
The beliefs that deceit is
a natural and acceptable
way to influence others
and that getting more
than one deserves is
acceptable.
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317
Chapter Summary
strengthening expert power, referent power, visibility,
and possibly centrality. Power has both beneficial and
adverse consequences for individuals. On the positive
side, empowerment strengthens their well-being and
effectiveness. On the negative side, research indicates
that when people become more powerful, their percep-
tual and decision-making skills can suffer.
Influence is any behavior that attempts to alter some-
one’s attitudes or behavior. The most widely studied
influence tactics are silent authority, assertiveness, infor-
mation control, coalition formation, upward appeal, per-
suasion, ingratiation and impression management, and
exchange. “Soft” influence tactics such as friendly persua-
sion and subtle ingratiation are more acceptable than
“hard” tactics such as upward appeal and assertiveness.
However, the most appropriate influence tactic also de-
pends on the influencer’s power base; on whether the
person being influenced, compared with the influencer,
is higher, lower, or at the same level in the organization;
and on personal, organizational, and cultural values
regarding influence behavior.
Organizational politics consists of influence tactics that
observers perceive to be self-serving behaviors at the ex-
pense of others and sometimes contrary to the interests of
the entire organization or work unit. Organizational poli-
tics is more prevalent when scarce resources are allocated
using complex and ambiguous decisions and when the
organization tolerates or rewards political behavior. Indi-
viduals with a high need for personal power and strong
Machiavellian values have a higher propensity to use
political tactics.
Organizational politics can be minimized by provid-
ing clear rules for resource allocation, establishing a free
flow of information, using education and involvement
during organizational change, supporting team norms
and a corporate culture that discourage dysfunctional pol-
itics, and having leaders who role-model organizational
citizenship rather than political savvy.
Power is the capacity to influence others. It exists when
one party perceives that he or she is dependent on the
other for something of value. However, the dependent
person must also have countervailing power—some power
over the dominant party—to maintain the relationship.
There are five sources of power. Legitimate power is
an agreement among organizational members that peo-
ple in certain roles can request certain behaviors of oth-
ers. Reward power is derived from the ability to control
the allocation of rewards valued by others and to remove
negative sanctions. Coercive power is the ability to apply
punishment. Expert power is the capacity to influence
others by possessing knowledge or skills that they value.
People have referent power when others identify with
them, like them, or otherwise respect them. Information
plays an important role in organizational power. Employ-
ees gain power by controlling the flow of information that
others need and by being able to cope with uncertainties
related to important organizational goals.
Four contingencies determine whether these sources
of power translate into real power. Individuals and work
units are more powerful when they are nonsubstitutable,
that is, when there is a lack of alternatives. Employees,
work units, and organizations reduce substitutability by
controlling tasks, knowledge, and labor and by differenti-
ating themselves from competitors. A second contin-
gency is centrality. People have more power when they
have high centrality, that is, when the number of people
affected is large and people are quickly affected by their
actions. Discretion, the third contingency of power, is the
freedom to exercise judgment. Power increases when
people have freedom to use their power. The fourth con-
tingency, visibility, is the idea that power increases to the
extent that a person’s or work unit’s competencies are
known to others.
Social networking involves cultivating social re-
lationships with others to accomplish one’s goals. This
activity increases an individual’s social capital, thereby
centrality, p. 306
coalition, p. 311
countervailing power, p. 301
impression management, p. 313
influence, p. 309
ingratiation, p. 313
inoculation effect, p. 312
legitimate power, p. 302
Machiavellian values, p. 316
organizational politics, p. 315
persuasion, p. 312
power, p. 300
referent power, p. 303
social capital, p. 307
substitutability, p. 305
upward appeal, p. 311
Key Terms
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5. List the eight influence tactics described in this
chapter in terms of how they are used by students to
influence their course instructors. Which influence
tactic is applied most often? Which is applied least
often, in your opinion? To what extent is each in-
fluence tactic considered legitimate behavior or
organizational politics?
6. How do cultural differences affect the following in-
fluence factors: (a) silent authority and (b) upward
appeal?
7. A few years ago, the CEO of Apple Computer in-
vited Steve Jobs (who was not associated with the
company at the time) to serve as a special adviser
and raise morale among Apple employees and
customers. While doing this, Jobs spent more time
advising the CEO on how to cut costs, redraw the
organization chart, and hire new people. Before
long, most of the top people at Apple were Jobs’s
colleagues, who began to systematically evaluate
and weed out teams of Apple employees. While
publicly supporting Apple’s CEO, Jobs privately
criticized him and, in a show of nonconfidence,
sold 1.5 million shares of Apple stock he had re-
ceived. This action caught the attention of Apple’s
board of directors, who soon after decided to re-
place the CEO with Steve Jobs. The CEO claimed
Jobs was a conniving backstabber who used political
tactics to get his way. Others suggest that Apple
would be out of business today if he hadn’t taken
over the company. In your opinion, were Steve
Jobs’s actions examples of organizational politics?
Justify your answer.
8. This book frequently emphasizes that successful
companies engage in organizational learning. How
do political tactics interfere with organizational
learning objectives?
1. What role does countervailing power play in the
power relationship? Give an example of your own
encounter with countervailing power at school or
work.
2. Several years ago, the Major League Baseball Players
Association went on strike in September, just before
the World Series started. The players’ contract ex-
pired at the beginning of the season (May), but they
held off the strike until September when they would
lose only one-sixth of their salaries. In contrast, a
September strike would hurt the owners financially
because they earn a larger portion of their revenue
during the playoffs. As one player explained: “If we
strike next spring, there’s nothing stopping [the club
owners] from letting us go until next June or July
because they don’t have that much at stake.” Use
your knowledge of the sources and contingencies of
power to explain why the baseball players associa-
tion had more power in negotiations by walking out
in September rather than March.
3. You have just been hired as a brand manager of
toothpaste for a large consumer products company.
Your job mainly involves encouraging the adver-
tising and production groups to promote and
manufacture your product more effectively. These
departments aren’t under your direct authority, al-
though company procedures indicate that they must
complete certain tasks requested by brand manag-
ers. Describe the sources of power you can use to
ensure that the advertising and production depart-
ments will help you make and sell toothpaste more
effectively.
4. How does social networking increase a person’s
power? What social networking strategies could
you initiate now to potentially enhance your future
career success?
Critical Thinking Questions
318
Case Study 10.1 THE RISE AND FALL OF WORLDCOM
Bernie Ebbers built WorldCom, Inc. (now part of
Verizon, Inc.) into one of the world’s largest telecom-
munications firms. Yet he and chief financial officer
(CFO) Scott Sullivan have become better known for
creating a massive corporate accounting fraud that
led to the largest bankruptcy in U.S. history. Two inves-
tigative reports and subsequent court cases concluded
that WorldCom executives were responsible for bil-
lions in fraudulent or unsupported accounting entries.
How did this mammoth accounting scandal occur
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without anyone raising the alarm? Evidence suggests
that Ebbers and Sullivan held considerable power
and influence that prevented accounting staff from
complaining, or even knowing, about the fraud.
Ebbers’s inner circle held tight control over the
flow of all financial information. The geographically
dispersed accounting groups were discouraged from
sharing information. Ebbers’s group also restricted
distribution of company-level financial reports and
prevented sensitive reports from being prepared at
all. Accountants didn’t even have access to the com-
puter files in which some of the largest fraudulent
entries were made. As a result, employees had to rely
on Ebbers’s executive team to justify the account ing
entries that were requested.
Another reason why employees complied with
questionable accounting practices was that CFO
Scott Sullivan wielded immense personal power. He
was considered a “whiz kid” with impeccable integ-
rity who had won the prestigious “CFO Excellence
Award.” Thus, when Sullivan’s office asked staff
to make questionable entries, some accountants as-
sumed Sullivan had found an innovative—and legal—
accounting loophole. If Sullivan’s influence didn’t
work, other executives took a more coercive ap-
proach. Employees cited incidents where they were
publicly berated for questioning headquarters’ deci-
sions and intimidated if they asked for more infor-
mation. When one employee at a branch refused to
alter an accounting entry, WorldCom’s controller
threatened to fly in from WorldCom’s Mississippi
headquarters to make the change himself. The em-
ployee changed the entry.
Ebbers had similar influence over WorldCom’s
board of directors. Sources indicate that his personal
charisma and intolerance of dissension produced a
319
passive board that rubber-stamped most of his
recommendations. As one report concluded: “The
Board of Directors appears to have embraced
suggestions by Mr. Ebbers without question or
dissent, even under circumstances where its mem-
bers now readily acknowledge they had significant
misgivings regarding his recommended course of
action.”
Discussion Questions
1. What power bases did Bernie Ebbers and Scott
Sullivan rely on to get away with accounting
fraud?
2. What influence tactics did Bernie Ebbers and
Scott Sullivan use to control employees and the
company’s board?
3. Did Bernie Ebbers and Scott Sullivan engage in
organizational politics? Explain your answer.
Sources: U.S. Bankruptcy Court, Southern District of New York, In
Re: WorldCom, Inc., et al., Debtors, Chapter 11 Case No. 02-15533
(AJG), Jointly Administered Second Interim Report of Dick
Thornburgh, Bankruptcy Court Examiner, June 9, 2003; Report
of Investigation by the Special Investigative Committee of the
Board of Directors of WorldCom, Inc., Dennis R. Beresford,
Nicholas deB. Katzenbach, C. B. Rogers, Jr., Counsel, Wilmer,
Cutler & Pickering, Accounting Advisors, PricewaterhouseCoo-
pers LLP, March 31, 2003. Also see T. Catan et al., “Before the
Fall,” Financial Times (London), 19 December 2002, p. 17;
J. O’Donnell and A. Backover, “Ebbers’ High-Risk Act Came
Crashing Down on Him,” USA Today , 12 December 2002, p. B1;
C. Stern, “Ebbers Dominated Board, Report Says,” Washington
Post , 5 November 2002, p. E1; D. S. Hilzenrath, “How a Distin-
guished Roster of Board Members Failed to Detect Company’s
Problems,” Washington Post , 16 June 2003, p. E1; S. Pulliam and
A. Latour, “Lost Connection,” Wall Street Journal , 12 January
2005, p. A1; S. Rosenbush, “Five Lessons of the WorldCom
Debacle,” BusinessWeek Online , 16 March 2005.
Case Study 10.2 RHONDA CLARK: TAKING CHARGE AT THE
SMITH FOUNDATION
Joseph C. Santora, Essex County College and TST, Inc.
Dr. Rhonda Clark was ecstatic as she hung up the
telephone. Bennett Mitchell, chairperson of KLS
Executive Search firm, had just informed her that
she landed the coveted position of chief executive
officer (CEO) at the Smith Foundation, a nonprofit
organization whose mission was to fund public
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awareness campaigns and research programs about
eye care. Clark knew that she had just pulled off a
major coup. Her appointment to this new, chal-
lenging position would indeed be the high point in
a long, arduous climb to the executive suite. As an
orga nizational outsider—one with no work experi-
ence within the hiring organization—she assumed
that her appointment as CEO signaled a strong de-
sire by the board to shake up the organizational
status quo. However, she heard from a very reli-
able inside source that the very board that hired
her and charged her with the responsibility of
transforming the foundation was extremely frag-
mented. The often-rambunctious board had forced
the last five CEOs to resign after very short tenures.
Clark’s feeling of exhilaration was rapidly being
replaced by cautious optimism. As a new CEO,
she pondered the rather thorny question: How
could she take charge of the board of directors to
ensure the mission of the organization would be
accomplished?
Background
Charlie Smith, an industrialist and philanthropist,
founded the Smith Foundation 40 years ago with a
multimillion-dollar endowment. Despite this gener-
ous financial start-up capital and additional income
derived from several financial investments and major
corporate donations, in recent years the foundation’s
endowment has been slowly dwindling as a result of
rather significant funding awards to academics, com-
munity organizations, and smaller, less well-funded
foundations. Board members have held some pre-
liminary discussions about developing new innova-
tive strategies to strengthen the balance sheet of the
organization. Currently, the foundation operates on
an annual budget of slightly less than $1,500,000
(USD).
In the last five years, some foundation board
members have begun to abandon many of their
fiduciary responsibilities. Over the past few months,
several board meetings have been canceled be-
cause the meet ings lacked a quorum. In general,
this 13-member board seemed to drift aimlessly in
one direction or another. The board has been oper-
ating at only 70 percent capacity for the past two
years with nine active board members—five men
and four women.
Challenges
Dr. Rhonda Clark believed she was the one who
could lead the Smith Foundation. She had great aca-
demic credentials and management experience that
would help her tackle her new position as the foun-
dation head. In the last 30 years, the 54-year old
Clark, who holds a PhD in political science and pol-
icy analysis from a major U.S. West Coast university,
has gained an enviable amount of managerial expe-
rience in the nonprofit and public sectors. Past pro-
fessional experiences included being a graduate
school professor, a director of research for a major
statewide political office holder, the director of plan-
ning in a large metropolitan hospital, and the direc-
tor of programs at a small foundation.
Immediately upon taking office, Clark was as-
tounded to learn that a small, but active and influen-
tial, faction on the board had withdrawn its initial
verbal promise to assist her in working closely with
the corporate community. Essentially, she was in-
formed that she was solely responsible for all external
corporate relations. Clark thought to herself, “I won-
der if they hired me because they thought they would
get a ‘do-nothing’ female leader. These folks want me
to either sink or swim on my own. Perhaps they set
me up for failure by giving me a one-year appoint-
ment.” She lamented: “I won’t let this happen. I really
need to learn about the key decision makers and
stakeholders on the board and in the larger commu-
nity, and fast.”
At the last board meeting, Clark detailed the
major elements of her latest proposal. Yet several
board members seemed totally unfazed by it. Soon
she began to encounter stiff resistance from some
male board members. Jim Jackson, in particular,
told Clark: “We are disappointed that you failed to
win a city contract to conduct a feasibility study to
determine if we can erect a facility in another sec-
tion of town. We’re not certain if you have the
right stuff to run this foundation, and we certainly
won’t help you to gain financial support for the
foundation by using our personal, corporate, or
political contacts.” Jackson thought to himself:
“We’ve removed CEOs before, we can remove
Clark, too.”
After hearing Jackson’s comments, Clark decided
to take another tack. She began to focus her atten-
tion on making external and internal inroads which
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she believed could result in some modest gains for
the foundation. For example, she identified and
developed a close relationship with a few well-
connected city agency executives, persuaded some
supporters to nominate her for membership on two
very influential boards, and forged a relationship
with two key foundation decision makers and politi-
cal power brokers. She reconfigured the internal
structure of the foundation to increase maximum
productivity from the staff, and she tightened bud-
getary controls by changing some fiscal policies and
procedures.
Clark also sought the support of Susan Frost, a
board member who likely had been instrumental in
Clark’s appointment as CEO. Clark said to herself,
“If I can develop a strong symbiotic relationship
with some female board members, like Sue, to sup-
port my plan, then maybe I’ll get some traction.” To
do this, Clark held a number of late-evening meet-
ings with Sue and another female board member.
They indicated their willingness to help her, but
only if she would consider implementing a few of
their ideas for the foundation as well as recommend-
ing their close friend for a current staff vacancy.
Clark knew they were trying to exercise their politi-
cal influence, yet she believed that everyone could
benefit from this quid pro quo relationship. She said
to herself, “I guess it’s a matter of you scratch my
back, and I scratch yours.” She eagerly agreed to
move their agenda along. In a matter of a few weeks,
as promised, they began working on a couple of
relatively “sympathetic” board members. One day
Clark got a very terse but crucial telephone call
from Sue. “Several of us support you. Proceed!”
Once she heard this, Clark began to move at light-
ning speed. She formed a 15-member coalition of
community, educational, and quasi-governmental
agencies that would apply for a collaborative federal
grant to create a public awareness eye campaign for
children. Through the dissemination of various me-
dia, coalition members would help to inform the
community-at-large about various eye diseases that
afflict young, school-age children. Shortly afterward,
Clark received notification from a federal agency
that this multiagency project would be awarded a
million-dollar grant. Clark would serve as the admin-
istrative and fiscal agent of the grant, and, as a result,
she would be able to earmark a considerable amount
of the administrative oversight dollars for the foun-
dation’s budget. For her efforts at coordinating this
project, Clark received high marks from coalition
and community members alike.
Yet, despite this important initial accomplish-
ment, Clark had the unpleasant task of notifying the
full board that, due to some unforeseen problems
and their lack of support on certain key initiatives,
the foundation would still experience a financial
deficit. She heard several rumors that her next em-
ployment contract would not be renewed by the
executive committee of the board. At this point she
thought about directly confronting the obstruction-
ists on the board by telling them that they were
unreasonable and, in fact, that they were the cause
of the foundation’s not recovering during the past
year . . . but she hesitated: She had signed on to do a
job, and she was unsure if this was the wisest course
of action to take at this time.
Despite this latest conflict between her and certain
board members, she paused to reflect on what she
believed to have been a tumultuous year as CEO.
Discussion Questions
1. Does Clark have any sources of power and any
contingencies of power? If so, list and discuss
them.
2. To what degree were Clark’s methods of influenc-
ing board members the most effective possible
under the circumstances presented in the case?
3. Do you think her methods of getting things done
at the foundation were ethical? Why or why not?
Note: The names and some managerial actions in
this case have been altered to preserve the integrity
and anonymity of the organization. This case is in-
tended to be used as a basis for class discussion
rather than to illustrate either effective or ineffective
handling of a management situation.
© Joseph C. Santora. Reprinted with permission.
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Team Exercise 10.4 BUDGET DELIBERATIONS
Sharon Card
PURPOSE This exercise is designed to help you
understand some of the power dynamics and influ-
ence tactics that occur across hierarchical levels in
organizations.
MATERIALS This activity works best where one
small room leads to a larger room, which leads to a
larger area.
INSTRUCTIONS These exercise instructions are
based on a class size of about 30 students. The
instruc tor may adjust the size of the first two groups
slightly for larger classes. The instructor will orga-
nize students as follows: A few (three or four) stu-
dents are assigned the positions of executives. They
are preferably located in a secluded office or corner
of a large classroom. Another six to eight students
are assigned positions as middle managers. These
people will ideally be located in an adjoining room
or space, allowing privacy for the executives. The
remaining students represent the nonmanagement
employees in the organization. They are located in
an open area outside the executive and management
rooms.
RULES Members of the executive group are free
to enter the space of either the middle-management
or nonmanagement groups and to communicate
whatever they wish, whenever they wish. Members
of the middle-management group may enter the
space of the nonmanagement group whenever they
wish, but they must request permission to enter the
322
Case Study 10.3 SHAKING UP OXFORD
John Hood may be soft-spoken,
but the New Zealand–born vice-
chancellor of Oxford University
shows flashes of the steely determination that first
convinced Oxford’s search committee to hire him to
give the place a top-to-bottom management overhaul.
Hood’s decisive actions have created few friends
among the scholars, but he claims he is merely work-
ing in the university community’s best interests. “I
am here as the servant of the scholars,” says Hood.
“One has no power or authority in this job.”
This BusinessWeek case study describes the changes
that John Hood is making at Oxford and how aca-
demics at the British university are responding to
those changes. The article looks at Hood’s influence
strategies, the methods used by Oxford’s professors
to resist those changes, and some of the politics of
change that has occurred. Read the full text of this
BusinessWeek article at www.mhhe.com/mcshane5e,
and prepare for the discussion questions below.
Discussion Questions
1. John Hood claims that he has no power or au-
thority in his job. Is he correct? What sources of
power work for and against him during this
change process?
2. What influence tactics has Hood used that are
most apparent in this case study?
3. What influence tactics have professors and other
stakeholders used to resist Hood’s changes?
Would you call any of these influence tactics “or-
ganizational politics”?
Source: S. Reed, “Shaking Up Oxford,” BusinessWeek , 5 December
2005, p. 48.
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http://www.mhhe.com/mcshane5e
executive group’s space. The executive group can
refuse the middle-management group’s request.
Members of the nonmanagement group are not
allowed to disturb the top group in any way unless
specifically invited by members of the executive
group. The nonmanagement group does have
the right to request permission to communicate
with the middle-management group. The middle-
management group can refuse the lower group’s
request.
TASK Your organization is in the process of pre-
paring a budget. The challenge is to balance needs
with financial resources. Of course, the needs are
greater than the resources. The instructor will
distribute a budget sheet showing a list of budget
requests and their costs. Each group has control over
a portion of the budget and must decide how to
spend the money over which they have control.
Nonmanagement has discretion over a relatively
small portion, and the executive group has discre-
tion over the greatest portion. The exercise is fin-
ished when the organization has negotiated a
satisfactory budget or when the instructor calls time-
out. The class will then debrief with the following
questions and others the instructor might ask.
DISCUSSION QUESTIONS
1. What can we learn from this exercise about
power in organizational hierarchies?
2. How is this exercise similar to relations in real
organizations?
3. How did students in each group feel about the
amount of power they held?
4. How did they exercise their power in relations
with the other groups?
323
Self-Assessment 10.5
GUANXI ORIENTATION SCALE
Guanxi, which is translated as “interpersonal con-
nections,” is an important element of doing business
in China and some other Asian countries with strong
Confucian cultural values. Guanxi is based on tradi-
tional Confucian values of helping others without
expecting future repayment. This instrument esti-
mates your guanxi orientation, that is, the extent
to which you accept and apply guanxi val-
ues. This self-assessment should be com-
pleted alone so that you can rate yourself
honestly without concerns of social comparison.
Class discussion will focus on the meaning of
guanxi and its relevance for organizational power
and influence.
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324
Self-Assessment 10.6
MACHIAVELLIANISM SCALE
Machiavellianism is named after Niccolò Machiavelli,
the 16th-century Italian philosopher who wrote The
Prince, a famous treatise about political behavior.
Out of Machiavelli’s work emerged this instrument
that estimates the degree to which you have a
Machiavellian personality. Indicate the ex-
tent to which you agree or disagree that each
statement in this instrument describes you.
Complete each item honestly to get the best estimate
of your level of Machiavellianism.
Self-Assessment 10.7
PERCEPTIONS OF POLITICS SCALE (POPS)
Organizations have been called “political arenas”—
environments where political tactics are common
because decisions are ambiguous and resources are
scarce. This instrument estimates the degree to which
you believe the school where you attend classes has
a politicized culture. The scale consists of several
statements that might or might not describe
your school. The statements refer to the ad-
ministration of the school, not the classroom.
Please indicate the extent to which you agree or dis-
agree with each statement.
After reading this chapter, if you feel that you need additional information, see www.mhhe.com/
mcshane5e for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/
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To reward themselves for a job well done, a team of young employees at Western
Technical College like to create funny mock videos or throw a pizza party during office
hours. Those events bother some older staff at the La Crosse, Wisconsin, school. This
conflict comes as no surprise to
Linda Gravett. “We had a sense
that there was tension,” says
Gravett, a human resource
consultant at Xavier University in
Cincinnati. Gravett and colleague
Robin Throckmorton identified
many forms of inter generational
conflict in their recent book on
that subject. “This was confirmed
in our research. We found there
was a lot of generational tension
around the use of technology and
work ethics.”
Some writers claim that
Generation-X and -Y employees
(those born after 1964) are
not that different from their
baby-boomer counterparts (born
between 1946 and 1964). For
example, some surveys report that both younger and older generations share similar
values and needs. However, differences do occur in each generation’s norms and
expectations, such as regarding work behavior and attire, and these differences are
sometimes interpreted critically by people in the other age group. “As offices go, the
editorial suites at Time Inc. are pretty laid back,” claims editor Dan Kadlec. “Yet there’s a
limit to what passes for acceptable appearance, and I was sure a recent bunch of college
interns had breached it spectacularly with their nose rings, tattoos and low-rise pants.
These were bright, ambitious kids. Why the blatant show of disrespect?”
To help minimize these conflicts, Ernst & Young introduced a special program that
alerts new hires to multigenerational differences. One topic, “Strategies to Connect with
Baby Boomers,” offers the following advice: It is probably not a good time to request time
off, even for a volunteer commitment, just after your boss says that the members of his
or her team of young staff are “spending too much time text-messaging each other and
listening to iPods.” 1
Technologically savvy and ambitious, Generation-X and -Y employees’ attributes and
attitudes toward work have the potential to induce generational conflicts in the
workplace.
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11
Conflict and Negotiation in
the Workplace
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Debate the positive and negative
consequences of conflict in the workplace.
2. Distinguish constructive conflict from
relationship conflict.
3. Describe three strategies for minimizing
relationship conflict during constructive-
conflict episodes.
4. Diagram the conflict process model.
5. Identify six structural sources of conflict in
organizations.
6. Outline the five conflict-handling styles and
discuss the circumstances in which each
would be most appropriate.
7. Summarize six structural approaches to
managing conflict.
8. Outline four situational influences on
negotiations.
9. Describe four skills of effective negotiators.
10. Compare and contrast the three types of
third-party dispute resolution.
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328 Part Three Team Processes
One of the facts of life is that people hold different points of view. They have unique
values hierarchies, develop unique perceptions of reality, and establish different
norms about how to act in social settings. At the same time, organizations are living
systems that demand dynamic, rather than static, relationships among employees. In
other words, employees at Ernst & Young, Western Technical College, Time, and
other organizations need to frequently agree on new work arrangements, revise the
company’s strategic direction, and renegotiate the allocation of scarce resources re-
quired to perform their jobs.
Without identical viewpoints, and with the need to frequently adjust to change,
conflict is bound to occur. Conflict is a process in which one party perceives that his
or her interests are being opposed or negatively affected by another party. 2 It may
occur when one party obstructs or plans to obstruct another’s goals in some way. For
example, a baby-boomer manager experiences conflict with Gen-X or Gen-Y em-
ployees who spend time text messaging because the manager believes that this prac-
tice interferes with her goal of completing departmental deadlines on time.
Text-messaging employees experience conflict with their boss because they view this
form of communication as a valuable way to network, keep informed, and (contrary
to the boss’s opinion) achieve departmental objectives. Conflict is ultimately based
on perceptions; it exists whenever one party believes that another might obstruct his or
her efforts, whether or not the other party actually intends to do so.
This chapter investigates the dynamics of conflict in organizational settings. We
begin by considering the age-old question “Is conflict good or bad?” Next, we de-
scribe the conflict process and examine in detail the main factors that cause or am-
plify conflict. The five styles of handling conflict are then described, followed by a
discussion of the structural approaches to conflict management. The last two sections
of this chapter introduce two procedures for resolving conflict: negotiation and third-
party resolution.
conflict
A process in which one
party perceives that
his or her interests are
being opposed or
negatively affected
by another party.
Learning
Objectives
After reading the next two sections, you should be able to:
1. Debate the positive and negative consequences of conflict in the
workplace.
2. Distinguish constructive conflict from relationship conflict.
3. Describe three strategies for minimizing relationship conflict during
constructive-conflict episodes.
4. Diagram the conflict process model.
Is Conflict Good or Bad?
For at least the past century, and likely much longer, experts have been debating
whether conflict is good or bad for organizational effectiveness. The conflict-is-bad
perspective has prevailed for most of that time. 3 Exhibit 11.1 ( a ) illustrates this view; the
downward line shows that as the level of conflict increases, it produces more adverse
outcomes. According to this perspective, even moderately low levels of disagreement
tatter the fabric of workplace relations and sap energy away from productive activities.
Conflict with one’s supervisor not only wastes productive time but also violates the
hierarchy of command and questions the efficient assignment of authority (in which
managers made the decisions and employees followed them).
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Chapter 11 Conflict and Negotiation in the Workplace 329
Although the conflict-is-bad perspective is now considered oversimplistic, numerous
studies report that conflict can potentially undermine team cohesion, information shar-
ing, decision making, and employee well-being (increased stress and lower job satisfac-
tion). It also seems to distort perceptions and increase organizational politics. 4 Conflict
distracts employees from their work and, in some cases, motivates them to withhold
valuable knowledge and other resources. People who experience conflict are less moti-
vated to communicate or try to understand the other party, and this further escalates
conflict as each side relies increasingly on distorted perceptions and stereotypes. One
survey estimates that 42 percent of a manager’s time is spent dealing with workplace
conflict and that conflict triggers most voluntary and involuntary employee turnover. 5
More than 80 years ago, social worker and political science scholar Mary Parker
Follett proposed the then-radical notion that conflict can be beneficial. 6 Her ideas
were slow to gain support. By the 1970s, however, the conflict-is-bad perspective had
been replaced by the optimal-conflict perspective, which holds that organizations are most
effective when employees experience some level of conflict in discussions but that or-
ganizations become less effective when they have high levels of conflict. The belief
that companies should have neither too little nor too much conflict, which is illustrated
by the upside-down U-shaped relationship in Exhibit 11.1( b ), remains popular today. 7
Many studies support Follett’s groundbreaking thesis that a moderate level of con-
flict is good. One outcome is improved decision making. Conflict energizes people to
debate issues and evaluate alternatives more thoroughly. The debate tests the logic of
arguments and encourages participants to reexamine their basic assumptions about
the problem and its possible solution. Another apparent benefit of moderate conflict
is that it prevents organizations from stagnating and becoming nonresponsive to their
external environment. This reflects our earlier observation that conflict occurs in or-
ganizations because they are living systems. Moderate levels of conflict are inevitable
and necessary as employees try to keep the organization responsive to the needs of
customers and other stakeholders. 8 A third benefit, which we discussed in the chapter
on teams, is that conflict with people outside the team potentially increases cohesion
within the team. People are more motivated to work together when faced with an
external threat, such as conflict with people outside the team.
The Emerging View: Constructive and Relationship Conflict
The upside-down U-shaped model of conflict was replaced in the 1990s by the perspec-
tive that there are two types of conflict with opposing consequences [see Exhibit 11.1( c )]. 9
(a) Conflict Is Bad
(pre-1970s)
Low High
Level of conflict
0
C
o
n
fl
ic
t
o
u
tc
o
m
e
s
Bad
Good
(b) Optimal Conflict
(1970s–1990s)
Low High
Level of conflict
0
C
o
n
fl
ic
t
o
u
tc
o
m
e
s
Bad
Good
(c) Two Types of Conflict
(current)
Low High
Level of conflict
0
C
o
n
fl
ic
t
o
u
tc
o
m
e
s
Bad
Good
Constructive
Relationship
Exhibit 11.1 Past and Present Perspectives of Conflict
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330 Part Three Team Processes
Constructive conflict occurs when people focus their discussion on the issue while
showing respect for people with other points of view. This conflict is called “construc-
tive” because different positions are encouraged so that ideas and recommendations
can be clarified, redesigned, and tested for logical soundness. Keeping the debate fo-
cused on the issue helps participants reexamine their assumptions and beliefs without
triggering the drive to defend and its associated negative emotions and ego–defense
mechanism behaviors. Teams and organizations with very low levels of constructive
conflict are less effective, but there is also likely an upper limit to the level of intensity
of constructive conflict. 10
In contrast to constructive conflict, relationship conflict focuses on people, rather
than the issues, as the source of conflict. The parties refer to interpersonal incompatibili-
ties such as “personality clashes” rather than legitimate differences of opinion regarding
tasks or decisions. Each party tries to undermine the other’s argument by questioning
her or his competency. Attacking a person’s credibility or displaying an aggressive
response toward the person triggers defense mechanisms and a competitive orientation.
The subject of the verbal attacks becomes less motivated to communicate and share
information, making it more difficult for the parties to discover common ground and
ultimately resolve the conflict. Instead, they increasingly rely on more distorted percep-
tions and stereotypes, and this, as we noted earlier, tends to further escalate the conflict.
Relationship conflict is sometimes called socioemotional or affective conflict because people
experience and react to strong emotional responses during such conflict episodes.
Separating Constructive Conflict from Relationship Conflict The current
perspective that there are two types of conflict leads to the logical conclusion that we
should encourage constructive conflict and minimize relationship conflict. This rec-
ommendation sounds good in theory, but recent evidence suggests that separating
these two types of conflict isn’t easy. Most of us experience some degree of relation-
ship conflict during and after any constructive debate. 11 In other words, any attempt
to engage in constructive conflict, no matter how calmly and rationally, may still sow
the seeds of relationship conflict. The stronger the level of debate and the more the
issue is tied to the individual’s self- concept, the higher the chance that the construc-
tive conflict will evolve into (or mix with) relationship conflict. As Connections 11.1
describes, even though Intel staff are taught the fine art of constructive debate, many
of them experience relationship conflict.
Fortunately, conflict management experts have identified three strategies that
potentially minimize the level of relationship conflict during constructive-conflict
episodes: 12
• Emotional intelligence . Relationship conflict is less likely to occur, or is less likely
to escalate, when team members have high levels of emotional intelligence.
Emotionally intelligent employees are better able to regulate their emotions
during debate, thus reducing the risk of escalating perceptions of interpersonal
hostility. People with high emotional intelligence are also more likely to view a
co-worker’s emotional reaction as valuable information about that person’s
needs and expectations, rather than as a personal attack.
• Cohesive team . Relationship conflict is suppressed when the conflict occurs within
a highly cohesive team. The longer people work together, get to know each
other, and develop mutual trust, the more latitude they give each other to show
emotions without being personally offended. Strong cohesion also allows each
person to know about and anticipate the behaviors and emotions of teammates.
constructive conflict
A type of conflict in
which people focus
their discussion on the
issue while maintaining
respect for people having
other points of view.
relationship conflict
A type of conflict in
which people focus on
characteristics of other
individuals, rather than
on the issues, as the
source of conflict.
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331
Constructive Confrontation
inside Intel
Former Goldman Sachs president John Thornton has had his
share of executive debates, but even he was surprised by
the animated discussion that permeates Intel, the chip maker,
where Thornton is a member of the board. “It can be kind of
shocking at first,” says Thornton, recalling his first few Intel
meetings. “You realize quickly that [Intel managers] practice
a form of honesty that borders on brutality.” Intel cofounder
and former chairman Andy Grove nurtured this culture of
conflict—called constructive confrontation—many years
ago when he noticed that meetings generate better ideas
when staff actively debate, rather than politely defer to, ideas
that others put forward. The practice is so important that
new Intel employees are taught the fine art of confrontation
through supervised debates and role plays.
Andy Grove emphasizes that conflict is constructive only
under specific circumstances. “Constructive confrontation
does not mean being loud, unpleasant or rude, and it is not
designed to affix blame,” warns Grove. “The essence of it is
to attack a problem by speaking up in a businesslike way.” If
you target the other person, the benefits of constructive de-
bate disintegrate. But some people claim that Intel’s con-
structive confrontation never was very constructive. Instead,
Connections 11.1
like John Thornton, some staff also experience a heavy dose
of relationship conflict. “I can tell you unequivocally that
constructive confrontation was a license for a**holes to be
a**holes and express themselves,” says former Intel em-
ployee Logan Shrine, who coauthored a book with Bob Coleman
on Intel’s changing culture. “Intel’s culture is dysfunctional
and anomalous to what’s considered acceptable behavior in
any other corporation.”13
Constructive conflict is part of Intel’s culture, but some
people say the computer-chip maker’s task-focused discussion
descends into relationship conflict.
Another benefit is that cohesion produces a stronger social identity with the
group, so team members are motivated to avoid escalating relationship conflict
during otherwise emotionally turbulent discussions.
• Supportive team norms . Various team norms can hold relationship conflict at bay
during constructive debate. When team norms encourage openness, for instance,
team members learn to appreciate honest dialogue without personally reacting
to any emotional display during the disagreements. 14 Other norms might dis-
courage team members from displaying negative emotions toward co-workers.
Team norms also encourage tactics that diffuse relationship conflict when it first
appears. For instance, research has found that teams with low re lationship con-
flict use humor to maintain positive group emotions, thereby offsetting negative
feelings team members might develop toward some co-workers during debate.
Conflict Process Model
Now that we have outlined the history of and current knowledge about conflict and
its outcomes, let’s look at the model of the conflict process, shown in Exhibit 11.2 . 15
This model begins with the sources of conflict, which we will describe in more detail
in the next section. At some point, the sources of conflict lead one or both parties to
perceive that conflict exists. One (or each) party becomes aware that the other party’s
statements and actions are incompatible with his or her own goals. Such perceptions
usually interact with emotions experienced about the conflict. 16 Conflict perceptions
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332 Part Three Team Processes
and emotions manifest themselves in the decisions and behaviors of one party toward
the other. These conflict episodes may range from subtle nonverbal behaviors to war-
like aggression. Particularly when people experience high levels of conflict emotions,
they have difficulty finding the words and expressions that communicate effectively
without further irritating the relationship. 17 Conflict is also manifested by the style
each side uses to resolve the conflict. Some people tend to avoid the conflict, whereas
others try to defeat those with opposing views.
Exhibit 11.2 shows arrows looping back from manifest conflict to conflict percep-
tions and emotions. These arrows illustrate that the conflict process is really a series
of episodes that potentially cycle into conflict escalation. 18 It doesn’t take much to
start this conflict cycle—just an inappropriate comment, a misunderstanding, or an
action that lacks diplomacy. These behaviors cause the other party to perceive that
conflict exists. Even if the first party did not intend to demonstrate conflict, the sec-
ond party’s response may create the perception that conflict exists.
Sources of
conflict
Conflict
escalation
Conflict
escalation
• Incompatible goals
• Differentiation
• Interdependence
• Scarce resources
• Ambiguous rules
• Poor communication
Manifest
conflict
• Conflict style
• Decisions
• Overt
behaviors
Conflict
outcomes
Positive
• Better decisions
• Responsive
organization
• Team cohesion
Negative
• Stress/low morale
• Turnover
• Politics
• Lower
performance
• Distorted
information
Conflict
perceptions
and emotions
Exhibit 11.2 Model of the Conflict Process
Learning
Objectives
After reading the next three sections, you should be able to:
5. Identify six structural sources of conflict in organizations.
6. Outline the five conflict-handling styles and discuss the circumstances
in which each would be most appropriate.
7. Summarize six structural approaches to managing conflict.
Structural Sources of Conflict in Organizations
The conflict model starts with the sources of conflict, so we need to understand these
sources to effectively diagnose conflict episodes and subsequently resolve the conflict
or occasionally to generate conflict where it is lacking. The six main conditions that
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Chapter 11 Conflict and Negotiation in the Workplace 333
cause conflict in organizational settings are incompatible goals, differentiation, inter-
dependence, scarce resources, ambiguous rules, and communication problems.
Incompatible Goals
Microsoft Corp. has been highly successful with its host of products and services, yet
various sources conclude that the company suffers from vicious infighting across prod-
uct groups. “Pretty much across the board people are saying that Microsoft is dysfunc-
tional,” concludes one industry analyst. “They are not cooperating across business
groups.” One of the major sources of this conflict is that some work units have goals that
are incompatible with those of other units. For example, the MSN group had developed
desktop search software that would compete against Google Desktop. However, Micro-
soft’s Windows group opposed release of the MSN software because the Windows group
had developed similar software for its Vista operating system. The MSN group also
fought against the Office people over MSN’s desire to connect their online calendar
with the calendar in Office. The Office group balked because “then MSN could canni-
balize Office,” says an employee who recently left Microsoft. “Windows and Office
would never let MSN have more budget or more control.” 19
The battles between the Microsoft MSN and Windows work units illustrate how
goal incompatibility —in which the goals of one person or department seem to interfere
with another person’s or department’s goals—can be a source of conflict in organiza-
tions. 20 MSN’s goal of competing against Google with desktop search software threat-
ened the Windows group’s goals of launching new features in Microsoft Vista. MSN’s
goal of providing users with better calendar integration threatened the Microsoft
Office group’s product territory, which might undermine its profitability or control
over the calendar feature.
Differentiation
Another source of conflict is differentiation —differences among people, departments, and
other entities regarding their training, values, beliefs, and experiences. Differentiation
can be distinguished from goal incompatibility because two people or departments
may agree on a common goal but have profound differences in how to achieve that
goal. Consider the classic tension between employees from two companies brought
together through a merger. Employees in each organization fight over the “right way”
to do things because of their unique experiences in the separate companies. This source
of conflict is apparent as Porsche AG takes control of Volkswagen Group. As Global
Connections 11.2 describes, VW chairman Ferdinand Piëch and his allies are battling
Porsche CEO Wendelin Wiedeking and his executive team because they have substan-
tially different views on how Europe’s largest automaker should be run.
Intergenerational conflicts, which were described in the opening story to this
chapter, are also mainly caused by differentiation. Younger and older employees
have different needs, different expectations, and different workplace practices, and
this sometimes produces conflicting preferences and actions. Recent studies suggest
that intergenerational differences occur because people develop social identities
around technological developments and other pivotal social events. 21 Information
technology also maintains differentiation because without face-to-face experiences,
employees have more difficulty forming common mental models and norms. For
instance, recent investigations indicate that virtual teams have a high incidence of
conflict because technology makes it difficult for them to form common experiences
and perspectives. 22
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Conflict Overdrive at VW
and Porsche
Volkswagen Group (VW) became a den of internal conflict
over the past decade as it acquired several fiefdoms—Audi,
Lamborghini, Bentley, Bugatti, Skoda, SEAT—that jealously
guarded their brands and continuously rebelled against
sharing knowledge. One member of VW’s supervisory board
(the German equivalent of a board of directors) commented
that managing the company is “like trying to ride a chariot
with four or five horses, each of which pulls in a different
direction.” Now Porsche AG is entering the fray. The luxury
sports car company, which relies on VW for some of its pro-
duction work, began acquiring stock in VW a few years ago
and recently achieved a controlling interest. Porsche CEO
Wendelin Wiedeking is aware of VW’s internal rivalries. “If
you mix the Porsche guys with the Audi guys and the VW
guys you will have trouble,” says Wiedeking. “Each is proud
to belong to his own company.”
Yet Wiedeking is stirring up a different type of conflict as
Porsche tightens its grip over VW’s supervisory board. Through
an unswerving drive for efficient production and astute mar-
keting, Wiedeking and his executive team transformed
Porsche into the world’s most profitable and prestigious car
company. Wiedeking now wants to apply those practices at
VW by closing down inefficient operations and money-losing
car lines. “Wiedeking is a Porsche CEO from another corpo-
rate culture,” says German auto analyst Christoph Stuermer.
“He’s out to maximize profits by cutting costs. And he snubbed
everyone, telling off VW management, interfering with their
way of doing business.” Ferdinand Dudenhoeffer, director of
Germany’s Center of Automotive Research (CAR), agrees.
“Porsche is very successful in being lean and profitable. It’s
not going to be harmonious.”
Particularly offended by Wiedeking’s plans is VW chair-
man Ferdinand Piëch, who has a different vision for Europe’s
largest automaker. Piëch, whose grandfather developed the
VW Beetle, places more emphasis on spectacular engineer-
ing than exceptional profits. For example, he continues to
support the money-losing Bugatti brand, which VW acquired
several years ago when Piëch was CEO. More recently, Piëch
championed the Phaeton, VW’s luxury car that broke new
ground in innovation (it boasts 100 patents) but has not been a
commercial success.
Global Connections 11.2
334
Wiedeking, on the other hand, believes that VW could be
more profitable if it stopped producing the Phaeton and
Bugatti. “Piëch sees his vision endangered by Wiedeking,”
says Dudenhoeffer. “Wiedeking said that there are no holy
cows at VW, no more Phaetons, no more Bugattis.” These
ideas make Piëch’s blood boil. “Anyone who says that VW
should pull the Phaeton doesn’t understand the world,” grum-
bles Piëch, explaining that luxury cars represent the only
segment with double-digit growth.
There is an unusual twist in the conflict involving Piëch,
Wiedeking, and Porsche. Piëch is a member of the Porsche
family. He is a cousin of Porsche chairman Wolfgang Porsche
and owns a 10 percent share of the Porsche company. Piëch
began his career at Porsche and became its chief engineer be-
fore moving to Audi and later VW. Furthermore, in what many
consider a blatant conflict of interest, Piëch supported Porsche’s
initial investment in VW. But with Piëch and Wiedeking on a col-
lision course, that initial friendly investment in the partnership
has turned into all-out corporate war. “There was always a
cease-fire between Piëch and the Porsches, but now it’s war,”
claims auto analyst Ferdinand Dudenhoeffer. “This is like Dallas
and Dynasty in Wolfsburg (VW’s German headquarters). No
company in the world is so self-absorbed with its problems.”23
Behind the smiling faces of Volkswagen Group chairman
Ferdinand Piëch (left) and Porsche CEO Wendelin Wiedeking
(right) is a deep conflict over how to run VW as Porsche
takes control of Europe’s largest carmaker.
Interdependence
Conflict tends to increase with the level of interdependence. Interdependence exists
when team members must share common inputs to their individual tasks, need to
interact in the process of executing their work, or receive outcomes (such as rewards)
that are partly determined by the performance of others. 24 Higher interdependence
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Chapter 11 Conflict and Negotiation in the Workplace 335
increases the risk of conflict because there is a greater chance that each side will dis-
rupt or interfere with the other side’s goals. 25
Other than when they have complete independence, employees tend to have the
lowest risk of conflict when working with others in a pooled-interdependence rela-
tionship. Pooled interdependence occurs where individuals operate independently except
for reliance on a common resource or authority (see Chapter 8). The potential for
conflict is higher in sequential interdependence work relationships, such as on an as-
sembly line. The highest risk of conflict tends to occur in reciprocal interdependence
situations. With reciprocal interdependence, employees are highly dependent on
each other and, consequ ently, have a higher probability of interfering with each
other’s work and personal goals.
Scarce Resources
Resource scarcity generates conflict because each person or unit requiring the same
resource necessarily undermines others who also need that resource to fulfill their
goals. Consider the lively debates among employees at Intel, described earlier in
Connections 11.1. These conflict episodes occur partly because there aren’t enough
financial, human capital, and other resources for everyone to accomplish her or his
goals, so employees need to justify why they should receive the resources. The more
resources one project receives, the fewer resources another project will have avail-
able to accomplish its goals.
Ambiguous Rules
Ambiguous rules—or the complete lack of rules—breed conflict. This occurs because
uncertainty increases the risk that one party intends to interfere with the other par-
ty’s goals. Ambiguity also encourages political tactics, and, in some cases, employ-
ees enter a free-for-all battle to win decisions in their favor. This explains why
conflict is more common during mergers and acquisitions. Employees from both
companies have conflicting practices and values, and few rules have developed to
minimize the maneuvering for power and resources. 26 When clear rules exist, on
the other hand, employees know what to expect from each other and have agreed
to abide by those rules.
Communication Problems
Conflict often occurs due to the lack of opportunity, ability, or motivation to com-
municate effectively. Let’s look at each of these causes. First, when two parties lack
the opportunity to communicate, each tends to rely more on stereotypes to under-
stand the other party in the conflict. Unfortunately, stereotypes are sufficiently sub-
jective that emotions can negatively distort the meaning of an opponent’s actions,
thereby escalating perceptions of conflict. Second, some people lack the necessary
skills to communicate in a diplomatic, nonconfrontational manner. When one party
communicates his or her disagreement arrogantly, opponents are more likely to
heighten their perception of the conflict. This may lead the other party to reciprocate
with a similar response, which further escalates the conflict. 27
A third problem is that the perception of conflict reduces the motivation to com-
municate. Relationship conflict is uncomfortable, so people avoid interacting with
others in a conflicting relationship. Unfortunately, less communication can further
escalate the conflict because there is less opportunity to empathize with the opponent’s
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336 Part Three Team Processes
situation and opponents are more likely to rely on distorted stereotypes of the other
party. In fact, conflict tends to further distort these stereotypes through the process of
social identity (see Chapter 3). We begin to see competitors less favorably so that our
self-concept remains positive during these uncertain times. 28
Interpersonal Conflict-Handling Styles
The six structural conditions described above set the stage for conflict, and these
sources lead to conflict perceptions and emotions that, in turn, motivate people to
take some sort of action to address the conflict. Along with pioneering the view that
some conflict is beneficial, Mary Parker Follett suggested that there are different conflict-
handling styles. The number of styles identified by conflict experts has varied over
the years, but most common are variations of the five-category model shown in
Exhibit 11.3 and described below: 29
• Problem solving. Problem solving tries to find a mutually beneficial solution
to the disagreement. This is known as the win-win orientation because people
using this style believe the resources at stake are expandable, rather than
Forcing Problem solving
Avoiding
Compromising
Yielding
High
High
Low
Assertiveness
(motivation to
satisfy one’s
own interests)
Low
Cooperativeness
(motivation to satisfy
other party’s interests)
Exhibit 11.3
Interpersonal
Conflict-Handling
Styles
Source: C. K. W. de Dreu, A. Evers, B. Beersma, E. S. Kluwer, and A. Nauta, “A Theory-Based Measure of Conflict
Management Strategies in the Workplace,” Journal of Organizational Behavior 22 (2001), pp. 645–668. For other
variations of this model, see T. L. Ruble and K. Thomas, “Support for a Two-Dimensional Model of Conflict Behavior,”
Organizational Behavior and Human Performance 16 (1976), p. 145; R. R. Blake, H. A. Shepard, and J. S. Mouton,
Managing Intergroup Conflict in Industry (Houston: Gulf, 1964); M. A. Rahim, “Toward a Theory of Managing
Organizational Conflict,” International Journal of Conflict Management 13, no. 3 (2002), pp. 206–235.
win-win orientation
The belief that con-
flicting parties will find
a mutually beneficial
solution to their
disagreement.
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Chapter 11 Conflict and Negotiation in the Workplace 337
fixed, if the parties work together to find a creative solution. Information
sharing is an important feature of this style because both parties collaborate
to identify common ground and potential solutions that satisfy everyone
involved.
• Forcing. Forcing tries to win the conflict at the other’s expense. People who
use this style typically have a win-lose orientation —they believe the parties
are drawing from a fixed pie, so the more one party receives, the less the
other party will receive. Consequently, this style relies on some of the “hard”
influence tactics described in Chapter 10, particularly assertiveness, to get
one’s own way.
• Avoiding. Avoiding tries to smooth over or avoid conflict situations altogether.
It represents a low concern for both self and the other party; in other words,
avoiders try to suppress thinking about the conflict. For example, some employ-
ees will rearrange their work area or tasks to minimize interaction with certain
co-workers. 30
• Yielding. Yielding involves giving in completely to the other side’s wishes, or
at least cooperating, with little or no attention to your own interests. This style
involves making unilateral concessions and unconditional promises, as well as
offering help with no expectation of reciprocal help.
• Compromising. Compromising involves looking for a position in which you make
concessions to some extent. It involves matching the other party’s concessions,
making conditional promises or threats, and actively searching for a middle
ground between the interests of the two parties.
Choosing the Best Conflict-Handling Style
Chances are that you have a preferred conflict-handling style. You might have a
tendency toward avoiding or yielding because disagreement makes you feel un-
comfortable and is inconsistent with your self-concept as someone who likes to get
along with everyone. Or perhaps you prefer the compromising and forcing strate-
gies because they reflect your strong need for achievement and for control over
your environment. In general, people gravitate toward one or two preferred conflict-
handling styles that match their personality, personal and cultural values, and past
experience. However, most people recognize that they should use different conflict-
handling styles in different situations. 31 In other words, the best style varies with the
situation. 32
Exhibit 11.4 summarizes the main contingencies, as well as problems, in using
each conflict-handling style. Problem solving has long been identified as the pre-
ferred conflict-handling style where possible because dialogue and clever thinking
help people break out of the limited boundaries of their opposing alternatives to
find an integrated solution whereby both gain value. In addition, recent studies
report that problem solving improves long-term relationships, reduces stress, and
minimizes emotional defensiveness and other indications of relationship conflict. 33
However, problem solving is the best choice of conflict handling only when there
is some potential for mutual gains, which is more likely to occur when the issue is
complex and when the parties have enough trust, openness, and time to share
information. If problem solving is used under the wrong conditions, there is an
increased risk that the other party will take advantage of the information you have
openly shared.
win-lose orientation
The belief that conflict-
ing parties are drawing
from a fixed pie, so the
more one party receives,
the less the other party
will receive.
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338 Part Three Team Processes
Exhibit 11.4 Conflict-Handling-Style Contingencies and Problems
Conflict-handling style Preferred style when . . . Problems with this style
• Involves sharing information that the
other party might use to his or her
advantage.
• Interests are not perfectly opposing
(i.e., not pure win-lose).
• Parties have trust, openness, and time to
share information.
• Issues are complex.
Problem solving
• Has highest risk of relationship conflict.
• May damage long-term relations, reducing
future problem solving.
• You have a deep conviction about your
position (e.g., believe the other person’s
behavior is unethical).
• Dispute requires a quick solution.
• The other party would take advantage of
more cooperative strategies.
Forcing
• Doesn’t usually resolve the conflict.
• May increase other party’s frustration.
• Conflict has become too emotionally
charged.
• Cost of trying to resolve the conflict
outweighs the benefits.
Avoiding
• Increases other party’s expectations in
future conflict episodes.
• Other party has substantially more power.
• Issue is much less important to you than
to the other party.
• Value and logic of your position aren’t as
clear.
Yielding
• Results in suboptimal solution when
mutual gains are possible.
• Parties have equal power.
• Time pressure exists for resolving the
conflict.
• Parties lack trust and openness for
problem solving.
Compromising
You might think that avoiding is an ineffective conflict management strategy, but it
is actually the best approach when conflict has become emotionally charged or when
negotiating has a higher cost than the benefits of conflict resolution. 34 At the same
time, conflict avoidance is often ineffective because it doesn’t resolve the conflict and
may increase the other party’s frustration. The forcing style of conflict resolution is
usually inappropriate because research indicates that it generates relationship conflict
more quickly or intensely than other conflict-handling styles. However, forcing may
be necessary when you know you are correct (e.g., the other party’s position is unethi-
cal or based on obviously flawed logic), the dispute requires a quick solution, or the
other party would take advantage of a more cooperative conflict-handling style.
The yielding style may be appropriate when the other party has substantially more
power, the issue is not as important to you as it is to the other party, and you aren’t con-
fident that your position has the best value or logical consistency. On the other hand,
yielding behaviors may give the other side unrealistically high expectations, thereby
motivating her or him to seek more from you in the future. In the long run, yielding may
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Chapter 11 Conflict and Negotiation in the Workplace 339
produce more conflict rather than resolve it. The compromising style may be best when
there is little hope for mutual gain through problem solving, both parties have equal
power, and both are under time pressure to settle their differences. However, we rarely
know for certain that mutual gains are not available, so entering a conflict with the com-
promising style may cause the parties to overlook better solutions.
Cultural and Gender Differences in Conflict-Handling Styles
Cultural differences are more than just a source of conflict. Cultural background also
affects the preferred conflict-handling style. 36 Some research suggests that people from
collectivist cultures—where people emphasize duty to groups to which they belong—
are motivated to maintain harmonious relations and, consequently, are more likely
NHLPA Stick Handles the Extremes of Conflict Handling Former National Hockey League Players’ Associa-
tion (NHLPA) boss Bob Goodenow (left in the photo) was called the Darth Vader of hockey. He relied on a
forcing style that catapulted NHL player salaries into the stratosphere, but he also soured relations with the
NHL commissioner and team owners, resulting in cancellation of an entire NHL season. Goodenow stepped
down after the canceled season, replaced by Ted Saskin (right), who promised a more diplomatic problem-
solving approach. “I just think that in any business you need a spirit of cooperation to move forward, and I
think Ted Saskin will handle that well,” said NHL board of governors chairman Harley Hotchkiss when Saskin
was appointed NHLPA executive director. But Saskin may have been too cozy with the NHL team owners and
too mistrusting of the players he represented. Some players opposed Saskin’s appointment, so the NHL com-
missioner’s staff allegedly gave Saskin the names of players who were conspiring against him. Saskin appar-
ently had the e-mails of these conspiring players monitored so he could anticipate their actions against him.
When news of the e-mail monitoring went public, Saskin was fired. Replacing Saskin is Paul Kelly, who so far
has been careful not to display too much yielding or forcing in his dealings with the NHL commissioner.35
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340 Part Three Team Processes
than those from low collectivism cultures to manage disagreements through avoid-
ance or problem solving. However, this view may be somewhat simplistic because
people in some collectivist cultures are also more likely to publicly shame those
whose actions conflict with expectations. 37
Some writers suggest that men and women also tend to rely on different conflict-
handling styles. 38 Generally, women pay more attention than do men to the rela-
tionship between the parties. Consequently, they tend to adopt a compromising or,
occasionally, problem-solving style in business settings and are more willing to
compromise to protect the relationship. Men tend to be more competitive and take a
short-term orientation to the relationship. In low collectivism cultures, men are more
likely than women to use the forcing approach to conflict handling. However,
we must be cautious about these observations because gender usually has a weak
influence on conflict management style.
Structural Approaches to Conflict Management
Conflict management styles pertain to how we approach the other party in a conflict
situation. But conflict management also involves altering the underlying structural causes
of potential conflict. The main structural approaches are emphasizing superordinate
goals, reducing differentiation, improving communication and understanding, reducing
task interdependence, increasing resources, and clarifying rules and procedures.
Emphasizing Superordinate Goals
One of the oldest recommendations for resolving conflict is to seek and find common
goals. 39 In organizational settings, this typically takes the form of a superordinate goal,
which is any goal that both conflicting parties value and whose attainment is beyond the
resources and effort of either party alone. 40 By increasing commitment to corporatewide
goals, employees pay less attention to competing individual or departmental-level goals,
thus reducing their perceived conflict with co-workers. They also potentially reduce the
problem of differentiation by establishing a common frame of reference. For example,
research indicates that the most effective executive teams frame their decisions as super-
ordinate goals that rise above each executive’s departmental or divisional goals. 41
Reducing Differentiation
Another way to minimize dysfunctional conflict is to reduce the differences that
produce the conflict in the first place. The more employees think they have common
backgrounds or experiences with co-workers, the more motivated they are to coordi-
nate their activities and resolve conflict through constructive discussion with those co-
workers. 42 One way to increase this commonality is by creating common experiences.
SAP, the German enterprise software company, applied this strategy when it recently
acquired Business Objects, a French company with a strong U.S. presence. Conflict is
common following many acquisitions because employees at each company have
different cultures, experiences, and loyalties. SAP minimized this differentiation by
immediately intermingling people from the two organizations. “In the first six months
after the acquisition, more than 35 percent of senior managers transferred from SAP
while all of the original Business Objects corporate services people are now a part of
a global shared services team,” says Business Objects CEO John Schwarz. “We also
encourage cross-border, cross-functional teamwork on projects such as major product
releases. In this way team members come to depend on each other.” 43
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Chapter 11 Conflict and Negotiation in the Workplace 341
Improving Communication and Understanding
A third way to resolve dysfunctional conflict is to give the conflicting parties more
opportunities to communicate and understand each other. This recommendation relates
to the contact hypothesis described in Chapter 3. Specifically, the more meaningful
interaction we have with someone, the less we rely on stereotypes to understand that
person. 44 There are two warnings, however. First, communication and understanding
interventions should be applied only after differentiation between the two sides has
been reduced or when differentiation is already sufficiently low. If perceived differen-
tiation remains high, attempts to manage conflict through dialogue might escalate
rather than reduce relationship conflict. The reason is that when we are forced to inter-
act with people who we believe are quite different and in conflict with us, we tend to
select information that reinforces that view. 45 Thus, communi cation and understanding
interventions are effective only when differentiation is sufficiently low.
The second warning is that people in collectivist and high power distance cultures
are less comfortable with the practice of resolving differences through direct and
open communication. 46 As noted earlier, people in Confucian cultures prefer an
avoidance conflict management style because it is the most consistent with harmony
and face saving. Direct communication is a high-risk strategy because it easily threat-
ens the need to save face and maintain harmony.
Reducing Interdependence
Conflict increases with the level of interdependence, so minimizing dysfunctional
conflict might involve reducing the level of interdependence between the parties. If
cost-effective, this can occur by dividing the shared resource so that each party has
exclusive use at different times. Sequentially or reciprocally interdependent jobs
might be combined so that they form a pooled interdependence. For example,
rather than having one employee serve customers and another operate the cash
register, each employee could handle both customer activities alone. Buffers also
help to reduce interdependence between people. Buffers include resources; for in-
stance, more inventory could be added between people who perform sequential
tasks. Organizations also use human buffers—people who serve as intermediaries
between interdependent people or work units that do not get along through direct
interaction.
Increasing Resources
An obvious way to reduce conflict caused by resource scarcity is to increase the
amount of resources available. Corporate decision makers might quickly dismiss this
solution because of the costs involved. However, they need to carefully compare
these costs with the costs of dysfunctional conflict arising out of resource scarcity.
Clarifying Rules and Procedures
Conflicts that arise from ambiguous rules can be minimized by establishing rules and
procedures. Armstrong World Industries, Inc., applied this strategy when consultants
and information system employees clashed while working together on development
of a client-server network. Information system employees at the flooring and building
materials company thought they should be in charge, whereas consultants believed
they had the senior role. Also, the consultants wanted to work long hours and take
Friday off to fly home, whereas Armstrong employees wanted to work regular hours.
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342 Part Three Team Processes
The company reduced these conflicts by having both parties agree on specific
responsibilities and roles. In addition, two executives were assigned responsibility for
establishing more rules if future disagreements arose. 47
Rules establish changes to the terms of interdependence, such as an employee’s
hours of work or a supplier’s fulfillment of an order. In most cases, the parties af-
fected by these rules are involved in the process of deciding these terms of interde-
pendence. Thus, by redefining the terms of interdependence, the strategy of clarifying
rules involves negotiation, which we discuss next.
Learning
Objectives
After reading the next two sections, you should be able to:
8. Outline four situational influences on negotiations.
9. Describe four skills of effective negotiators.
10. Compare and contrast the three types of third-party dispute
resolution.
Resolving Conflict through Negotiation
Think back through yesterday’s events. Maybe you had to work out an agreement
with other students about what tasks to complete for a team project. Chances are that
you shared transportation with someone, so you had to clarify the timing of the ride.
Then perhaps there was the question of who made dinner. Each of these daily events
created potential conflict, and they were resolved through negotiation. Negotiation
occurs whenever two or more conflicting parties attempt to resolve their divergent
goals by redefining the terms of their interdependence. In other words, people nego-
tiate when they think that discussion can produce a more satisfactory arrangement (at
least for them) in their exchange of goods or services.
As you can see, negotiation is not an obscure practice reserved for labor and man-
agement bosses when hammering out a collective agreement. Everyone negotiates,
every day. Most of the time, you don’t even realize that you are in negotiations. Ne-
gotiation is particularly evident in the workplace because employees work interde-
pendently with each other. They negotiate with their supervisors over next month’s
work assignments, with customers over the sale and delivery schedules of their prod-
uct, and with co-workers over when to have lunch. And yes, they occasionally negoti-
ate with each other in labor disputes and workplace agreements.
Some writers suggest that negotiations are more successful when the parties adopt a
problem-solving style, whereas others caution that this conflict-handling style is some-
times costly. 48 We know that any win-lose style (forcing, yielding, etc.) is unlikely to
produce the optimal solution because the parties have not shared information neces-
sary to discover a mutually satisfactory solution. On the other hand, we must be careful
about openly adopting a problem-solving style until mutual trust has been established.
The concern with the problem-solving style is that information is power, so infor-
mation sharing gives the other party more power to leverage a better deal if the op-
portunity occurs. Skilled negotiators often cautiously adopt the problem-solving style
at the outset by sharing information slowly and determining whether the other side
will reciprocate. In this respect, they try to establish trust with the other party. 49 They
switch to one of the win-lose styles only when it becomes apparent that a win-win
solution is not possible or the other party is unwilling to share information with a
cooperative orientation.
negotiation
The process whereby
two or more conflicting
parties attempt to re-
solve their divergent
goals by redefining
the terms of their
interdependence.
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Chapter 11 Conflict and Negotiation in the Workplace 343
Bargaining-Zone Model of Negotiations
The negotiation process moves each party along a continuum with an area of poten-
tial overlap called the bargaining zone . 50 Exhibit 11.5 displays one possible bargaining-
zone situation. This linear diagram illustrates a purely win-lose situation—one side’s
gain will be the other’s loss. However, the bargaining-zone model can also be applied
to situations in which both sides potentially gain from the negotiations. As this model
illustrates, the parties typically establish three main negotiating points. The initial-offer
point is the team’s opening offer to the other party. This may be its best expectation
or a pie-in-the-sky starting point. The target point is the team’s realistic goal or expec-
tation for a final agreement. The resistance point is the point beyond which the team
will make no further concessions.
The parties begin negotiations by describing their initial-offer point for each item on
the agenda. In most cases, the participants know that this is only a starting point that will
change as both sides offer concessions. In win-lose situations, neither the target nor the
resistance point is revealed to the other party. However, people try to discover the other
side’s resistance point because this knowledge helps them determine how much they
can gain without breaking off negotiations. When the parties have a win-win orientation,
on the other hand, the objective is to find a creative solution that keeps both parties close
to their initial-offer points. They hope to find an arrangement by which each side loses
relatively little value on some issues and gains significantly more on other issues.
Situational Influences on Negotiations
The effectiveness of negotiating depends on both the situation and the behaviors of
the negotiators. Four of the most important situational factors are location, physical
setting, time, and audience.
Exhibit 11.5 Bargaining-Zone Model of Negotiations
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344 Part Three Team Processes
Location It is easier to negotiate on your own turf because you are familiar with
the negotiating environment and are able to maintain comfortable routines. 51 Also,
there is no need to cope with travel-related stress or depend on others for resources
during the negotiation. Of course, you can’t walk out of negotiations as easily when
on your own turf, but this is usually a minor issue. Considering these strategic benefits
of home turf, many negotiators agree to neutral territory. Phone calls, videoconfer-
ences, and other forms of information technology potentially avoid territorial issues,
but skilled negotiators usually prefer the media richness of face-to-face meetings.
Frank Lowy, cofounder of retail property giant Westfield Group, says that telephones
are “too cold” for negotiating. “From a voice I don’t get all the cues I need. I go by
touch and feel and I need to see the other person.” 52
Physical Setting The physical distance between the parties and formality of the
setting can influence their orientation toward each other and the disputed issues. So
can the seating arrangements. People who sit face-to-face are more likely to develop
a win-lose orientation toward the conflict situation. In contrast, some negotiation
groups deliberately intersperse participants around the table to convey a win-win
orientation. Others arrange the seating so that both parties face a whiteboard, reflect-
ing the notion that both parties face the same problem or issue.
Time Passage and Deadlines The more time people invest in negotiations,
the stronger is their commitment to reaching an agreement. This increases the
motivation to resolve the conflict, but it also fuels the escalation of commitment
problems, described in Chapter 7. For example, the more time put into negotia-
tions, the stronger the tendency to make unwarranted concessions so that the
negotiations do not fail.
Time deadlines may be useful when they motivate the parties to complete nego-
tiations. However, time pres sures are usually a liability in negotiations. 53 One prob-
lem is that time pressure inhibits a problem-solving conflict-handling style because
the parties have less time to exchange information or present flexible offers. Nego-
tiators under time pressure also process information less effectively, so they have
less creative ability to discover a win-win solution to
the conflict. There is also anecdotal evidence that nego-
tiators make excessive concessions and soften their
demands more rapidly as the deadline approaches.
Audience Characteristics Most negotiators have au-
diences—anyone with a vested interest in the negotiation
outcomes, such as executives, other team members, or
the general public. Negotiators tend to act differently
when their audience observes the negotiation or has de-
tailed information about the process, compared to situa-
tions in which the audience sees only the end results. 54
When the audience has direct surveillance over the pro-
ceedings, negotiators tend to be more competitive, less
willing to make concessions, and more likely to engage
in political tactics against the other party. This “hard-
line” behavior shows the audience that the negotiator is
working for their interests. With the audience watching,
the negotiator also has more interest in saving face.
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Chapter 11 Conflict and Negotiation in the Workplace 345
Negotiator Skills
Negotiator skills play an important role in resolving conflict. Four of the most impor-
tant skills are setting goals, gathering information, communicating effectively, and
making concessions.
Preparation and Goal Setting Research consistently reports that people have
more favorable negotiation results when they prepare for the negotiation and set
goals. 55 In particular, negotiators should carefully think through their initial-offer,
target, and resistance points. They need to consider alternative strategies in case the
negotiation fails. Negotiators also need to check their underlying assumptions, as well
as goals and values. Equally important is the need to research what the other party
wants from the negotiation. “You have to be prepared every which way about the
people, the subject, and your fallback position,” advises Paul Tellier, the former pres-
ident of Bombardier, Inc. “Before walking into the room for the actual negotiation,
I ask my colleagues to throw some curve balls at me,” he says. 56
Gathering Information “Seek to understand before you seek to be understood.”
This popular philosophy from management guru Stephen Covey applies to effective
negotiations. It means that we should spend more time listening closely to the other
party and asking for details. 57 One way to improve the information-gathering process
is to have a team of people participate in negotiations. Asian companies tend to have
large negotiation teams for this purpose. 58 With more information about the oppo-
nent’s interests and needs, negotiators are better able to discover low-cost conces-
sions or proposals that will satisfy the other side.
Communicating Effectively Effective negotiators communicate in a way that
maintains effective relationships between the parties. Specifically, they minimize so-
cioemotional conflict by focusing on issues rather than people. Effective negotiators
also avoid irritating statements such as “I think you’ll agree that this is a generous of-
fer.” Third, effective negotiators are masters of persuasion. They structure the content
of their message so that it is accepted by others, not merely understood. 59
Making Concessions Concessions are important because they (1) enable the
parties to move toward the area of potential agreement, (2) symbolize each party’s
motivation to bargain in good faith, and (3) tell the other party of the relative impor-
tance of the negotiating items. 60 However, concessions move the parties toward
agreement only under certain conditions. 61 First, concessions need to be labeled—the
other party needs to be aware that your action is a concession, that this concession is
costly to you, and that it is beneficial to the other party. Second, concessions should
be accompanied by an expectation that the other party should reciprocate. In fact,
when there is a lack of trust, a concession should be contingent on a specific recipro-
cal action by the other party. Finally, concessions should be given in installments,
not all at once. The rationale is that people experience more positive emotions from
two smaller concessions than they would if those concessions were combined into
one larger concession. For example, rather than making one concession to complete
the project a month earlier than initially offered, you first offer to finish the work
three weeks earlier and then later make a concession to complete it an additional
week earlier.
How many concessions should you make, and when should you make them?
This varies with the other party’s expectations and the level of trust between you
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346 Part Three Team Processes
and the other party. For instance, many Chinese negotiators are wary of people who
change their position during the early stages of negotiations. Similarly, some writers
warn that Russian negotiators tend to view concessions as a sign of weakness, rather
than a sign of trust. 62 Generally, the best strategy is to be moderately tough and give
just enough concessions to communicate sincerity and motivation to resolve the
conflict. 63 Being too tough can undermine relations between the parties; giving too
many concessions implies weakness and encourages the other party to use power
and resistance.
Third-Party Conflict Resolution
Most of this chapter has focused on people directly involved in a conflict, yet many dis-
putes in organizational settings are resolved with the assistance of the manager respon-
sible for the feuding parties or of some other third party. Third-party conflict resolution
is any attempt by a relatively neutral person to help conflicting parties resolve their
differences. There are generally three types of third-party dispute resolution activities:
arbitration, inquisition, and mediation. These activities can be classified by their levels of
control over the process and control over the decision (see Exhibit 11.6 ). 64
• Arbitration. Arbitrators have high control over the final decision but low control
over the process. Executives engage in this strategy by following previously
agreed-on rules of due process, listening to arguments from the disputing em-
ployees, and making a binding decision. Arbitration is applied as the final stage
of grievances by unionized employees in many countries, but it is also becoming
more common in nonunion conflicts.
• Inquisition. Inquisitors control all discussion about the conflict. Like arbitrators,
they have high decision control because they choose the form of conflict resolu-
tion. However, they also have high process control because they choose which
information to examine and how to examine it, and they generally decide how
the conflict resolution process will be handled.
Level of
process
control
Low
Low
Level of decision control
High
High
Mediation
Arbitration
Inquisition
Exhibit 11.6
Types of Third-Party
Intervention
third-party conflict
resolution
Any attempt by a rela-
tively neutral person to
help conflicting parties
resolve their differences.
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Chapter 11 Conflict and Negotiation in the Workplace 347
• Mediation. Mediators have high control over the intervention process. In fact,
their main purpose is to manage the process and context of interaction between
the disputing parties. However, the parties make the final decision about how
to resolve their differences. Thus, mediators have little or no control over the
conflict resolution decision.
Choosing the Best Third-Party Intervention Strategy
Team leaders, executives, and co-workers regularly intervene in disputes between em-
ployees and departments. Sometimes they adopt a mediator role; other times they serve
as arbitrators. Occasionally, they begin with one approach and then switch to another.
However, research suggests that people in positions of authority (e.g., managers) usually
adopt an inquisitional approach, whereby they dominate the intervention process as
well as make a binding decision. 65 Managers prefer the inquisition approach because it
is consistent with the decision-oriented nature of managerial jobs, gives them control
over the conflict process and outcome, and tends to resolve disputes efficiently.
However, the inquisitional approach to third-party conflict resolution is usually the
least effective in organizational settings. 66 One problem is that leaders who take an in-
quisitional role tend to collect limited information about the problem, so their imposed
decision may produce an ineffective solution to the conflict. Another problem is that
employees often view inquisitional procedures and outcomes as unfair because they
have little control over this approach. In particular, the inquisitional approach poten-
tially violates several practices required to support procedural justice (see Chapter 5).
Which third-party intervention is most appropriate in organizations? The answer
partly depends on the situation, such as the type of dispute, the relationship between
the manager and employees, and cultural values such as power distance. 67 But gener-
ally speaking, for everyday disagreements between two employees, the mediation ap-
proach is usually best because it gives employees more responsibility for resolving
their own disputes. The third-party representative merely establishes an appropriate
context for conflict resolution. Although not as efficient as other strategies, mediation
potentially offers the highest level of employee satisfaction with the conflict process
and outcomes. 68 When employees cannot resolve their differences through mediation,
arbitration seems to work best because the predetermined rules of evidence and other
processes create a higher sense of procedural fairness. 69 Moreover, arbitration is pre-
ferred where the organization’s goals should take priority over individual goals.
Alternative Dispute Resolution Rather than battle each other in court or exter-
nal arbitration, the U.S. Air Force and its civilian staff have resolved most workplace
conflicts quickly and with improved mutual understanding through alternative dis-
pute resolution (ADR). “The parties, in essence, maintain control over the [ADR]
process and its outcome,” explains Air Mobility Command civilian programs branch
chief Diana Hendrix. Some Air Force bases retain a mediator to identify issues and
explore options with the parties without imposing a solution. Other bases use peer
review panels, consisting of four or six union and nonunion employees who examine
facts, listen to the parties, and make a final binding decision. But even with these
formal third-party systems in place, Hendrix explains that supervisors are the first
line of defense in resolving workplace conflict. “Ultimately, it’s about Air Force em-
ployees and supervisors resolving conflicts in an efficient and effective manner so
they can continue performing the Air Force mission of supporting and defending the
United States of America,” she says. 70
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348 Part Three Team Processes
The U.S. Air Force has joined a growing list of organizations that have taken third-
party resolution one step further through an alternative dispute resolution (ADR)
process (for employees only, also called internal dispute resolution or employee dispute
resolution ). ADR includes third-party dispute resolution in an orderly sequence. ADR
typically begins with a meeting between the employee and employer to clarify and
negotiate their differences. If this fails, a mediator is brought in to help the parties
reach a mutually agreeable solution. If mediation fails, the parties submit their case to
an arbitrator, whose decision may be either binding or voluntarily accepted by the
employer. Although most ADR systems rely on professional arbitrators, some firms,
such as Eastman Kodak and some U.S. Air Force bases, prefer peer arbitration, which
includes a panel of co-workers and managers who are not involved in the dispute. 72
Whether resolving conflict through third-party dispute resolution or direct dialogue,
we need to recognize that many solutions come from the sources of conflict that were
identified earlier in this chapter. This may seem obvious, but in the heat of conflict,
people often focus on each other rather than the underlying causes. Recognizing con-
flict sources is the role of effective leadership, which is discussed in the next chapter.
Redress at USPS Over the past 15 years, the United States Postal Service (USPS) has applied evidence-
based management practices to discover the best approach for resolving employee disputes, specifi-
cally equal employment opportunity complaints between staff members and their direct supervisors.
The program began as a pilot project in the Florida Panhandle region using professional mediators,
while another variation (using employees trained in mediation) was tested in upstate New York. USPS
also compared the traditional facilitation approach, in which mediators actively move the parties toward
settlement, with the transformative approach, in which both parties are given more power and recogni-
tion to resolve their own disputes. The emerging mediation process, called REDRESS (Resolve Employ-
ment Disputes, Reach Equitable Solutions Swiftly), adopts the transformative approach with external
professional mediators. The employee may bring a representative or engage in the process alone. The
USPS employment mediation program is now the world’s largest and has received favorable recogni-
tion from conflict resolution experts.71
alternative dispute
resolution (ADR)
An orderly process
of third-party dispute
resolution, typically
including mediation
followed by arbitration.
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349
Chapter Summary
toward the other side. The conflict process often escalates
through a series of episodes.
Organizational behavior experts have identified several
conflict-handling styles: problem solving, forcing, avoiding,
yielding, and compromising. People who use problem solv-
ing have a win-win orientation. Other styles, particularly
forcing, assume a win-lose orientation. In general, people
gravitate toward one or two preferred conflict-handling
styles that match their personality, personal and cultural
values, and past experience. However, the best style de-
pends on various characteristics of the situation.
Structural approaches to conflict management include
emphasizing superordinate goals, reducing differentia-
tion, improving communication and understanding,
reducing interdependence, increasing resources, and
clarifying rules and procedures.
Negotiation occurs whenever two or more conflicting
parties attempt to resolve their divergent goals by rede-
fining the terms of their interdependence. Negotiations
are influenced by several situational factors, including
location, physical setting, time passage and deadlines,
and audience. Important negotiator behaviors include
preparation and goal setting, gathering information,
communicating effectively, and making concessions.
Third-party conflict resolution is any attempt by a rela-
tively neutral person to help the parties resolve their differ-
ences. The three main forms of third-party dispute resolution
are mediation, arbitration, and inquisition. Managers tend to
use an inquisition approach, although mediation and arbi-
tration are more appropriate, depending on the situation.
Conflict is the process in which one party perceives that
his or her interests are being opposed or negatively affect ed
by another party. For many years, conflict was viewed as
undesirable and counterproductive. There is evidence
that conflict can produce undesirable outcomes such as
lower job satisfaction, team cohesion, and knowledge
sharing as well as higher organizational politics and turn-
over. However, experts later formed the opinion that
organizations suffer from too little as well as too much
conflict. Research reports that moderate conflict can im-
prove decision making, organizational responsiveness to
the environment, and team cohesion (when conflict is
with sources outside the team).
The current perspective involves distinguishing con-
structive conflict from relationship conflict. The former
focuses on issues and a logical evaluation of ideas, whereas
the latter pays attention to interpersonal incompatibilities
and flaws. Although the ideal would be to encourage
constructive conflict and minimize relationship conflict,
relationship conflict tends to emerge in most constructive-
conflict episodes. However, relationship conflict is less likely
to dominate when the parties are emotionally intelligent,
have a cohesive team, and have supportive team norms.
The conflict process model begins with the six struc-
tural sources of conflict: incompatible goals, differentia-
tion (different values and beliefs), interdependence, scarce
resources, ambiguous rules, and communication prob-
lems. These sources lead one or more parties to perceive
a conflict and to experience conflict emotions. This, in
turn, produces manifest conflict, such as hostile behaviors
alternative dispute resolution
(ADR), p. 348
conflict, p. 328
constructive conflict, p. 330
negotiation, p. 342
relationship conflict,
p. 330
third-party conflict resolution, p. 346
win-lose orientation, p. 337
win-win orientation, p. 336
Key Terms
ployees will work cooperatively and be happier at
Creative Toys. Discuss the merits and limitations of
the CEO’s policy.
3. Conflict among managers emerged soon after a
French company acquired a Swedish firm. The
Swedes perceived the French management as hier-
archical and arrogant, whereas the French thought
1. Distinguish constructive conflict from relationship
conflict, and explain how to apply the former with
minimal levels of the latter.
2. The chief executive officer of Creative Toys, Inc.,
read about cooperation in Japanese companies and
vowed to bring the same philosophy to the com-
pany. The goal is to avoid all conflict so that em-
Critical Thinking Questions
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Case Study 11.1 TAMARACK INDUSTRIES
David J. Cherrington, Brigham Young University
Tamarack Industries manufactures motorboats pri-
marily used for waterskiing. During the summer
months, a third production line is normally created
to help meet the heavy summer demand. This third
line is usually created by assigning the experienced
workers to all three lines and hiring college students
who are home for summer vacation to complete the
crews. In the past, however, experienced workers
resented having to break up their teams to form a
third line. They also resented having to work with a
bunch of college kids and complained that the kids
were slow and arrogant.
The foreman, Dan Jensen, decided to try a differ-
ent strategy this summer and have all the college stu-
dents work on the new line. He asked Mark Allen to
supervise the new crew because Mark claimed that
he knew everything about boats and could perform
every job “with my eyes closed.” Mark was happy to
accept the new job and participated in selecting his
own crew. Mark’s crew was called “the Greek Team”
because all the college students were members of a
fraternity or sorority named with Greek letters.
Mark spent many hours in training to get his group
running at full production. The college students
learned quickly, and by the end of June their produc-
tion rate was up to standard, with an error rate that
was only slightly above normal. To simplify the learn-
ing process, Dan Jensen assigned the Greek Team long
production runs that generally consisted of 30 to 40
identical units. Thus the training period was shortened
350
the Swedes were naive and cautious and lacked an
achievement orientation. Describe ways to reduce
dysfunctional conflict in this situation.
4. This chapter describes three levels of interdepen-
dence that exist in interpersonal and intergroup re-
lationships. Identify examples of each level in your
work or school activities. How do these three levels
affect potential conflict for you?
5. Jane has just been appointed as purchasing manager
of Tacoma Technologies Corp. The previous pur-
chasing manager, who recently retired, was known
for his “winner-take-all” approach to suppliers. He
continually fought for more discounts and was skep-
tical about any special deals that suppliers would
propose. A few suppliers refused to do business with
Tacoma Technologies, but senior management was
confident that the former purchasing manager’s ap-
proach minimized the company’s costs. Jane wants
to try a more collaborative approach to working
with suppliers. Will her approach work? How
should she adopt a more collaborative approach in
future negotiations with suppliers?
6. You are a special assistant to the commander-in-chief
of a peacekeeping mission to a war-torn part of the
world. The unit consists of a few thousand peace-
keeping troops from the United States, France, India,
and four other countries. The troops will work to-
gether for approximately one year. What strategies
would you recommend to improve mutual under-
standing and minimize conflict among these troops?
7. The chief operating officer (COO) has noticed that
production employees in the company’s Mexican
manufacturing operations are unhappy with some of
the production engineering decisions made by engi-
neers in the company’s headquarters in Chicago. At
the same time, the engineers complain that produc-
tion employees aren’t applying their engineering
specifications correctly and don’t understand why
those specifications were put in place. The COO be-
lieves that the best way to resolve this conflict is to
have a frank and open discussion between some of
the engineers and employees representing the Mexi-
can production crew. This open-dialogue approach
worked well recently among managers in the com-
pany’s Chicago headquarters, so it should work
equally well between the engineers and production
staff. On the basis of your knowledge of communi-
cation and mutual understanding as a way to resolve
conflict, discuss the COO’s proposal.
8. Describe the inquisitional approach to resolving dis-
putes between employees or work units. Discuss its
appropriateness in organizational settings, including
the suitability of its use with a multigenerational
workforce.
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and errors were reduced. Shorter production runs
were assigned to the experienced teams.
By the middle of July, a substantial rivalry had
been created between the Greek Team and the older
workers. At first, the rivalry was good-natured. But
after a few weeks, the older workers became resent-
ful of the remarks made by the college students. The
Greek Team often met its production schedules with
time to spare at the end of the day for goofing around.
It wasn’t uncommon for someone from the Greek
Team to go to another line pretending to look for ma-
terials just to make demeaning comments. The expe-
rienced workers resented having to perform all the
shorter production runs and began to retaliate with
sabotage. They would sneak over during breaks and
hide tools, dent materials, install something crooked,
and in other small ways do something that would
slow production for the Greek Team.
Dan felt good about his decision to form a separate
crew of college students, but when he heard reports of
sabotage and rivalry, he became very concerned. Be-
cause of complaints from the experienced workers,
Dan equalized the production so that all of the crews
had similar production runs. The rivalry, however,
did not stop. The Greek Team continued to finish
early and flaunt their performance in front of the
other crews.
One day the Greek Team suspected that one of
their assemblies was going to be sabotaged during
the lunch break by one of the experienced crews.
By skillful deception, they were able to substitute
an assembly from the other experienced line for
theirs. By the end of the lunch period, the Greek
Team was laughing wildly because of their decep-
tion, while one experienced crew was very angry
with the other one.
Dan Jensen decided that the situation had to be
changed and announced that the job assignments be-
tween the different crews would be shuffled. The em-
ployees were told that when they appeared for work
the next morning, the names of the workers assigned
to each crew would be posted on the bulletin board.
The announcement was not greeted with much en-
thusiasm, and Mark Allen decided to stay late to try
to talk Dan out of his idea. Mark didn’t believe the
rivalry was serious enough for this type of action, and
he suspected that many of the college students would
quit if their team was broken up.
Discussion Questions
1. What are the signs (symptoms) of conflict in this
case?
2. Use the conflict model to (a) identify the struc-
tural causes of conflict and (b) discuss the escala-
tion of conflict described in this case.
3. If you were Dan Jensen, what action would you
take in this situation?
Sources: Reprinted with permission of David Chemington,
Brigham Young University.
Case Study 11.2 THE NEW HEAT AT FORD
Soon after Alan Mulally became
Ford Motor Co.’s new chief ex-
ecutive, he and two senior engi-
neers endured a grueling critique by Consumer Reports
magazine’s automobile testing staff of the company’s
current lineup of vehicles. After a couple of hours
on the firing line, Ford’s engineers started interrupt-
ing the testers in attempts to defend their products.
Sensing the building conflict, Mulally handed the
two engineers pads and pens. “You know what? Let’s
just listen and take notes,” he said. This episode, and
many others, illustrated that Ford has become a
troubled organization where people are more fo-
cused on fighting each other than on learning from
disagreement.
This BusinessWeek case study describes several
conflict-related events that Mulally has experienced
or created since his arrival at Ford. It also provides
Ford’s history of generating or avoiding conflict epi-
sodes. Read the full text of this BusinessWeek article at
www.mhhe.com/mcshane5e , and prepare for the
discussion questions below.
351
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http://www.mhhe.com/mcshane5e
Discussion Questions
1. Identify the main conditions at Ford described
in this case study that seem to have generated
dysfunctional conflict.
2. What has Mulally done to reduce or remove
these sources of conflict? In what ways has he
encouraged or created more conflict?
3. The opening paragraphs of this case study de-
scribe a conflict incident involving Consumer Re-
ports staff and two senior Ford engineers. Discuss
this incident in terms of the conflict model. Was
Mulally’s intervention in this incident a good
idea? Why or why not?
Source: D. Kiley, “The New Heat at Ford,” BusinessWeek , 4 June
2007, pp. 32–38.
352
Class Exercise 11.3 THE CONTINGENCIES OF CONFLICT HANDLING
Gerard A. Callanan and David F. Perri, West Chester University of Pennsylvania
PURPOSE This exercise is designed to help you
understand the contingencies of applying conflict-
handling styles in organizational settings.
INSTRUCTIONS
1. Participants will read each of the five scenarios
presented below and select the most appropriate
response from among the five alternatives. Each
scenario has a correct response for that situation.
2. (Optional) The instructor may ask each student to
complete the Dutch Test for Conflict Handling
self-assessment in this chapter (Self-Assessment
11.5) or a similar instrument. This instrument will
provide an estimate of your preferred conflict-
handling style.
3. As a class, participants give their feedback on
the responses to each of the scenarios, with the
instructor guiding discussion on the contextual
factors embodied in each scenario. For each sce-
nario, the class should identify the response se-
lected by the majority. In addition, participants
will discuss how they decided on the choices
they made and the contextual factors they took
into account in making their selections.
4. (Optional) Students will compare their responses
to the five scenarios with their results from the
conflict-handling self-assessment. Discussion
will focus on the extent to which each person’s
preferred conflict-handling style influenced her
or his alternatives in this activity and on the
implications of this style preference for manag-
ing conflict in organizations.
SCENARIO 1
SETTING: You are a manager of a division in the
accounting department of a large eastern U.S. bank.
Nine exempt-level analysts and six nonexempt cleri-
cal staff report to you. Recently, one of your analysts,
Jane Wilson, has sought the bank’s approval for tu-
ition reimbursement for the cost of an evening MBA
program specializing in organizational behavior. The
bank normally encourages employees to seek ad-
vanced degrees on a part-time basis. Indeed, through
your encouragement, nearly all of the members of
your staff are pursuing additional schoolwork. You
consult the bank’s policy manual and discover that
two approvals are necessary for reimbursement—
yours and that of the manager of training and devel-
opment, Kathy Gordon. Further, the manual states
that approval for reimbursement will only be granted
if the coursework is “reasonably job related.” Based
on your review of the matter, you decide to approve
Jane’s request for reimbursement. However, Kathy
Gordon rejects it outright by claiming that course-
work in organizational behavior is not related to an
accounting analyst position. She states that the bank
will only reimburse the analyst for a degree in either
accounting or finance. In your opinion, however, the
interpersonal skills and insights to be gained from a
degree in organizational behavior are job-related and
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353
SCENARIO 2
SETTING: You are the vice president of a relatively
large division (80 employees) in a medium-sized
consumer products company. Due to the recent
turnover of minority staff, your division has fallen
behind in meeting the company’s goal for equal
employment opportunity (EEO) hiring. Because of
a scarcity of qualified minority candidates, it appears
that you may fall further behind in achieving stated
EEO goals.
Although you are aware of the problem, you be-
lieve that the low level of minority hiring is due to
increased attrition in minority staff as well as the
lack of viable replacement candidates. However,
the EEO officer believes that your hiring criteria
are too stringent, resulting in the rejection of mi-
nority candidates with the basic qualifications to do
can also benefit the employee in future assignments.
The analyst job requires interaction with a variety of
individuals at different levels in the organization, and
it is important that interpersonal and communication
skills be strong.
After further discussion it becomes clear that you
and Kathy Gordon have opposite views on the mat-
ter. Since both of you are at the same organization
level and have equal status, it appears that you are at
an impasse. Although the goal of reimbursement is
important, you are faced with other pressing demands
on your time. In addition, the conflict has diverted
the attention of your work group away from its pri-
mary responsibilities. Because the school term is
about to begin, it is essential that you and Kathy
Gordon reach a timely agreement to enable Jane to
pursue her coursework.
ACTION ALTERNATIVES FOR SCENARIO 1:
Please indicate your first (1) and second (2) choices
from among the following alternatives by writing the
appropriate number in the space provided.
the job. You support the goals and principles of
EEO; however, you are concerned that the hiring
of less-qualified candidates will weaken the perfor-
mance of your division. The EEO officer believes
that your failure to hire minority employees is dam-
aging to the company in the short term because
corporate goals will not be met, and in the long
term because it will restrict the pool of minority
candidates available for upward mobility. Both of
you regard your concerns as important. Further,
you recognize that both of you have the company’s
best interests in mind and that you have a mutual
interest in resolving the conflict.
ACTION ALTERNATIVES FOR SCENARIO 2:
Please indicate your first (1) and second (2) choices
from among the following alternatives by writing the
appropriate number in the space provided.
Action alternative Ranking (1st and 2d)
1. You go along with Kathy Gordon’s view and advise Jane Wilson to select either accounting
or finance as a major for her MBA.
2. You decide to withdraw from the situation completely and tell Jane to work it out with Kathy
Gordon on her own.
3. You decide to take the matter to those in higher management levels and argue forcefully for
your point of view. You do everything in your power to ensure that a decision will be made in
your favor.
4. You decide to meet Kathy Gordon halfway in order to reach an agreement. You advise Jane
to pursue her MBA in accounting or finance, but also recommend she minor in organizational
behavior by taking electives in that field.
5. You decide to work more closely with Kathy Gordon by attempting to get a clear as well as
flexible policy written that reflects both of your views. Of course, this will require a significant
amount of your time.
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354
Action alternative Ranking (1st and 2d)
1. You conclude that the whole problem is too complex an issue for you to handle right now.
You put it on the “back burner” and decide to reconsider the problem at a later date.
2. You believe that your view outweighs the perspective of the EEO officer. You decide to argue
your position more vigorously and hope that your stance will sway the EEO officer to agree
with your view.
3. You decide to accept the EEO officer’s view. You agree to use less stringent selection criteria
and thereby hire more minority employees.
4. You give in to the EEO officer somewhat by agreeing to relax your standards a little bit. This
would allow slightly more minority hiring (but not enough to satisfy the EEO goal) and could
cause a small reduction in the overall performance of your division.
5. You try to reach a consensus that addresses each of your concerns. You agree to work
harder at hiring more minority applicants and request that the EEO officer agree to help find
the most qualified minority candidates available.
SCENARIO 3
SETTING: You are the manager in charge of the
financial reporting section of a large insurance com-
pany. It is the responsibility of your group to make
periodic written and oral reports to senior manage-
ment regarding the company’s financial perfor-
mance. The company’s senior management has
come to rely on your quick and accurate dissemina-
tion of financial data as a way to make vital decisions
in a timely fashion. This has given you a relatively
high degree of organizational influence. You rely on
various operating departments to supply you with
financial information according to a preestablished
reporting schedule.
In two days, you must make your quarterly pre-
sentation to the company’s board of directors. How-
ever, the claims department has failed to supply you
with several key pieces of information that are criti-
cal to your presentation. You check the reporting
schedule and realize that you should have had the
information two days ago. When you call Bill Jones,
the claims department manager, he informs you that
he cannot possibly have the data to you within the
next two days. He states that other pressing work
has a higher priority. Although you explain the criti-
cal need for these data, he is unwilling to change his
position. You believe that your presentation is vital
to the company’s welfare and explain this to Bill
Jones. Although Bill has less status than you, he has
been known to take advantage of individuals who
are unwilling or unable to push their point of view.
With your presentation less than two days away, it is
critical that you receive information from the claims
department within the next 24 hours.
ACTION ALTERNATIVES FOR SCENARIO 3:
Please indicate your first (1) and second (2) choices
from among the following alternatives by writing the
appropriate number in the space provided.
Action alternative Ranking (1st and 2d)
1. Accept the explanation from Bill Jones and try to get by without the figures by using your
best judgment as to what they would be.
2. Tell Bill Jones that unless you have the data from his department on your desk by tomorrow
morning, you will be forced to go over his head to compel him to give you the numbers.
3. Meet Bill Jones halfway by agreeing to receive part of the needed figures and using your
own judgment on the others.
4. Try to get your presentation postponed until a later date, if possible.
5. Forget about the short-term need for information and try to achieve a longer-term solution,
such as adjusting the reporting schedule to better accommodate your mutual needs.
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SCENARIO 4
SETTING: You are the production manager of a
medium-sized building products company. You con-
trol a production line that runs on a three-shift basis.
Recently, Ted Smith, the materials handling man-
ager, asked you to accept a different packaging of
the raw materials for the production process than
what has been customary. He states that new ma-
chinery he has installed makes it much easier to pro-
vide the material in 100-pound sacks instead of the
50-pound bags that you currently receive. Ted fur-
ther explains that the provision of the material in the
50-pound bags would put an immense strain on his
operation, and he therefore has a critical need for
you to accept the change. You know that accepting
materials in the new packaging will cause some mi-
nor disruption in your production process but should
not cause long-term problems for any of the three
shifts. However, you are a little annoyed by the pro-
posed change because Ted did not consult with you
before he installed the new equipment. In the past,
you and he have been open in your communication.
You do not think that this failure to consult you rep-
resents a change in your relationship.
Because you work closely with Ted, it is essential
that you maintain the harmonious and stable work-
ing relationship that you have built over the past few
years. In addition, you may need some help from
him in the future, since you already know that your
operation will have special material requirements in
about two months. You also know that Ted has influ-
ence at higher levels of the organization.
ACTION ALTERNATIVES FOR SCENARIO 4:
Please indicate your first (1) and second (2) choices
from among the following alternatives by writing the
appropriate number in the space provided.
Action alternative Ranking (1st and 2d)
1. Agree to accept the raw material in the different format.
2. Refuse to accept the material in the new format because it would cause a disruption in
your operation.
3. Propose a solution where you accept material in the new format during the first shift but
not during the second and third.
4. Tell Ted Smith that you do not wish to deal with the issue at this time but that you will
consider his request and get back to him at a later date.
5. Tell Ted Smith of your concern regarding his failure to consult with you before installing
new equipment. Inform him that you wish to find longer-term solutions to the conflict
between you and him.
SCENARIO 5
SETTING: You are employed as supervisor of the
compensation and benefits section in the human re-
sources department of a medium-sized pharmaceuti-
cal company. Your staff of three clerks is responsible
for maintaining contacts with the various benefits
providers and answering related questions from the
company’s employees. Your section shares secre-
tarial, word processing, and copier resources with
the training and development section of the depart-
ment. Recently, a disagreement has arisen between
you and Beth Hanson, the training and development
supervisor, over when the secretarial staff should
take their lunches. Beth would like the secretarial
staff to take their lunches an hour later to coincide
with the time most of her people go to lunch. You
know that the secretaries do not want to change their
lunchtimes. Further, the current time is more conve-
nient for your staff.
At this time, you are hard-pressed to deal with the
situation. You have an important meeting with the
provider of dental insurance in two days. It is critical
that you are well prepared for this meeting, and
these other tasks are a distraction.
ACTION ALTERNATIVES FOR SCENARIO 5:
Please indicate your first (1) and second (2) choices
from among the following alternatives by writing the
appropriate number in the space provided.
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356
Action alternative Ranking (1st and 2d)
1. Take some time over the next day and propose a solution whereby three days a week the
secretaries take their lunch at the earlier time and two days at the later.
2. Tell Beth Hanson you will deal with the matter in a few days, after you have addressed the
more pressing issues.
3. Let Beth Hanson have her way by agreeing to a later lunch hour for the secretarial staff.
4. Flat out tell Beth Hanson that you will not agree to a change in the secretaries’ lunchtime.
5. Devote more time to the issue. Attempt to achieve a broad-based consensus with Beth
Hanson that meets her needs as well as yours and those of the secretaries.
Source: G. A. Callanan and D. F. Perri, “Teaching Conflict Management Using a Scenario-Based Approach,” Journal of Education for
Business , 81 ( January–February 2006), pp. 131–139. Reprinted with permission of the Helen Dwight Reid Educational Foundation.
Published by Heldref Publications, 1319 Eighteenth St., NW, Washington, D.C. 20036-1802. Copyright © 2006.
Team Exercise 11.4 UGLI ORANGE ROLE PLAY
PURPOSE This exercise is designed to help you
understand the dynamics of interpersonal and inter-
group conflict as well as the effectiveness of negotia-
tion strategies under specific conditions.
MATERIALS The instructor will distribute infor-
mation on roles for Dr. Roland, Dr. Jones, and a few
observers. Ideally, each negotiation should occur in
a private area away from other negotiations.
INSTRUCTIONS
1. The instructor will divide the class into an even
number of teams of three people each, with one
participant left over for each team formed (e.g., six
observers if there are six teams). One-half of the
teams will take the role of Dr. Roland, and the
other half will be Dr. Jones. The instructor will dis-
tribute information about the roles after these
teams have been formed.
2. Members within each team are given 10 minutes
(or some other time limit stated by the instruc-
tor) to learn their roles and decide on a negotiat-
ing strategy.
3. After reading their roles and discussing strategy,
each Dr. Jones team is matched with a Dr. Roland
team to conduct negotiations. Observers will re-
ceive observation forms from the instructor, and
two observers will be assigned to watch the paired
teams during prenegotiations and subsequent
negotiations.
4. As soon as Roland and Jones reach agreement
or at the end of the time allotted for the negotia-
tion (whichever comes first), the Roland and
Jones teams report to the instructor for further
instruction.
5. At the end of the exercise, the class will con-
gregate to discuss the negotiations. Observers,
negotiators, and instructors will then discuss
their observations and experiences and the
implications for conflict management and
negotiation.
Source: This exercise was developed by Robert J. House, Wharton
Business School, University of Pennsylvania. A similar incident is
also attributed to earlier writing by R. R. Blake and J. S. Mouton.
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Self-Assessment 11.5
THE DUTCH TEST FOR CONFLICT HANDLING
PURPOSE This self-assessment is designed to help
you identify your preferred conflict-management
style.
INSTRUCTIONS Read each of the statements below
and circle the response that you believe best reflects
your position regarding each statement. Then use the
scoring key in Appendix B at the end of the book to
calculate your results for each conflict-management
style. This exercise should be completed alone so that
you can assess yourself honestly without concerns of
social comparison. Class discussion will focus on the
different conflict-management styles and the situations
in which each is most appropriate.
When I have a conflict at work, I do the following:
Not at
all
▼
Very
much
▼
1. I give in to the wishes of the other party. 1 2 3 4 5
2. I try to realize a middle-of-the-road solution. 1 2 3 4 5
3. I push my own point of view. 1 2 3 4 5
4. I examine issues until I find a solution that really satisfies
me and the other party.
1 2 3 4 5
5. I avoid confrontation about our differences. 1 2 3 4 5
6. I concur with the other party. 1 2 3 4 5
7. I emphasize that we have to find a compromise solution. 1 2 3 4 5
8. I search for gains. 1 2 3 4 5
9. I stand for my own and other’s goals and interests. 1 2 3 4 5
10. I avoid differences of opinion as much as possible. 1 2 3 4 5
11. I try to accommodate the other party. 1 2 3 4 5
12. I insist that we both give in a little. 1 2 3 4 5
13. I fight for a good outcome for myself. 1 2 3 4 5
14. I examine ideas from both sides to find a mutually
optimal solution.
1 2 3 4 5
15. I try to make differences seem less severe. 1 2 3 4 5
16. I adapt to the parties’ goals and interests. 1 2 3 4 5
17. I strive whenever possible toward a 50-50 compromise. 1 2 3 4 5
18. I do everything to win. 1 2 3 4 5
19. I work out a solution that serves my own and the other’s
interests as well as possible.
1 2 3 4 5
20. I try to avoid a confrontation with the other. 1 2 3 4 5
Dutch Test for Conflict Handling
Source: C. K. W. de Dreu, A. Evers, B. Beersma, E. S. Kluwer, and A. Nauta, “A Theory-Based Measure of Conflict Management Strategies in the
Workplace,” Journal of Organizational Behavior 22 (2001), pp. 645–668. Copyright © 2001 John Wiley & Sons Limited. Reproduced with permission.
After reading this chapter, if you feel that you need additional information, see www.mhhe.com/
mcshane5e for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/
When Anne Sweeney took the reins of the ABC television network a few years ago,
pundits said she was accepting the toughest job in the industry. The network was
floundering in fourth place; only two of its programs were in the top 20; several new
high-potential programs fizzled; employee morale was as low as the network’s ratings.
Sweeney successfully built the Disney, Nickelodeon, and FX cable networks, but many
observers wondered whether anyone could lead ABC television out of its deep hole.
Yet in less than four years under Sweeney, ABC was
competing for the top spot with popular programs such
as Desperate Housewives, Lost, and Grey’s Anatomy.
How did this remarkable turnaround occur? Sweeney
credits ABC’s managers and creative talent, but these
people point to Sweeney’s leadership as the key factor that
unleashed their potential. Disney Channel Entertainment
president Rich Ross suggests that Sweeney avoids
micromanaging her staff but applies her analytic skill to
challenge managers to think through their ideas. “[She]
asks the tough questions. . . . It trains you to anticipate it,”
says Ross. Fred Silverman agrees: “[News Corporation
founder] Rupert Murdoch was once quoted as saying
she has a steel fist in a velvet glove,” says the famed
television producer and executive. “There’s great resolve
and strength there.”
Others emphasize Sweeney’s supportive leadership
style. “She has been incredibly supportive through all
the ups and downs of rebuilding a network schedule,
which made it possible for us to achieve so much so
fast,” says ABC Entertainment president Stephen
McPherson. Albert Cheng echoes this view: “Anne makes
it a point to engage with everyone,” says the Disney
Digital Media executive vice president. “She’s very
concerned about the people who work for her.”
Still others say that Sweeney’s leadership strength
is her ability to engage staff in a vision of the future.
“Anne draws upon her optimism and her grace in
keeping her focus firmly on the future—the future of our own organization and the
future of the entire industry,” says ABC News president David Westin. “In short, none
of us could wish for a better leader, through whatever may come our way.” 1
Employees and experts alike say that Anne Sweeney’s
leadership has been a decisive factor in the remarkable
turnaround of the ABC television network.
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12
Leadership in
Organizational Settings
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Define leadership and shared leadership.
2. List the main competencies of effective
leaders and discuss the limitations of the
competency perspective of leadership.
3. Describe the people-oriented and task-
oriented leadership styles.
4. Outline the path-goal theory of leadership.
5. Summarize leadership substitutes theory.
6. Distinguish transformational leadership from
transactional and charismatic leadership.
7. Describe the four elements of
transformational leadership.
8. Describe the implicit leadership
perspective.
9. Discuss similarities and differences in the
leadership styles of women and men.
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360 Part Three Team Processes
What Is Leadership?
What makes someone an effective leader? This question has challenged great thinkers
for most of written history, and it is the focus of this chapter. The opening vignette,
which described the leadership of Anne Sweeney, cochair of Disney Media Networks
and president of Disney-ABC Television Group, offers a few clues. Sweeney’s leadership
is viewed from several perspectives, all of which are important. The opening vignette
also reveals that leadership is no longer yesteryear’s image of the command-and-control
boss. Although Sweeney steps in when the situation requires, followers say her success
as a leader comes, in part, from trusting them to do their jobs without micromanage-
ment. Also notice that Sweeney’s leadership is a contrast to the heroic leadership model;
she routinely directs the spotlight of success toward her staff rather than herself.
A few years ago, 54 leadership experts from 38 countries reached a consensus that
leadership is about influencing, motivating, and enabling others to contribute toward
the effectiveness and success of the organizations of which they are members. 2
Leaders apply various forms of influence—particularly persuasion and related tactics
that build commitment—to ensure that followers have the motivation and role clarity to
achieve specified goals. Leaders also arrange the work environment—such as allocating
resources and altering communication patterns—so that employees can achieve organi-
zational objectives more easily.
Shared Leadership
Leadership isn’t restricted to the executive suite. Anyone in the organization may be
a leader in various ways and at various times. 3 This view is known as shared
leadership or the leaderful organization . From this emerging view, leadership is plural,
not singular. It doesn’t operate out of one formally assigned position or role. Instead,
a team or work unit may have several leaders at the same time. One team member
might champion the introduction of new technology, while a co-worker keeps the
work unit focused on key performance indicators. Some organizations, such as SEMCO
SA and W. L. Gore & Associates, depend on shared leadership because there are no
formal leaders. 4 Anyone can be a leader, if he or she has an idea or vision that other
employees are eager to follow.
Shared leadership flourishes in organizations where the formal leaders are willing
to delegate power and encourage employees to take initiative and risks without fear
of failure (i.e., a learning orientation culture). Shared leadership also calls for a col-
laborative rather than internally competitive culture because employees take on
shared leadership roles when co-workers support them for their initiative. Further-
more, shared leadership lacks formal authority, so it operates best when employees
learn to influence others through their enthusiasm, logical analysis, and involvement
of co-workers in their idea or vision.
Consider, for example, the emergence of shared leadership at Rolls-Royce Engine
Services in Oakland, California. As part of its employee engagement initiative, the
Learning
Objectives
After reading the next two sections, you should be able to:
1. Define leadership and shared leadership.
2. List the main competencies of effective leaders and discuss the
limitations of the competency perspective of leadership.
leadership
Influencing, motivating,
and enabling others
to contribute toward
the effectiveness
and success of the
organizations of which
they are members.
shared leadership
The view that leadership
is broadly distributed,
rather than assigned to
one person, such that
people within the team
and organization lead
each other.
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Chapter 12 Leadership in Organizational Settings 361
Shared Leadership at W. L. Gore & Associates W. L. Gore &
Associates has no formal (called vertical ) leaders. Instead, the
company’s 7,000 associates work with champions of projects and
other initiatives because they are willing to follow them. “There is
no positional power,” explains a Gore team leader. “You are only a
leader if teams decide to respect and follow you.” Diane Davidson
discovered this extreme version of shared leadership when the
newly hired apparel industry sales executive asked her “starting
sponsor” to identify her boss. The sponsor replied that she had no
boss and eventually advised her to “stop using the B-word.”
Davidson initially thought the company must have formal manag-
ers who downplayed their position, but she soon realized that Gore
really is a shared leadership organization. “Your team is your boss,
because you don’t want to let them down,” says Davidson.
“Everyone’s your boss, and no one’s your boss.” In fact, when Gore
employees are asked in annual surveys “Are you a leader?” more
than 50 percent of them answer “Yes.”5
aircraft engine repair facility involved employees directly with clients, encouraged
weekly huddles for information sharing, and accepted employee requests for less
micromanagement. Employees not only experienced higher levels of engagement
and empowerment; they also accepted more leadership responsibilities. “I saw peo-
ple around me, all front-line employees, who were leaders,” says a machine program-
mer at the Rolls-Royce Oakland plant. “They weren’t actually leading the company,
but they were people you would listen to and follow. We didn’t have titles, but people
had respect for what we did.” 6
Leadership is one of the most researched, and possibly the most complex, topics
in organizational behavior. This has resulted in an enormous volume of leadership
literature, most of which can be organized into five perspectives: competency, behav-
ioral, contingency, transformational, and implicit. 7 Although some of these perspec-
tives are currently more popular than others, each helps us to more fully understand
the complex issue of leadership. This chapter explores each of these five perspectives
of leadership. In the final section, we also consider cross-cultural and gender issues in
organizational leadership.
Competency Perspective of Leadership
Since the beginning of recorded civilization, people have been interested in the
personal characteristics that distinguish great leaders from the rest of us. 8 In the
6th century BCE, the Chinese philosopher Lao-tzu described effective leaders as
selfless, honest, fair, and hardworking. The Greek philosopher Plato claimed that
great leaders have wisdom and a superior capacity for logical thinking. For the
past century, hundreds of leadership studies have tried to empirically identify the
traits of effective leaders. However, a major review in the late 1940s concluded
that no consistent list of traits could be distilled from this research. This conclusion
was revised a decade later, suggesting that a few traits are associated with effective
leaders. 9 These paltry findings caused many scholars to give up their search for
personal characteristics that distinguish effective leaders.
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362 Part Three Team Processes
Over the past two decades, leadership researchers and consultants have returned to
the notion that effective leaders possess specific personal characteristics. 10 The earlier
research was apparently plagued by methodological problems, lack of theoretical foun-
dation, and inconsistent definitions of leadership. The emerging work has identified
several leadership competencies, that is, skills, knowledge, aptitudes, and other personal
characteristics that lead to superior performance (see Chapter 2). The main categories
of leadership competencies are listed in Exhibit 12.1 and described below: 11
• Personality. Most of the Big Five personality dimensions (see Chapter 2) are
associated with effective leadership to some extent, but the strongest predictors
are high levels of extroversion (outgoing, talkative, sociable, and assertive) and
conscientiousness (careful, dependable, and self-disciplined). With high extro-
version, effective leaders are comfortable having an influential role in social
settings. With higher conscientiousness, effective leaders set higher personal
goals for themselves and are more motivated to pursue those goals.
• Self-concept. Successful leaders have a positive self-evaluation, including high
self-esteem, self-efficacy, and internal locus of control (see Chapter 2). 12 They
are confident in their leadership skills and ability to achieve objectives. These
leaders also have a complex, internally consistent, and clear self-concept. They
know themselves and act consistently with that self-concept. These characteris-
tics are essential for authentic leadership, which refers to how well leaders know
themselves (have a clear self-concept) and act consistently with that self-concept
(such as being consistent with their personal values). 13
• Drive. Related to their high conscientiousness and positive self-concept, successful
leaders have a high need for achievement (see Chapter 5). This drive represents
the inner motivation that leaders possess to pursue their goals and encourage
others to move forward with theirs. Drive inspires inquisitiveness, an action orien-
tation, and boldness to take the organization or team into uncharted waters. In
fact, Larry Bossidy, the former CEO of Honeywell and Allied Signal, says that
drive is so important for leadership that “if you have to choose between someone
with a staggering IQ . . . and someone with a lower IQ who is absolutely deter-
mined to succeed, you’ll always do better with the second person.” 14
• Integrity. Integrity involves truthfulness and consistency of words and actions, quali-
ties that are related to honesty and ethicality. Leaders have a high moral capacity to
judge dilemmas on the basis of sound values and to act accordingly. Notice that in-
tegrity is ultimately based on the leader’s values, which provide an anchor for con-
sistency. Several large-scale studies have reported that integrity and honesty are the
most important characteristics of effective leaders. 15 Unfortunately, numerous sur-
veys report that employees don’t trust their leaders and don’t think they have integ-
rity. For example, only 2 percent of Americans have a great deal of trust in the
people who run big companies; 30 percent say they don’t trust these leaders at all! 16
• Leadership motivation. Effective leaders are motivated to lead others. They have
a strong need for socialized power, meaning that they want power as a means to
accomplish organizational objectives and similar good deeds. This contrasts
with a need for personalized power, which is the desire to have power for personal
gain or for the thrill one might experience from wielding power over others (see
Chapter 5). 17 Leadership motivation is also necessary because, even in collegial
firms, leaders are in contests for positions further up the hierarchy. Effective
leaders thrive rather than wither in the face of this competition. 18
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Chapter 12 Leadership in Organizational Settings 363
• Knowledge of the business. Effective leaders possess tacit and explicit knowledge
of the business environment in which they operate.
• Cognitive and practical intelligence. Leaders have above-average cognitive ability
to process enormous amounts of information. Leaders aren’t necessarily geniuses;
rather, they have a superior ability to analyze a variety of complex alternatives
and opportunities. Furthermore, leaders have practical intelligence; they are
able to use their knowledge of the business to solve real-world problems by
adapting to, shaping, or selecting appropriate environments. Unlike cognitive
intelligence, which is assessed by performance on clearly defined problems with
sufficient information and usually one best answer, practical intelligence is as-
sessed by performance in real-world settings, where problems are poorly de-
fined, information is missing, and more than one solution may be plausible. 19
• Emotional intelligence. Effective leaders have a high level of emotional intelli-
gence. 20 They are able to perceive and express emotion, assimilate emotion in
thought, understand and reason with emotion, and regulate emotion in them-
selves and others (see Chapter 4).
Competency Perspective Limitations and
Practical Implications
Although the competency perspective is gaining popularity (again), it has a few limi-
tations. 21 First, it assumes that all effective leaders have the same personal character-
istics that are equally important in all situations. This is probably a false assumption;
leadership is far too complex to have a universal list of traits that apply to every con-
dition. Some competencies might not be important all the time. Second, alternative
Exhibit 12.1
Competencies of
Effective Leaders
Leadership competency Description
Personality The leader’s higher levels of extroversion (outgoing,
talkative, sociable, and assertive) and conscientiousness
(careful, dependable, and self-disciplined).
Self-concept The leader’s self-beliefs and positive self-evaluation about his
or her own leadership skills and ability to achieve objectives.
Drive The leader’s inner motivation to pursue goals.
Integrity The leader’s truthfulness and tendency to translate words
into deeds.
Leadership motivation The leader’s need for socialized power to accomplish team
or organizational goals.
Knowledge of the business The leader’s tacit and explicit knowledge about the com-
pany’s environment, enabling the leader to make more
intuitive decisions.
Cognitive and practical intelligence The leader’s above-average cognitive ability to process
information (cognitive intelligence) and ability to solve
real-world problems by adapting to, shaping, or selecting
appropriate environments (practical intelligence).
Emotional intelligence The leader’s ability to monitor his or her own and others’
emotions, discriminate among them, and use the inform a-
tion to guide his or her thoughts and actions.
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364 Part Three Team Processes
combinations of competencies may be equally successful; two people with different
sets of competencies might be equally good leaders. Third, the competency perspec-
tive views leadership as something within a person, yet experts emphasize that lead-
ership is relational. People are effective leaders because of their favorable relationships
with followers, so effective leaders cannot be identified without considering the qual-
ity of these relationships. 22
As we will learn later in this chapter, several leadership researchers have also
warned that some personal characteristics might influence only our perception that
someone is a leader, not whether the individual really makes a difference to the orga-
nization’s success. People who exhibit self-confidence, extroversion, and other traits
are called leaders because they fit our prototype of an effective leader. Or we might
see a successful person, call that person a leader, and then attribute unobservable
traits that we consider essential for great leaders.
The competency perspective of leadership does not necessarily imply that leader-
ship is a talent acquired at birth rather than developed throughout life. On the con-
trary, competencies indicate only leadership potential, not leadership performance.
People with these characteristics become effective leaders only after they have devel-
oped and mastered the necessary leadership behaviors. People with somewhat lower
leadership competencies may become very effective leaders because they have lever-
aged their potential more fully.
Learning
Objectives
After reading the next two sections, you should be able to:
3. Describe the people-oriented and task-oriented leadership styles.
4. Outline the path-goal theory of leadership.
5. Summarize leadership substitutes theory.
Behavioral Perspective of Leadership
In the 1940s and 1950s, leadership experts at several universities launched an inten-
sive research investigation to answer the question “What behaviors make leaders ef-
fective?” Questionnaires were administered to subordinates, asking them to rate their
supervisors on a large number of behaviors. This study distilled two clusters of lead-
ership behaviors from literally thousands of leadership behavior items. 23
One cluster represents people-oriented behaviors. This cluster includes behaviors
such as showing mutual trust and respect for subordinates, demonstrating a genuine
concern for their needs, and having a desire to look out for their welfare. Leaders
with a strong people-oriented style listen to employee suggestions, do personal favors
for employees, support their interests when required, and treat employees as equals.
The other cluster represents a task-oriented leadership style and includes behaviors
that define and structure work roles. Task-oriented leaders assign employees to
specific tasks, clarify their work duties and procedures, ensure that they follow com-
pany rules, and push them to reach their performance capacity. They establish stretch
goals and challenge employees to push beyond those high standards.
Choosing Task- versus People-Oriented Leadership
Should leaders be task-oriented or people-oriented? This is a difficult question to answer
because each style has its advantages and disadvantages. Recent evidence suggests that
both styles are positively associated with leader effectiveness, but differences are often
apparent only in very high or very low levels of each style. Generally, absenteeism,
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Chapter 12 Leadership in Organizational Settings 365
grievances, turnover, and job dissatisfaction are higher among employees who work with
supervisors with very low levels of people-oriented leadership. Job performance is lower
among employees who work for supervisors with low levels of task-oriented leadership. 24
Research suggests that university students value task-oriented instructors because they
want clear objectives and well-prepared lectures that abide by the unit’s objectives. 25
One problem with the behavioral leadership perspective is that the two categories
are broad generalizations that mask specific behaviors within each category. For in-
stance, task-oriented leadership includes planning work activities, clarifying roles,
and monitoring operations and performance. Each of these clusters of activities are
fairly distinct and likely have different effects on employee well-being and perfor-
mance. A second concern is that the behavioral approach assumes that high levels of
both styles are best in all situations. In reality, the best leadership style depends on
the situation. 26 On a positive note, the behavioral perspective lays the foundation for
two of the main leadership styles—people-oriented and task-oriented—found in many
contemporary leadership theories. These contemporary theories adopt a contingency
perspective, which is described next.
Contingency Perspective of Leadership
The contingency perspective of leadership is based on the idea that the most appro-
priate leadership style depends on the situation. Most (although not all) contingency
leadership theories assume that effective leaders must be both insightful and flexi-
ble. 27 They must be able to adapt their behaviors and styles to the immediate situa-
tion. This isn’t easy to do, however. Leaders typically have a preferred style. It takes
considerable effort for leaders to choose and enact different styles to match the situa-
tion. As we noted earlier, leaders must have high emotional intelligence so they can
diagnose the circumstances and match their behaviors accordingly.
Path-Goal Theory of Leadership
Several contingency theories have been proposed over the years, but path-goal
leadership theory has withstood scientific critique better than the others. Indeed,
one recent study found that the path-goal theory explained more about effective leader-
ship than did another popular perspective of leadership (transformational, which we
describe later in this chapter). 28 Path-goal leadership theory has its roots in the expec-
tancy theory of motivation (see Chapter 5). 29 Early research incorporated expectancy
theory into the study of how leader behaviors influence employee perceptions of ex-
pectancies (paths) between employee effort and performance (goals). Out of this early
work was born path-goal theory as a contingency leadership model.
Path-goal theory states that effective leaders ensure that employees who perform
their jobs well receive more valued rewards than those who perform poorly. Effective
leaders also provide the information, support, and other resources necessary to help
employees complete their tasks. 30 In other words, path-goal theory advocates servant
leadership . 31 Servant leaders do not view leadership as a position of power; rather,
they are coaches, stewards, and facilitators. Leadership is an obligation to understand
employee needs and to facilitate their work performance. Servant leaders ask, “How
can I help you?” rather than expect employees to serve them. “The role of the leader
is to create environments where others can do great work—and then to get out of the
way,” suggests Microsoft executive Steve Vamos. Similarly, when Financial Planning
Association president Jim Barnash was recently asked about his leadership style, he
replied: “I try to live a servant-leader’s life, which means being more interested in
your needs than my needs.” 32
servant leadership
The view that leaders
serve followers, rather
than vice versa; leaders
help employees fulfill
their needs and are
coaches, stewards, and
facilitators of employee
performance.
path-goal leadership
theory
A contingency theory of
leadership based on the
expectancy theory of
motivation that relates
several leadership styles
to specific employee
and situational
contingencies.
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366 Part Three Team Processes
Employee
contingencies
• Skills and experience
• Locus of control
Environmental
contingencies
• Task structure
• Team dynamics
Leader behaviors
• Directive
• Supportive
• Participative
• Achievement-oriented
Leader effectiveness
• Employee motivation
• Employee satisfaction
• Leader acceptance
Exhibit 12.2
Path-Goal
Leadership Theory
Path-Goal Leadership Styles Exhibit 12.2 presents the path-goal theory of lead-
ership. This model specifically highlights four leadership styles and several contin-
gency factors leading to three indicators of leader effectiveness. The four leadership
styles are: 33
• Directive. This leadership style consists of clarifying behaviors that provide a
psychological structure for subordinates. The leader clarifies performance goals,
the means to reach those goals, and the standards against which performance
will be judged. It also includes judicious use of rewards and disciplinary actions.
Directive leadership is the same as task-oriented leadership, described earlier,
and echoes our discussion in Chapter 2 on the importance of clear role percep-
tions in employee performance.
• Supportive. In this style, the leader’s behaviors provide psychological support for
subordinates. The leader is friendly and approachable; makes the work more
pleasant; treats employees with equal respect; and shows concern for the status,
needs, and well-being of employees. Supportive leadership is the same as people-
oriented leadership, described earlier, and reflects the benefits of social support
to help employees cope with stressful situations.
• Participative. Participative leadership behaviors encourage and facilitate subordi-
nate involvement in decisions beyond their normal work activities. The leader
consults with employees, asks for their suggestions, and takes these ideas into
serious consideration before making a decision. Participative leadership relates
to involving employees in decisions.
• Achievement-oriented. This leadership style emphasizes behaviors that encourage
employees to reach their peak performance. The leader sets challenging goals,
expects employees to perform at their highest level, continuously seeks im-
provement in employee performance, and shows a high degree of confidence
that employees will assume responsibility and accomplish challenging goals.
Achievement-oriented leadership applies goal-setting theory as well as positive
expectations in self-fulfilling prophecy.
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Chapter 12 Leadership in Organizational Settings 367
The path-goal model contends that effective leaders are capable of selecting the
most appropriate behavioral style (or styles) for each situation. Leaders might simul-
taneously use two or more styles. In the opening vignette to this chapter, for example,
Disney-ABC executive Anne Sweeney was applauded for her supportive as well as
achievement-oriented leadership styles. Furthermore, she is both supportive and par-
ticipative in situations where these leadership styles are most appropriate.
Contingencies of Path-Goal Theory As a contingency theory, path-goal theory
states that each of the four leadership styles will be effective in some situations but
not in others. The path-goal leadership model specifies two sets of situational
variables that moderate the relationship between a leader’s style and effectiveness:
(1) employee characteristics and (2) characteristics of the employee’s work envi-
ronment. Several contingencies have already been studied within the path-goal
framework, and the model is open for more variables in the future. 35 However,
only four contingencies are reviewed here (see Exhibit 12.3 ).
• Skill and experience. A combination of directive and supportive leadership is
best for employees who are (or perceive themselves to be) inexperienced and
unskilled. 36 Directive leadership gives subordinates information about how to
accomplish the task, whereas supportive leadership helps them cope with the
uncertainties of unfamiliar work situations. Directive leadership is detrimental
when employees are skilled and experienced because it introduces too much
supervisory control.
• Locus of control. Recall from Chapter 2 that people with an internal locus of
control believe that they have control over their work environment. Conse-
quently, these employees prefer participative and achievement-oriented lead-
ership styles and may become frustrated with a directive style. In contrast,
Striving to Become the Starbucks of Sushi Douglas Foo has high
expectations of himself and of his executive team at Apex-Pal Interna-
tional. “When we opened our first Sakae Sushi restaurant, we didn’t
want it to be just another restaurant, we wanted it to be a global brand,”
says the award-winning Singaporean entrepreneur who launched the
Sakae Sushi chain of restaurants a decade ago. Foo’s achievement-
oriented leadership style is apparent when he says: “We want to be the
Starbucks of sushi. We want to be everywhere.” So far, his executive
team seems to be delivering on Foo’s high expectations. Sakae Sushi
now boasts more than 80 outlets across seven countries in Asia, and it
recently opened restaurants in New York City. “My proudest achieve-
ment to date would be my team of driven people. They are the reason
why my business is accelerating and they are the biggest value in the
company,” says Foo. Along with his achievement-oriented leadership
style, Foo is considered a supportive boss. He emphasizes family values,
holds Family Days, and hands out vouchers so that staff can bring their
families to the restaurant to celebrate birthdays. “He’s a great boss and
treats us more like his family,” says Apex-Pal’s marketing executive,
Joyce Lee.34
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368 Part Three Team Processes
people with an external locus of control believe that their performance is
due more to luck and fate, so they tend to be more satisfied with directive
and supportive leadership.
• Task structure. Leaders should adopt the directive style when the task is nonrou-
tine, because this style minimizes role ambiguity that tends to occur in complex
work situations (particularly for inexperienced employees). 37 The directive style is
ineffective when employees have routine and simple tasks because the manager’s
guidance serves no purpose and may be viewed as unnecessarily close control.
Employees in highly routine and simple jobs may require supportive leadership
to help them cope with the tedious nature of the work and lack of control over the
pace of work. Participative leadership is preferred for employees performing non-
routine tasks because the lack of rules and procedures gives them more discretion
to achieve challenging goals. The participative style is ineffective for employees in
routine tasks because they lack discretion over their work.
• Team dynamics. Cohesive teams with performance-oriented norms act as a substi-
tute for most leader interventions. High team cohesion substitutes for supportive
leadership, whereas performance-oriented team norms substitute for directive
and possibly achievement-oriented leadership. Thus, when team cohesiveness is
low, leaders should use the supportive style. Leaders should apply a directive
style to counteract team norms that oppose the team’s formal objectives. For ex-
ample, the team leader may need to use legitimate power if team members have
developed a norm to “take it easy” rather than get a project completed on time.
Path-goal theory has received more research support than other contingency lead-
ership models, but the evidence is far from complete. A few contingencies (e.g., task
structure) have limited research support. Other contingencies and leadership styles in
the path-goal leadership model haven’t been investigated at all (as noted by the ques-
tion marks in Exhibit 12.3). 38 Another concern is that as path-goal theory expands,
the model may become too complex for practical use. Few people would be able to
remember all the contingencies and the appropriate leadership styles for those con-
tingencies. In spite of these limitations, path-goal theory remains a relatively robust
contingency leadership theory.
Other Contingency Theories
At the beginning of this chapter we noted that numerous leadership theories have
developed over the years. Most of them are found in the contingency perspective of
Exhibit 12.3 Selected Contingencies of Path-Goal Theory
Achievement-
Directive Supportive Participative oriented
Employee contingencies
Skill and experience Low Low High High
Locus of control External External Internal Internal
Environmental contingencies
Task structure Nonroutine Routine Nonroutine ???
Team dynamics Negative norms Low cohesion Positive norms ???
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Chapter 12 Leadership in Organizational Settings 369
leadership. Some overlap with the path-goal model in terms of leadership styles, but
most use simpler and more abstract contingencies. We will very briefly mention only
two here because of their popularity and historical significance to the field.
Situational Leadership Theory One of the most popular contingency theories
among practitioners is the situational leadership theory (SLT) also called the life-cycle
theory of leadership, developed by Paul Hersey and Ken Blanchard. 39 SLT suggests
that effective leaders vary their style with the “readiness” of followers. (An earlier ver-
sion of the model called this “maturity.”) Readiness refers to the employee’s or work
team’s ability and willingness to accomplish a specific task. Ability refers to the extent
to which the follower has the skills and knowledge to perform the task without the
leader’s guidance. Willingness refers to the follower’s motivation and commitment to
perform the assigned task. The model compresses these distinct concepts into a single
situational condition.
The situational leadership model also identifies four leadership styles—telling, selling,
participating, and delegating—that Hersey and Blanchard distinguish in terms of the
amount of directive and supportive behavior provided. For example, “telling” has high
task behavior and low supportive behavior. The situational leadership model has four
quadrants, with each quadrant showing the leadership style that is most appropriate
under different circumstances.
In spite of its popularity, several studies and at least three reviews have concluded
that the situational leadership model lacks empirical support. 40 Only one part of the
model apparently works, namely, that leaders should use “telling” (i.e., directive style)
when employees lack motivation and ability. (Recall that this is also documented in
path-goal theory.) The model’s elegant simplicity is attractive and entertaining, but
most parts don’t represent reality very well.
Fiedler’s Contingency Model Fiedler’s contingency model , developed by
Fred Fiedler and his associates, is the earliest contingency theory of leadership. 41
According to this model, leader effectiveness depends on whether the person’s natu-
ral leadership style is appropriately matched to the situation. The theory examines
two leadership styles that essentially correspond to the previously described people-
oriented and task-oriented styles. Unfortunately, Fiedler’s model relies on a question-
naire that does not measure either leadership style very well.
Fiedler’s model suggests that the best leadership style depends on the level of
situational control, that is, the degree of power and influence that the leader possesses
in a particular situation. Situational control is affected by three factors in the follow-
ing order of importance: leader-member relations, task structure, and position
power. 42 Leader-member relations refers to how much employees trust and respect the
leader and are willing to follow his or her guidance. Task structure refers to the clarity
or ambiguity of operating procedures. Position power is the extent to which the leader
possesses legitimate, reward, and coercive power over subordinates. These three con-
tingencies form the eight possible combinations of situation favorableness from the
leader’s viewpoint. Good leader-member relations, high task structure, and strong
position power create the most favorable situation for the leader because he or she
has the most power and influence under these conditions.
Fiedler has gained considerable respect for pioneering the first contingency theory of
leadership. However, his theory has fared less well. As mentioned, the leadership-style
scale used by Fiedler has been widely criticized. There is also no scientific justification
for placing the three situational control factors in a hierarchy. Moreover, the concept of
situational leadership
theory
A commercially popular
but poorly supported
leadership model stating
that effective leaders
vary their style (telling,
selling, participating,
delegating) with the
“readiness” of followers.
Fiedler’s contingency
model
Developed by Fred
Fiedler, an early
contingency leadership
model that suggests
that leader effectiveness
depends on whether the
person’s natural leader-
ship style is appropriately
matched to the situation.
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370 Part Three Team Processes
leader-member relations is really an indicator of leader effectiveness (as in path-goal
theory) rather than a situational factor. Finally, the theory considers only two leadership
styles, whereas other models present a more complex and realistic array of behavior
options. These concerns explain why the theory has limited empirical support. 43
Changing the Situation to Match the Leader’s Natural Style Fiedler’s contin-
gency model may have become a historical footnote, but it does make an important
and lasting contribution by suggesting that leadership style is related to the individu-
al’s personality and, consequently, is relatively stable over time. Leaders might be
able to alter their style temporarily, but they tend to use a preferred style in the long
term. More recent scholars have also proposed that leadership styles are “hardwired”
more than most contingency leadership theories assume. 44
If leadership style is influenced by a person’s personality, organizations should
engineer the situation to fit the leader’s dominant style, rather than expect leaders to
change their style with the situation. A directive leader might be assigned inexperi-
enced employees who need direction rather than seasoned people who work less ef-
fectively under a directive style. Alternatively, companies might transfer supervisors to
workplaces where their dominant style fits best. For instance, directive leaders might
be parachuted into work teams with counterproductive norms, whereas leaders who
prefer a supportive style should be sent to departments in which employees face
work pressures and other stressors.
Leadership Substitutes
So far, we have looked at theories that recommend using different leadership styles in
various situations. But one theory, called leadership substitutes , identifies conditions
that either limit the leader’s ability to influence subordinates or make a particular lead-
ership style unnecessary. The literature identifies several conditions that possibly sub-
stitute for task-oriented or people-oriented leadership. For example, performance-based
reward systems keep employees directed toward organizational goals, so they might
replace or reduce the need for task-oriented leadership. Task-oriented leadership is
also less important when employees are skilled and experienced. These propositions
are similar to path-goal leadership theory; namely, directive leadership is unnecessary—
and may be detrimental—when employees are skilled or experienced. 45
Some research suggests that effective leaders help team members learn to lead
themselves through leadership substitutes; in other words, co-workers substitute for
leadership in high-involvement team structures. 46 Co-workers instruct new employees,
thereby providing directive leadership. They also provide social support, which re-
duces stress among fellow employees. Teams with norms that support organizational
goals may substitute for achievement-oriented leadership, because employees
encourage (or pressure) co-workers to stretch their performance levels. 47
Self-leadership—the process of influencing oneself to establish the self-direction
and self-motivation needed to perform a task (see Chapter 6)—is another possible
leadership substitute. 48 Employees with high self-leadership set their own goals, rein-
force their own behavior, maintain positive thought processes, and monitor their own
performance, thereby managing both personal motivation and abilities. As employ-
ees become more proficient in self-leadership, they presumably require less supervi-
sion to keep them focused and energized toward organizational objectives.
The leadership substitutes model has intuitive appeal, but the evidence so far is
mixed. Some studies show that a few substitutes do replace the need for task- or
leadership substitutes
A theory identifying
contingencies that
either limit a leader’s
ability to influence
subordinates or make
a particular leadership
style unnecessary.
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Chapter 12 Leadership in Organizational Settings 371
people-oriented leadership, but others do not. The difficulties of statistically testing for
leadership substitutes may account for some problems, but a few writers contend that
the limited support is evidence that leadership plays a critical role regardless of the situ-
ation. 49 At this point, we can conclude that a few conditions such as self-directed work
teams, self-leadership, and reward systems might reduce the importance of task- or
people-oriented leadership but probably won’t completely replace leaders in these roles.
Learning
Objectives
After reading this section, you should be able to:
6. Distinguish transformational leadership from transactional and char-
ismatic leadership.
7. Describe the four elements of transformational leadership.
Transformational Perspective of Leadership
In the opening vignette to this chapter, ABC News president David Westin described
his boss, Disney-ABC executive Anne Sweeney, as an excellent leader because she
focuses on the future of the company and the industry. In fact, Sweeney is considered
an entrepreneurial visionary who experiments with new channels through which the
television industry delivers content. Under Sweeney’s leadership, ABC was the first
network to sign up shows for iTunes. It was also an innovator in online content,
including delivering ad-supported free streaming programs on the Internet. In fact,
Sweeney embodies the company’s unofficial motto: Create what’s next.
Through her vision, communication, and actions, Anne Sweeney is transforming
ABC as well as the television industry. In other words, she practices transforma-
tional leadership . Transformational leaders such as Anne Sweeney, Herb Kelleher
(Southwest Airlines), A. G. Lafley (Procter & Gamble), Carlos Ghosn (Renault/
Nissan), and Richard Branson (Virgin) dot the corporate landscape. These leaders are
agents of change. They create, communicate, and model a shared vision for the team
or organization, and they inspire followers to strive for that vision. 50
Transformational versus Transactional Leadership
Transformational leadership differs from transactional leadership . 51 The leadership
literature offers a confusing array of definitions for transactional leadership, but we
shall define it as helping organizations achieve their current objectives more effi-
ciently, such as by linking job performance to valued rewards and ensuring that em-
ployees have the resources needed to get the job done. The contingency and
behavioral theories described earlier adopt the transactional perspective because they
focus on leader behaviors that improve employee performance and satisfaction.
Transactional leadership is considered by some writers as “managing” or “doing
things right” because leaders concentrate on improving employee performance and
well-being. 52 In contrast, transformational leadership is about “leading”—changing the
organization’s strategies and culture so that they have a better fit with the surround-
ing environment. Transformational leaders are change agents who energize and di-
rect employees to a new set of corporate values and behaviors.
Organizations require both transactional and transformational leadership. 53 Transac-
tional leadership improves organizational efficiency, whereas transformational leadership
steers companies onto a better course of action. Transformational leadership is particu-
larly important in organizations that require significant alignment with the external
transformational
leadership
A leadership perspective
that explains how
leaders change teams
or organizations by
creating, communicating,
and modeling a vision
for the organization or
work unit and inspiring
employees to strive for
that vision.
transactional leadership
Leadership that helps
organizations achieve
their current objectives
more efficiently, such
as by linking job per-
formance to valued
rewards and ensuring
that employees have
the resources needed
to get the job done.
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372 Part Three Team Processes
environment. Unfortunately, too many leaders get trapped in the daily managerial ac-
tivities that represent transactional leadership. 54 They lose touch with the transforma-
tional aspect of effective leadership. Without transformational leaders, organizations
stagnate and eventually become seriously misaligned with their environments.
Transformational versus Charismatic Leadership
Another topic that has generated some confusion and controversy is the distinction be-
tween transformational and charismatic leadership. 55 Many researchers either use the words
interchangeably, as if they have the same meaning, or view charismatic leadership as an
essential ingredient of transformational leadership. Others take this view further by sug-
gesting that charismatic leadership is the highest degree of transformational leadership.
However, the emerging view, which this book adopts, comes from a third group of
experts who contend that charisma is distinct from transformational leadership. These
academics point out that charisma is a personal trait or relational quality that provides
referent power over followers, whereas transformational leadership is a set of behaviors
that people use to lead the change process. 56 Charismatic leaders might be transforma-
tional leaders; indeed, their personal power through charisma is a tool to change the
behavior of followers. However, some research points out that charismatic or “heroic”
leaders easily build allegiance in followers but do not necessarily change the organization.
Other research suggests that charismatic leaders produce dependent followers, whereas
transformational leaders have the opposite effect—they build follower empowerment,
which tends to reduce dependence on the leader. For example, one study reported a
negative relationship between charismatic leadership and the self-efficacy of followers. 57
The main point here is that transformational leaders are not necessarily charis-
matic. Alan G. Lafley, the CEO of Procter & Gamble, is not known for being charismatic,
but he has transformed the household goods company like no leader in recent mem-
ory. Similarly, IBM CEO Sam Palmisano speaks with humility yet continues to drive
IBM’s success. “I don’t have much curb appeal,” Palmisano says of his minimal cha-
risma, adding that IBM has more than 300,000 brilliant people to drive the organization.
“I just try to lead them and get them to come together around a common point of
Leading without Charisma Charisma is not a word that comes to mind
when seeing Alan George Lafley in action as a leader. Various sources
say that the Procter & Gamble (P&G) CEO is distinctly “unassuming,”
with “a humble demeanor that belies his status.” Lafley is so soft-spoken
that colleagues have to bend forward to hear him. One industry observer
declared that “if there were 15 people sitting around the conference table,
it wouldn’t be obvious that he was the CEO.” Lafley may lack charisma,
but that hasn’t stopped him from transforming the household products
company where his charismatic predecessor had failed (and was
ousted after just 18 months). Lafley’s consistent vision, as well as
symbolic and strategic actions toward a more customer-friendly and
innovative organization, have provided the direction and clarity that P&G
lacked. Importantly, Lafley also walks the talk; for 10 to 15 days each year,
he personally interviews and observes customers using P&G products in
their homes, from Germany to Venezuela. The result: P&G has become
the industry’s hotspot for innovation, its market share and profitability
have experienced sustained growth, and its stock price has soared.58
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Chapter 12 Leadership in Organizational Settings 373
Model
the vision
Communicate
the vision
Develop
a strategic
vision
Build
commitment
to the vision
Elements of
Transformational
Leadership
Exhibit 12.4
Elements of
Transformational
Leadership
view,” he explains. 59 In other words, Palmisano and Lafley lead by applying transfor-
mational leadership behaviors.
Elements of Transformational Leadership
There are several descriptions of transformational leadership, but most include the
following four elements: Create a strategic vision, communicate the vision, model the
vision, and build commitment toward the vision (see Exhibit 12.4 ).
Create a Strategic Vision Transformational leaders establish a vision of the
company’s future state that engages employees to achieve objectives they didn’t
think possible. These leaders shape a strategic vision of a realistic and attractive
future that bonds employees together and focuses their energy toward a superordi-
nate organizational goal. 60 A shared strategic vision represents the substance of
transformational leadership. It reflects a future for the company or work unit that is
ultimately accepted and valued by organizational members. “In essence, leadership
is about dreaming the impossible and helping followers achieve the same,” says
Nandan Nilekani, CEO of India’s information technology giant, Infosys. “More-
over, the dream has to be built on sound and context- invariant values to sustain the
enthusiasm and energy of people over a long time.” 61
Strategic vision creates a “higher purpose” or superordinate goal that energizes
and unifies employees. 62 A strategic vision might originate with the leader, but it is
just as likely to emerge from employees, clients, suppliers, or other stakeholders. A
shared strategic vision plays an important role in organizational effectiveness. 63 Visions
offer the motivational benefits of goal setting, but they are compelling future states that
bond employees and motivate them to strive for those objectives. Visions are typi-
cally described in a way that distinguishes them from the current situation yet makes
the goal both appealing and achievable.
Communicate the Vision If vision is the substance of transformational leader-
ship, communicating that vision is the process. CEOs say that the most important
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374 Part Three Team Processes
leadership quality is being able to build and share their vision for the organization.
“Part of a leader’s role is to set the vision for the company and to communicate that
vision to staff to get their buy-in,” explains Dave Anderson, president of WorkSafeBC
(the Workers’ Compensation Board of British Columbia, Canada). 64
Transformational leaders communicate meaning and elevate the importance of the
visionary goal to employees. They frame messages around a grand purpose with emo-
tional appeal that captivates employees and other corporate stakeholders. Framing
helps transformational leaders establish a common mental model so that the group or
organization will act collectively toward the desirable goal. 65 Transformational leaders
bring their visions to life through symbols, metaphors, stories, and other vehicles that
transcend plain language. Metaphors borrow images of other experiences, thereby
creating richer meaning of the vision that has not yet been experienced.
Model the Vision Transformational leaders not only talk about a vision; they enact
it. They “walk the talk” by stepping outside the executive suite and doing things that
symbolize the vision. 66 For example, when Anne Sweeney became president of Disney-
ABC Television Group, she put much effort into communicating her vision of the fu-
ture and ensuring that her actions were consistent with her words. “There was a lot of
uncertainty about who this new team was, what they were going to be about and how
the company would be managed,” she recalls. “My job was to let people know what my
management philosophy was and to not just talk the talk, but walk the walk.” 67
Leaders walk the talk through significant events such as visiting customers, moving
their offices closer to employees, and holding ceremonies to destroy outdated policy man-
uals. However, they also alter mundane activities—meeting agendas, dress codes, execu-
tive schedules—so that the activities are more consistent with the vision and its underlying
values. Modeling the vision is important because doing so legitimizes and demonstrates
what the vision looks like in practice. “As an executive, you’re always being watched by
employees, and everything you say gets magnified—so you teach a lot by how you con-
duct yourself,” advises Carl Bass, CEO of California software company Autodesk.
Modeling the vision is also important because it builds employee trust in the
leader. The greater the consistency between the leader’s words and actions, the more
employees will believe in and be willing to follow the leader. In fact, one survey re-
ported that leading by example is the most important characteristic of a leader.
“There are lots of people who talk a good story, but very few deliver one,” warns
Peter Farrell, founder and chairman of San Diego–based ResMed. “You’ve got to
mean what you say, say what you mean, and be consistent.” 68
Build Commitment toward the Vision Transforming a vision into reality re-
quires employee commitment. Transformational leaders build this commitment in
several ways. Their words, symbols, and stories build a contagious enthusiasm that
energizes people to adopt the vision as their own. Leaders demonstrate a “can do”
attitude by enacting their vision and staying on course. Their persistence and consis-
tency reflect an image of honesty, trust, and integrity. Finally, leaders build commit-
ment by involving employees in the process of shaping the organization’s vision.
Evaluating the Transformational Leadership Perspective
Transformational leaders do make a difference. Subordinates are more satisfied and
have higher affective organizational commitment under transformational leaders. They
also perform their jobs better, engage in more organizational citizenship behaviors,
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Chapter 12 Leadership in Organizational Settings 375
and make better or more creative decisions. One study of bank branches reported that
organizational commitment and financial performance seemed to increase where the
branch manager completed a transformational leadership training program. 69
Transformational leadership is currently the most popular leadership perspective,
but it faces a number of challenges. One problem is that some writers engage in
circular logic by defining transformational leadership by the leader’s success. 70 They
suggest that leaders are transformational when they successfully bring about change,
rather than when they engage in certain behaviors we call transformational. This
circular definition makes it impossible to determine whether transformational lead-
ership is effective. Another concern is that transformational leadership is usually
described as a universal rather than contingency-oriented model. Only very recently
have writers begun to explore the idea that transformational leadership is more valu-
able in some situations than others. 71 For instance, transformational leadership is
probably more appropriate when organizations need to adapt than when environ-
mental conditions are stable. Preliminary evidence suggests that the transformational
leadership perspective is relevant across cultures. However, there may be specific
elements of transformational leadership, such as the way visions are formed and
communicated, that are more appropriate in North America than in other cultures.
Learning
Objectives
After reading the next two sections, you should be able to:
8. Describe the implicit leadership perspective.
9. Discuss similarities and differences in the leadership styles of women
and men.
Implicit Leadership Perspective
The competency, behavior, contingency, and transformational leadership perspec-
tives make the basic assumption that leaders “make a difference.” Certainly, there is
evidence that senior executives do influence organizational performance. However,
leadership also involves followers’ perceptions about the characteristics and influence
of people they call leaders. This perceptual perspective of leadership is collectively
called implicit leadership theory . 72
Prototypes of Effective Leaders
Implicit leadership theory consists of two related concepts. The main part of this theory
states that everyone has leadership prototypes —preconceived beliefs about the features and
behaviors of effective leaders. These prototypes, which develop through socialization
within the family and society, 73 shape our expectations and acceptance of others as lead-
ers, and this in turn affects our willingness to serve as followers. In other words, we are
more willing to allow someone to influence us as a leader if that person looks and acts
like our prototype of a leader. For example, one recent study established that inherited
personality characteristics significantly influence the perception that someone is a
leader in a leaderless situation. 74 Such leadership prototypes not only support a person’s
role as leader; they also form or influence our perception of the leader’s effectiveness.
If the leader looks like and acts consistently with our prototype, we are more likely to
believe that the leader is effective. 75 This prototype comparison process occurs because
people have an inherent need to quickly evaluate individuals as leaders, yet leadership
effectiveness is often ambiguous and might not be apparent for a long time.
implicit leadership
theory
A theory stating that
people evaluate a
leader’s effectiveness
in terms of how well
that person fits pre-
conceived beliefs
about the features and
behaviors of effective
leaders (leadership
prototypes) and that
people tend to inflate
the influence of leaders
on organizational events.
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376 Part Three Team Processes
The Romance of Leadership
Along with relying on implicit prototypes of effective leaders, followers tend to dis-
tort their perception of the influence that leaders have on the environment. This
“romance of leadership” effect exists because in most cultures people want to believe
that leaders make a difference. Consider the experience of Ricardo Semler, the char-
ismatic CEO of Brazilian conglomerate SEMCO SA:
At the company, no matter what you do, people will naturally create and nurture a char-
ismatic fi gure,” Semler suggests. “The charismatic fi gure, on the other hand, feeds this;
it doesn’t just happen, and it is very diffi cult to check your ego at the door. The people
at SEMCO don’t look and act like me. They are not yes-men by any means. What is left,
however, is a certain feeling that has to do with the cult of personality. They credit me with
successes that are not my own, and they don’t debit me my mistakes. They give undue
importance to what I say, and I think that doesn’t go away. 76
There are two basic reasons why people inflate their perceptions of the leader’s
influence over the environment. 77 First, leadership is a useful way for us to simplify
life events. It is easier to explain organizational successes and failures in terms of the
leader’s ability than by analyzing a complex array of other forces. Second, there is a
strong tendency in the United States and other Western cultures to believe that life
events are generated more from people than from uncontrollable natural forces. 78
This illusion of control is satisfied by believing that events result from the rational
actions of leaders. In other words, employees feel better believing that leaders make
a difference, so they actively look for evidence that this is so.
One way that followers support their perceptions that leaders make a difference
is through fundamental attribution error (see Chapter 3). Research has found that
(at least in Western cultures) leaders are given credit or blame for the company’s
success or failure because employees do not readily see the external forces that also
influence these events. Leaders reinforce this belief by taking credit for organiza-
tional successes. 79
The implicit leadership perspective provides valuable advice to improve leader-
ship acceptance. It highlights the fact that leadership is a perception of followers as
much as the actual behaviors and formal roles of people calling themselves leaders.
Potential leaders must be sensitive to this fact, understand what followers expect, and
act accordingly. Individuals who do not make an effort to fit leadership prototypes
will have more difficulty bringing about necessary organizational change.
Cross-Cultural and Gender Issues in Leadership
Along with the five perspectives of leadership presented throughout this chapter,
cultural values and practices affect what leaders do. Culture shapes the leader’s
values and norms, which influence his or her decisions and actions. Cultural values
also shape the expectations that followers have of their leaders. An executive who
acts inconsistently with cultural expectations is more likely to be perceived as an
ineffective leader. Furthermore, leaders who deviate from those values may experi-
ence various forms of influence to get them to conform to the leadership norms and
expectations of the society. In other words, implicit leadership theory, described in
the previous section of this chapter, explains differences in leadership practices
across cultures.
Over the past few years, 150 researchers from dozens of countries have worked
together on Project GLOBE (Global Leadership and Organizational Behavior
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Chapter 12 Leadership in Organizational Settings 377
Effectiveness) to identify the effects of cultural values on leadership. 80 The project
organized countries into 10 regional clusters, of which the United States, Great Britain,
and similar countries are grouped into the “Anglo” cluster. The results of this massive
investigation suggest that some features of leadership are universal and some differ
across cultures. Specifically, the GLOBE project reports that “charismatic visionary”
is a universally recognized concept and that middle managers around the world be-
lieve that it is characteristic of effective leaders. Charismatic visionary represents a clus-
ter of concepts including visionary, inspirational, performance orientation, integrity,
and decisiveness. 81 In contrast, participative leadership is perceived as characteristic
of effective leadership in low power distance cultures but less so in high power dis-
tance cultures. For instance, one study reported that Mexican employees expect man-
agers to make decisions affecting their work. Mexico is a high power distance culture,
so followers expect leaders to apply their authority rather than delegate their power
most of the time. 82 In summary, there are similarities and differences in the concept
and preferred practice of leadership across cultures.
With respect to gender, studies in field settings have generally found that male and
female leaders do not differ in their levels of task-oriented or people-oriented leader-
ship. The main explanation is that real-world jobs require similar behavior from male
and female job incumbents. 83 However, women do adopt a participative leadership
Microsoft Germany’s Gender Leadership Boom Europe’s population is shrinking and aging, two trends
that worried Achim Berg (second from left in photo) when he was recently hired as CEO of Microsoft
Germany. Fortunately, in a country where men still overwhelmingly dominate the executive suite, the
former Deutsche Telekom executive has a straightforward solution: Hire more female managers and
create a work environment that motivates them to stay. Berg now has five women on the 12-person
management board and a growing pool of junior female staff members working their way into leadership
positions. Berg also welcomes the gender balance because it brings more diverse leadership styles.
“Women have a different management style,” Berg claims. Dorothee Belz, Microsoft Germany’s director of
legal and corporate affairs, agrees. Women, she suggests, look at issues differently and are more willing
than men to discuss problems. Berg says that working with more female colleagues has also altered his
own leadership style; it has become more consultative, with less forcefulness on “speed and quick
results.” He has also noticed less politics in executive meetings. “It seems that there is a noticeable
decline in territorial behavior. But perhaps we’d be better off consulting a zoologist,” says Berg, laughing.84
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Leadership is defined as the ability to influence, motivate,
and enable others to contribute toward the effectiveness
and success of the organizations of which they are mem-
bers. Leaders use influence to motivate followers and ar-
range the work environment so that they do the job more
effectively. Leaders exist throughout the organization, not
just in the executive suite.
The competency perspective tries to identify the char-
acteristics of effective leaders. Recent writing suggests
that leaders have specific personality characteristics, posi-
tive self-concept, drive, integrity, leadership motivation,
knowledge of the business, cognitive and practical intelli-
gence, and emotional intelligence. The behavioral per-
spective of leadership identifies two clusters of leader
behavior, people-oriented and task-oriented. People-
oriented behaviors include showing mutual trust and
respect for subordinates, demonstrating a genuine con-
cern for their needs, and having a desire to look out for
their welfare. Task-oriented behaviors include assigning
employees to specific tasks, clarifying their work duties
and procedures, ensuring they follow company rules, and
pushing them to reach their performance capacity.
The contingency perspective of leadership takes the
view that effective leaders diagnose the situation and
adapt their style to fit that situation. The path-goal model
is the prominent contingency theory that identifies four
leadership styles—directive, supportive, participative, and
achievement-oriented—and several contingencies relating
to the characteristics of the employee and of the situation.
Two other contingency leadership theories include the
situational leadership theory and Fiedler’s contingency
Chapter Summary
theory. Research support is quite weak for both theories.
However, a lasting element of Fiedler’s theory is the idea
that leaders have natural styles and, consequently, compa-
nies need to change the leaders’ environments to suit their
style. Leadership substitutes theory identifies contingen-
cies that either limit the leader’s ability to influence subor-
dinates or make a particular leadership style unnecessary.
Transformational leaders create a strategic vision,
communicate that vision through framing and use of met-
aphors, model the vision by ‘walking the talk’ and acting
consistently, and build commitment toward the vision.
This contrasts with transactional leadership, which in-
volves linking job performance to valued rewards and
ensuring that employees have the resources needed to
get the job done. The contingency and behavioral per-
spectives adopt the transactional view of leadership.
According to the implicit leadership perspective, peo-
ple have leadership prototypes, which they use to evalu-
ate the leader’s effectiveness. Furthermore, people form a
romance of leadership; they want to believe that leaders
make a difference, so they engage in fundamental attribu-
tion error and other perceptual distortions to support this
belief in the leader’s impact.
Cultural values also influence the leader’s personal
values, which in turn influence his or her leadership
practices. Women generally do not differ from men in
the degree of people-oriented or task-oriented leadership.
However, female leaders more often adopt a participative
style. Research also suggests that people evaluate female
leaders on the basis of gender stereotypes, which may
result in higher or lower ratings.
style more readily than their male counterparts. One possible reason is that, compared
to boys, girls are often raised to be more egalitarian and less status-oriented, which
is con sistent with being participative. There is also some evidence that women have
somewhat better interpersonal skills than men, and this translates into their relatively
greater use of the participative leadership style. A third explanation is that subordi-
nates, on the basis of their own gender stereotypes, expect female leaders to be more
participative, so female leaders comply with follower expectations to some extent.
Several recent surveys report that women are rated higher than men on the emerging
leadership qualities of coaching, teamwork, and empowering employees. 85 Yet research
also suggests that women are evaluated negatively when they try to apply the full range
of leadership styles, particularly more directive and autocratic approaches. Thus, ironi-
cally, women may be well suited to contemporary leadership roles, yet they often con-
tinue to face limitations of leadership through the gender stereotypes and prototypes of
leaders that are held by followers. 86 Overall, both male and female leaders must be sen-
sitive to the fact that followers have expectations about how leaders should act, and
negative evaluations may go to leaders who deviate from those expectations.
378 Part Three Team Processes
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Fiedler’s contingency model, p. 369
implicit leadership theory, p. 375
leadership, p. 360
leadership substitutes, p. 370
path-goal leadership theory, p. 365
servant leadership, p. 365
shared leadership, p. 360
situational leadership theory, p. 369
transactional leadership, p. 371
transformational leadership, p. 371
Key Terms
6. This chapter distinguished charismatic leadership
from transformational leadership. Yet charisma is
identified by most employees and managers as a
characteristic of effective leaders. Why is charisma
commonly related to leadership? In your opinion,
are the best leaders charismatic? Why or why not?
7. Identify a current political leader (e.g., president,
governor, mayor) and his or her recent accomplish-
ments. Now, using the implicit leadership perspec-
tive, think of ways that these accomplishments of
the leader may be overstated. In other words, ex-
plain why they may be due to factors other than the
leader.
8. You hear two people debating the merits of women
as leaders. One person claims that women make
better leaders than do men because women are
more sensitive to their employees’ needs and in-
volve them in organizational decisions. The other
person counters that although these leadership styles
may be increasingly important, most women have
trouble gaining acceptance as leaders when they
face tough situations in which a more autocratic
style is required. Discuss the accuracy of the com-
ments made in this discussion.
1. Why is it important for top executives to value and
support leadership demonstrated at all levels of the
organization?
2. Find two newspaper ads for management or execu-
tive positions. What leadership competencies are
mentioned in these ads? If you were on the selection
panel, what methods would you use to identify these
competencies in job applicants?
3. Consider your favorite teacher. What people-oriented
and task-oriented leadership behaviors did he or she
use effectively? In general, do you think students
prefer an instructor who is more people-oriented or
task-oriented? Explain your preference.
4. Your employees are skilled and experienced cus-
tomer service representatives who perform nonrou-
tine tasks, such as solving unique customer problems
or meeting special needs with the company’s equip-
ment. Use path-goal theory to identify the most ap-
propriate leadership style(s) you should use in this
situation. Be sure to fully explain your answer, and
discuss why other styles are inappropriate.
5. Transformational leadership is the most popular per-
spective of leadership. However, it is far from perfect.
Discuss the limitations of transformational leadership.
Critical Thinking Questions
Case Study 12.1 PROFITEL INC.
As a formerly government-owned telephone mono-
poly, Profitel enjoyed many decades of minimal com-
petition. Even today, as a publicly traded enterprise,
the company’s almost exclusive control over tele-
phone copper wiring across the country keeps its profit
margins above 40 percent. Competitors in telephone
and DSL broadband continue to rely on Profitel’s
wholesale business, which generates substantially
more profit than similar wholesale services in many
other countries. However, Profitel has stiff competi-
tion in the cellular (mobile) telephone business, and
other emerging technologies (voice-over-Internet)
379
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threaten Profitel’s dominance. Because of these threats,
Profitel’s board of directors decided to hire an outsider
as the new chief executive.
Although several qualified candidates expressed
an interest in Profitel’s top job, the board selected
Lars Peeters, who had been CEO for six years of a
publicly traded European telephone company, fol-
lowed by a brief stint as CEO of a cellular telephone
company in the United States until it was acquired by
a larger firm. Profitel’s board couldn’t believe its good
fortune; Peeters brought extensive industry knowl-
edge and global experience, a high-octane energy
level, self-confidence, decisiveness, and a congenial
yet strongly persuasive interpersonal style. He also
had a unique “presence,” which caused people to pay
attention and respect his leadership. The board was
also impressed with Peeters’s strategy to bolster Profi-
tel’s profit margins. This included investing heavily
in the latest wireless broadband technology (for both
cellular telephone and computer Internet) before
competitors could gain a foothold, cutting costs through
layoffs and reduction of peripheral services, and put-
ting pressure on the government to deregulate Profi-
tel’s traditional and emerging businesses. When
Peeters described his strategy to the board, one board
member commented that this was the same strategy
Peeters used in his previous two CEO postings.
Peeters dismissed the comment, saying that each situ-
ation is unique.
Peeters lived up to his reputation as a decisive ex-
ecutive. Almost immediately after taking the CEO
job at Profitel, he hired two executives from the
European company where he had previously worked.
Together, over the next two years, they cut the work-
force by 5 percent and rolled out the new wireless
broadband technology for cell phones and Internet.
Costs increased somewhat due to downsizing ex-
penses and the wireless technology rollout. Profitel’s
wireless broadband subscriber list grew quickly be-
cause, in spite of its very high prices, the technology
faced limited competition and Profitel was pushing
customers off the older technology to the new net-
work. Profitel’s customer satisfaction ratings fell, how-
ever. A national consumer research group reported
that Profitel’s broadband offered the country’s worst
value. Employee morale also declined due to layoffs
and the company’s public image problems. Some in-
dustry experts also noted that Profitel selected its
wireless technology without evaluating the alternative
emerging wireless technology, which had been gain-
ing ground in other countries. Peeters’s aggressive
campaign against government regulation also had
unintended consequences. Rather than achieving less
regulation, criticizing the government and its telecom-
munications regulator made Profitel look even more
arrogant in the eyes of both customers and govern-
ment leaders.
Profitel’s board was troubled by the company’s
lackluster share price, which had declined 20 per-
cent since Peeters was hired. Some board members
also worried that the company had bet on the wrong
wireless technology and that subscription levels
would stall far below the number necessary to
achieve the profits stated in Peeters’s strategic plan.
This concern came closer to reality when a foreign-
owned competitor won a $1 billion government con-
tract to improve broadband services in regional
areas of the country. Profitel’s proposal for that re-
gional broadband upgrade had specified high prices
and limited corporate investment, but Peeters had
been confident Profitel would be awarded the con-
tract because of its market dominance and existing
infrastructure with the new wireless network. When
the government decided otherwise, Profitel’s board
fired Peeters along with the two executives he had
hired from the European company. Now, the board
had to figure out what went wrong and how to avoid
this problem in the future.
Discussion Questions
1. Which perspective of leadership best explains
the problems experienced in this case? Analyze
the case using concepts discussed in that leader-
ship perspective.
2. What can organizations do to minimize the lead-
ership problems discussed above?
© 2008 Steven L. McShane.
380
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Team Exercise 12.3 LEADERSHIP DIAGNOSTIC ANALYSIS
PURPOSE To help students learn about the differ-
ent path-goal leadership styles and understand when
to apply each style.
INSTRUCTIONS
1. Students individually write down two incidents in
which someone was an effective manager or leader
over them. The leader and situation can be from
work, a sports team, a student work group, or any
other setting where leadership might emerge. For
example, students might describe how their super-
visor in a summer job pushed them to reach higher
performance goals than they would have done
otherwise. Each incident should state the actual
behaviors that the leader used, not just general
statements (e.g., “My boss sat down with me and
we agreed on specific targets and deadlines; then
he said several times over the next few weeks that
I was capable of reaching those goals.”) Each inci-
dent requires only two or three sentences.
2. After everyone has written his or her two inci-
dents, the instructor will form small groups (typ-
ically, four or five students). Each team will
answer the following questions for each incident
presented in that team:
a. Which path-goal theory leadership style(s)—
directive, supportive, participative, or
achievement-oriented—did the leader apply
in this incident?
b. Ask the person who wrote the incident about
the conditions that made this leadership style
(or these styles, if more than one was used)
appropriate in this situation? The team should
list these contingency factors clearly and,
where possible, connect them to the contingen-
cies described in path-goal theory. ( Note: The
team might identify path-goal leadership con-
tingencies that are not described in the book.
These, too, should be noted and discussed.)
3. After the teams have diagnosed the incidents,
each team will describe to the entire class the
most interesting incident as well as the team’s
diagnosis of that incident. Other teams will cri-
tique the diagnosis. Any leadership contingen-
cies not mentioned in the textbook should also
be presented and discussed.
381
Case Study 12.2 MACK ATTACK
John J. Mack, who had left
Morgan Stanley four years ear-
lier, was back as CEO, replac-
ing Philip J. Purcell, who had resigned weeks earlier
after mounting criticism that he was mismanaging
the once-mighty investment bank. Whereas Purcell
was a top-down strategist and tended to hole up in
his office, Mack is drawing on his skills as a sales-
man and operator to make Morgan Stanley as nim-
ble and dynamic as possible. He also hired key
people to help him put the new culture in place.
This BusinessWeek case study examines the leader-
ship of Morgan Stanley CEO John J. Mack. It de-
scribes his actions to change the investment bank’s
culture and to redirect decision making so that it is
more aggressive rather than timid. Read through this
BusinessWeek article at www.mhhe.com/mcshane5e ,
and prepare for the discussion questions below.
Discussion Questions
1. On the basis of the information in this case study,
describe the competencies that seem strongest
in John Mack.
2. To what extent has John Mack exhibited transfor-
mational leadership behaviors to shift Morgan
Stanley’s culture and decision making?
Source: E. Thornton, “Mack Attack,” BusinessWeek, 3 July 2006, p. 88.
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http://www.mhhe.com/mcshane5e
Self-Assessment 12.4
WHAT IS YOUR BOSS’S PREFERRED LEADERSHIP STYLE?
PURPOSE This assessment is designed to help
you understand two important dimensions of leader-
ship and identify which of these dimensions is more
prominent in your supervisor, team leader, or coach
or in another person to whom you are accountable.
INSTRUCTIONS Read each of the statements
below and circle the response that you believe best
describes your supervisor. You may substitute for
“supervisor” anyone else to whom you are account-
able, such as a team leader, CEO, course instructor,
or sports coach. Then use the scoring key in Appen-
dix B at the end of the book to calculate the results
for each leadership dimension. After completing this
assessment, be prepared to discuss in class the dis-
tinctions between these leadership dimensions.
Leadership Dimensions Instrument
My Supervisor . . .
Strongly
agree
▼
Agree
▼
Neutral
▼
Disagree
▼
Strongly
disagree
▼
1. Focuses attention on irregularities, mistakes, exceptions,
and deviations from what is expected of me.
5 4 3 2 1
2. Engages in words and deeds that enhance his or her
image of competence.
5 4 3 2 1
3. Monitors performance for errors needing correction. 5 4 3 2 1
4. Serves as a role model for me. 5 4 3 2 1
5. Points out what I will receive if I do what is required. 5 4 3 2 1
6. Instills pride in being associated with him or her. 5 4 3 2 1
7. Keeps careful track of mistakes. 5 4 3 2 1
8. Can be trusted to help me overcome any obstacle. 5 4 3 2 1
9. Tells me what to do to be rewarded for my efforts. 5 4 3 2 1
10. Makes me aware of strongly held values, ideals, and
aspirations that are shared in common.
5 4 3 2 1
11. Is alert for failure to meet standards. 5 4 3 2 1
12. Mobilizes a collective sense of mission. 5 4 3 2 1
13. Works out agreements with me on what I will receive if I
do what needs to be done.
5 4 3 2 1
14. Articulates a vision of future opportunities. 5 4 3 2 1
15. Talks about special rewards for good work. 5 4 3 2 1
16. Talks optimistically about the future. 5 4 3 2 1
After reading this chapter, if you feel that you need additional information, see www.mhhe.com/
mcshane5e for more in-depth information and interactivities that correspond to this chapter.
Source: Items and dimensions are adapted from D. N. Den Hartog, J. J. Van Muijen, and P. L. Koopman, “Transactional versus Transformational
Leadership: An Analysis of the MLQ,” Journal of Occupational & Organizational Psychology 70 (March 1997), pp. 19–34. Den Hartog et al. label
transactional leadership as “rational-objective leadership” and label transformational leadership as “inspirational leadership.” Many of their items may have
originated from B. M. Bass and B. J. Avolio, Manual for the Multifactor Leadership Questionnaire (Palo Alto, CA: Consulting Psychologists Press, 1989).
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http://www.mhhe.com/
Part Four
Organizational Processes
Chapter 13 Organizational Structure
Chapter 14 Organizational Culture
Chapter 15 Organizational Change
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BioWare Corp. was created by three medical doctors who had a passion for developing
electronic games. They had some experience in interactive medical education, but
starting a company to make commercial games was another matter. Two of the
physicians, Ray Muzyka and Greg Zeschuk, became joint chief executive officers of the
new company, while the third partner returned to medical practice two years after
BioWare was launched. The company was initially organized into a simple team structure
in which everyone worked together to create its first
game, Shattered Steel .
During the development of Shattered Steel, Muzyka
and Zeschuk started a second game project, called
Baldur’s Gate . The question was, what organizational
structure would best support this company for the
future? BioWare could simply have two teams working
independently on the two games. However, a multiteam
structure would duplicate resources, possibly undermine
information sharing among people with the same
expertise across teams, and weaken employee loyalty
to the overall company.
Alternatively, the game developer could create
departments around the various specializations,
including art, programming, audio, quality assurance,
and design. This would allow employees with similar
technical expertise to share information and create new
ideas within their specialization. However, employees
would not have the same level of teamwork or
commitment to the final product as they would in a
team-based project structure. 1
BioWare Corp. cofounders Ray Muzyka (left) and Greg
Zeschuk (right) had to choose which organizational
structure would best serve the rapidly growing electronics
company.
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Organizational Structure
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Describe three types of coordination in
organizational structures.
2. Justify the optimal span of control in a given
situation.
3. Discuss the advantages and disadvantages
of centralization and formalization.
4. Distinguish organic from mechanistic
organizational structures.
5. Identify and evaluate the six pure types of
departmentalization.
6. Describe three variations of divisional
structure and explain which one should be
adopted in a particular situation.
7. Diagram the matrix structure and discuss
its advantages and disadvantages.
8. Compare and contrast network structures
with other forms of departmentalization.
9. Identify four characteristics of external
environments and discuss the preferred
organizational structure for each
environment.
10. Summarize the influence of organizational
size, technology, and strategy on
organizational structure.
13
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386 Part Four Organizational Processes
What organizational structure will work best for BioWare? We’ll find out in this
chapter. Organizational structure refers to the division of labor as well as the
patterns of coordination, communication, workflow, and formal power that direct
organizational activities. The chapter begins by introducing the two fundamental pro-
cesses in organizational structure: division of labor and coordination. This is followed
by a detailed investigation of the four main elements of organizational structure: span
of control, centralization, formalization, and departmentalization. The latter part of
this chapter examines the contingencies of organizational design, including external
environment, organizational size, technology, and strategy.
Throughout this chapter, we hope to show that an organization’s structure is much
more than an organizational chart diagramming which employees report to which manag-
ers. Organizational structure includes reporting relationships, but it also relates to job de-
sign, information flow, work standards and rules, team dynamics, and power relationships.
Organizational structures are frequently used as tools for organizational change because
they establish new communication patterns and align employee behavior with the corpo-
rate vision. 2 For example, when Charles Schwab & Co. experienced financial trouble not
long ago, founder Charles Schwab (who returned as CEO) held a two-day marathon ses-
sion in which the company’s top executives were asked to redraw the organizational
chart in a way that would make the company simpler, more decentralized, and refocused
on the customer. Every executive in the room, including those whose jobs would be
erased from the new structure, was asked for his or her input. 3 The point we want to em-
phasize here is that organizational structure reconfigures power, communication patterns,
and possibly the company’s culture in the long term. As such, altering the organization’s
structure is an important component of an executive’s toolkit for organizational change. 4
organizational structure
The division of labor as
well as the patterns of
coordination, communi-
cation, workflow, and
formal power that direct
organizational activities.
Division of Labor and Coordination
All organizational structures include two fundamental requirements: the division of
labor into distinct tasks and the coordination of that labor so that employees are able
to accomplish common goals. 5 Organizations are groups of people who work interde-
pendently toward some purpose. To efficiently accomplish their goals, these groups
typically divide the work into manageable chunks, particularly when there are many
different tasks to perform. They also introduce various coordinating mechanisms to
ensure that everyone is working effectively toward the same objectives.
Division of Labor
Division of labor refers to the subdivision of work into separate jobs assigned to dif-
ferent people. Subdivided work leads to job specialization , because each job now
includes a narrow subset of the tasks necessary to complete the product or service. To
produce its first electronic game, BioWare’s cofounders divided the work among a
dozen or more employees. Some people were responsible for programming; others
Learning
Objectives
After reading the next two sections, you should be able to:
1. Describe three types of coordination in organizational structures.
2. Justify the optimal span of control in a given situation.
3. Discuss the advantages and disadvantages of centralization and
formalization.
4. Distinguish organic from mechanistic organizational structures.
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Chapter 13 Organizational Structure 387
completed the artwork; still others developed the game’s sound effects; and so
forth. Today’s electronic games are so sophisticated that a project may extend for
more than a year and involve several dozen people with highly specialized exper-
tise. As companies get larger, this horizontal division of labor is usually accompa-
nied by vertical division of labor: Some people are assigned the task of supervising
employees, others are responsible for managing those supervisors, and so on.
Why do companies divide the work required to build an electronic game into several
jobs? As you learned earlier in this book, job specialization increases work efficiency. 6
Job incumbents can master their tasks quickly because work cycles are shorter. Less
time is wasted changing from one task to another. Training costs are reduced because
employees require fewer physical and mental skills to accomplish the assigned work.
Finally, job specialization makes it easier to match people with specific aptitudes or
skills to the jobs for which they are best suited. Although one person working alone
might be able to design an electronic game, doing so would take much longer than hav-
ing the game designed by a team of specialists. Also, an individual who produces su-
perb animation might deliver only mediocre software coding, whereas a highly skilled
team of people would have higher quality across all areas of work.
Coordinating Work Activities
When people divide work among themselves, they require coordinating mechanisms
to ensure that everyone works in concert. Coordination is so closely connected to
division of labor that the optimal level of specialization is limited by the feasibility of
coordinating the work. In other words, an organization should divide work among
many people only to the extent that those people can coordinate with each other.
Otherwise, individual effort is wasted due to misalignment, duplication, and mis-
timing of tasks. Coordination also tends to become more expensive and difficult as
the division of labor increases, so companies specialize jobs only to the point where
it isn’t too costly or challenging to coordinate the people in those jobs. 7
Every organization—from the two-person corner convenience store to the largest
corporate entity—uses one or more of the following coordinating mechanisms: 8 infor-
mal communication, formal hierarchy, and standardization (see Exhibit 13.1 ). These
Form of coordination Description Subtypes/strategies
Informal communication
Formal hierarchy
Standardization
Sharing information on mutual tasks;
forming common mental models to
synchronize work activities
Assigning legitimate power to individuals,
who then use this power to direct work
processes and allocate resources
Creating routine patterns of behavior
or output
Sources: Based on information in J. Galbraith, Designing Complex Organizations (Reading, MA: Addison-Wesley, 1973), pp. 8–19; H. Mintzberg,
The Structuring of Organizations (Englewood Cliffs, NJ: Prentice Hall, 1979), chap. 1; D. A. Nadler and M. L. Tushman, Competing by Design: The
Power of Organizational Architecture (New York: Oxford University Press, 1997), chap. 6.
Exhibit 13.1 Coordinating Mechanisms in Organizations
• Direct communication
• Liaison roles
• Integrator roles
• Temporary teams
• Direct supervision
• Formal communication channels
• Standardized skills
• Standardized processes
• Standardized output
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388 Part Four Organizational Processes
forms of coordination align the work of staff within the same department as well as
across work units. These coordinating mechanisms are also critical when several orga-
nizations work together, such as in joint ventures and humanitarian aid programs. 9
Coordination through Informal Communication Informal communication is a
coordinating mechanism in all organizations. It includes sharing information on mutual
tasks as well as forming common mental models so that employees synchronize work
activities using the same mental road map. 10 Informal communication is vital in non-
routine and ambiguous situations because employees can exchange a large volume of
information through face-to-face communication and other media-rich channels.
Coordination through informal communication is easiest in small firms, such as Bio-
Ware when it was a start-up firm, although information technologies have further lever-
aged this coordinating mechanism in large organizations. 11 Companies employing
thousands of people also support informal communication by keeping each production
site small. Magna International, the global auto-parts manufacturer, keeps its plants to a
maximum size of around 200 employees. Magna’s leaders believe that employees have
difficulty remembering each other’s names in plants that are any larger, a situation that
makes informal communication more difficult as a coordinating mechanism. 12
Larger organizations also encourage coordination through informal communica-
tion by assigning liaison roles to employees, who are expected to communicate and
share information with co-workers in other work units. Where coordination is required
among several work units, companies create integrator roles . These people are respon-
sible for coordinating a work process by encouraging employees in each work unit to
share information and informally coordinate work activities. Integrators do not have
authority over the people involved in that process, so they must rely on persuasion
and commitment. Brand managers at Procter & Gamble have integrator roles because
they coordinate work among marketing, production, and design groups. 13
Another way that larger organizations encourage coordination through informal
communication is by organizing employees from several departments into temporary
teams. This strategy occurs through concurrent engineering in the product or service
development process. Traditional product development is a sequential arrangement.
For example, the marketing department might develop a product strategy, which is
passed “over the wall” to design engineers, whose design work is then passed on to
manufacturing engineers to figure out a cost-efficient production process and to the
purchasing department to source raw materials. This serial process can be cumbersome
because its main coordinating mechanism is formal hierarchical communication.
In contrast, concurrent engineering involves forming a cross-functional project
team of people from these specialized departments to engage in product develop-
ment simultaneously. By being assigned to a team, rather than working within their
usual specialized departments, employees are given the mandate and opportunity to
coordinate with each other using informal communication. As soon as the design
engineer begins to form the product specifications, representatives from manufactur-
ing, engineering, marketing, purchasing, and other departments can offer feedback
as well as begin their contribution to the process. This coordination usually occurs
through information technology, but it also includes plenty of face-to-face communi-
cation when the concurrent-engineering team members are located together in the
same physical space. Face-to-face communication is a particularly information-rich
medium, which allows team members to work on various stages of product develop-
ment (marketing, design, manufacturing, purchasing, etc.) at the same time. The re-
sult: Chrysler, Toyota, Harley-Davidson, and many other organizations have found
concurrent engineering
The organization of
employees from several
departments into a
temporary team for the
purpose of developing a
product or service.
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Chapter 13 Organizational Structure 389
that the concurrent-engineering process tends to produce higher-quality products
with dramatically less development time than does the traditional arrangement. 14
Coordination through Formal Hierarchy Informal communication is the most
flexible form of coordination, but it can become chaotic as the number of interdepen-
dencies among employees increases. Consequently, as organizations grow, they rely
increasingly on a second coordinating mechanism: formal hierarchy. 15 Hierarchy
assigns legitimate power to individuals, who then use this power to direct work
processes and allocate resources. In other words, work is coordinated through direct
supervision—the chain of command.
The formal hierarchy has traditionally been applauded as the optimal coordinating
mechanism for large organizations. A century ago, administrative management scholars
argued that organizations are most effective when managers exercise their authority and
employees receive orders from only one supervisor. Coordination should occur through
the chain of command; that is, up the hierarchy and across to the other work unit. Any
organization with a formal structure coordinates work to some extent through this ar-
rangement. For instance, project leaders at BioWare are responsible for ensuring that
employees on their computer game project remain on schedule and that their respective
tasks are compatible with tasks completed by other team members. The formal hierarchy
also coordinates work among executives through the division of organizational activities.
If the organization is divided into geographic areas, the structure gives the regional
group leaders legitimate power over executives responsible for production, customer
service, and other activities in those areas. If the organization is divided into product
groups, the heads of those groups have the right to coordinate work across regions.
The formal hierarchy can be efficient for simple and routine situations, but it is not as
agile for coordination in complex and novel situations. Communicating through the
chain of command is rarely as fast or accurate as direct communication between em-
ployees. For instance, we noted earlier that product development—typically a complex
and novel activity—tends to occur more quickly and produce higher-quality results when
people coordinate mainly through informal communication rather than formal hierar-
chy. Another concern with formal hierarchy is that managers are able to closely super-
vise only a limited number of employees. As the business grows, the number of
supervisors and layers of management must increase, resulting in a costly bureaucracy.
Finally, today’s workforce is less tolerant of rigid structures. For instance, Wegmans Food
Market is one of the best places to work, partly because
the Rochester, New York–based grocery chain minimizes
formal hierarchy as a coordinating mechanism.
Coordination through Standardization Standard-
ization, the third means of coordination, involves creating
routine patterns of behavior or output. This coordinating
mechanism takes three distinct forms:
• Standardized processes. Quality and consistency of
a product or service can often be improved by
standardizing work activities through job descrip-
tions and procedures. 16 This coordinating mecha-
nism is feasible when the work is routine (such as
mass production) or simple (such as making piz-
zas), but it is less effective in nonroutine and
complex work such as product design.
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390 Part Four Organizational Processes
• Standardized outputs. This form of standardization involves ensuring that individu-
als and work units have clearly defined goals and output measures (e.g., customer
satisfaction, production efficiency). For instance, to coordinate the work of sales-
people, companies assign sales targets rather than specific behaviors.
• Standardized skills. When work activities are too complex to standardize through
processes or goals, companies often coordinate work effort by extensively training
employees or hiring people who have learned precise role behaviors from educa-
tional programs. This form of coordination is used in hospital operating rooms.
Surgeons, nurses, and other operating room professionals coordinate their work
more through training than through goals or company rules.
Division of labor and coordination of work represent the two fundamental ingredi-
ents of all organizations. But how work is divided, which coordinating mechanisms are
emphasized, who makes decisions, and other issues are related to the four elements
of organizational structure.
Elements of Organizational Structure
Every company is configured in terms of four basic elements of organizational struc-
ture. This section introduces three of them: span of control, centralization, and formal-
ization. The fourth element—departmentalization—is presented in the next section.
Span of Control
Span of control (also called span of management ) refers to the number of people di-
rectly reporting to the next level in the hierarchy. A narrow span of control exists
when very few people report directly to a manager, whereas a wide span exists when
a manager has many direct reports. 17 A century ago, French engineer and manage-
ment scholar Henri Fayol strongly recommended a relatively narrow span of control,
typically no more than 20 employees per supervisor and 6 supervisors per manager.
Fayol championed formal hierarchy as the primary coordinating mechanism, so he
believed that supervisors should closely monitor and coach employees. His views
were similar to those of Napoleon and other military leaders, who declared that
somewhere between 3 and 10 subordinates is the optimal span of control. These pre-
scriptions were based on the belief that managers simply could not monitor and con-
trol any more subordinates closely enough. 18
Today, we know better. The best-performing manufacturing plants currently
have an average of 38 production employees per supervisor. 19 What’s the secret
here? Did Fayol, Napoleon, and others miscalculate the optimal span of control?
The answer is that those sympathetic to hierarchical control believed that employees
should perform the physical tasks, whereas supervisors and other management per-
sonnel should make the decisions and monitor employees to make sure they per-
formed their tasks. In contrast, the best-performing manufacturing operations today
rely on self-directed teams, so direct supervision (formal hierarchy) is supplemented
with other coordinating mechanisms. Self-directed teams coordinate mainly through
informal communication and specialized knowledge, so formal hierarchy plays a
minor role. Many firms that employ doctors, lawyers, and other professionals have
a larger span of control because these staff members coordinate their work mainly
through standardized skills. For example, more than two dozen people report directly
to Cindy Zollinger, president of Boston-based litigation-consulting firm Cornerstone
Research. Zollinger explains that this large number of direct reports is possible
span of control
The number of people
directly reporting to
the next level in the
hier archy.
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Chapter 13 Organizational Structure 391
because she leads professional staff who don’t require close supervision. “They
largely run themselves,” Zollinger explains. “I help them in dealing with obstacles
they face, or in making the most of opportunities that they find.” 20
A second factor influencing the best span of control is whether employees perform
routine tasks. A wider span of control is possible when employees perform routine jobs,
because there is less frequent need for direction or advice from supervisors. A narrow
span of control is necessary when employees perform novel or complex tasks, because
these employees tend to require more supervisory decisions and coaching. This principle
is illustrated in a survey of American property and casualty insurers. The average span
of control in commercial-policy processing departments is around 15 employees per
supervisor, whereas the span of control is 6.1 in claims service and 5.5 in commercial
underwriting. Staff members in the latter two departments perform more technical work,
so they have more novel and complex tasks. Commercial-policy processing, on the
other hand, is like production work, where tasks are routine and have few exceptions. 21
A third influence on span of control is the degree of interdependence among employ-
ees within the department or team. 22 Generally, a narrow span of control is necessary
where employees perform highly interdependent work with others. More supervision is
required for highly interdependent jobs because employees tend to experience more
conflict with each other, which requires more of a manager’s time to resolve. Also, em-
ployees are less clear on their personal work performance in highly interdependent
tasks, so supervisors spend more time providing coaching and feedback.
Tall versus Flat Structures Span of control is interconnected with organizational
size (number of employees) and the number of layers in the organizational hierarchy.
Consider two companies with the same number of employees. If Company A has a
wider span of control (more direct reports per manager) than Company B, then
Company A must have fewer layers of management (i.e., a flatter structure) than does
Company B. The reason for this relationship is that a company with a wider span
of control necessarily has more employees per supervisor, more supervisors for each
middle manager, and so on. This larger number of direct reports, compared to a
The Struggle to Stay Flat When Ken Iverson became CEO of Nucor
Corporation in the mid-1960s, he insisted that the Charlotte, North
Carolina, steelmaker have only three layers of management below him:
Crew supervisors reported to their functional manager (production,
shipping, maintenance), who reported to the plant manager, who re-
ported to Iverson. By allowing each plant to operate as an independent
business, this flat structure was manageable even as Nucor grew to
more than two dozen plants. But today Nucor is America’s largest steel-
maker in terms of shipments, employing 20,000 people at more than four
dozen facilities worldwide. Managing 50 or more direct reports would
itself be a full-time job, so Nucor’s current chairman and CEO, Dan DiMicco
(shown in photo), reluctantly added another layer of management (five
executive vice presidents). “I needed to be free to make decisions on
trade battles,” says DiMicco, adding that he continues to stay involved by
checking his own e-mail and meeting with staff at every opportunity.
Even with five layers of hierarchy, Nucor is incredibly lean. Many other
companies the same size have twice as many levels of management. 23
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392 Part Four Organizational Processes
com pany with a narrower span of control, is possible only by removing layers of
management. The interconnection of span of control, organizational size (number of
employees), and number of management layers also means that as companies em-
ploy more people, they must widen the span of control, build a taller hierarchy, or
both. Most companies end up building taller structures because they rely on direct
supervision to some extent as a coordinating mechanism and there are limits to how
many people each manager can coordinate.
Unfortunately, building a taller hierarchy (more layers of management) creates
problems. First, tall structures have higher overhead costs because most layers of
hierarchy consist of managers rather than employees who actually make the prod-
uct or supply the service. Second, senior managers in tall structures often receive
lower-quality and less timely information from the external environment because
information from frontline employees is transmitted slowly or not at all up the hier-
archy. Also, the more layers of management through which information must pass,
the higher the probability that managers will filter out information that does not put
them in a positive light. Finally, tall hierarchies tend to undermine employee em-
powerment and engagement because they focus power around managers rather
than employees. 24
These problems have prompted leaders to “delayer”—remove one or more levels
in the organizational hierarchy. 25 Soon after Mark Hurd was hired as CEO of HP
(Hewlett-Packard), he stripped the high-technology company’s 11 layers of hierarchy
down to 8 layers. He argued that this action reduced costs and would make HP more
nimble. BASF’s European Seal Sands plant went even further when it was dramati-
cally restructured around self-directed teams. “Seven levels of management have
been cut basically to two,” says a BASF executive. 26
Although many companies enjoy reduced costs and more empowered employees
when they delayer the organizational hierarchy, some organizational experts warn that
there are also negative long-term consequences of cutting out too much middle manage-
ment. 27 These include undermining necessary managerial functions, increasing work-
load and stress among management, and restricting managerial career development:
• Undermines managerial functions. Critics of delayering point out that all compa-
nies need managers to guide work activities, coach subordinates, and manage
company growth. Furthermore, managers are needed to make quick decisions
and represent a source of appeal over conflicts. These valuable functions are
underserved when the span of control becomes too wide.
• Increases workload and stress. Delayering increases the number of direct reports per
manager and thus significantly increases management workload and correspond-
ing levels of stress. Managers partly reduce the workload by learning to give
subordinates more autonomy rather than micromanaging them. However, this
role adjustment itself is stressful (same responsibility, but less authority or control),
and many companies increase the span of control beyond the point at which
many managers are capable of coaching or leading their direct reports.
• Restricts managerial career development. Delayering results in fewer managerial
jobs, so companies have less maneuverability to develop managerial skills.
Promotions are also riskier because they involve a larger jump in responsibility
in flatter, compared to taller, hierarchies. Furthermore, having fewer promotion
opportunities means that managers experience more career plateauing, which
reduces their motivation and loyalty. Chopping back managerial career struc-
tures also sends a signal that managers are no longer valued. “Delayering has
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Chapter 13 Organizational Structure 393
had an adverse effect on morale, productivity and performance,” argues a
senior executive in the Australian federal government. “Disenfranchising
middle management creates negative perceptions and lower commitment to
the organization with consequent reluctance to accept responsibility. 28
Centralization and Decentralization
Centralization and decentralization are a second element to consider when designing
an organizational structure. Centralization means that formal decision-making au-
thority is held by a small group of people, typically those at the top of the organiza-
tional hierarchy. Most organizations begin with centralized structures, as the founder
makes most of the decisions and tries to direct the business toward his or her vision.
As organizations grow, however, they diversify and their environments become more
complex. Senior executives aren’t able to process all the decisions that significantly
influence the business. Consequently, larger organizations typically decentralize; that
is, they disperse decision authority and power throughout the organization.
The optimal level of centralization or decentralization depends on several contin-
gencies that we will examine later in this chapter. However, we also need to keep in
mind that different degrees of decentralization can occur simultaneously in different
parts of an organization. Nestlé, the Swiss-based food company, has decentralized
marketing decisions to remain responsive to local markets, but it has centralized pro-
duction, logistics, and supply chain management activities to improve cost efficien-
cies and avoid having too much complexity across the organization. “If you are too
decentralized, you can become too complicated—you get too much complexity in
your production system,” explains a Nestlé executive. 29
Likewise, 7-Eleven relies on both centralization and decentralization in different
parts of the organization. The convenience store chain leverages buying power and
efficiencies by centralizing decisions about information technology and supplier pur-
chasing. At the same time, it decentralizes local inventory decisions to store managers
so that they can adapt quickly to changing circumstances at the local level. Along
with receiving ongoing product training and guidance from regional consultants,
store managers have the best information about their customers and can respond
quickly to local market needs. “We could never predict a busload of football players
on a Friday night, but the store manager can,” explains a 7-Eleven executive. 30
Formalization
Formalization is the degree to which organizations standardize behavior through
rules, procedures, formal training, and related mechanisms. 31 In other words, compa-
nies become more formalized as they increasingly rely on various forms of standard-
ization to coordinate work. McDonald’s Restaurants and most other efficient fast-food
chains typically have a high degree of formalization because they rely on standardiza-
tion of work processes as a coordinating mechanism. Employees have precisely de-
fined roles, right down to how much mustard should be dispensed, how many pickles
should be applied, and how long each hamburger should be cooked.
Older companies tend to become more formalized because work activities be-
come routinized, making them easier to document into standardized practices. Larger
companies also tend to have more formalization because direct supervision and infor-
mal communication among employees do not operate as easily when large numbers
of people are involved. External influences, such as government safety legislation and
strict accounting rules, also encourage formalization.
centralization
The degree to which
formal decision authority
is held by a small group
of people, typically
those at the top of the
organizational hierarchy.
formalization
The degree to which or-
ganizations standardize
behavior through rules,
procedures, formal
training, and related
mechanisms.
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394 Part Four Organizational Processes
Formalization may increase efficiency and compliance, but it can also create prob-
lems. 32 Rules and procedures reduce organizational flexibility, so employees follow
prescribed behaviors even when the situation clearly calls for a customized response.
High levels of formalization tend to undermine organizational learning and creativ-
ity. Some work rules become so convoluted that organizational efficiency would de-
cline if they were actually followed as prescribed. Formalization is also a source of job
dissatisfaction and work stress. Finally, rules and procedures have been known to
take on a life of their own in some organizations. They become the focus of attention
rather than the organization’s ultimate objectives of producing a product or service
and serving its dominant stakeholders.
The challenge that companies face as they get larger and older is to avoid too much
formalization. Yahoo seems to be a case in point. A decade ago, the world’s most popu-
lar Web portal site was a creative hotspot among Web-based companies. Through stra-
tegic acquisitions (Flickr, del.icio.us, Yahoo! 360, etc.), the company continues to launch
new services, but observers and former staff say that internal innovations have been
hampered by creeping bureaucracy. “In a small company [the attitude] is, ‘Hey, let’s
launch it and let’s see if the users like it,’ ” says a senior Yahoo staffer who recently
moved to a smaller firm. “There was a time a few years ago where Yahoo had more of
that mentality. But as companies get bigger and bigger, many of them reach a point
where they can’t do that as quickly.” Another former Yahoo employee is more blunt: “If
you are on the Internet, you have to be fast and you have to take risks. The organiza-
tional structure that Yahoo has is completely antithetical to the industry they are in.” 33
Mechanistic versus Organic Structures
We discussed span of control, centralization, and formalization together because they
cluster around two broader organizational forms: mechanistic and organic struc-
tures. 34 A mechanistic structure is characterized by a narrow span of control and
Growing an Organic TAXI Award-winning TAXI, whose clients include
Blue Shield of California, New York Life Insurance, and Molson Coors,
is a rising star in the competitive world of creative marketing. One of
TAXI’s secrets to success has been an organic structure, in contrast
to its major competitors, which have more rigid mechanistic hierar-
chies. “[Other advertising firms] operated on a 19th-century model of
many secular departments trying to integrate everything ad hoc. Most
cultures were so layered that a great idea was easily crushed,” ex-
plains TAXI cofounder Paul Lavoie (bottom right in this photo with a few
staff from TAXI’s New York City office). “We needed a flexible infra-
structure, able to move with the pace of change. TAXI started lean
and nimble, and remains so today.” But as it gained popularity, TAXI
faced the challenge of accommodating growth (30 to 40 percent per
year) without evolving into yet another mechanistic firm. Its solution
was to duplicate itself across several cities, with each unit maintain-
ing an organic structure that actively collaborates with other offices.
The company also maintains an organic structure by keeping each
business unit relatively small. For example, when its office in Toronto,
Canada, reached 150 staff members, TAXI opened a second office in
that city, called TAXI 2. 35
mechanistic structure
An organizational struc-
ture with a narrow span
of control and a high
degree of formalization
and centralization.
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Chapter 13 Organizational Structure 395
high degree of formalization and centralization. Mechanistic structures have many
rules and procedures, limited decision making at lower levels, tall hierarchies of peo-
ple in specialized roles, and vertical rather than horizontal communication flows.
Tasks are rigidly defined and are altered only when sanctioned by higher authorities.
Companies with an organic structure have the opposite characteristics. They oper-
ate with a wide span of control, decentralized decision making, and little formaliza-
tion. Tasks are fluid, adjusting to new situations and organizational needs.
As a general rule, mechanistic structures operate better in stable environments be-
cause they rely on efficiency and routine behaviors, whereas organic structures work
better in rapidly changing (i.e., dynamic) environments because they are more flexible
and responsive to the changes. Organic structures are also more compatible with orga-
nizational learning, high-performance workplaces, and quality management because
they emphasize information sharing and an empowered workforce rather than hierar-
chy and status. 36 However, the advantages of organic structures, rather than mechanis-
tic structures, in dynamic environments occur only when employees have developed
well-established roles and expertise. 37 Without these conditions, employees are unable
to coordinate effectively with each other, resulting in errors and gross inefficiencies.
Start-up companies often face this problem, known as the liability of newness . Newness
makes start-up firms more organic—they tend to be smaller organizations with few rules
and considerable delegation of authority. However, employees in new organizations
often lack industry experience, and their teams have not developed sufficiently for peak
performance. As a result, the organic structures of new companies cannot compensate
for the poorer coordination and significantly lower efficiencies caused by the lack of
structure from past experience and team mental models. Fortunately, companies can
minimize the liability of newness by launching businesses with existing teams of people
or with industry veterans guiding the novices. Nitro Group is an example. The upstart
ad agency was founded in Shanghai in 2002 and expanded quickly to London, New
York, Sydney, and other centers. Each of these offices is highly organic, with fairly
young staff, yet each local office is able to draw on the expertise of several experienced
staff members to assist with specific accounts. Thus, Nitro enjoys an organic structure
yet has the foundations of well-established roles and expertise to deliver the service. 38
Learning
Objectives
After reading this section, you should be able to:
5. Identify and evaluate the six pure types of departmentalization.
6. Describe three variations of divisional structure and explain which
one should be adopted in a particular situation.
7. Diagram the matrix structure and discuss its advantages and
disadvantages.
8. Compare and contrast network structures with other forms of
departmentalization.
Forms of Departmentalization
Span of control, centralization, and formalization are important elements of organiza-
tional structure, but most people think about organizational charts when the discus-
sion of organizational structure arises. The organizational chart represents the fourth
element in the structuring of organizations, called departmentalization. Departmen-
talization specifies how employees and their activities are grouped together. It is a
organic structure
An organizational struc-
ture with a wide span of
control, little formaliza-
tion, and decentralized
decision making.
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396 Part Four Organizational Processes
fundamental strategy for coordinating organizational activities because it influences
organizational behavior in the following ways: 39
• Departmentalization establishes the chain of command—the system of common
supervision among positions and units within the organization. It frames the
membership of formal work teams and typically determines which positions
and units must share resources. Thus, departmentalization establishes interde-
pendencies among employees and subunits.
• Departmentalization focuses people around common mental models or
ways of thinking, such as serving clients, developing products, or supporting a
particular skill set. This focus is typically anchored around the common
budgets and measures of performance assigned to employees within each
departmental unit.
• Departmentalization encourages coordination through informal communication
among people and subunits. With common supervision and resources, mem-
bers within each configuration typically work near each other, so they can use
frequent and informal interaction to get the work done.
There are almost as many organizational charts as there are businesses, but the six
most common pure types of departmentalization are simple, functional, divisional,
team-based, matrix, and network.
Simple Structure
Most companies begin with a simple structure . 40 They employ only a few people and
typically offer only one distinct product or service. There is minimal hierarchy—usu-
ally just employees reporting to the owners. Employees perform broadly defined
roles because there are insufficient economies of scale to assign them to specialized
jobs. The simple structure is highly flexible and minimizes the walls that form be-
tween employees in other structures. However, the simple structure usually depends
on the owner’s direct supervision to coordinate work activities, so it is very difficult to
operate as the company grows and becomes more complex.
Functional Structure
Growing organizations usually introduce a functional structure at some level of the
hierarchy or at some time in their history. A functional structure organizes employ-
ees around specific knowledge or other resources. The opening vignette to this chap-
ter described how the cofounders of BioWare contemplated the functional structure
for the electronic game company. Specifically, they considered the possibility of
creating departments around the various specializations, including art, program-
ming, audio, quality assurance, and design.
Evaluating the Functional Structure The functional structure creates specialized
pools of talent that typically serve everyone in the organization. This provides more
economies of scale than are possible if functional specialists are spread over different
parts of the organization. It increases employee identity with the specialization or
profession. Direct supervision is easier in functional structures because managers
oversee people with common issues and expertise. 41
The functional structure also has limitations. 42 Grouping employees around their
skills tends to focus attention on those skills and related professional needs rather than
functional structure
An organizational struc-
ture in which employees
are organized around
specific knowledge or
other resources.
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Chapter 13 Organizational Structure 397
divisional structure
An organizational struc-
ture in which employees
are organized around
geographic areas,
outputs (products or
services), or clients.
on the company’s product, service, or client needs. Unless people are transferred from
one function to the next, they might not develop a broader understanding of the busi-
ness. Compared with other structures, the functional structure usually produces higher
dysfunctional conflict and poorer coordination in serving clients or developing prod-
ucts. These problems occur because employees need to work with co-workers in other
departments to complete organizational tasks yet they have different subgoals and
mental models of ideal work. Together, these problems require substantial formal con-
trols and coordination when people are organized around functions.
Divisional Structure
The divisional structure (sometimes called the multidivisional or M-form structure)
groups employees around geographic areas, outputs (products or services), or clients.
Exhibit 13.2 illustrates these three variations of divisional structure. The geographic
divisional structure organizes employees around distinct regions of the country or world.
Exhibit 13.2 ( a ) illustrates a geographic divisional structure recently adopted by Barrick
Gold Corporation, the world’s largest gold-mining company. The product/service divi-
sional structure organizes employees around distinct outputs. Exhibit 13.2 ( b ) illustrates a
simplified version of this type of structure at Philips. The Dutch electronics company
divides its workforce mainly into three divisions: health care products, lighting products,
Commissioner
(chief executive)
Wages and investments
(individual taxpayers)
Small businesses and
self-employed
Large and midsize
businesses
Tax-exempt and
government entities
Chief executive
officer
Health care Lighting products
Consumer
lifestyle
(a) Geographic structure
(b) Product structure
(c) Client structure
Chief executive
officer
North
America
South
America
Australia/
Pacific
Africa
Exhibit 13.2 Three Types of Divisional Structure
Note: Diagram ( a ) shows the global geographic divisional structure of Barrick Gold Corp.; diagram ( b ) is similar to the product divisions at Philips;
diagram ( c ) is similar to the customer-focused structure at the U.S. Internal Revenue Service.
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398 Part Four Organizational Processes
and consumer products. The client divisional structure organizes employees around spe-
cific customer groups. Exhibit 13.2 ( c ) illustrates a customer-focused divisional structure
similar to one adopted by the U.S. Internal Revenue Service. 43
Which form of divisional structure should large organizations adopt? The answer
depends mainly on the primary source of environmental diversity or uncertainty. 44
Suppose an organization has one type of product sold to people across the country. If
customer needs vary across regions, or if state governments impose different regula-
tions on the product, then a geographic structure would be best to be more vigilant of
this diversity. On the other hand, if the company sells several types of products across
the country and customer preferences and government regulations are similar every-
where, then a product structure would likely work best.
Coca-Cola, Nestlé, and many other food and beverage companies are organized
mainly around geographic regions because consumer tastes and preferred marketing
strategies vary considerably around the world. Even though McDonald’s makes the
same Big Mac throughout the world, the company has more fish products in Hong
Kong and more vegetarian products in India, in line with traditional diets in those
A More Customer-Facing Caterpillar For decades, Caterpillar, Inc., the world’s largest manufacturer of
construction and mining equipment, enjoyed a cozy dominance in the North American marketplace,
resulting in an insular culture focused on fiefdoms of expertise rather than customers or cost efficiency.
Reflecting this culture, Caterpillar operated with a functional structure, organizing employees around
engineering, marketing, manufacturing, and other business processes with almost no communication
across these units. The vice presidents of these departments were so powerful that one CEO described
them as “the kingpins of decisions.” Several years ago, more agile competitors from Japan and elsewhere
threatened Caterpillar’s future. Fortunately, the company reacted quickly enough to remain in business.
One of its first actions was to jettison the old corporate structure in favor of a divisional structure that paid
more attention to customers and efficiency. The new structure essentially demoted the functional vice
presidents, who now report to the product and marketing people who previously reported to them. 45
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Chapter 13 Organizational Structure 399
countries. Philips, on the other hand, is organized around products because consumer
preferences around the world are similar within each product group. Hospitals from
Geneva, Switzerland, to Santiago, Chile, buy similar medical equipment from Philips,
whereas the manufacturing and marketing of these products are quite different from
Philips’ consumer electronics business.
The Globally Integrated Enterprise Many companies are moving away from
structures that organize people around geographic clusters. 46 One reason is that cli-
ents can purchase products online and communicate with businesses from almost
anywhere in the world, so local representation is less critical. Reduced geographic
variation is another reason for the shift away from geographic structures; freer trade
has reduced government intervention, and consumer preferences for many products
and services are becoming more similar (converging) around the world. The third
reason is that large companies increasingly have global business customers who de-
mand one global point of purchase, not one in every country or region.
This shift away from geographic and toward product or client-based divisional
structures reflects the trend toward the globally integrated enterprise . 47 As the
label implies, a globally integrated enterprise connects work processes around the
world, rather than replicating them within each country or region. This type of orga-
nization typically organizes people around product or client divisions. Even func-
tional units—production, marketing, design, human resources, and so on—serve the
company worldwide rather than within specific geographic clusters. These functions
are sensitive to cultural and market differences and have local representation to sup-
port that sensitivity, but local representatives are associates of a global function rather
than a local subsidiary copied across several regions. Indeed, a globally integrated
enterprise is marked by a dramatic increase in virtual teamwork, because employees
are assigned global projects and ongoing responsibilities for work units that transcend
geographic boundaries.
The globally integrated enterprise no longer orchestrates its business from a single
headquarters in one “home” country. Instead, its divisional and functional operations
are led from where the work is concentrated, and this concentration depends on eco-
nomics (cost of labor, infrastructure, etc.), expertise, and openness (trade, capital flow,
knowledge sharing, etc.). For example, IBM has moved toward the globally inte-
grated enterprise structure by locating its global data centers in Colorado, Web site
management in Ireland, back-office finance in Brazil, software in India, and procure-
ment in China. IBM’s vice president of worldwide engineering, responsible for pro-
curement, recently moved from Armonk, New York, to China, where the procurement
center is located. “These people are not leading teams focused on China or India or
Brazil or Ireland—or Colorado or Vermont,” says IBM CEO Sam Palmisano. “They
are leading integrated global operations.” 48
Evaluating the Divisional Structure The divisional form is a building-block struc-
ture; it accommodates growth relatively easily and focuses employee attention on prod-
ucts or customers rather than tasks. Different products, services, or clients can be
accommodated by sprouting new divisions. These advantages are offset by a number of
limitations. First, the divisional structure tends to duplicate resources, such as produc-
tion equipment and engineering or information technology expertise. Also, unless the
division is quite large, resources are not used as efficiently as they are in functional
structures where resources are pooled across the entire organization. The divisional
structure also creates silos of knowledge. Expertise is spread across several autonomous
business units, and this reduces the ability and perhaps motivation of the people in one
globally integrated
enterprise
An organizational
structure in which work
processes and executive
functions are distributed
around the world
through global centers,
rather than developed
in a home country and
replicated in satellite
countries or regions.
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400 Part Four Organizational Processes
division to share their knowledge with counterparts in other divisions. In contrast, a
functional structure groups experts together, thereby supporting knowledge sharing.
Finally, the preferred divisional structure depends on the company’s primary
source of environmental diversity or uncertainty. This principle seems to be applied
easily enough at Coca-Cola, McDonald’s, and Philips, but many global organizations
experience diversity and uncertainty in terms of geography, product, and clients.
Consequently, some organizations revise their structures back and forth or create
complex structures that attempt to give all three dimensions equal status. This waf-
fling and complexity generates further complications, because organizational struc-
ture decisions shift power and status among executives. If the company switches from
a geographic to product structure, people who lead the geographic fiefdoms suddenly
get demoted under the product chiefs. In short, leaders of global organizations strug-
gle to find the best divisional structure, often with the result that one or more execu-
tives leave and those who remain experience frustration.
Team-Based Structure
The opening story to this chapter introduced the organizational structure dilemma that
BioWare’s cofounders faced when they decided to rapidly expand operations. One of
the structural forms they considered was based entirely on teams. This team-based
structure would have BioWare employees organized around several projects, each with
its own autonomous team. Generally, a team-based organizational structure is built
around self-directed teams that complete an entire piece of work, such as manufacturing
a product or developing an electronic game. This type of structure is usually organic.
There is a wide span of control because teams operate with minimal supervision. In ex-
treme situations, there is no formal leader, just someone selected by other team mem-
bers to help coordinate the work and liaise with top management. Team structures are
highly decentralized because almost all day-to-day decisions are made by team mem-
bers rather than someone further up the organizational hierarchy. Finally, many team-
based structures have low formalization because teams are given relatively few rules
about how to organize their work. Instead, executives assign quality and quantity output
targets and often productivity improvement goals to each team. Teams are then encour-
aged to use available resources and their own initiative to achieve those objectives.
Team-based structures are usually found within the manufacturing or service op-
erations of larger divisional structures. For example, several GE Aircraft Engines
plants are organized as team-based structures, but these plants operate within GE’s
larger divisional structure. However, a small number of firms apply the team-based
structure from top to bottom, including W. L. Gore & Associates and Semco SA,
where almost all associates work in teams.
Evaluating the Team-Based Structure The team-based organization represents
an increasingly popular structure because it is usually more flexible and responsive to
the environment. 49 It tends to reduce costs because teams have less reliance on formal
hierarchy (direct supervision). A cross-functional team structure improves communi-
cation and cooperation across traditional boundaries. With greater autonomy, this
structure also allows quicker and more informed decision making. 50 For this reason,
some hospitals have shifted from functional departments to cross-functional teams.
Teams composed of nurses, radiologists, anesthetists, a pharmacology representative,
possibly social workers, a rehabilitation therapist, and other specialists communicate
and coordinate more efficiently, thereby reducing delays and errors. 51
team-based structure
An organizational
structure built around
self-directed teams
that complete an entire
piece of work.
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Chapter 13 Organizational Structure 401
Against these benefits, the team-based structure can be costly to maintain due to the
need for ongoing interpersonal skill training. Teamwork potentially takes more time to
coordinate than formal hierarchy during the early stages of team development. Employ-
ees may experience more stress due to increased ambiguity in their roles. Team leaders
also experience more stress due to increased conflict, loss of functional power, and un-
clear career progression ladders. In addition, team structures suffer from duplication of
resources and potential competition (and lack of resource sharing) across teams. 52
Matrix Structure
Throughout this chapter we have referred to the dilemma that Ray Muzyka and Greg
Zeschuk faced regarding the best choice of an organizational structure for BioWare.
The electronic game developer could adopt a functional structure, but this might not
generate an optimal level of teamwork or commitment to the final product. Alterna-
tively, BioWare’s employees could be organized into a team-based structure. But having
several teams would duplicate resources and possibly undermine resource sharing
among people with the same expertise across teams.
After carefully weighing the various organizational structure options, Muzyka and
Zeschuk adopted a matrix structure to gain the benefits of both a functional structure
and a project-based (team) structure. BioWare’s matrix structure, which is similar to the
diagram in Exhibit 13.3 , is organized around both functions (art, audio, programming,
matrix structure
An organizational
structure that overlays
two structures (such as
a geographic divisional
and a functional
structure) in order to
leverage the benefits
of both.
Art
department
leader
Audio
department
leader
Programming
department
leader
Quality
assurance
leader
CEO
Game 1
project
leader
Game 2
project
leader
Game 3
project
leader
Employee
Exhibit 13.3
Project-Based
Matrix Structure
(Similar to BioWare’s
Structure)
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402 Part Four Organizational Processes
etc.) and team-based game development projects. Employees are assigned to a cross-
functional team responsible for a specific game project, yet they also belong to a
permanent functional unit from which they are reassigned when their work is com-
pleted on a particular project. 53 Muzyka and Zeschuk say the matrix structure en-
courages employees to think in terms of the final product yet keeps them organized
around their expertise to encourage knowledge sharing. “The matrix structure also
supports our overall company culture where BioWare is the team, and everyone is
always willing to help each other whether they are on the same project or not,” they
add. BioWare’s matrix structure has proved to be a good choice, particularly as the
company (which recently became an independent division of Electronic Arts) has
grown to almost 400 employees working on more than a half-dozen game projects in
Austin, Texas, and Edmonton, Canada.
BioWare’s structure, in which project teams overlap with functional departments, is
just one form of matrix structure. Another variation, which is common in large global
firms, is to have geography on one axis and products/services or client groups on the
other. Procter & Gamble recently moved toward this type of global matrix structure
with geographic divisions (called “market development organizations”) on one axis and
“global business units,” representing global brands, on the other axis. Previously, P&G
had a geographic divisional structure, which gave too much power to country managers
and not enough power or priority to globalizing its major brands (e.g., Pantene, Tide,
Pringles). P&G’s leaders believe that the new matrix structure will balance this power,
thereby supporting its philosophy of thinking globally and acting locally. 54
Evaluating the Matrix Structure The matrix structure usually makes very
good use of resources and expertise, making it ideal for project-based organiza-
tions with fluctuating workloads. When properly managed, it improves communi-
cation efficiency, project flexibility, and innovation, compared to purely functional
or divisional designs. It focuses employees on serving clients or creating products
yet keeps people organized around their specialization, so knowledge sharing im-
proves and resources are used more efficiently. The matrix structure is also a logical
choice when, as in the case of Procter & Gamble, two different dimensions (re-
gions and products) are equally important. Structures determine executive power
and what is important; the matrix structure works when two different dimensions
deserve equal attention.
In spite of these advantages, the matrix structure has several well-known prob-
lems. 55 One concern is that it increases conflict among managers who equally
share power. Employees working at the matrix level have two bosses and, conse-
quently, two sets of priorities that aren’t always aligned with each other. Project
leaders might squabble with functional leaders regarding the assignment of spe-
cific employees to projects as well as regarding the employee’s technical compe-
tence. For example, Citigroup, Inc., recently adopted a geographic-product matrix
structure and apparently is already experiencing dysfunctional conflict between
the regional and product group executives. 56 Aware of these potential conflicts,
BioWare holds several “synchronization meetings” each year involving all depart-
ment directors (art, design, audio, etc.), producers (i.e., game project leaders), and
the human resource manager. These meetings sort out differences and ensure that
staff members are properly assigned to each game project.
Another challenge is that the existence of two bosses can dilute accountability. In
a functional or divisional structure, one manager is responsible for everything, even
the most unexpected issues. But in a matrix structure, the unusual problems don’t
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Chapter 13 Organizational Structure 403
get resolved because neither manager takes ownership of them. 57 Mark Hurd was so
concerned about accountability that he replaced Hewlett-Packard’s matrix structure
soon after becoming CEO. “The more accountable I can make you, the easier it is
for you to show you’re a great performer,” Hurd declared. “The more I use a matrix,
the easier I make it to blame someone else.” 58 The combination of dysfunctional
conflict and ambiguous accountability in matrix structures also explains why some
employees experience more stress and some managers are less satisfied with their
work arrangements.
Network Structure
BMW and Mercedes aren’t eager to let you know this, but some of their vehicles
designed and constructed with Germanic precision are neither designed nor con-
structed by them or in Germany. Much of BMW’s X3, for example, was designed
Losing Data in the Matrix Soon after Britain’s Inland Revenue and Customs/Excise departments merged to
become HM Revenue & Customs (HMRC), the combined department experienced a series of errors that
violated individual privacy rights. The most serious of these incidents occurred when HMRC staff somehow
lost two computer disks containing confidential details of 25 million child welfare claimants. The UK
government’s investigation into the security lapse concluded that along with resulting from poor security
procedures, the error was partly due to “muddled accountabilities” created by the matrix organizational
structure under which the new department operated. The investigator’s initial briefing stated that the
matrix structure and numerous departments made it “difficult to relate roles and responsibilities amongst
senior management to accountability.” In fact, responsibility for data security was assigned to no less
than five departments, each of which reported to different director generals. The final report concluded
that “[HMRC] is not suited to the so-called ‘constructive friction’ matrix type organization [that was] in
place at the time of the data loss.” HMRC has since changed to a more traditional, single-command
organizational structure. 59
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404 Part Four Organizational Processes
by Magna Steyr in Austria. Magna also manufactured the vehicle in Austria until
BMW transferred this work to its plant in South Carolina. The contract manufacturer
also builds Mercedes’s off-road G-class vehicle. Both BMW and Mercedes are hub
organizations that own and market their respective brands, whereas Magna and other
suppliers are spokes around the hub that provide production, engineering, and other
services that get the auto firms’ luxury products to customers. 60
BMW, Mercedes, and many other organizations are moving toward a network
structure as they design and build a product or serve a client through an alliance of
several organizations. 61 As Exhibit 13.4 illustrates, this collaborative structure typi-
cally consists of several satellite organizations beehived around a hub or core firm.
The core firm orchestrates the network process and provides one or two other core
competencies, such as marketing or product development. In our example, BMW or
Mercedes is the hub that provides marketing and management, whereas other firms
perform many other functions. The core firm might be the main contact with custom-
ers, but most of the product or service delivery and support activities are farmed out
to satellite organizations located anywhere in the world. Extranets (Web-based net-
works with partners) and other technologies ensure that information flows easily and
openly between the core firm and its array of satellites. 62
One of the main forces pushing toward a network structure is the recognition that
an organization has only a few core competencies . A core competency is a knowledge
base that resides throughout the organization and provides a strategic advantage. As
companies discover their core competency, they “unbundle” noncritical tasks to
other organizations that have a core competency at performing those tasks. For in-
stance, BMW decided long ago that its core competency is not facilities management,
so it outsourced this function at its British engine plant to Dalkia, which specializes in
facility maintenance and energy management. 63
Marketing
partner
(USA)
Core firm
Assembly
partner
(Mexico)
Call center
partner
(India)
Accounting
partner
(USA)
Product
development
partner
(France)
Package
design
partner
(UK)
Exhibit 13.4
A Network Structure
network structure
An alliance of several
organizations for the
purpose of creating a
product or serving a
client.
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Chapter 13 Organizational Structure 405
Companies are also more likely to form network structures when technology is
changing quickly and production processes are complex or varied. 64 Many firms cannot
keep up with the hyperfast changes in information technology, so they have outsourced
their entire information system departments to IBM, EDS, and other firms that spe-
cialize in information system services. Similarly, many high-technology firms form
networks with Flextronics, Celestica, and other electronic equipment manufacturers
that have expertise in diverse production processes.
Evaluating the Network Structure For several years, organizational behavior theo-
rists have argued that organizational leaders must develop a metaphor of organizations
as plasmalike organisms rather than rigid machines. 65 Network structures come close to
the organism metaphor because they offer the flexibility to realign their structure with
changing environmental requirements. If customers demand a new product or service,
the core firm forms new alliances with other firms offering the appropriate resources.
For example, by working with Magna International, BMW was probably able to de-
velop and launch the X3 vehicle much sooner than would have been the case if it had
performed these tasks on its own. When BMW needs a different type of manufacturing,
it isn’t saddled with nonessential facilities and resources. Network structures also offer
efficiencies because the core firm becomes globally competitive as it shops worldwide
for subcontractors with the best people and the best technology at the best price. In-
deed, the pressures of global competition have made network structures more vital,
and computer-based information technology has made them possible. 66
A potential disadvantage of network structures is that they expose the core firm to
market forces. Other companies may bid up the price for subcontractors, whereas the
short-term cost would be lower if the company hired its own employees to perform
the same function. Another problem is that although information technology makes
worldwide communication much easier, it will never replace the degree of control
organizations have when manufacturing, marketing, and other functions are in-house.
The core firm can use arm’s-length incentives and contract provisions to maintain the
subcontractor’s quality, but these actions are relatively crude compared to maintaining
the quality of work performed by in-house employees.
Learning
Objectives
After reading this section, you should be able to:
9. Identify four characteristics of external environments and discuss
the preferred organizational structure for each environment.
10. Summarize the influences of organizational size, technology, and
strategy on organizational structure.
Contingencies of Organizational Design
Most organizational behavior theories and concepts have contingencies: Ideas that
work well in one situation might not work as well in another situation. This contingency
approach is certainly relevant when choosing the most appropriate organizational
structure. 67 In this section, we introduce four contingencies of organizational design:
external environment, size, technology, and strategy. Before doing so, however, we
need to warn you that this discussion is necessarily simplified because of an unresolved
debate among organizational structure experts. 68 The debate centers on the question of
whether specific contingencies can be associated with specific elements of structure
(centralization, formalization, etc.) or whether we need to examine configurations of
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406 Part Four Organizational Processes
contingencies with broad typologies of organizational structure (such as organic versus
mechanistic). Some writers further suggest that more than two different structural
typologies might work equally well in a particular situational configuration. With these
caveats in mind, let’s examine the four main contingencies of organizational structure.
External Environment
The best structure for an organization depends on its external environment. The ex-
ternal environment includes anything outside the organization, including most stake-
holders (e.g., clients, suppliers, government), resources (e.g., raw materials, human
resources, information, finances), and competitors. Four characteristics of external
environments influence the type of organizational structure best suited to a particular
situation: dynamism, complexity, diversity, and hostility. 69
Dynamic versus Stable Environments Dynamic environments have a high rate
of change, leading to novel situations and a lack of identifiable patterns. Organic
structures are better suited to this type of environment so that the organization can
adapt more quickly to changes, but only if employees are experienced and coordi-
nate well in teamwork. 70 In contrast, stable environments are characterized by regu-
lar cycles of activity and steady changes in supply and demand for inputs and outputs.
Events are more predictable, enabling the firm to apply rules and procedures. Mech-
anistic structures are more efficient when the environment is predictable, so they
tend to work better than organic structures.
Complex versus Simple Environments Complex environments have many ele-
ments, whereas simple environments have few things to monitor. As an example, a
major university library operates in a more complex environment than a small-town
public library. The university library’s clients require several types of services—book
borrowing, online full-text databases, research centers, course reserve collections, and
so on. A small-town public library has fewer of these demands placed on it. The more
complex the environment, the more decentralized the organization should become.
Decentralization is a logical response to complexity because decisions are pushed down
to people and subunits with the necessary information to make informed choices.
Diverse versus Integrated Environments Organizations located in diverse envi-
ronments have a greater variety of products or services, clients, and regions. In con-
trast, an integrated environment has only one client, product, and geographic area. The
more diversified the environment, the more the firm needs to use a divisional structure
aligned with that diversity. If it sells a single product around the world, a geographic
divisional structure would align best with the firm’s geographic diversity, for example.
Hostile versus Munificent Environments Firms located in a hostile environ-
ment face resource scarcity and more competition in the marketplace. Hostile envi-
ronments are typically dynamic ones because they reduce the predictability of access
to resources and demand for outputs. Organic structures tend to be best in hostile
environments. However, when the environment is extremely hostile—such as a severe
shortage of supplies or lower market share—organizations tend to temporarily central-
ize so that decisions can be made more quickly and executives feel more comfortable
being in control. 71 Ironically, centralization may result in lower-quality decisions
during organizational crises, because top management has less information, particularly
when the environment is complex.
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Chapter 13 Organizational Structure 407
Being Big and Small All at Once Johnson & Johnson (J&J)
may be best known for Band-Aids and baby powder, but the
New Jersey–based company is really a conglomerate of 250
businesses in 57 countries that manufacture and/or market
prescription medicines (accounting for 40 percent of its total
business), medical devices and diagnostics (the largest such
business in the world), and personal care products (tooth-
brushes, skin creams, shampoos, etc.). Successful companies
decentralize when operating in complex and diversified
environments, and J&J is no exception. “J&J is probably the
reference company for being decentralized,” says William
Weldon, J&J’s chairman and CEO. Weldon points out that the
company’s decentralized structure allows it be more sensitive
and responsive to each unique culture and business setting.
“The men and women who run our businesses around the
world usually are people who grew up in those markets,
understand those markets, and develop themselves in those
markets,” Weldon explains. Decentralization of a large orga-
nization has other advantages. “We are big and we are small
all at once,” says J&J’s Web site. “Each of our operating
companies functions as its own small business . . . [yet] they
also have access to the know-how and resources of a Fortune
50 company. It’s like having dozens of strategic partners at
their fingertips.” 72
Organizational Size
Larger organizations should have different structures from smaller organizations. 73 As
the number of employees increases, job specialization increases due to a greater divi-
sion of labor. The greater division of labor requires more elaborate coordinating
mechanisms. Thus, larger firms make greater use of standardization (particularly
work processes and outcomes) to coordinate work activities. These coordinating
mechanisms create an administrative hierarchy and greater formalization. Histori-
cally, larger organizations make less use of informal communication as a coordinat-
ing mechanism. However, emerging information technologies and increased
emphasis on empowerment have caused informal communication to regain its im-
portance in large firms. 74
Larger organizations also tend to be more decentralized. Executives have neither
sufficient time nor expertise to process all the decisions that significantly influence
the business as it grows. Therefore, decision-making authority is pushed down to
lower levels, where incumbents are able to cope with the narrower range of issues
under their control.
Technology
Technology is another factor to consider when designing the best organizational
structure for the situation. 75 Technology refers to the mechanisms or processes by which
an organization turns out its product or service. One technological contingency is
variability —the number of exceptions to standard procedure that tend to occur. In
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408 Part Four Organizational Processes
Organizational structure is the division of labor as
well as the patterns of coordination, communication,
workflow, and formal power that direct organizational
activities. All organizational structures divide labor
into distinct tasks and coordinate that labor to accom-
plish common goals. The primary means of coordina-
tion are informal communication, formal hierarchy,
and standardization.
The four basic elements of organizational structure
are span of control, centralization, formalization, and
departmentalization. The optimal span of control—the
Chapter Summary
number of people directly reporting to the next level in
the hierarchy—depends on the presence of coordinating
mechanisms other than formal hierarchy, as well as on
whether employees perform routine tasks and how
much interdependence there is among employees
within the department.
Centralization occurs when formal decision author-
ity is held by a small group of people, typically senior
executives. Many companies decentralize as they be-
come larger and more complex, but some sections
of the company may remain centralized while other
work processes with low variability, jobs are routine and follow standard operating
procedures. Another contingency is analyzability —the predictability or difficulty of the
required work. The less analyzable the work, the more it requires experts with suffi-
cient discretion to address the work challenges. An organic, rather than a mechanis-
tic, structure should be introduced where employees perform tasks with high variety
and low analyzability, such as in a research setting. The reason is that employees face
unique situations with little opportunity for repetition. In contrast, a mechanistic
structure is preferred where the technology has low variability and high analyzability,
such as an assembly line. The work is routine and highly predictable, an ideal situa-
tion for a mechanistic structure to operate efficiently.
Organizational Strategy
Organizational strategy refers to the way the organization positions itself in its
setting in relation to its stakeholders, given the organization’s resources, capabilities,
and mission. 76 In other words, strategy represents the decisions and actions applied
to achieve the organization’s goals. Although size, technology, and environment in-
fluence the optimal organizational structure, these contingencies do not necessarily
determine structure. Instead, corporate leaders formulate and implement strategies
that shape both the characteristics of these contingencies as well as the organization’s
resulting structure.
This concept is summed up with the simple phrase “Structure follows strategy.” 77
Organizational leaders decide how large to grow and which technologies to use.
They take steps to define and manipulate their environments, rather than let the
organization’s fate be entirely determined by external influences. Furthermore,
organizational structures don’t evolve as a natural response to these contingencies.
Instead, they result from organizational decisions. Thus, organizational strategy
influences both the contingencies of structure and the structure itself. If a company’s
strategy is to compete through innovation, a more organic structure would be pre-
ferred because it is easier for employees to share knowledge and be creative. If a
company chooses a low-cost strategy, a mechanistic structure is preferred because
it maximizes production and service efficiency. 78 Overall, it is now apparent that
organizational structure is influenced by size, technology, and environment, but
the organization’s strategy may reshape these elements and loosen their connection
to organizational structure.
organizational strategy
The way the organiza-
tion positions itself in its
setting in relation to its
stakeholders, given the
organization’s resources,
capabilities, and mission.
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products or customers rather than tasks. However, this
structure duplicates resources and creates silos of knowl-
edge. Team-based structures are very flat, with low for-
malization, and organize self-directed teams around work
processes rather than functional specialties. The matrix
structure combines two structures to leverage the benefits
of both types of structure. However, this approach re-
quires more coordination than functional or pure divi-
sional structures, may dilute accountability, and increases
conflict. A network structure is an alliance of several
organizations for the purpose of creating a product or
serving a client.
The best organizational structure depends on the
firm’s external environment, size, technology, and strat-
egy. The optimal structure depends on whether the envi-
ronment is dynamic or stable, complex or simple, diverse
or integrated, and hostile or munificent. As organizations
increase in size, they become more decentralized and
more formalized. The work unit’s technology—including
variety of work and analyzability of problems—influences
whether to adopt an organic or mechanistic structure.
These contingencies influence but do not necessarily de-
termine structure. Instead, corporate leaders formulate
and implement strategies that shape both the characteris-
tics of these contingencies as well as the organization’s
resulting structure.
sections decentralize. Formalization is the degree to
which organizations standardize behavior through
rules, procedures, formal training, and related mecha-
nisms. Companies become more formalized as they get
older and larger. Formalization tends to reduce organi-
zational flexibility, organizational learning, creativity,
and job satisfaction.
Span of control, centralization, and formalization clus-
ter into mechanistic and organic structures. Mechanistic
structures are characterized by a narrow span of control
and a high degree of formalization and centralization.
Companies with an organic structure have the opposite
characteristics.
Departmentalization specifies how employees and
their activities are grouped together. It establishes the
chain of command, focuses people around common
mental models, and encourages coordination through
informal commu nication among people and subunits.
A functional structure organizes employees around
specific knowledge or other resources. This fosters
greater specialization and improves direct supervision,
but it weakens the focus on serving clients or develop-
ing products.
A divisional structure groups employees around geo-
graphic areas, clients, or outputs. This structure accom-
modates growth and focuses employee attention on
3. Administrative theorists concluded many decades
ago that the most effective organizations have a
narrow span of control. Yet today’s top-performing
manufacturing firms have a wide span of control.
Why is this possible? Under what circumstances,
if any, should manufacturing firms have a narrow
span of control?
4. Leaders of large organizations struggle to
identify the best level and types of centralization
and decentralization. What should companies
consider when determining the degree of
decentralization?
1. TAXI and Nitro, two creative advertising companies
described in this chapter, have organic, team-based
structures. What coordinating mechanism likely
dominates in this type of organizational structure?
Describe the extent and form in which the other two
types of coordination might be apparent at TAXI
and Nitro.
2. Think about the business school or other or ganiza-
tional unit whose classes you are currently attending.
What is the dominant coordinating mechanism used
to guide or control the instructor? Why is this coordi-
nating mechanism used the most here?
Critical Thinking Questions
centralization, p. 393
concurrent engineering, p. 388
divisional structure, p. 397
formalization, p. 393
functional structure, p. 396
globally integrated enterprise, p. 399
matrix structure, p. 401
mechanistic structure, p. 394
network structure, p. 404
organic structure, p. 395
organizational strategy, p. 408
organizational structure, p. 386
span of control, p. 390
team-based structure, p. 400
Key Terms
409
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Case Study 13.1 MACY’S GETS PERSONAL
Macy’s, Inc., wants to get more personal with its cus-
tomers. The world’s largest department store is re-
sponding to declining sales by introducing a new
organizational structure in which local districts and
stores have more autonomy to personalize merchan-
dise and marketing for customers in that area. This
change is part of its “My Macy’s” strategy developed
a year earlier, which is aimed at getting customers to
feel a personal connection to the Macy’s outlets in
their area by ensuring that those stores provide mer-
chandise assortments, size ranges, marketing pro-
grams, and shopping experiences that are more
closely aligned to local needs.
“Improving sales and earnings performance requires
innovation in engaging our customer more effectively
in every store, as well as reducing total costs,” explains
Macy’s CEO Terry J. Lundgren. “We believe the right
answer is to reallocate our resources to place more em-
phasis and talent at the local market level to differenti-
ate Macy’s stores, serve customers, and drive business.
In essence, we plan to drive sales growth by improving
our knowledge at the local level and then acting quickly
on that knowledge. In addition, we believe our new
strategies will speed up decision making and simplify
the process of working with our vendors.”
Macy’s new organizational structure consists of 20
districts spread across three regions (East, South, and
West). District managers and their small staff of store
merchandisers and planners will be responsible for an
average of 10 stores rather than 16 to 18 stores in the
previous structure. This narrower span of control gives
district staff and management the opportunity to work
more closely with each store. The district managers, who
report to regional heads, will also have more autonomy
to make decisions regarding space allocation, service
levels, and visual merchandising within each store.
The district store merchandisers will liaise with
Macy’s central buying executives to understand and
act on the merchandise needs of local customers.
The district planners will provide market-specific in-
telligence to division planning offices. The company
is introducing new systems technology to help the
district and store management more accurately stock
local stores with items, brands, garment sizes, and
colors preferred by customers who shop at those
specific locations. District offices will also receive re-
sources to participate in local events. The new struc-
ture will result in about 250 people in district offices,
double the previous number at that level. Mean-
while, Macy’s is laying off more than 2,000 employ-
ees, many of them from regional offices where many
decisions were previously made.
Macy’s new organizational structure and marketing
strategy is something of an about-face. Over the past
410
departmentalization might be best for DTL if dereg-
ulation and trade agreements occur?
6. IBM is becoming a globally integrated enterprise.
What does this organization look like in terms of its
departmentalization? What challenges might face
companies that try to adopt the globally integrated
enterprise model?
7. From an employee perspective, what are the ad-
vantages and disadvantages of working in a matrix
structure?
8. Suppose that you have been hired as a consultant
to diagnose the environmental characteristics of
your college or university. How would you de-
scribe the school’s external environment? Is the
school’s existing structure appropriate for this
environment?
5. Diversified Technologies Ltd. (DTL) makes four
types of products, each type to be sold to different
types of clients. For example, one product is sold
exclusively to automobile repair shops, whereas
another is used mainly in hospitals. Customer
expectations and needs are surprisingly similar
throughout the world. The company has separate
marketing, product design, and manufacturing
facilities in Asia, North America, Europe, and
South America because, until recently, each jurisdic-
tion had unique regulations governing the produc-
tion and sales of these products. However, several
governments have begun the process of deregulat-
ing the products that DTL designs and manufac-
tures, and trade agreements have opened several
markets to foreign-made products. Which form of
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Even with these concerns, Macy’s CEO is upbeat
about the reorganization. “I’m pretty excited about the
new structure,” says Lundgren. “It’s about growing
sales. It’s about trying to be more locally in tune with
customer preferences. It’s about giving our team a
small span of control, so they really get educated about
what the product needs are for that local consumer.”
Discussion Questions
1. What changes has Macy’s introduced in terms of
the four elements of organizational structure?
2. What contingencies suggest that Macy’s new
organizational structure is appropriate for its
environment?
3. What problems do you think Macy’s might ex-
perience with the new organizational structure?
What factors suggest that the new organizational
structure may face problems?
Sources: D. Moin, “Macy’s to Cut 2,550 Jobs in Restructuring,”
Women’s Wear Daily , 7 February 2008, p. 3; “Macy’s Launches
New Initiatives to Drive Sales, Earnings,” Business Wire , 7 Feb-
ruary 2008; P. Alexander, “Will Macy’s Go Far Enough?” Adver-
tising Age , 5 May 2008, p. 30.
411
few years, the company rebranded several local de-
partment stores that it has acquired. Burdines in
Florida, Stern’s in New York, Bon Marché in the Pacific
Northwest, Goldsmith’s in Memphis, and Kaufmann’s
in Pittsburgh, among others, are now called Macy’s.
This rebranding may have weakened the company’s
personal connection to local customers. Furthermore,
until recently, Macy’s followed the traditional depart-
ment store model of standardizing merchandising and
marketing regardless of geographic locale. This re-
sulted in advertising winter coats in Miami and swim-
suits in Detroit in December.
One retail analyst suggests that Macy’s reorganiza-
tion is an indication that its recent mergers and acqui-
sitions have not worked out as smoothly as planned.
“The need for closer supervision exists in this com-
pany,” says the analyst. “This is a new layer of closer
supervision.” Another retail expert warns that Macy’s
needs to carefully get the right balance regarding de-
centralization and formalization. “Too much localiza-
tion can inflate costs, while too much standardization
triggers staleness. A retailer must understand which
business elements should incorporate localization,
how costly they are to customize, and how much im-
pact they will have from store to store.”
Case Study 13.2 MORE THAN COSMETIC CHANGES AT AVON
After several years of stellar
growth and earnings, Avon Prod-
ucts Inc. suddenly experienced
declining sales around the world. CEO Andrea Jung,
who led the company through its good years, now
had to become a turnaround expert. “I’d never done
anything like that before,” admits Jung. “My first re-
action was: ‘I get it. I see the numbers, but I just don’t
know if I, or we, have the stomach for it.” One of Jung’s
strategies was to reorganize Avon so that it would be
more nimble and responsive to the market.
This BusinessWeek case study describes how
Avon CEO Andrea Jung introduced a new organi-
zational struc ture and made other changes to re-
turn the cosme tics company to profitability and
growth. Read the full text of this BusinessWeek article
at www.mhhe.com/mcshane5e , and prepare for
the discussion questions below.
Discussion Questions
1. What organizational structure problems did
Avon experience prior to the reorganization?
2. What changes did Andrea Jung make to Avon’s or-
ganizational structure? In your opinion, were these
structural changes appropriate? Why or why not?
3. This case study also refers to problems and im-
provements in managerial decision making. In
what way(s) does decision making relate to orga-
nizational structure here?
Source: N. Byrnes, “Avon: More than Cosmetic Changes,” Business-
Week, 12 March 2007, pp. 62–63.
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http://www.mhhe.com/mcshane5e
Team Exercise 13.3 THE CLUB ED EXERCISE
Cheryl Harvey and Kim Morouney, Wilfred Laurier University
PURPOSE This exercise is designed to help you
understand the issues to consider when designing or-
ganizations at various stages of growth.
MATERIALS Each student team should have
enough overhead transparencies or flip-chart sheets
to display several organizational charts.
INSTRUCTIONS Each team discusses the scenario
presented. The first scenario is presented below. The
instructor will facilitate discussion and notify teams
when to begin the next step. The exercise and de-
briefing require approximately 90 minutes, although
fewer scenarios can reduce the time somewhat.
1. Students are placed in teams (typically four or
five people).
2. After reading Scenario 1 presented below, each
team will design an organizational chart (depart-
mentalization) that is most appropriate for the situ-
ation. Students should be able to describe the type
of structure drawn and explain why it is appropri-
ate. The structure should be drawn on an overhead
transparency or flip chart for others to see during
later class discussion. The instructor will set a fixed
time (e.g., 15 minutes) to complete this task.
Scenario 1. Determined never to shovel snow
again, you are establishing a new resort business
on a small Caribbean island. The resort is
under construction and is scheduled to open
one year from now. You decide it is time to
draw up an organizational chart for this new
venture, called Club Ed.
3. At the end of the time allowed, the instructor
will present Scenario 2, and each team will be
asked to draw another organizational chart to
suit that situation. Again, students should be
able to describe the type of structure drawn and
explain why it is appropriate.
4. At the end of the time allowed, the instructor
will present Scenario 3, and each team will be
asked to draw another organizational chart to
suit that situation.
5. Depending on the time available, the instructor
might present a fourth scenario. The class will
gather to present their designs for each scenario.
During each presentation, teams should describe
the type of structure drawn and explain why it is
appropriate.
Source: Reprinted with permission of Cheryl Harvey, Wilfrid
Laurier University.
412
Self-Assessment 13.4
WHAT ORGANIZATIONAL STRUCTURE DO YOU PREFER?
PURPOSE This exercise is designed to help you
understand how an organization’s structure influ-
ences the personal needs and values of people work-
ing in that structure.
INSTRUCTIONS Personal values influence how
comfortable you are working in different organiza-
tional structures. You might prefer an organization
with clearly defined rules or no rules at all. You
might prefer a firm where almost any employee can
make important decisions or one where important
decisions are screened by senior executives. Read
each statement below and indicate the extent to
which you would like to work in an organization
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413
with that characteristic. When finished, use the scor-
ing key in Appendix B at the end of the book to
calculate your results. This self-assessment should
be completed alone so that you can assess yourself
honestly without concerns of social comparison. Class
discussion will focus on the elements of organiza-
tional design and their relationship to personal needs
and values.
Not at all
Some-
what
Very
much ScoreA little
Organizational Structure Preference Scale
I would like to work in an organization where . . .
A person’s career ladder has several steps toward
higher status and responsibility.
Employees perform their work with few rules to limit
their discretion.
Responsibility is pushed down to employees who
perform the work.
Supervisors have few employees, so they work
closely with each person.
Senior executives make most decisions to ensure that
the company is consistent in its actions.
Jobs are clearly defined so that there is no confusion
over who is responsible for various tasks.
Employees have their say on issues, but senior
executives make most of the decisions.
Job descriptions are broadly stated or nonexistent.
Everyone’s work is tightly synchronized around top-
management operating plans.
Most work is performed in teams without close
supervision.
Work gets done through informal discussion with
co-workers rather than through formal rules.
Supervisors have so many employees that they can’t
watch anyone very closely.
Everyone has clearly understood goals, expectations,
and job duties.
Senior executives assign overall goals, but leave daily
decisions to frontline teams.
Even in a large company, the CEO is only three or
four levels above the lowest position.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
© 2000 Steven L. McShane.
After reading this chapter, if you feel that you need additional information, see www.mhhe.com/
mcshane5e for more in-depth information and interactivities that correspond to this chapter.
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http://www.mhhe.com/
Propelled by a culture of cost efficiency and competitiveness, Dell, Inc., was the
unstoppable leader in the computer industry for more than a decade. Experts praised
its low-cost, responsive manufacturing and direct-marketing sales model. Founder
Michael Dell championed short-
term objectives, while Kevin
Rollins (until recently Dell CEO)
was the architect of efficiency-
oriented processes and measures.
Dell culture emphasized
“winning,” meaning that it focused
on beating the competition and
staying on top through low prices.
“There are some organizations
where people think they’re a hero
if they invent a new thing,” Rollins
said a few years ago. “Being a
hero at Dell means saving money.”
Although still an efficient
manufacturer of low-cost
computers, Dell’s spectacular
success has stalled while HP and
other competitors are moving
ahead. The reason? Dell’s strong
culture blinded leaders and most staff to anything other than building low-cost computers,
yet the market was shifting toward a preference for style and innovation. “Dell’s culture is not
inspirational or aspirational,” suggests one industry expert. “[Its] culture only wants to talk
about execution.” A few staff warned that Dell’s culture needed to change, but those who
dared to criticize the company’s deeply ingrained values and assumptions were quickly
silenced. “A lot of red flags got waved—but only once,” recalls a former Dell manager.
Meanwhile, Dell’s fortunes—including public ratings of its culture—were falling. A
few years ago, Dell ranked number one on Fortune magazine’s list of most admired
companies in America; two years later, it was off the top 20 list. Similarly, Dell Canada
placed fifth on the list of Canada’s most admired corporate cultures in 2006. A year later,
the company was not mentioned at all; its culture was no longer admired.
These and other concerns motivated founder Michael Dell to return as CEO, replacing
Kevin Rollins. Other senior executives have also left the company. “The company was too
focused on the short term,’’ Dell admits. He apparently also repeatedly emphasizes to
staff that Dell’s past culture “is not a religion.” Dell is convinced he can turn the company
around, and there is some indication his new vision is working. Still, a few critics believe
that changing Dell’s culture will be a mammoth task. “It’s not an easy transition,” warns a
technology analyst. “You’ve got to change your mind-set and your culture.” 1
Dell’s competitive and efficiency-focused culture is now becoming a liability to the
computer-maker’s future.
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14
Organizational Culture
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Describe the elements of organizational
culture.
2. Discuss the importance of organizational
subcultures.
3. List four categories of artifacts through
which corporate culture is deciphered.
4. Identify three functions of organizational
culture.
5. Discuss the conditions under which
organizational culture strength improves
organizational performance.
6. Compare and contrast four strategies for
merging organizational cultures.
7. Identify the four strategies for changing or
strengthening an organization’s culture.
8. Apply attraction-selection-attrition theory
to explain how organizational culture
strengthens.
9. Describe the stages of organizational
socialization.
10. Explain how realistic job previews assist
the socialization process.
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416 Part Four Organizational Processes
Dell’s current challenges illustrate the perils of ignoring organizational culture.
Organizational culture consists of the values and assumptions shared within an
organization. 2 It defines what is important and unimportant in the company and, con-
sequently, directs everyone in the organization toward the “right way” of doing things.
You might think of organizational culture as the organization’s DNA— invisible to the
naked eye, yet a powerful template that shapes what happens in the workplace.
This chapter begins by identifying the elements of organizational culture and then
describing how culture is deciphered through artifacts. This is followed by a discus-
sion of the relationship between organizational culture and performance, including
the effects of cultural strength, fit, and adaptability. Then we examine ways to change
or strengthen organizational culture. The final section of this chapter turns our atten-
tion to the challenges of and solutions to merging organizational cultures.
Learning
Objectives
After reading the next two sections, you should be able to:
1. Describe the elements of organizational culture.
2. Discuss the importance of organizational subcultures.
3. List four categories of artifacts through which corporate culture is
deciphered.
organizational culture
The values and
assumptions shared
within an organization.
Elements of Organizational Culture
Exhibit 14.1 illustrates how the shared values and assumptions of an organization’s
culture relate to each other and are associated with artifacts, which are discussed later
in this chapter. Values, which were described in Chapters 1 and 2, are stable, evaluative
beliefs that guide our preferences for outcomes or courses of action in a variety of
situations. 3 They are conscious perceptions about what is good or bad, right or wrong.
In the context of organizational culture, values are discussed as shared values, which are
values that people within the organization or work unit have in common and place
near the top of their hierarchy of values. 4 At Dell, employees generally hold the shared
values of efficiency and competitiveness (winning), whereas other possible values take
a lower priority. Organizational culture also consists of shared assumptions —a deeper
element that some experts believe is the essence of corporate culture. Shared assump-
tions are nonconscious, taken-for-granted perceptions or ideal prototypes of behavior
that are considered the correct way to think and act toward problems and opportunities.
Shared assumptions are so deeply ingrained that you probably wouldn’t discover them
by surveying employees. Only by observing the employees, analyzing their decisions,
and debriefing them on their actions would these assumptions rise to the surface.
It has become a popular practice for leaders to identify and publicly state their
organization’s culture or, more precisely, their shared values. Yahoo, the online por-
tal company, is no exception. Its Web site proudly says that six values represent
“what makes it tick”: excellence, innovation, customer fixation, teamwork, commu-
nity, and fun. Korean steelmaker POSCO, which is one of Asia’s most admired com-
panies and rated by senior university students as the most desired company to work
for in Korea, also proudly describes its six core values: customer focus, execution
(achieving goals), integrity, recognizing the value of people, and challenge (an in-
domitable spirit of transforming the impossible into reality).
Do these values really represent the cultural content of Yahoo and POSCO? Possibly,
to some extent. However, these value proclamations represent espoused values —the
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Chapter 14 Organizational Culture 417
values that leaders say they and their staff rely on to guide their decisions and actions. 5
Organizational leaders construct a positive public image by claiming to believe in
values that are socially desirable, even when they are not applied (see Chapter 2). An
often-cited example is Enron Corp. 6 The Houston-based energy conglomerate listed
its cultural values as communication, respect, integrity, and excellence, yet it went
bankrupt when its leaders perpetrated one of the world’s largest accounting frauds.
The problem was that Enron’s espoused values were quite different from its enacted
values. Another issue is that even if leaders abide by the espoused values, lower-level
employees might not share these values. In contrast, organizational culture consists of
shared enacted values —the values that leaders and employees truly rely on to guide
their decisions and actions. These “values-in-use” are apparent by watching people in
action.
Artifacts of
organizational culture
Organizational culture
Physical
structures
Language
Rituals and
ceremonies
Stories
and legends
Shared assumptions
• Nonconscious, taken-for-
granted beliefs
• Implicit mental models,
ideal protoypes of
behavior
Shared values
• Conscious beliefs
• Evaluate what is good or
bad, right or wrong
Exhibit 14.1 Organizational Culture Assumptions, Values, and Artifacts
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418 Part Four Organizational Processes
Content of Organizational Culture
Organizations differ in their cultural content, that is, the relative ordering of values
and varying types of assumptions. Dell’s culture places efficiency and competitiveness
far above innovation and aesthetics, whereas the culture at Apple, Inc., prioritizes
innovation and style as equal to or higher than cost efficiency. Here are a few more
companies and their apparent dominant cultures:
• SAS Institute. Burning the midnight oil is a way of life at many high-technology
companies, but SAS Institute has a completely different culture. The software
company in Cary, North Carolina, shoos out its employees by 6 p.m. and locks
the doors to be sure they practice work–life balance. Located on a 200-acre
campus, SAS supports employee well-being with free on-site medical care,
unlimited sick days, heavily subsidized day care, ski trips, personal trainers,
inexpensive gourmet cafeterias, and tai chi classes. CEO Jim Goodnight has
fended off dozens of potential acquiring companies because he wants to keep
the employee-friendly culture intact. “We spent many years building a culture
here that’s honed out of respect for our employees, and is one of innovation
and creativity, one of exceeding customer expectations,” Goodnight explains.
“I don’t want to see that end by SAS being merged into another company.” 7
• ICICI Bank. India’s second-largest bank exudes a performance-oriented culture
focused on growth. Its organizational practices place a premium on training,
career development, goal setting, and pay for performance, all with the intent
of maximizing employee achievement and customer service. The company
relies on GE’s storied performance curve, in which a small percentage of staff
receive generous rewards while the bottom 5 percent are cut from the payroll.
“Growth happens only when there are differential rewards for differential
performers,” explains ICICI’s head of human resources. 8
• Toyota Motor Company. Being good isn’t good enough at Toyota. The company
that continuously raises the bar on production efficiency has a strong learning
orientation culture—employees are encouraged to discover and acknowledge
mistakes so that the company can continuously improve. Toyota’s culture also
emphasizes humility. Even as it rises to the top of the auto industry, Toyota’s
leaders are hesitant to talk up their successes. “We’re paranoid against arro-
gance,” explains Ray Tanguay, vice president of Toyota Motor Engineering
and Manufacturing North America. “‘Not good enough’ are key words for us.” 9
Employee-friendly and creative, performance-oriented, efficiency and humility—how
many corporate cultural values are there? Many experts have tried to classify corpo-
rate culture into a few easy-to-remember categories. One of the most popular and
respected models identifies seven corporate cultures (see Exhibit 14.2 ). Another
popular model identifies four organizational cultures organized in a two-by-two
table representing internal versus external focus and flexibility versus control. Other
models organize cultures around a circle with 8 or 12 categories. These circumplex
models suggest that some cultures are opposite to others, such as an avoidance culture
versus a self-actualization culture, or a power culture versus a collegial culture. 10
These organizational culture models and surveys are popular with corporate lead-
ers faced with the messy business of diagnosing their company’s culture and identify-
ing what kind of culture they want to develop. Unfortunately, they also present a
distorted view of organizational culture. First, these models oversimplify the diversity
of cultural values in organizations. The fact is, there are dozens of individual values,
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Chapter 14 Organizational Culture 419
and many more combinations of values, so the number of organizational cultures that
these models describe likely falls considerably short of the full set. Second, we must
remember that organizational culture includes shared assumptions about the right way
to do things, not just shared values. Few models take this more subterranean aspect of
culture into account.
A third concern is that these organizational culture models and measures typically
adopt an “integration” perspective; they assume that most organizations have a fairly
clear, unified culture that is easily decipherable. 11 They assert that an organization’s
culture is inherently measurable because any ambiguity is outside the domain of
the culture. The integration perspective further assumes that when an organization’s
culture changes, it shifts from one unified condition to a new unified condition with
only temporary ambiguity or weakness during the transition. These assumptions are
probably incorrect or, at best, oversimplified. An organization’s culture is usually
quite blurry, so much so that it cannot be estimated through employee surveys alone.
As we discuss next, organizations consist of diverse subcultures that preclude any
potential consensus or consistency in values and assumptions across the organization.
Indeed, even these subcultural clusters can be ill-defined because values and assump-
tions are ultimately unique to every individual. We are not suggesting here that orga-
nizational culture is nonexistent; some degree of shared values and assumptions does
exist in many organizations. Instead, we warn that popular organizational culture
models and measures oversimplify the variety of organizational cultures and falsely
presume that organizations can easily be identified within these categories.
Organizational Subcultures
When discussing organizational culture, we are really referring to the dominant culture,
that is, the values and assumptions shared most consistently and widely by the orga-
nization’s members. The dominant culture is usually understood and internalized by
senior management, but it sometimes exists in spite of senior management’s desire
for another culture. Furthermore, as mentioned in the previous section, an organiza-
tion’s dominant culture is not as unified or clear as many consultants and business
leaders assume. Instead, organizations are composed of subcultures located throughout
their various divisions, geographic regions, and occupational groups. 12 Some sub-
cultures enhance the dominant culture by espousing parallel assumptions and values;
others differ from but do not oppose the dominant culture; still others are called
Exhibit 14.2
Organizational
Culture Profile
Dimensions and
Characteristics
Organizational culture
dimension Characteristics of the dimension
Innovation Experimenting, opportunity seeking, risk taking, few rules, low
cautiousness
Stability Predictability, security, rule-oriented
Respect for people Fairness, tolerance
Outcome orientation Action-oriented, high expectations, results-oriented
Attention to detail Precise, analytic
Team orientation Collaboration, people-oriented
Aggressiveness Competitive, low emphasis on social responsibility
Source: Based on information in C. A. O’Reilly III, J. Chatman, and D. F. Caldwell, “People and Organizational
Culture: A Profile Comparison Approach to Assessing Person-Organization Fit,” Academy of Management Journal
34, no. 3 (1991), pp. 487–518.
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420 Part Four Organizational Processes
countercultures because they embrace values or assumptions that directly oppose the
organization’s dominant culture. It is also possible that some organizations (including
some universities, according to one study) operate with subcultures and no decipher-
able dominant culture at all. 13
Subcultures, particularly countercultures, potentially create conflict and dissension
among employees, but they also serve two important functions. 14 First, they maintain
the organization’s standards of performance and ethical behavior. Employees who
hold countercultural values are an important source of surveillance and critical review
of the dominant order. They encourage constructive conflict and more creative think-
ing about how the organization should interact with its environment. Subcultures
prevent employees from blindly following one set of values and thereby help the
organization to abide by society’s ethical values.
The second function of subcultures is that they are the spawning grounds for
emerging values that keep the firm aligned with the needs of customers, suppliers,
society, and other stakeholders. Companies eventually need to replace their domi-
nant values with ones that are more appropriate for the changing environment. If
subcultures are suppressed, the organization may take longer to discover and adopt
values aligned with the emerging environment.
Deciphering Organizational Culture through Artifacts
We can’t directly see an organization’s cultural assumptions and values. Instead, as
Exhibit 14.1 illustrated earlier, we decipher organizational culture indirectly through
artifacts. Artifacts are the observable symbols and signs of an organization’s culture,
such as the way visitors are greeted, the organization’s physical layout, and how em-
ployees are rewarded. 15 A few experts suggest that artifacts are the essence of organi-
zational culture, whereas most others (including the authors of this book) view artifacts
as symbols or indicators of culture. Either way, artifacts are important because they
reinforce and potentially support changes to an organization’s culture.
Artifacts provide valuable evidence about a company’s culture. 16 An organization’s
culture is usually too ambiguous and complex and its cultural assumptions too deeply
ingrained to be measured through surveys. Instead, we need to observe workplace
behavior, listen to everyday conversations among staff and with customers, study
written documents and e-mails, note physical structures and settings, and interview
staff about corporate stories. In other words, we need to sample information from a
range of organizational artifacts. For example, the Mayo Clinic conducted an assess-
ment of its culture by hiring an anthropologist to decipher the medical organization’s
culture at its headquarters in Rochester, Minnesota, and to identify ways of transfer-
ring that culture to its two newer sites in Florida and Arizona. For six weeks, the an-
thropologist shadowed employees, posed as a patient in waiting rooms, did countless
interviews, and accompanied physicians on patient visits. The final report outlined
Mayo’s dominant culture and how its satellite operations varied from that culture. 17
In this section, we review the four broad categories of artifacts: organizational stories
and legends, rituals and ceremonies, language, and physical structures and symbols.
Organizational Stories and Legends
Stories permeate strong organizational cultures. Some tales recount heroic deeds,
such as Michael Dell’s determination in the 1980s to build his computer company,
beginning from his dorm room when attending university. Other stories ridicule past
artifacts
The observable
symbols and signs of
an organization’s
culture.
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Chapter 14 Organizational Culture 421
events that deviate from the firm’s core values. Organizational stories and legends
serve as powerful social prescriptions of the way things should (or should not) be
done. They add human realism to corporate expectations, individual performance
standards, and the criteria for getting fired. Stories also produce emotions in listeners,
and this tends to improve listeners’ memory of the lesson within the story. 18 Stories
have the greatest effect on communicating corporate culture when they describe real
people, are assumed to be true, and are known by employees throughout the organi-
zation. Stories are also prescriptive—they advise people what to do or not to do. 19
Rituals and Ceremonies
Rituals are the programmed routines of daily organizational life that dramatize an
organization’s culture. They include how visitors are greeted, how often senior execu-
tives visit subordinates, how people communicate with each other, how much time
Stories of Cirque du Soleil’s Daring Culture Cirque du Soleil, the Montreal-based troupe that combines
circus with theater, thrives on a culture of daring and creativity. This is apparent in stories about how the
troupe was started. In 1980, Gilles Ste-Croix asked the Quebec government for funding to start a street
theater group in Baie-Saint-Paul, northwest of Quebec City. When the government rejected the application,
Ste-Croix walked 55 miles (90 kilometers) from Baie-Saint-Paul to Quebec City . . . on stilts! The grueling
22-hour trip got the government’s attention and financial support. “If you’re crazy enough to walk all
this way on stilts, we’ll give you some money to create jobs,” a Quebec government representative
apparently said. Without that daring event, Cirque du Soleil probably wouldn’t exist today, because
Ste-Criox’s band of 15 performers included Guy Laliberté, who founded Cirque du Soleil in 1984 with
Ste-Croix and others. In 1987, Cirque du Soleil was invited to perform at the Los Angeles Arts Festival,
but the festival could not provide funds in advance to cover Cirque du Soleil’s costs. Laliberté took a
gamble by literally emptying the troupe’s bank account to transport the performers and equipment to
California. “I bet everything on that one night [at the Los Angeles Arts Festival],” Laliberté recalls. “If we
failed, there was no cash for gas to come home.” Fortunately, the gamble paid off. Cirque du Soleil was
a huge success, which led to more opportunities and successes in the following years.20
rituals
The programmed
routines of daily
organizational life that
dramatize the organiza-
tion’s culture.
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422 Part Four Organizational Processes
employees take for lunch, and so on. For instance, BMW’s fast-paced culture is quite
literally apparent in the way employees walk around the German carmaker’s offices.
“When you move through the corridors and hallways of other companies’ buildings,
people kind of crawl, they walk slowly,” observes a BMW executive. “But BMW
people tend to move faster.” 21 Ceremonies are more formal artifacts than rituals.
Ceremonies are planned activities conducted speci fically for the benefit of an audi-
ence. This would include publicly rewarding (or punishing) employees or celebrating
the launch of a new product or newly won contract.
Organizational Language
The language of the workplace speaks volumes about the company’s culture. How
employees address co-workers, describe customers, express anger, and greet stake-
holders are all verbal symbols of cultural values. Employees at The Container Store
compliment each other about “being Gumby,” meaning that they are being as flex-
ible as the once-popular green toy to help a customer or another employee. 22 When
Charles Schwab & Co. acquired U.S. Bank, executives at U.S. Bank winced when
they heard Schwab executives use the word “customers”; U.S. Bank staff have
“clients,” a term that reflects a deeper, longer-term relationship. 23 Language also
highlights values held by organizational subcultures. For instance, consultants
working at Whirlpool kept hearing employees talk about the appliance company’s
“PowerPoint culture.” This phrase, which names Microsoft’s presentation software,
is a critique of Whirlpool’s hierarchical culture in which communication is one-way
(from executives to employees). 24
Physical Structures and Symbols
Winston Churchill once said, “We shape our buildings; thereafter, they shape us.” 25
The former British prime minister was reminding us that buildings both reflect and
influence an organization’s culture. The size, shape, location, and age of buildings
might suggest a company’s emphasis on teamwork, environmental friendliness, flex-
ibility, or any other set of values. 26 Wal-Mart’s culture of efficiency and frugality is
easily apparent from its head office in Bentonville, Arkansas. The world’s largest re-
tailer operates out of what looks like an old shopping mall—a low-rise brick structure
surrounded by a large parking lot. Oakley, Inc’s “interplanetary headquarters” in
Foothills Ranch, California, on the other hand, is a vaultlike structure complete with
towering metallic walls studded with oversize bolts, representing its secretive and
protective culture. “We’ve always had a fortress mentality,” says an executive at the
eyewear and clothing company. “What we make is gold, and people will do anything
to get it, so we protect it.” 27
Even if the building doesn’t make much of a statement, there is a treasure trove of
physical artifacts inside. Desks, chairs, office space, and wall hangings (or lack of
them) are just a few of the items that might convey cultural meaning. 28 The interior of
Wal-Mart’s head office symbolizes frugality just as much as does its exterior building
structure. Suppliers crowd into a spartan waiting room that could have been copied
from offices at the state department of motor vehicles. Visitors pay for their own soft
drinks and coffee. Multimillion-dollar contracts are discussed with Wal-Mart buyers
in small rooms, each with one fluorescent lightbulb and one framed picture of Wal-Mart
founder Sam Walton. 29
The physical artifacts at the head offices of Mother symbolize a culture quite
different from Wal-Mart’s. Housed in a converted warehouse in an artsy district of
ceremonies
Planned displays of
organizational culture,
conducted specifically
for the benefit of an
audience.
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Chapter 14 Organizational Culture 423
London, the creative agency has a large reception hall with an adjoining casual lounge
on one side and a large cafeteria on the other, where staff can get free fruit, cereals,
toast, and similar snacks any time they want. A wide staircase leads from reception to
the next floor, which has meeting rooms separated only by dividers made of hanging
strips of opaque plastic. The top floor of Mother’s offices is one room dominated by a
massive concrete table around which dozens of staff work. Each of these physical
artifacts alone might not say much, but put enough of them together and you can see
how they symbolize Mother’s edgy creative culture with a strong team orientation. 30
Learning
Objectives
After reading the next section, you should be able to:
4. Identify three functions of organizational culture.
5. Discuss the conditions under which organizational culture strength
improves organizational performance.
Lee Kum Kee’s Secret Sauce to Success Guangdong Nanfang Lee Kum
Kee Health Products Co., Ltd., a subsidiary of food products company
Lee Kum Kee, has a secret sauce that makes it one of the best places to
work in Asia. “Two words explain why we are a Best Employer: corporate
culture,” says human resource vice president Raymond Lo. “Our unique
culture is our competitive edge. It plays a major role in the success of
our organization.” Lee Kum Kee’s core values include pragmatism,
integrity, constant entrepreneurship, and sharing the benefits with
community. Lo explains that cultural values are so important that leaders
must believe in and live them. “The corporate culture must have a
soul,” he says. “Many companies try to model themselves on successful
companies, but unless the chief executive and management truly believe
in the culture, it won’t work.” Lo adds that his company actively works to
ensure everyone understands and believes in the company’s culture.
“We also spend a lot of time in team building in order to nourish our
corporate culture.”33
Is Organizational Culture Important?
Does organizational culture improve organizational effectiveness? Leaders at The
Container Store, Mayo Clinic, Cirque du Soleil, and other companies think so.
“Culture is one of the most precious things a company has, so you must work harder
on it than anything else,” says Herb Kelleher, founder of Southwest Airlines. Many
writers of popular-press management books also assert that the most successful com-
panies have strong cultures. In fact, one popular management book, Built to Last,
suggests that successful companies are “cultlike” (although not actually cults, the au-
thors are careful to point out). 31 The research evidence, however, is more ambivalent
than these proclamations. Specifically, companies with strong cultures tend to be more
successful, but only under a particular set of conditions. 32 Before discussing these
contingencies, let’s examine organizational culture strength and its potential benefits.
Corporate culture strength refers to how widely and deeply employees hold the com-
pany’s dominant values and assumptions. In a strong organizational culture, most
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424 Part Four Organizational Processes
• Control system
• Social glue
• Sense making
• Organizational
performance
• Employee well-being
Functions of
strong cultures Organizational outcomes
Benefits of culture strength
depend on . . .
• Whether culture content fits the
environment
• Moderate, not cultlike, strength
• An adaptive culture
Exhibit 14.3 Potential Benefits and Contingencies of Culture Strength
employees across all subunits understand and embrace the dominant values. These
values and assumptions are also institutionalized through well-established artifacts,
thereby making it difficult to change the culture. Furthermore, strong cultures tend to
be long-lasting; some can be traced back to the values and assumptions established
by the company’s founder. In contrast, companies have weak cultures when the dom-
inant values are held mainly by a few people at the top of the organization, are barely
discernible, and are in flux. A strong corporate culture potentially increases the com-
pany’s success by serving three important functions (see Exhibit 14.3 ):
1. Control system . Organizational culture is a deeply embedded form of social control
that influences employee decisions and behavior. 34 Culture is pervasive and oper-
ates nonconsciously. You might think of it as an automatic pilot, directing employ-
ees in ways that are consistent with organizational expectations.
2. Social glue . Organizational culture is the “social glue” that bonds people together
and makes them feel part of the organizational experience. 35 Employees are moti-
vated to internalize the organization’s dominant culture because it fulfills their
need for social identity. This social glue is increasingly important as a way to at-
tract new staff and retain top performers.
3. Sense making . Organizational culture assists the sense-making process. 36 It helps
employees to understand what goes on and why things happen in the company.
Corporate culture also makes it easier for them to understand what is expected of
them and to interact with other employees who know the culture and believe in it.
For instance, one recent study reported that organizational culture strength in-
creases role clarity, which reduces stress among sales staff. 37
Contingencies of Organizational Culture and Effectiveness
Studies have found only a modestly positive relationship between culture strength
and organizational effectiveness because three contingencies need to be considered:
(1) whether the culture content is aligned with the environment, (2) whether the
culture is not so strong that it becomes cultlike, and (3) whether the culture incor-
porates an adaptive culture (see Exhibit 14.3).
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Chapter 14 Organizational Culture 425
Culture Content Alignment with Environment One contingency is whether
the organization’s culture content—its dominant values and assumptions—is aligned
with the external environment. Consider the situation that Dell recently faced. As
described in the opening vignette to this chapter, Dell’s culture gave the highest priority
to cost efficiency and competitiveness, yet these values and assumptions are no longer
ideal for the marketplace. Low-cost computers are still popular, but consumers in-
creasingly demand computers that are innovative and look “cool.” Dell had a strong
culture, but it was no longer the best culture for the external environment.
Avoiding a Corporate Cult A second contingency is the degree of culture
strength. Various experts suggest that companies with very strong cultures (i.e., cor-
porate “cults”) may be less effective than companies with moderately strong cul-
tures. 38 One reason why corporate cults may undermine organizational effectiveness
is that they lock decision makers into mental models, which can blind them to new
opportunities and unique problems. They overlook or incorrectly define subtle mis-
alignments between the organization’s activities and the changing environment. Dell
faced this problem. Kevin Rollins and Michael Dell sensed that the company’s cul-
ture tolerated competitive staff members even if they didn’t collaborate, and it em-
phasized financial performance far too much (staff even had stock tickers on their
computer screens). Yet these leaders never thought about changing this culture. In-
stead, the program they created a few years ago (called the “Soul of Dell”) merely
supplemented the company’s core values and assumptions. “It’s not that we didn’t
have a culture with the qualities that drive business success,” explained a Dell execu-
tive at the time. “We just aspired to do better.” 39
The other reason why very strong cultures may be dysfunctional is that they sup-
press dissenting subcultural values. At Dell, for instance, anyone who questioned the
company’s almost sacred values and assumptions was quickly silenced, even though
the dissenting values could have helped Dell shift more quickly to a better-aligned
culture. The challenge for organizational leaders is to maintain not only a strong cul-
ture but one that allows subcultural diversity. Subcultures encourage constructive
conflict, which improves creative thinking and offers some level of ethical vigilance
over the dominant culture. In the long run, a subculture’s nascent values could be-
come important dominant values as the environment changes. Corporate cults sup-
press subcultures, thereby undermining these benefits.
Culture Is an Adaptive Culture A third contingency between cultural strength
and organizational effectiveness is whether the culture content includes an adaptive
culture . 40 An adaptive culture exists when employees are receptive to change—they
assume that the organization needs to continuously adapt to its external environment
and that they need to be flexible in their roles within the organization. Employees in
an adaptive culture embrace an open-systems perspective, in which the organiza-
tion’s survival and success require ongoing adaptation to the external environment,
which itself is continuously changing. They assume that their future depends on
monitoring the external environment and serving stakeholders with the resources
available. Thus, employees in adaptive cultures have a strong sense of ownership.
They take responsibility for the organization’s performance and alignment with the
external environment.
In an adaptive culture, receptivity to change extends to internal processes and
roles. Employees recognize that satisfying stakeholder needs requires continuous
improvement of internal work processes. Toyota’s culture, described earlier in this
adaptive culture
An organizational culture
in which employees are
receptive to change,
including the ongoing
alignment of the organi-
zation to its environment
and continuous im-
provement of internal
processes.
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426 Part Four Organizational Processes
chapter, illustrates this aspect of an adaptive culture because it values the continuous
improvement of the production process as well as of its products and services. Fur-
thermore, employee support for changing internal work processes involves flexibility
in their own work roles. The phrase “That’s not my job” is found in nonadaptive
cultures. Finally, an adaptive culture has a strong learning orientation because recep-
tivity to change and improvement logically involves support for action-oriented dis-
covery. With a learning orientation, employees welcome new learning opportunities,
actively experiment with new ideas and practices, view reasonable mistakes as a nat-
ural part of the learning process, and continuously question past practices. 41
Organizational Culture and Business Ethics
An organization’s culture influences more than just the bottom line; it can also affect
the ethical conduct of the organization’s employees. This makes sense because good
behavior is driven by ethical values, and ethical values can become embedded in
an organization’s dominant culture. A few years ago, Michael Dell and former CEO
Kevin Rollins saw this connection between culture and ethics when they launched
the “Soul of Dell.” Concerned about employee obsession with the company’s stock
price, the executives tried to shift the company’s winning culture into one that em-
phasizes “winning with integrity.” 42 For example, one of the computer maker’s re-
vised values was defined as “behaving ethically in every interaction and in every
aspect of how we conduct business.” Unfortunately, the Soul of Dell initiative prob-
ably didn’t change the company’s culture. Two years after the Soul of Dell cultural
change program was launched, the company reported that some executives had ma-
nipulated the company books to reach performance targets that would give them a
larger bonus. 43
Learning
Objectives
After reading the next two sections, you should be able to:
6. Compare and contrast four strategies for merging organizational
cultures.
7. Identify the four strategies for changing or strengthening an
organization’s culture.
8. Apply attraction-selection-attrition theory to explain how
organizational culture strengthens.
9. Describe the stages of organizational socialization.
10. Explain how realistic job previews assist the socialization process.
Merging Organizational Cultures
4C Corporate Culture Clash and Chemistry is a company with an unusual name and
mandate. The Dutch consulting firm helps clients to determine whether their culture
is aligned (“chemistry”) or incompatible with (“clash”) a potential acquisition or
merger partner. The firm also analyzes the company’s culture with its strategy. There
should be plenty of demand for 4C’s expertise. According to various studies, most
corporate mergers and acquisitions fail in terms of subsequent performance of the
merged organization. Evidence suggests that such failures occur partly because cor-
porate leaders are so focused on the financial or marketing logistics of a merger that
they fail to conduct due-diligence audits on their respective corporate cultures. 44
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Chapter 14 Organizational Culture 427
Some forms of integration (which we discuss later in this section) may allow success-
ful mergers between companies with different cultures. However, research concludes
that mergers typically suffer when organizations with significantly divergent corpo-
rate cultures merge into a single entity with a high degree of integration. 45
The marriage of AOL with Time Warner is one of the more spectacular culture
clashes. In theory, the world’s largest merger offered huge opportunities for converg-
ing AOL’s dominance in Internet services with Time Warner’s deep knowledge of
and assets in traditional media. Instead, the two corporate cultures mixed like oil and
water. AOL’s culture valued youthful, high-flying, quick deal making. People were
rewarded with stock options. Time Warner, on the other hand, had a button-down,
hierarchical, systematic culture. Executives were older and the reward was a decent
retirement package (affectionately known as the “golden rubber band” because
people who left invariably returned for the retirement benefit). 46
Bicultural Audit
Organizational leaders can minimize these cultural collisions and fulfill their duty of
due diligence by conducting a bicultural audit. 47 A bicultural audit diagnoses cul-
tural relations between the companies and determines the extent to which cultural
clashes will likely occur. The bicultural audit process begins by identifying cultural
differences between the merging companies. Next, the bicultural audit data are ana-
lyzed to determine which differences between the two firms will result in conflict and
which cultural values provide common ground on which to build a cultural founda-
tion in the merged organization. The final stage involves identifying strategies and
preparing action plans to bridge the two organizations’ cultures.
A few years ago, pulp-and-paper conglomerate Abitibi-Price applied a bicultural
audit before it agreed to merge with rival Stone Consolidated. Specifically, Abitibi de-
veloped the Merging Cultures Evaluation Index (MCEI), an evaluation system that
helped Abitibi executives compare its culture with other companies in the industry.
The MCEI analyzed several dimensions of corporate culture, such as concentration of
power versus diffusion of power, innovation versus tradition, wide versus narrow flow
of information, and consensus versus authoritative decision making. Abitibi and Stone
executives completed the questionnaire to assess their own culture, and then they com-
pared the results. The MCEI results, along with financial and infrastructural informa-
tion, served as the basis for Abitibi-Price to merge with Stone Consolidated to become
Abitibi-Consolidated (now Abitibi Bowater), the world’s largest pulp-and-paper firm. 48
Strategies for Merging Different Organizational Cultures
In some cases, the bicultural audit results in a decision to end merger talks because the
two cultures are too different to merge effectively. However, even with substantially
different cultures, two companies may form a workable union if they apply the appro-
priate merger strategy. The four main strategies for merging different corporate cul-
tures are assimilation, deculturation, integration, and separation (see Exhibit 14.4 ). 49
Assimilation Assimilation occurs when employees at the acquired company will-
ingly embrace the cultural values of the acquiring organization. Typically, this strat-
egy works best when the acquired company has a weak, dysfunctional culture and
the acquiring company’s culture is strong and aligned with the external environment.
Culture clash is rare with assimilation because the acquired firm’s culture is weak and
employees are looking for better cultural alternatives. Research in Motion (RIM), the
bicultural audit
A process of diagnosing
cultural relations
between companies
and determining the
extent to which cultural
clashes will likely occur.
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428 Part Four Organizational Processes
BlackBerry wireless device maker, applies the assimilation strategy by deliberately
acquiring only small start-up firms. “Small companies . . . don’t have cultural issues,”
says RIM co-CEO Jim Balsillie, adding that they are typically absorbed into RIM’s
culture with little fuss or attention. 50
Deculturation Assimilation is rare. Employees usually resist organizational
change, particularly when they are asked to throw away personal and cultural values.
Under these conditions, some acquiring companies apply a deculturation strategy by
imposing their culture and business practices on the acquired organization. The ac-
quiring firm strips away artifacts and reward systems that support the old culture.
People who cannot adopt the acquiring company’s culture are often terminated. De-
culturation may be necessary when the acquired firm’s culture doesn’t work but em-
ployees aren’t convinced of this. However, this strategy is difficult to apply effectively
because the acquired firm’s employees resist the cultural intrusions from the buying
firm, thereby delaying or undermining the merger process.
Integration A third strategy is to combine the two or more cultures into a new
composite culture that preserves the best features of the previous cultures. Integration
is slow and potentially risky because there are many forces preserving the existing
cultures. Still, this strategy should be considered when the companies have relatively
weak cultures or when their cultures include several overlapping values. Integration
also works best when people realize that their existing cultures are ineffective and,
therefore, people are motivated to adopt a new set of dominant values.
Separation A separation strategy occurs when the merging companies agree to
remain distinct entities with minimal exchange of culture or organizational prac-
tices. This strategy is most appropriate when the two merging companies are in
unrelated industries or operate in different countries, because the most appropri-
ate cultural values tend to differ by industry and national culture. For example,
Cisco Systems followed a separation strategy when it acquired Linksys. The home
wireless network company was performing well and was in a different business
Merger strategy Description Works best when:
Assimilation Acquired company embraces
acquiring firm’s culture.
Acquired firm has a weak culture.
Deculturation Acquiring firm imposes its culture
on an unwilling acquired firm.
Rarely works—may be necessary
only when acquired firm’s culture
doesn’t work but employees don’t
realize it.
Integration Merging companies combine the
two or more cultures into a new
composite culture.
Existing cultures can be improved.
Separation Merging companies remain distinct
entities with minimal exchange of
culture or organizational practices.
Firms operate successfully in
different businesses requiring
different cultures.
Exhibit 14.4
Strategies for
Merging Different
Organizational
Cultures
Sources: Based on ideas in A. R. Malekazedeh and A. Nahavandi, “Making Mergers Work by Managing Cultures,”
Journal of Business Strategy, May–June 1990, pp. 55–57; K. W. Smith, “A Brand-New Culture for the Merged Firm,”
Mergers and Acquisitions, 35 (June 2000), pp. 45–50.
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Chapter 14 Organizational Culture 429
environment—low-cost mass-market retail—so Cisco made sure that Linksys kept its
own culture. Cisco executives were so concerned about this separation that the com-
pany formed a team to ensure that Cisco’s leaders did not impose their culture and
control on the smaller enterprise. 52 Cisco’s action are rare, however. Executives in
acquiring firms usually have difficulty keeping their hands off the acquired firm. It’s
not surprising, therefore, that only 15 percent of mergers leave the acquired company
as a stand-alone unit. 53
Changing and Strengthening Organizational Culture
Is it possible to change an organization’s culture? Yes, but doing so isn’t easy, the
change rarely occurs quickly, and often the culture ends up changing (or replacing)
corporate leaders. In fact, some writers argue that leaders shouldn’t even bother to
attempt such a transformation because organizational culture “cannot be man-
aged.” 54 This view is more extreme than most, but organizational culture experts
generally agree that changing an organization’s culture is a considerable challenge.
At the same time, under the right conditions, organizational culture can be a power-
ful influence on the company’s success. Over the next few pages, we will highlight
four strategies that have had some success at altering corporate cultures. This list,
outlined in Exhibit 14.5 , is not exhaustive, but each activity seems to work well un-
der the right circumstances.
Actions of Founders and Leaders
An organization’s culture begins with its founders. 55 You can see this at Dell, Inc.,
where founder Michael Dell established a competitive and cost-focused culture.
Founders are often visionaries who provide a powerful role model for others to fol-
low. The company’s culture sometimes reflects the founder’s personality, and this
cultural imprint can remain with the organization for decades. For example, some
observers say that Dell’s culture is so much a part of Michael Dell’s personal orienta-
tion to life that he might not be the best person to try to change it.
A Marriage of Cultural Separation A decade ago, McDonald’s Restaurants took
a controlling interest in Chipotle Mexican Grill, a young start-up restaurant chain
with a considerably different approach to doing business. While McDonald’s
epitomizes fast food, Chipotle is a model of freshly prepared Mexican-style meals.
Recognizing that McDonald’s culture and practices wouldn’t work at Chipotle,
founder and CEO Steve Ells convinced the global food giant to keep a distance
from the younger restaurant chain’s culture. “Chipotle structured the agreement
so that McDonald’s would essentially become the ‘banker’ without changing
recipes, ingredients, or culture— all the elements to which Chipotle fans and
team members are loyal,” says Ells. For the most part, McDonald’s executives
kept to their word, but Ells did have to explain to them on several occasions why
the restaurant only serves food that it makes better than anyone else. “They
probably did give me grief,” Ells admitted. Eventually, McDonald’s sold its stake in
Chipotle for a tidy profit. “We learned from each other,” Ells says of the partner-
ship, “but we use different kinds of food, and we aim for a different kind of ex-
perience and culture altogether. So we ended up going our separate ways.”51
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430 Part Four Organizational Processes
Founders establish an organization’s culture, but they and subsequent leaders are
sometimes able to reshape that culture by applying transformational leadership and
organizational change practices. 56 The recent changes at Procter & Gamble Co.
(P&G) illustrate this point. P&G had a very strong hierarchical culture for several
decades, yet by applying many of the transformational leadership practices described
in Chapter 12, chief executive A. G. Lafley was able to alter that culture into one that
is much more customer-focused.
Aligning Artifacts
Artifacts represent more than just the visible indicators of a company’s culture. They
are also mechanisms that reshape and reinforce the culture. By altering artifacts—or creat-
ing new ones—leaders can potentially adjust shared values and assumptions. National
Australia Bank (NAB) is a case in point. John Stewart was hired as CEO a few years ago,
after rogue trading caused large financial and reputational losses. Investigations of the
trading debacle revealed that NAB’s culture was too hierarchical, bureaucratic, and
profit-focused. Stewart shifted NAB’s culture toward one that is more open, account-
able, and egalitarian by improving leadership, recruitment, rewards, communication
practices, and empowered accountability through decentralization. For example, he
cut head-office staff by more than half, devoted considerable time to coaching upcom-
ing executives, and publicly rewarded employees for revealing and learning from their
mistakes. “Most of our problems continue to be internal, so my main concern is that
we get our cultural change right,” explained Stewart, who recently retired. Coinciden-
tally, NAB had just moved into a low-rise campuslike building in Melbourne’s dock-
lands area, which also had the effect of supporting an open and egalitarian culture. 57
Corporate cultures are also altered and strengthened through the artifacts of sto-
ries and behaviors. According to Max De Pree, former CEO of furniture manufac-
turer Herman Miller, Inc., every organization needs “tribal storytellers” to keep the
Strengthening
Organizational
Culture
Attracting,
selecting,
and socializing
employees
Actions of
founders and
leaders
Introducing
culturally
consistent
rewards
Aligning
artifacts
Exhibit 14.5
Strategies for
Changing and
Strengthening
Organizational
Culture
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Chapter 14 Organizational Culture 431
organization’s history and culture alive. 59 Leaders play a role by creating memorable
events that symbolize the cultural values they want to develop or maintain. At Wall
Street investment firm Goldman Sachs, this leadership function is so important that
executives are called “culture carriers.” Goldman’s senior executives live and breathe
the company’s culture so much that they can effectively transmit and reinforce that
culture. 60 Companies also strengthen culture in new operations by transferring cur-
rent employees who abide by the culture.
Introducing Culturally Consistent Rewards
Reward systems are artifacts that often have a powerful effect on strengthening or
reshaping an organization’s culture. 61 John Stewart relied on rewards to transform
the culture at National Australia Bank. Robert Nardelli also used the rewards lever
to change Home Depot’s freewheeling culture. Nardelli introduced precise mea-
sures of corporate performance and drilled managers with weekly performance
objectives related to those metrics. A two-hour weekly conference call became a
ritual in which Home Depot’s top executives were held accountable for the previ-
ous week’s goals. These actions reinforced a more disciplined (and centralized)
performance-oriented culture. 62
Attracting, Selecting, and Socializing Employees
Organizational culture is strengthened by attracting and hiring people who already
embrace the cultural values. This process, along with weeding out people who don’t
fit the culture, is explained by attraction-selection-attrition (ASA) theory . 63
ASA theory states that organizations have a natural tendency to attract, select, and
attraction-selection-
attrition (ASA) theory
A theory which states
that organizations have
a natural tendency to
attract, select, and
retain people with values
and personality char-
acteristics that are
consistent with the
organization’s character,
resulting in a more
homogeneous organi-
zation and a stronger
culture.
Lululemon Athletica Changes the Leader, Keeps the
Culture With its new-age, self-affirmation culture
and a focus on healthy lifestyles, Lululemon Athletica
Inc. has been a phenomenal success story in the
retail industry. The designer of high-end yoga wear
opened its first store a decade ago and now boasts
more than 80 stores in the United States, Canada,
and Australia. Founder Dennis J. (“Chip”) Wilson
recognized that Lululemon needed a leader with
more corporate experience, but he didn’t want the
new leader to undermine the company’s existing
culture. He may have found an ideal choice in former
Starbucks vice president Christine Day. “[Lululemon
is] another premium brand with an exceptional
product and a tremendous culture,” says Day, who
is now Lululemon’s chief executive officer. “I feel
quite at home.” She adds that the decision to join
Lululemon required careful thought about the culture
fit with her personal values. “For me that’s about
really being able to live my values both personally
and at work,” she says.58
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432 Part Four Organizational Processes
retain people with values and personality characteristics that are consistent with the
organization’s character, resulting in a more homogeneous organization and a
stronger culture.
• Attraction. Job applicants engage in self-selection by avoiding employment in
companies whose values seem incompatible with their own values. 64 Companies
often encourage this self-selection by actively describing their cultures, but appli-
cants will look for evidence of the company’s culture even when it is not adver-
tised. Applicants also inspect organizational artifacts when visiting the company.
• Selection. How well the person “fits” in with the company’s culture is often a factor
in deciding which job applicants to hire. Companies with strong cultures often put
applicants through several interviews and other selection tests, in part to better
gauge the applicants’ values and their congruence with the company’s values. 65
Consider Park Place Dealerships. As one of the top-rated luxury-car dealerships
in the United States, the Dallas–Fort Worth company relies on interviews and se-
lection tests to carefully screen applicants for their culture fit. “Testing is one piece
of our hiring process that enables us to find people who will not only be success-
ful in our culture, but thrive and enjoy our culture,” says Park Place chairman
Ken Schnitzer. When Park Place recently acquired a Lexus dealership in California,
several people who did not fit the culture left. “We’ve had some turnover,”
Schnitzer acknowledges in reference to the Lexus dealership. “We’re looking for
people to fit into our culture. It’s not easy to get hired by Park Place.” 66
• Attrition. People are motivated to seek environments that are sufficiently con-
gruent with their personal values and to leave environments that are a poor fit.
This occurs because person-organization value congruence supports their social
identity and minimizes internal role conflict. Even if employees aren’t forced
out, many quit when value incongruence is sufficiently high. This likely oc-
curred when Park Place Dealerships acquired the Lexus dealership in California—
some staff members left voluntarily or otherwise because they did not fit Park
Place’s unique culture. 67
Along with their use of attraction, selection, and attrition, organizations rely on
organizational socialization to strengthen their cultures. Organizational socialization
is the process by which individuals learn the values, expected behaviors, and social
knowledge necessary to assume their roles in the organization. 68 When a company
clearly communicates its culture, job candidates and new hires are more likely to in-
ternalize its values quickly and deeply. Socialization is an important process to help
newcomers absorb the corporate culture as well as adjust to co-workers, work proce-
dures, and other corporate realities. Thus, the final section of this chapter looks more
closely at the organizational socialization process.
Organizational Socialization
Trung Nguyen’s first few days of work at Oklahoma-based Integris-Health were filled
with orientation sessions. “I was expecting something extremely boring where it was
hard to stay awake, like watching hours of videos or PowerPoint slides,” admits Nguyen.
Instead, the seminars taught him a lot about the company, what it stands for, and the
community it serves. “I’ve lived in Oklahoma for more than 20 years,” says Nguyen,
who is originally from Vietnam. “And this week, I’ve learned more about the commu-
nity that’s surrounding me and the health services that care for my loved ones.” 69
organizational
socialization
The process by which
individuals learn the
values, expected
behaviors, and social
knowledge necessary
to assume their roles
in the organization.
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Chapter 14 Organizational Culture 433
Integris-Health successfully brings employees into the organization through orien-
tation sessions and other organizational socialization practices to help newcomers
learn about the company and adjust to their role in the company. An important part
of this process is helping newcomers become familiar with, and believe in, the orga-
nization’s culture. “The cultural aspects of our training programs are at least as im-
portant as the technical aspects,” says an executive at JetBlue, the New York–based
discount airline. “The People Department will find the right people and we will incul-
cate the culture into them and nurture that culture until we release them out into the
operation.” 70 Research indicates that when employees are effectively socialized into
the organization, they tend to perform better, have higher job satisfaction, and re-
main longer with the organization. 71
Socialization as a Learning and Adjustment Process
Organizational socialization is a process of both learning and adjustment. It is a learning
process because newcomers try to make sense of the company’s physical workplace,
social dynamics, and strategic and cultural environment. They learn about the orga-
nization’s performance expectations, power dynamics, corporate culture, company
history, and jargon. They also need to form successful and satisfying relationships
with other people from whom they can learn the ropes. 72 Thus, effective socialization
enables new recruits to form a cognitive map of the physical, social, and strategic and
cultural dynamics of the organization without information overload.
Organizational socialization is also a process of adjustment, because individuals
need to adapt to their new work environment. They develop new work roles that re-
configure their social identity, adopt new team norms, and practice new behaviors. 73
Research reports that the adjustment process is fairly rapid for many people, usually
occurring within a few months. However, newcomers with diverse work experience
seem to adjust better than those with limited previous experience, possibly because
they have a larger toolkit of knowledge and skills to make the adjustment possible. 74
Stages of Organizational Socialization
Socialization is a continuous process, beginning long before the first day of employ-
ment and continuing throughout one’s career within the company. However, it is
most intense when people move across organizational boundaries, such as when they
first join a company or get transferred to an international assignment. Each of these
transitions is a process that can be divided into three stages. Our focus here is on the
socialization of new employees, so the three stages are called preemployment social-
ization, encounter, and role management (see Exhibit 14.6 ). These stages parallel the
individual’s transition from outsider to newcomer and then to insider. 75
Stage 1: Preemployment Socialization Think back to the months and weeks
before you began working in a new job (or attending a new school). You actively
searched for information about the company, formed expectations about working
there, and felt some anticipation about fitting into that environment. The preemploy-
ment socialization stage encompasses all the learning and adjustment that occurs be-
fore the first day of work. In fact, a large part of the socialization adjustment process
occurs during this stage. 76
The main problem with preemployment socialization is that outsiders rely on indi-
rect information about what it is like to work in the organization. This information is
often distorted by inherent conflicts during the mating dance between employer and
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434 Part Four Organizational Processes
applicant. 77 One conflict occurs between the employer’s need to attract qualified ap-
plicants and the applicant’s need for accurate information to make better employment
decisions. Many firms use a “flypaper” approach by describing only positive aspects of
the job and company, causing applicants to accept job offers on the basis of incomplete
or false expectations. Another conflict that prevents accurate exchange of information
occurs when applicants avoid asking important questions about the company because
they don’t want to convey an unfavorable image to their prospective employer. For
instance, applicants usually don’t like to ask about starting salaries and promotion op-
portunities because it makes them sound greedy or overaggressive. Yet, unless the em-
ployer provides this information, applicants might fill in the missing information with
false assumptions that produce an inaccurate psychological contract.
Two other types of conflict tend to distort preemployment information for employ-
ers. Applicants engage in impression management when seeking employment, and
this tends to motivate them to hide negative information, act out of character, and oc-
casionally embellish information about their past accomplishments. At the same time,
employers are sometimes reluctant to ask certain questions or use potentially valuable
selection devices because they might scare off applicants. Unfortunately, employers
are more likely to hire the wrong people when applicants embellish their résumés and
when employers are unwilling to ask applicants important questions.
Stage 2: Encounter The first day on the job typically marks the beginning of the
encounter stage of organizational socialization. This is the stage in which newcomers
test their prior expectations with the perceived realities. Many companies fail the test,
resulting in reality shock —the stress that results when employees perceive discrepan-
cies between their preemployment expectations and on-the-job reality. 78 Reality shock
doesn’t necessarily occur on the first day; it might develop over several weeks or even
months as newcomers form a better understanding of their new work environment.
Reality shock is common in many organizations. 79 Unmet expectations some-
times occur because the employer is unable to live up to its promises, such as fail-
ing to provide challenging projects or the resources to get the work done. Reality
shock also occurs because new hires develop distorted work expectations through
the information exchange conflicts described above. Whatever the cause, reality
shock impedes the socialization process because the newcomer’s energy is directed
toward managing the stress rather than learning and accepting organizational
knowledge and roles. 80
reality shock
The stress that results
when employees
perceive discrepancies
between their pre-
employment expectations
and on-the-job reality.
Preemployment
socialization
(outsider)
• Learn about the
organization and
job.
• Form employment
relationship
expectations.
Encounter
(newcomer)
• Test expectations
against perceived
realities.
Role
management
(insider)
• Strengthen work
relationships.
• Practice new
role behaviors.
• Resolve
work-nonwork
conflicts.
Socialization
outcomes
• Higher motivation.
• Higher loyalty.
• Higher satisfaction.
• Lower stress.
• Lower turnover.
Exhibit 14.6 Stages of Organizational Socialization
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Chapter 14 Organizational Culture 435
Stage 3: Role Management Role management, the third stage of organizational
socialization, actually begins during preemployment socialization, but it is most ac-
tive as employees make the transition from newcomers to insiders. They strengthen
relationships with co-workers and supervisors, practice new role behaviors, and adopt
attitudes and values consistent with their new positions and the organization. Role
management also involves resolving the conflicts between work and nonwork activi-
ties, including resolving discrepancies between their existing values and those em-
phasized by the organizational culture.
Improving the Socialization Process
One potentially effective way to improve the socialization process is through a realistic
job preview (RJP) —a balance of positive and negative information about the job and
work context. 81 Unfortunately, as mentioned earlier, many companies overpromise.
They often exaggerate positive features of the job and neglect to mention the undesir-
able elements in the hope that the best applicants will get “stuck” on the organization.
In contrast, an RJP helps job applicants to decide for themselves whether their skills,
needs, and values are compatible with the job and organization.
RJPs scare away some applicants, but they also tend to reduce turnover and in-
crease job performance. 82 This occurs because RJPs help applicants develop more
accurate preemployment expectations, which, in turn, minimize reality shock. RJPs
represent a type of vaccination by preparing employees for the more challenging and
troublesome aspects of work life. There is also some evidence that RJPs increase or-
ganizational loyalty. A possible explanation for this is that companies providing can-
did information are easier to trust. They also show respect for the psychological
contract and concern for employee welfare. 83
Lindblad’s RJP Keeps Newcomer Expectations Shipshape Lindblad Expeditions can’t afford to have crew members jump ship
soon after starting the job. To minimize reality shock, the 500-employee adventure cruise company gives applicants a DVD showing
a realistic picture of what it’s like to work on board. The program shows not one but two scenes in which staff members are cleaning
toilets. One scene reveals the cramped quarters for crew members. In another scene, a dishwasher talks about washing 5,000
dishes in one day. The video is meant to scare off applicants who cannot adjust easily to the challenges of working on a ship. The
realistic job preview video does have this effect, says Lindblad human resource manager Kris Thompson, but the attrition is well
worth it if it reduces turnover soon after staff are hired. “If [new hires] get on board and say, ‘This is not what I expected,’ then
shame on us,” says Thompson.84
realistic job preview
(RJP)
A method of improving
organizational social-
ization in which job
applicants are given a
balance of positive and
negative information
about the job and work
context.
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Organizational culture consists of the values and assump-
tions shared within an organization. Shared assumptions
are nonconscious, taken-for-granted perceptions or beliefs
that have worked so well in the past that they are consid-
ered the correct way to think and act toward problems
and opportunities. Values are stable, evaluative beliefs
that guide our preferences for outcomes or courses of
action in a variety of situations.
Chapter Summary
Organizations differ in their cultural content, that is,
the relative ordering of values. There are several classi-
fications of organizational culture, but they tend to
oversimplify the wide variety of cultures and com-
pletely ignore the underlying assumptions of culture.
Organizations have subcultures as well as the dominant
culture. Subcultures maintain the organization’s stan-
dards of performance and ethical behavior. They are
436 Part Four Organizational Processes
Socialization Agents Ask new employees what most helped them to adjust to
their jobs and chances are they will mention helpful co-workers, bosses, or maybe
even friends who work for the company. The fact is, much organizational socializa-
tion occurs informally through these socialization agents. 85 Supervisors tend to pro-
vide technical information, performance feedback, and information about job duties.
They also improve the socialization process by giving newcomers reasonably chal-
lenging first assignments, buffering them from excessive demands, and helping them
form social ties with co-workers.
Co-workers are important socialization agents because they are easily accessible,
can answer questions when problems arise, and serve as role models for appropriate
behavior. New employees tend to receive this information and support when co-
workers integrate them into the work team. Co-workers also aid the socialization
process by being flexible and tolerant in their interactions with new hires. The chal-
lenge for some companies is helping newcomers to learn from co-workers about the
company’s culture when opening new stores where most employees are new to the
company. At Whole Foods Market, the solution is yoghurt. “One of our secrets is
what I refer to as our ‘yoghurt culture,’ ” explains Whole Foods Market cofounder
John Mackey. This strategy involves transferring employees who carry Whole Foods
Market’s unique culture to new stores so that recently hired employees learn and
embrace that culture more quickly. “For example, in our Columbus Circle store in
New York, about 25% of the team members transferred from existing stores,” Mackey
recalls. “They were the starting culture for the fermentation that turned Columbus
Circle into a true Whole Foods store.” 86
Several organizations rely on a “buddy system,” whereby newcomers are assigned
to co-workers who act as sources of information and social support. Meridian Technology
Center in Stillwater, Oklahoma, relies on a buddy system in the socialization of new
staff members. Buddies introduce new hires to other employees, give them campus
tours, and generally familiarize them with the physical layout of the workplace. They
have lunch with employees on their first day and meet weekly with them for their
first two months. Cxtec, the networking and voice technology company in Syracuse,
New York, helps new staff meet other employees through food. On the first Friday of
each month, new staff members take charge of the doughnut cart, introducing them-
selves as they distribute the morning snack to the company’s 350 employees. 87 Col-
lectively, these practices help newcomers to form social networks, which, as you
learned in Chapter 10, are powerful means of gaining information and influence in
the organization.
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437
Organizational culture is very difficult to change, but
culture change is possible and sometimes necessary for a
company’s continued survival. Four strategies for changing
and strengthening an organization’s culture are the actions
of founders and leaders, aligning artifacts with the desired
culture, introducing culturally consistent rewards, and
attracting, selecting, and socializing employees.
Attraction-selection-attrition (ASA) theory states that
organizations have a natural tendency to attract, select,
and retain people with values and personality characteris-
tics that are consistent with the organization’s character,
resulting in a more homogeneous organization and a
stronger culture. Organizational socialization is the
process by which individuals learn the values, expected
behaviors, and social knowledge necessary to assume
their roles in the organization. It is a process of both
learning about the work context and adjusting to new
work roles, team norms, and behaviors.
Employees typically pass through three socialization
stages: preemployment, encounter, and role manage-
ment. To manage the socialization process, organizations
should introduce realistic job previews (RJPs) and recog-
nize the value of socialization agents in the process. RJPs
give job applicants a realistic balance of positive and neg-
ative information about the job and work context. Social-
ization agents provide information and social support
during the socialization process.
also the source of emerging values that replace aging
core values.
Artifacts are the observable symbols and signs of an
organization’s culture. Four broad categories of artifacts
include organizational stories and legends, rituals and
ceremonies, language, and physical structures and
symbols. Understanding an organization’s culture requires
assessment of many artifacts because they are subtle and
often ambiguous.
Organizational culture has three main functions: a
form of social control, the “social glue” that bonds
people together, and a way to help employees make
sense of the workplace. Companies with strong cultures
generally perform better than those with weak cultures,
but only when the cultural content is appropriate for
the organization’s environment. Also, the culture
should not be so strong that it drives out dissenting
values, which may form emerging values for the future.
Organizations should have adaptive cultures so that
employees support ongoing change in the organization
and their own roles.
Organizational culture clashes are common in merg-
ers and acquisitions. This problem can be minimized by
performing a bicultural audit to diagnose the compatibil-
ity of the organizational cultures. The four main strategies
for merging different corporate cultures are integration,
deculturation, assimilation, and separation.
3. The CEO of a manufacturing firm wants everyone
to support the organization’s dominant culture of
lean efficiency and hard work. The CEO has intro-
duced a new reward system to reinforce this culture
and personally interviews all professional and mana-
gerial applicants to ensure that they bring similar
values to the organization. Some employees who
criticized these values had their careers sidelined
until they left. Two midlevel managers were fired for
supporting contrary values, such as work–life bal-
ance. Based on your knowledge of organizational
subcultures, what potential problems is the CEO
creating?
1. Superb Consultants has submitted a proposal to
analyze the cultural values of your organization. The
proposal states that Superb has developed a revolu-
tionary new survey to tap the company’s true cul-
ture. The survey takes just 10 minutes to complete,
and the consultants say results can be based on a
small sample of employees. Discuss the merits and
limitations of this proposal.
2. Some people suggest that the most effective organi-
zations have the strongest cultures. What do we
mean by the “strength” of organizational culture,
and what possible problems are there with a strong
organizational culture?
Critical Thinking Questions
adaptive culture, p. 425
artifacts, p. 420
attraction-selection-attrition (ASA)
theory, p. 431
bicultural audit, p. 427
ceremonies, p. 422
organizational culture, p. 416
organizational socialization, p. 432
realistic job preview (RJP), p. 435
reality shock, p. 434
rituals, p. 421
Key Terms
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Case Study 14.1 HILLTON’S TRANSFORMATION
Thirty years ago, Hillton was a small city (about
70,000 residents) that served as an outer suburb to a
large metropolitan city. The municipality of Hillton
treated its employees like family and gave them a
great deal of autonomy in their work. Everyone in
the organization (including the two labor unions rep-
resenting employees) implicitly agreed that the lead-
ers and supervisors of the organization should rise
through the ranks on the basis of their experience.
Few people were ever hired from the outside into
middle or senior positions. The rule of employment
at Hillton was to learn the job skills, maintain a rea-
sonably good work record, and wait your turn for
promotion.
Hillton grew rapidly over the past three decades.
As the population grew, so did the municipality’s
workforce to keep pace with the increasing demand
for municipal services. This meant that employees
were promoted fairly quickly and were almost as-
sured guaranteed employment. In fact, until recently,
Hillton had never laid off any employee. The organi-
zation’s culture could be described as one of entitle-
ment and comfort. Neither the elected city councilors
nor the city manager bothered the departmental
managers about their work. There were few cost con-
trols because the rapid growth placed more emphasis
on keeping up with the population expansion. The
public became somewhat more critical of the city’s
poor service, including road construction at inconve-
nient times and the apparent lack of respect some
employees showed toward taxpayers.
During these expansion years, Hillton put most of
its money into “outside” (also called “hard”) munici-
pal services. These included road building, utility
construction and maintenance, fire and police pro-
tection, recreational facilities, and land use control.
This emphasis occurred because an expanding pop-
ulation demanded more of these services and most
of Hillton’s senior people came from the outside ser-
vices group. For example, Hillton’s city manager for
many years was a road development engineer. The
“inside” workers (taxation, community services, etc.)
tended to have less seniority, and their departments
were given less priority.
As commuter and road systems developed, Hillton
attracted more upwardly mobile professionals into
the community. Some infrastructure demands contin-
ued, but now these suburban dwellers wanted more
of the soft services, such as libraries, social activities,
and community services. They also began complain-
ing about the way the municipality was being run.
The population had more than tripled over the past
three decades, and it was increasingly apparent that
the organization needed more corporate planning, in-
formation systems, organization development, and
cost control systems. In various ways, residents voiced
4. Identify at least two artifacts you have observed in
your department or school from each of the four
broad categories: (a) organizational stories and
legends, (b) rituals and ceremonies, (c) language,
(d) physical structures and symbols.
5. “Organizations are more likely to succeed when
they have an adaptive culture.” What can an organi-
zation do to foster an adaptive culture?
6. Suppose you are asked by senior officers of a city
government to identify ways to reinforce a new cul-
ture of teamwork and collaboration. The senior ex-
ecutive group clearly supports these values, but it
wants everyone in the organization to embrace
them. Identify four types of activities that would
strengthen these cultural values.
7. Socialization is most intense when people pass
through organizational boundaries. One example is
your entry into the college or university that you are
now attending. What learning and adjustment oc-
curred as you moved from outsider to newcomer
to insider as a student here.
8. Acme Corp. is planning to acquire Beta Corp.,
which operates in a different industry. Acme’s
culture is entrepreneurial and fast-paced, whereas
Beta employees value slow, deliberate decision
making by consensus. Which merger strategy would
you recommend to minimize culture shock when
Acme acquires Beta? Explain your answer.
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439
lay off a few of the outside workers due to lack of
demand for hard services.
One of the most significant changes was that the
outside departments no longer held dominant posi-
tions in city management. Most of the professional
managers had worked exclusively in administrative
and related inside jobs. Two had master of business
administration degrees. This led to some tension be-
tween the professional managers and the older out-
side managers.
Even before the layoffs, managers of outside depart-
ments resisted the changes more than others did. These
managers complained that their employees with the
highest seniority were turned down for promotions.
They argued for more budget and warned that infra-
structure problems would cause liability problems. In-
formally, these outside managers were supported by
the labor union representing outside workers. The
union leaders tried to bargain for more job guarantees,
whereas the union representing inside workers focused
more on improving wages and bene fits. Leaders of the
outside union made several statements in the local me-
dia that the city had “lost its heart” and that the public
would suffer from the actions of the new professionals.
Discussion Questions
1. Contrast Hillton’s earlier corporate culture with
the emerging set of cultural values.
2. Considering the difficulty in changing organi-
zational culture, why does Hillton’s manage-
ment seem to have been successful at this
transformation?
3. Identify two other strategies that the city might con-
sider to reinforce the new set of corporate values.
Copyright © 2000 Steven L. McShane. This case is a slightly
fictionalized account of actual events.
their concerns that the municipality was not provid-
ing the quality of management that they would expect
from a city of Hillton’s size.
Three years ago, a new mayor and council re-
placed most of the previous incumbents, mainly on
the platform of improving the municipality’s man-
agement structure. The new council gave the city
manager, along with two other senior managers, an
early retirement buyout package. Rather than pro-
moting from the lower ranks, the council decided to
fill all three positions with qualified candidates from
large municipal corporations in the region. The fol-
lowing year, several long-term managers left Hillton
and at least half of those positions were filled by
people from outside the organization.
In less than two years, Hillton had eight senior or
departmental managers hired from other munici-
palities who played a key role in changing the orga-
nization’s value system. These eight managers
became known (often with negative connotations) as
the “professionals.” They worked closely with each
other to change the way middle and lower-level
managers had operated for many years. They
brought in a new computer system and emphasized
cost controls in areas where managers previously
had complete autonomy. Promotions were increas-
ingly based more on merit than seniority.
These managers frequently announced in meet-
ings and newsletters that municipal employees must
provide superlative customer service and that Hillton
would become one of the most customer-friendly
places for citizens and those who do business with
the municipality. To this end, the managers were
quick to support the public’s increasing demand for
more soft services, including expanded library ser-
vices and recreational activities. And when popula-
tion growth recently flattened out, the city manager
and other professionals gained council support to
Case Study 14.2 MERCK’S NEW CULTURAL CURE
Richard Clark was thrust into
the CEO job at Merck & Co.
during its darkest hour. The
pharmaceutical giant was drowning in liability suits
stemming from its arthritis drug Vioxx, which was
pulled from the market because of a link to heart
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440
Class Exercise 14.3 DIAGNOSING CORPORATE CULTURE
PROCLAMATIONS
PURPOSE This exercise is designed to help you
understand the importance and context in which
corporate culture is identified and discussed in
organizations.
INSTRUCTIONS This exercise is a take-home ac-
tivity, although it can be completed in classes where
computers and Internet connections are available.
The instructor will divide the class into small teams
(typically four or five people per team). Each team is
assigned a specific industry—such as energy, biotech-
nology, or computer hardware.
The team’s task is to search the Web sites of sev-
eral companies in the selected industry for company
statements about their corporate cultures. Use com-
pany Web-site search engines (if they exist) to find
documents with key phrases such as “corporate cul-
ture” or “company values.”
In the next class, or at the end of the time allotted
in the current class, students will report on their ob-
servations by answering the following three discus-
sion questions.
DISCUSSION QUESTIONS
1. What values seem to dominate the corporate
cultures of the companies you searched? Are
these values similar or diverse across companies
in the industry?
2. What was the broader content of the Web pages
on which these companies described or men-
tioned their corporate cultures?
3. Do companies in this industry refer to their cor-
porate cultures on their Web sites more or less
than companies in other industries searched by
teams in this class?
attacks and strokes. Meanwhile, two of the compa-
ny’s other blockbuster drugs were getting close to
the expiration of their patents. And Merck’s labs,
which other companies once hailed as a bastion of
scientific innovation, were crippled by a culture that
buried good ideas under layers of bureaucracy. To
revitalize drug development, Clark had to inject a
new set of values where Merck’s 60,000 employees—
scientists, regulatory staff, and salespeople—would
be motivated to work together.
This BusinessWeek case study describes the actions
of CEO Richard Clark to change Merck’s culture into
one that is more in tune with the current environ-
ment. Read the full text of this BusinessWeek article at
www.mhhe.com/mcshane5e , and prepare for the dis-
cussion questions that follow.
Discussion Questions
1. Describe the main features of Merck’s past culture,
and explain why that culture was not effective.
2. What are the key cultural values that CEO
Richard Clark wants to instill in Merck employ-
ees? Explain how this new culture is better
aligned with the external environment.
3. What strategies has Clark applied to transform
Merck’s culture? In your opinion, to what extent
will each of these strategies be effective at bring-
ing about cultural change?
Source: A. Weintraub, “Is Merck’s Medicine Working?” Business-
Week , 30 July 2007, p. 66.
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http://www.mhhe.com/mcshane5e
Copyright © 2000 Steven L. McShane.
Corporate Culture Preference Scale
I would prefer to work in an organization:
1a. Where employees work well together in teams. or 1b. That produces highly respected products or services.
2a. Where top management maintains a sense of
order in the workplace.
or 2b. Where the organization listens to customers and
responds quickly to their needs.
3a. Where employees are treated fairly. or 3b. Where employees continuously search for ways to
work more efficiently.
4a. Where employees adapt quickly to new work
requirements.
or 4b. Where corporate leaders work hard to keep
employees happy.
5a. Where senior executives receive special benefits
not available to other employees.
or 5b. Where employees are proud when the organization
achieves its performance goals.
6a. Where employees who perform the best get paid
the most.
or 6b. Where senior executives are respected.
7a. Where everyone gets her or his job done like
clockwork.
or 7b. That is on top of innovations in the industry.
8a. Where employees receive assistance to overcome
any personal problems.
or 8b. Where employees abide by company rules.
9a. That is always experimenting with new ideas in the
marketplace.
or 9b. That expects everyone to put in 110 percent for peak
performance.
10a. That quickly benefits from market opportunities. or 10b. Where employees are always kept informed about
what’s happening in the organization.
11a. That can quickly respond to competitive threats. or 11b. Where most decisions are made by the top
executives.
12a. Where management keeps everything under
control.
or 12b. Where employees care for each other.
441
After reading this chapter, if you feel that you need additional information, see www.mhhe.com/
mcshane5e for more in-depth information and interactivities that correspond to this chapter.
Self-Assessment 14.4
WHAT ARE YOUR CORPORATE CULTURE PREFERENCES?
PURPOSE This self-assessment is designed to help
you identify the corporate culture that fits most
closely with your personal values and assumptions.
INSTRUCTIONS Read each pair of statements in
the Corporate Culture Preference Scale and circle
the statement that describes the organization you
would prefer to work in. Then use the scoring key in
Appendix B at the end of the book to calculate your
results for each subscale. The scale does not attempt
to measure your preference for every corporate
culture—just a few of the more common varieties.
Also, keep in mind that none of these corporate cul-
tures is inherently good or bad. The focus here is on
how well you fit within each of them. This exercise
should be completed alone so that you can assess
yourself honestly without concerns of social com-
parison. Class discussion will focus on the impor-
tance of matching job applicants to the organization’s
dominant values.
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http://www.mhhe.com/
In the mid-1990s, South Umpqua State Bank, in the foothills of southern Oregon, had
$140 million in assets and six branches. Ray Davis, who was hired around that time
as Umpqua’s new CEO, didn’t believe the financial institution would last long if it
remained a sleepy community bank, so he initiated a
seismic shift in its culture and practices. “We asked
the question: why should anyone do business with
us?” Davis recalls. “So we set out to differentiate
ourselves in customer sales and service.” Today, with
assets of $8.3 billion and 148 stores from Napa,
California, to Bellevue, Washington, Umpqua Bank is
the largest regional community bank in the Pacific
Northwest. It is also one of America’s best places to
work and a popular destination for bank executives
around the world who want to discover Umpqua’s
unique model of banking.
Umpqua Bank’s transformation originated with
Davis’s vision that the bank should provide a unique
retail experience supported by a customer-focused
and innovative culture. This model of banking was
communicated to employees, who received heavy
doses of customer service training conducted by the
Ritz-Carlton hotel. Rather than performing specialized
jobs, employees were trained so that each could provide most customer services
(loans, deposits, etc.) within the branch.
Umpqua Bank morphed its branches into retail stores, complete with comfy chairs,
coffee bars (serving Umpqua’s own brand of coffee), video games, free Wi-Fi, and high-
definition TVs showing the financial news. The new design and parallel changes in
employee service began as a pilot project at one store with staff members hand-picked
by Davis. The executive team hired people whose values were consistent with the bank’s
new culture. At the same time, the team got “the wrong people off the bus.” For example,
three of the six original branch managers left the company.
Davis was aware of potential resistance throughout this period of turbulent change.
“When you are leading for growth, you know you are going to disrupt comfortable
routines and ask for new behavior, new priorities, new skills,” he acknowledges. “Even
when we want to change, and do change, we tend to relax and the rubber band snaps
us back into our comfort zones.” To prevent employees from returning to their old ways,
Davis introduced a “return on quality” (ROQ) measure for each store and department.
This composite measure of customer service and performance is calculated monthly
and distributed to all employees so that they know their work unit’s relative standing in
the organization. 1
Applying effective organizational change
practices has helped Umpqua Bank become the
largest regional community bank in the Pacific
Northwest.
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15
Organizational Change
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Describe the elements of Lewin’s force
field analysis model.
2. Outline six reasons why people resist
organizational change.
3. Discuss six strategies for minimizing
resistance to change.
4. Outline the conditions for effectively
diffusing change from a pilot project.
5. Describe the action research approach to
organizational change.
6. Outline the “Four-D” model of
appreciative inquiry and explain how
this approach differs from action
research.
7. Explain how parallel learning structures
assist the change process.
8. Discuss three ethical issues in organizational
change.
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444 Part Four Organizational Processes
Umpqua Bank’s transformation from a sleepy community bank to a regional leader
illustrates many of the strategies and practices necessary to successfully change organi-
zations. It reveals how CEO Ray Davis created an urgency to change, minimized re-
sistance to change, built the new model from a pilot project that was later diffused
throughout the organization, and introduced systems and structures that reinforced
employee behaviors consistent with the new banking model and company culture.
Although Umpqua’s transformation sounds as though it was a smooth transition, most
organizational change is messy, requiring considerable leadership effort and vigilance.
As we will describe throughout this chapter, the challenge of change is not so much in
deciding which way to go; the challenge is in the execution of this strategy. “We had to
pull the train back into the station a few times to make sure everyone was on board,”
says Umpqua Bank executive Lani Hayward. “We’re trying to do something that’s
never been done before and that’s to be a community bank at any size.” 2
This chapter begins by introducing Lewin’s model of change and its component
parts. This includes sources of resistance to change, ways to minimize this resistance,
and ways to stabilize desired behaviors. Next, the chapter examines four approaches
to organizational change—action research, appreciative inquiry, large-group interven-
tions, and parallel learning structures. The last section of this chapter considers both
cross-cultural and ethical issues in organizational change.
Learning
Objectives
After reading the next three sections, you should be able to:
1. Describe the elements of Lewin’s force field analysis model.
2. Outline six reasons why people resist organizational change.
3. Discuss six strategies for minimizing resistance to change.
4. Outline the conditions for effectively diffusing change from a pilot
project. force field analysis
Kurt Lewin’s model of
systemwide change
that helps change
agents diagnose the
forces that drive and
restrain proposed
organizational change.
Lewin’s Force Field Analysis Model
Social psychologist Kurt Lewin developed the force field analysis model to explain
how the change process works (see Exhibit 15.1 ). 3 Although it was developed more
than 50 years ago, recent reviews conclude that Lewin’s force field analysis model
remains one of the most widely respected ways of viewing this process. 4
One side of the force field model represents the driving forces that push organizations
toward a new state of affairs. These might include new competitors or technologies,
evolving workforce expectations, or a host of other environmental changes. Corporate
leaders also produce driving forces even when external forces for change aren’t appar-
ent. For instance, some experts call for “divine discontent” as a key feature of successful
organizations, meaning that leaders continually urge employees to strive for higher
standards or new innovations even when the company outshines the competition.
The other side of Lewin’s model represents the restraining forces that maintain the
status quo. These restraining forces are commonly called “resistance to change” be-
cause they appear as employee behaviors that block the change process. Stability
occurs when the driving and restraining forces are roughly in equilibrium, that is,
they are of approximately equal strength in opposite directions.
Lewin’s force field model emphasizes that effective change occurs by unfreezing
the current situation, moving to a desired condition, and then refreezing the system
so that it remains in the desired state. Unfreezing involves producing disequilibrium
unfreezing
The first part of the
change process, in
which the change agent
produces disequilibrium
between the driving and
restraining forces.
refreezing
The latter part of the
change process, in which
systems and conditions
are introduced that
reinforce and maintain
the desired behaviors.
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Chapter 15 Organizational Change 445
between the driving and restraining forces. As we will describe later, this may occur
by increasing the driving forces, reducing the restraining forces, or having a combina-
tion of both. Refreezing occurs when the organization’s systems and structures are
aligned with the desired behaviors. They must support and reinforce the new role
patterns and prevent the organization from slipping back into the old way of doing
things. Over the next few pages, we use Lewin’s model to understand why change is
blocked and how the process can evolve more smoothly.
Restraining Forces
Robert Nardelli pushed hard to transform Home Depot from a loose configuration of
fiefdoms to a more performance-oriented operation that delivered a consistent cus-
tomer experience. Change did occur at the world’s largest home improvement re-
tailer, but at a price. A large number of talented managers and employees left the
company, and some of those remaining continued to resent Nardelli’s transforma-
tion. Disenchanted staff referred to the company as “Home Despot” because the
changes took away their autonomy. Others named it “Home GEpot,” a cutting refer-
ence to the large number of former GE executives that Nardelli hired into top posi-
tions. After five years, the Home Depot board decided to replace Nardelli, partly
because he made some unsuccessful strategic decisions and partly because of the af-
tereffects of Nardelli’s changes. 5
Robert Nardelli, who is now CEO of Chrysler, experienced employee resistance to
change when at Home Depot. Resistance to change takes many forms, ranging from
overt work stoppages to subtle attempts to continue the “old ways.” One recent study
of bank employees reported that subtle resistance is much more common than overt
resistance. Some employees in that study avoided the desired changes by moving
into different jobs. Others continued to perform tasks the old way as long as manage-
ment didn’t notice. Even when employees complied with the planned changes, they
engaged in resistance by performing their work without corresponding cognitive or
emotional support for the change. 6 In other words, they resisted by communicating
nonverbally (and sometimes verbally!) to customers that they disliked the changes
forced on them. Some experts point out that these subtle forms of resistance create
Desired
conditions
Current
conditions
Restraining
forces
Driving
forcesRestraining
forces
Driving
forces
Restraining
forces
Driving
forces
Exhibit 15.1
Lewin’s Force Field
Analysis Model
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446 Part Four Organizational Processes
the greatest obstacles to change because they are not as visible as overt resistance. In
the words of one manager: “[Change efforts] never die because of direct confronta-
tion. Direct confrontation you can work with because it is known. Rather, they die a
death of a thousand cuts. People and issues you never confront drain the life out of
important [initiatives] and result in solutions that simply do not have the performance
impact that they should have.” 7
John Thompson experienced this subtle resistance to change soon after he became
CEO of Symantec Corporation. To reduce costs, Thompson suggested that the
computer cable included in all Symantec software packages was an unnecessary
expense because most customers already owned these cables. Everyone at the cost-
cutting meeting agreed that the cables should no longer be shipped with the software
but would be provided free to customers who requested them. Yet several weeks later
Thompson discovered that computer cables were still being shipped with the soft-
ware, so he reminded the executive responsible that the team makes these decisions
only once. “If you’ve got a disagreement or a point of view, bring it up when we’re
going through the discussion,” Thompson advised the executive. “Don’t hold back
Not Hoppy about Change Hoppy, a carbonated low-alcohol malt-and-hops beverage, was popular
around Tokyo after World War II as a cheap alternative to expensive beer, but it fell out of favor as beer
became affordable. Mina Ishiwatari (center in photo), granddaughter of Hoppy Beverage Co.’s founder,
was determined to improve Hoppy’s image when she joined the company a decade ago. Unfortunately,
the company’s 30 employees—mostly men in their fifties who were family members—didn’t want to dis-
turb their cozy jobs. “It was a turbulent decade of eliminating evils from the company and rebuilding a
new organization from scratch,” recalls Ishiwatari, who began as a rank-and-file employee and is now
the company’s executive vice president. “I tried to take a new marketing approach to change the image
of Hoppy . . . but no one would listen to me.” With limited support and budget, Ishiwatari developed a
Web site that informed the public about the product, sold it online, and documented Ishiwatari’s views in
an early Weblog. As the contemporary marketing caught the attention of health-conscious young people,
Hoppy sales have doubled to about US$25 million annually, even though it is sold only around Tokyo. Most
employees who opposed Ishiwatari’s radical changes have since left the company; almost all of the
43 current staff members were hired by Ishiwatari and support her vision of Hoppy’s future. 8
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Chapter 15 Organizational Change 447
and give me this smiley kind of benign agreement. Go back and get it fixed. We’re
not shipping cables any more.” 9
Employee Resistance as a Resource for Change Although Symantec’s CEO
was probably frustrated by the executive’s passive resistance to change, change
agents need to realize that resistance is a common and natural human response. As
economist John Kenneth Galbraith once quipped, “In the choice between changing
one’s mind and proving there’s no need to do so, most people get busy on the
proof!” 10 Even when people do support change, they typically assume that it is
others—not themselves—who need to change. The problem, however, isn’t so much
that resistance to change exists. The main problem is that change agents typically
view resistance as an unreasonable, dysfunctional, and irrational response to a de-
sirable initiative. They often form an “us versus them” perspective without consid-
ering that the causes of resistance may, in fact, be traced back to their own actions
or inaction. 11
The emerging view among change management experts is that resistance to
change needs to be seen as a resource, rather than as an impediment to change. First,
resistance incidents are symptoms of deeper problems in the change process. They
are signals that the change agent has not sufficiently addressed the underlying condi-
tions that support effective organizational change. 12 In some situations, employees
may be worried about the consequences of change, such as how the new conditions will
take away their power and status. In other situations, employees show resistance be-
cause of concerns about the process of change itself, such as the effort required to
break old habits and learn new skills.
Second, resistance should be recognized as a form of constructive conflict. As
you learned in Chapter 11, constructive conflict can potentially improve decision
making, including identifying better ways to improve the organization’s success.
However, constructive conflict is typically accompanied by dysfunctional relation-
ship conflict. This appears to be the case when change agents see resistance to
change as an impediment rather than a resource. They describe the people who
resist as the problem, whereas their focus should be on understanding the rea-
sons why these people resist. Thus, by viewing resistance as a form of construc-
tive conflict, change agents may be able to improve the change strategy or change
process.
Finally, resistance should be viewed in the context of justice and motivation. Re-
sistance is a form of voice, so, as described in Chapter 5, it potentially improves
procedural justice. By redirecting initial forms of resistance into constructive conver-
sations, change agents can increase employee perceptions and feelings of fairness.
Furthermore, resistance is motivational; it potentially engages people to think about
the change strategy and process. Change agents can harness that motivational force
to ultimately strengthen commitment to the change initiative.
Why Employees Resist Change Change management experts have developed
a long list of reasons why people do not embrace change. 13 Many of these reasons
relate to a lack of motivation, such as exists when employees estimate that the
negative consequences that the change might impose on them outweigh the bene-
fits. Another factor is the inability to change due to lack of adequate skills and
knowledge. Employees also resist change unwittingly because they lack a suffi-
ciently clear understanding of what is expected of them (i.e., lack of role clarity).
Six of the most commonly cited reasons why people resist change are summarized
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The FBI Meets Its Own
Resistance
In 1993, following the first terrorist attack on the World Trade
Center, the U.S. Federal Bureau of Investigation (FBI) was
given a new mandate: refocus from a reactive law enforcement
agency (solving crimes) to a proactive domestic intelligence
agency (preventing terrorism). Eight years later, the FBI was
still mainly a crime investigation organization with limited
intelligence-gathering capabilities. This failure to change was
identified as a factor in the FBI’s inability to prevent terrorist
attacks on the same buildings as well as the Pentagon. One
government report even stated that the FBI and the CIA “seem
to be working harder and harder just to maintain a status quo
that is increasingly irrelevant to the new challenges.”
One source of resistance, according to government reports,
is that FBI employees and managers are unable or unwilling
to change because solving crimes (rather than intelligence
gathering) is burned into their mindset, routines, career paths,
and decentralized structure. Most FBI field managers were
trained in law enforcement, so they continue to give preferential
treatment and resources to enforcement rather than terrorist
prevention initiatives.
Even if FBI leaders were motivated to become more focused
on intelligence gathering, the organization’s systems and
structures undermine these initiatives. The FBI has been a de-
centralized organization, where field agents operate without
much orchestration from headquarters. Until recently, the FBI
also lacked a secure centralized information system (in fact,
most of its records were still paper-based), which is essential
for intelligence work but less important for criminal investiga-
tions. Furthermore, information is so closely guarded further down
the ranks (called “close holds”) that an information access
barrier called “the wall” isolates FBI intelligence officers from
the mainstream criminal investigation staff. Overall, these
structural characteristics effectively scuttled any attempt to
transform the FBI into an intelligence agency.
Resistance to change was also likely due in part to a his-
toric rivalry between the FBI and the Central Intelligence
Agency (CIA). Raising the profile and legitimacy of intelligence
gathering at the FBI would have acknowledged that the CIA’s
Connections 15.1
work was valuable, so some FBI leaders and staff were reluc-
tant to move in that direction.
The FBI is now taking concerted steps to address these
barriers to change. But John Miller, the FBI’s assistant direc-
tor of the office of public affairs, admits that the FBI continues
to face challenges. “The FBI has no corner on the market of
people being resistant to change,” he says. “We don’t recruit
people from Planet Perfect; we recruit human beings.” 14
The FBI experienced many sources of resistance in its
mandate of transforming from a reactive law enforcement
agency into a proactive domestic intelligence agency.
below. 15 Connections 15.1 describes how some of these sources of resistance existed
at the FBI in spite of clear evidence that the law enforcement agency needed to
develop a new mandate.
• Direct costs. People tend to block actions that result in higher direct costs or
lower benefits than those in the existing situation. Connections 15.1 describes
how some FBI managers likely resisted the bureau’s new intelligence mandate
because it would necessarily remove some of their resources, personal status,
and career opportunities.
448
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Chapter 15 Organizational Change 449
• Saving face. Some people resist change as a political strategy to “prove” that the
decision is wrong or that the person encouraging change is incompetent. This
not-invented-here syndrome is widespread, according to change experts. Says
one consultant, “Unless they’re scared enough to listen, they’ll never forgive
you for being right and for knowing something they don’t.” 16
• Fear of the unknown. People resist change out of worry that they cannot adjust to
the new work requirements. This fear of the unknown increases the risk of per-
sonal loss. For example, even if many FBI managers and professionals recog-
nized that the agency should change its mandate, they likely were reluctant to
push the changes forward because it is difficult to anticipate how this mandate
would affect them personally.
• Breaking routines. People typically resist initiatives that force them out of their
comfort zones and require them to invest time and energy in learning new role
patterns. Umpqua Bank CEO Ray Davis, who was introduced in the opening
vignette to this chapter, acknowledged this source of resistance when describing
the “rubber band” effect—employees tend to snap back into their comfort zones
rather than stick with the new behaviors. Indeed, most employees in one survey
admitted they don’t follow through with organizational changes because they
“like to keep things the way they are” or the changes seem to be too compli-
cated or time wasting. 17 FBI agents likely resisted the organization’s new man-
date because they were accustomed to working independently on investigations,
so it would be a challenge to engage in more information sharing and collabora-
tion across teams and departments.
• Incongruent team dynamics. Teams develop and enforce conformity to a set of
norms that guide behavior. However, conformity to existing team norms may
discourage employees from accepting organizational change. For example, Best
Buy introduced the results-only work environment (ROWE), in which employ-
ees were evaluated by their results, not their face time. Yet, even though the
program allowed employees to wander in to work at any time, deviations were
often met with half-humorous barbs from co-workers, such as “Forgot to set
your alarm clock again?” These rebukes, which were consistent with the team
norms that previously governed face-time violations, undermined the ROWE
program. Best Buy’s consultants eventually set up sessions that warned employ-
ees about these taunts, which they called “sludge.” 18
• Incongruent organizational systems. Rewards, information systems, patterns of au-
thority, career paths, selection criteria, and other systems and structures are
both friends and foes of organizational change. When properly aligned, they re-
inforce desired behaviors. When misaligned, they pull people back into their
old attitudes and behavior. Even enthusiastic employees lose momentum after
failing to overcome the structural confines of the past.
Unfreezing, Changing, and Refreezing
According to Lewin’s force field analysis model, effective change occurs by un-
freezing the current situation, moving to a desired condition, and then refreezing
the system so that it remains in this desired state. Unfreezing occurs when the driving
forces are stronger than the restraining forces. This happens by making the driving
forces stronger, weakening or removing the restraining forces, or doing a combination
of both.
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450 Part Four Organizational Processes
With respect to the first option, driving forces must increase enough to motivate
change. Change rarely occurs by increasing driving forces alone, however, because
the restraining forces often adjust to counterbalance the driving forces. This is rather
like the coils of a mattress. The harder corporate leaders push for change, the stronger
the restraining forces push back. This antagonism threatens the change effort by pro-
ducing tension and conflict within the organization. The preferred option is to both
increase the driving forces and reduce or remove the restraining forces. Increasing
the driving forces creates an urgency for change, whereas reducing the restraining
forces minimizes resistance to change.
Creating an Urgency for Change
It is almost a cliché to say that organizations today operate in more dynamic, fast-paced
environments than they did a few decades ago. The environmental pressures represent
the driving forces that push employees out of their comfort zones. They energize peo-
ple to face the risks that change creates. In many organizations, however, corporate
leaders buffer employees from the external environment to such an extent that these
driving forces are hardly felt by anyone below the top executive level. The result is that
employees don’t understand why they need to change and leaders are surprised when
their change initiatives do not have much effect. The change process therefore neces-
sarily begins by ensuring that employees develop an urgency for change. This typically
occurs by informing employees about competitors, changing consumer trends, impend-
ing government regulations, and other driving forces in the external environment. 19
Firing Up Chrysler’s Urgency for Change Chrysler Corporation’s attempt to create a team-based or-
ganizational structure at its Belvidere assembly plant initially met with stiff resistance. “There is a need
to change,” says plant manager Kurt Kavajecz. The problem, he explains, is that employees didn’t see
the need for change. They knew that “we build cars pretty well. . . . So why do we have to change?” To
develop a stronger urgency for change, Kavajecz told employees about the challenges the company
faces. “If you show them what’s going on in the industry, if you give them the information, the data on
why we are changing, at the end of the presentation, they get it,” he explains. “They see that plants are
closing and jobs are going away. We talk very openly about those things, and they understand why
we’re changing.” The Chrysler plant eventually introduced team-based work. 20
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Chapter 15 Organizational Change 451
Customer-Driven Change Some companies fuel the urgency to change by put-
ting employees in direct contact with customers. Dissatisfied customers represent a
compelling driving force for change because of the adverse consequences for the
organization’s survival and success. Customers also provide a human element that
further energizes employees to change current behavior patterns. 21
Executives at Shell Europe applied customer-driven change when they discovered
that middle managers seemed blissfully unaware that Shell wasn’t achieving either its
financial goals or its customer needs. So, to create an urgency for change, the Euro-
pean managers were loaded onto buses and taken out to talk with customers and
employees who work with customers every day. “We called these ‘bus rides.’ The
idea was to encourage people to think back from the customer’s perspective rather
than from the head office,” explains Shell Europe’s vice president of retailing. “The
bus rides were difficult for a lot of people who, in their work history, had hardly ever
had to talk to a customer and find out what was good and not so good about Shell
from the customer’s standpoint.” 22
Creating an Urgency for Change without External Forces Exposing employees
to external forces can strengthen the urgency for change, but leaders often need to be-
gin the change process before problems come knocking at the company’s door. “You
want to create a burning platform for change even when there isn’t a need for one,”
says Steve Bennett, CEO of financial software company Intuit. 23 Creating an urgency
for change when the organization is riding high requires a lot of persuasive influence
that helps employees visualize future competitive threats and environmental shifts.
For instance, Apple Computer’s iPod dominates the digital music market, but
Steve Jobs wants the company to be its own toughest competitor. Just when sales of
the iPod Mini were soaring, Jobs challenged a gathering of 100 top executives and
engineers to develop a better product to replace it. “Playing it safe is the most danger-
ous thing we can do,” Jobs warned. Nine months later, the company launched the
iPod Nano, which replaced the still-popular iPod Mini, before competitors could offer
a better alternative. 24
Experts warn, however, that employees may see the burning-platform strategy as
manipulative, a view that produces cynicism about change and undermines trust in
the change agent. 25 Also, the urgency for change does not always need to be initiated
from a problem-oriented perspective. Instead, as we will describe later in this chapter,
effective change agents can adopt a positive orientation by championing a vision of a
more appealing future state. By creating a future vision of a better organization, leaders
effectively make the current situation less appealing. When the vision connects to
employee values and needs, it can be a motivating force for change even when external
“problems” are not strong.
Reducing the Restraining Forces
Employee resistance should be viewed as a resource, but its underlying causes—the
restraining forces—need to be addressed. As we explained earlier using the mattress-
coil metaphor, it is not enough to increase the driving forces because employees of-
ten push back harder to offset the opposing force. Exhibit 15.2 summarizes six
strategies for addressing the sources of employee resistance. If feasible, communica-
tion, learning, employee involvement, and stress management should be attempted
first. 26 However, negotiation and coercion are necessary for people who will clearly
lose something from the change and in cases where the speed of change is critical.
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452 Part Four Organizational Processes
Strategy Example When applied Problems
Communication Customer complaint
letters are shown to
employees.
When employees don’t
feel an urgency for
change or don’t know
how the change will
affect them.
Time-consuming and
potentially costly.
Learning Employees learn how
to work in teams as
company adopts a
team-based structure.
When employees need
to break old routines
and adopt new role
patterns.
Time-consuming and
potentially costly.
Employee
involvement
Company forms task
force to recommend
new customer service
practices.
When the change effort
needs more employee
commitment, some
employees need to save
face, and/or employee
ideas would improve
decisions about the
change strategy.
Very time-consuming.
Might lead to conflict
and poor decisions if
employees’ interests
are incompatible with
organizational needs.
Stress
management
Employees attend
sessions to discuss
their worries about the
change.
When communication,
training, and
involvement do not
sufficiently ease
employee worries.
Time-consuming and
potentially expensive.
Some methods may not
reduce stress for all
employees.
Negotiation Employees agree to
replace strict job
categories with
multiskilling in return
for increased job
security.
When employees will
clearly lose something of
value from the change
and would not otherwise
support the new condi-
tions. Also necessary
when the company must
change quickly.
May be expensive,
particularly if other
employees want to
negotiate their support.
Also tends to produce
compliance but not
commitment to the
change.
Coercion Company president tells
managers to “get on
board” the change or
leave.
When other strategies
are ineffective and the
company needs to
change quickly.
Can lead to more subtle
forms of resistance,
as well as long-term
antagonism with the
change agent.
Exhibit 15.2
Strategies for
Minimizing
Resistance to
Change
Sources: Adapted from J. P. Kotter and L. A. Schlesinger, “Choosing Strategies for Change,” Harvard Business
Review 57 (1979), pp. 106–114; P. R. Lawrence, “How to Deal with Resistance to Change,” Harvard Business Review,
May–June 1954, pp. 49–57.
Communication As Connections 15.1 described, the FBI experienced a high level
of resistance to changing into an intelligence-gathering organization. One of the first
strategies the FBI leaders are now applying to address that resistance is communicat-
ing in every way possible and to as many audiences as possible that the FBI must
change, why it must change, and what the new bureau will look like. “The word is
out. Terrorism is the No. 1 priority, and intelligence is what the bureau is about,” says
former assistant attorney general Paul R. Corts, who has worked closely with the FBI
during the change process. “You’ve got to say it, say it, and say it again.”
Communication is the highest priority and first strategy required for any organiza-
tional change. According to one recent survey, communication (together with involve-
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Chapter 15 Organizational Change 453
ment) is considered the top strategy for engaging employees in the change process. 27
Communication improves the change process in at least two ways. First, as mentioned
earlier, leaders develop an urgency to change by candidly telling employees about the
driving forces for change. Whether through town hall meetings with senior manage-
ment or by directly meeting with disgruntled customers, employees become energized
to change. Second, communication can potentially reduce fear of the unknown. The
more corporate leaders communicate their vision of the future, the more easily em-
ployees can understand their own role in that future. This effort may also begin the
process of adjusting team norms to be more consistent with the new reality.
Learning Learning is an important process in most change initiatives because em-
ployees require new knowledge and skills to fit the organization’s evolving require-
ments. The FBI is now addressing past resistance to change through heavy investment
in training staff in counterterrorism and counterintelligence. In addition, hundreds of
FBI executives have been sent to weeklong courses to learn how to coach employees
during the change process. Coaching and other forms of learning are time-consuming,
but they help employees break routines by teaching them new role patterns.
Employee Involvement Unless the change must occur quickly or employee inter-
ests are highly incompatible with the organization’s needs, employee involvement is
almost an essential part of the change process. Chapter 7 described several potential
benefits of employee involvement, all of which are relevant to organizational change.
Employees who participate in decisions about the change tend to feel they have more
personal responsibility for its successful implementation, rather than being disinter-
ested agents of someone else’s decisions. 28 This sense of ownership also minimizes the
problems of saving face and fear of the unknown. Furthermore, the complexity of to-
day’s work environment demands that more people provide ideas regarding the best
direction of the change effort. Employee involvement is such an important component
Employee Involvement Sizzles at Lopez Foods With blue-chip clients
such as McDonald’s and Wal-Mart, Lopez Foods, Inc. has built an
impressive business over the past 15 years. And with annual sales
of $500 million, the Oklahoma City–based beef patty and sausage
manufacturer has become the 10th-largest Hispanic-owned company
in America. To ensure that the next 15 years will be equally successful,
CEO Eduardo Sanchez recently introduced a major organizational
change initiative aimed at making “a quantum leap” in the company’s
efficiency and performance. Employee involvement has been a critical
component of the change process. The company held several “brown
paper” sessions in which the current production process was mapped
out on a large wall of brown paper and employees were asked to verify
that process and to figure out how to improve it. “We got everyone
involved, got sticky [notes], and said, ‘Here’s the process as-is, and we
want to work on the to-be—what’s it going to be?’“ says assistant vice
president Dave Lopez. Sanchez was surprised at the employees’ high
level of enthusiasm for improving efficiency. “Things we thought would
be a hard sell on the employees, they themselves have come up to us
and said, ‘We can do this better,’ or ‘We don’t need five people here,
we only need three,’“ says Sanchez. 29
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454 Part Four Organizational Processes
of organizational change that special initiatives have been developed to allow partici-
pation in large groups. These change interventions are described later in the chapter.
Stress Management Organizational change is a stressful experience for many
people because it threatens self-esteem and creates uncertainty about the future. 30
Communication, learning, and employee involvement can reduce some of the stress-
ors. However, research indicates that companies also need to introduce stress man-
agement practices to help employees cope with the changes. 31 In particular, stress
management minimizes resistance by removing some of the direct costs and fear of
the unknown of the change process. Stress also saps energy, so minimizing stress po-
tentially increases employee motivation to support the change process.
Negotiation As long as people resist change, organizational change strategies will
require some influence tactics. Negotiation is a form of influence that involves the
promise of benefits or resources in exchange for the target person’s compliance with
the influencer’s request. This strategy potentially activates those who would other-
wise lose out from the change. However, it merely gains compliance rather than com-
mitment to the change effort, so it might not be effective in the long term.
Coercion If all else fails, leaders rely on coercion to change organizations. Coercion
can include persistently reminding people of their obligations, frequently monitor-
ing behavior to ensure compliance, confronting people who do not change, and
using threats of sanctions to force compliance. Replacing people who will not sup-
port the change is an extreme step, but it is fairly common. The opening story to
this chapter described how three of the original six branch managers at Umpqua
Bank left the company when Ray Davis introduced a radically different model of
banking. Similarly, within one year after Robert Nardelli was hired as CEO of Home
Depot, most of the retailer’s top management team had voluntarily or involuntarily
left the company.
Replacing staff is a radical form of organizational unlearning because replacing
executives removes knowledge of the organization’s past routines. This potentially
opens up opportunities for new practices to take hold. 32 At the same time, coercion
is a risky strategy because survivors (employees who do not leave) may have less
trust in corporate leaders and engage in more political tactics to protect their own
job security.
Refreezing the Desired Conditions
Unfreezing and changing behavior won’t produce lasting change. People are crea-
tures of habit, so they easily slip back into past patterns. Therefore, leaders need to
refreeze the new behaviors by realigning organizational systems and team dynamics
with the desired changes. 33 For instance, recall that the FBI experienced resistance to
change because organizational structures interfered with the desired future of intelli-
gence gathering. Now the FBI is not only changing; it is institutionalizing these
changes through new systems and structures. New career paths have been established
for intelligence officers as well as for criminal investigation agents. The compensa-
tion system has been redesigned to reward staff who succeed in intelligence work
rather than just criminal investigations. The FBI is also slowly developing informa-
tion systems so that agents can share knowledge quickly with each other and with
other agencies.
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Chapter 15 Organizational Change 455
Change Agents, Strategic Visions, and
Diffusing Change
Kurt Lewin’s force field analysis model is a useful template to explain the dynamics
of organizational change. But it overlooks three ingredients in effective change pro-
cesses: change agents, strategic visions, and diffusing change.
Change Agents and Strategic Visions
The opening vignette to this chapter described several ways that Umpqua Bank CEO
Ray Davis supported organizational change. Perhaps the most important of these was
Davis’s own skills and behaviors as a transformational leader. He developed an ap-
pealing vision of the desired future state, communicated that vision in ways that were
meaningful to others, made decisions and acted in ways that were consistent with that
vision, and built commitment to that vision. 34 Change agents come in different forms,
and more than one person is often required to fulfill these different roles. 35 In most
situations, however, transformational leaders are the primary agents of change.
A key element of leading change is a strategic vision. A leader’s vision provides a
sense of direction and establishes the critical success factors against which the real
changes are evaluated. Furthermore, vision provides an emotional foundation to the
change because it links the individual’s values and self-concept to the desired change. 36
A strategic vision also minimizes employee fear of the unknown and provides a better
understanding about what behaviors employees must learn for the desired future.
Diffusion of Change
In Chapter 4, as well as earlier in this chapter, we described Best Buy’s results-only
work environment (ROWE) initiative, which was introduced to support work–life
balance and employment expectations of a younger workforce. ROWE evaluates
employees by their results, not their face time. This new arrangement gives employ-
ees at the Minneapolis-based retailer the freedom to come to work when it suits
them. ROWE is a significant departure from the traditional employment relationship,
so Best Buy wisely introduced an early version of it as a pilot project. Specifically, the
program was first tested with a retail division of 320 employees that suffered from
low morale and high turnover. Only after employee engagement scores increased
and turnover fell over several months was the ROWE program expanded to other
parts of the organization. 37
As at Best Buy, change agents often test the transformation process with a pilot proj-
ect and then diffuse what has been learned from this experience to other parts of the
organization. Unlike centralized, systemwide changes, pilot projects are more flexible
and less risky. 38 The pilot project approach also makes it easier to select organizational
groups that are most ready for change, thus increasing the pilot project’s success.
But how do we ensure that the change process started in the pilot project is ad-
opted by other segments of the organization? The MARS model introduced in Chap-
ter 2 offers a useful template for organizing the answer to this question. First,
employees are more likely to adopt the practices of a pilot project when they are
motivated to do so. 39 This occurs when they see that the pilot project is successful and
people in the pilot project receive recognition and rewards for changing their previ-
ous work practices. Diffusion also requires supervisor support and reinforcement of
the desired behaviors. More generally, change agents need to minimize the sources
of resistance to change that we discussed earlier in this chapter.
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456 Part Four Organizational Processes
Second, employees must have the ability—the required skills and knowledge—to
adopt the practices introduced in the pilot project. According to innovation diffusion
studies, people adopt ideas more readily when they have an opportunity to interact
and learn from others who have already applied the new practices. 40 Thus, pilot pro-
jects get diffused when employees in the original pilot are dispersed to other work
units as role models and knowledge sources.
Third, pilot projects get diffused when employees have clear role perceptions, that
is, when they understand how the practices in a pilot project apply to them even
though they are in a completely different functional area. For instance, accounting
department employees won’t easily recognize how they can adopt quality improve-
ment practices developed by employees in the production department. The challenge
here is for change agents to provide guidance that is neither too specific, because it
might not seem relevant to other areas of the organization, nor too abstract, because
this makes the instructions too vague. Finally, employees require supportive situa-
tional factors, including the resources and time necessary to adopt the practices
demonstrated in the pilot project.
Learning
Objectives
After reading the next two sections, you should be able to:
5. Describe the action research approach to organizational change.
6. Outline the “Four-D” model of appreciative inquiry and explain how
this approach differs from action research.
7. Explain how parallel learning structures assist the change process.
8. Discuss three ethical issues in organizational change.
Four Approaches to Organizational Change
So far, this chapter has examined the dynamics of change that occur every day in
organizations. However, organizational change agents and consultants also apply
various structured approaches to organizational change. This section introduces four
of the leading approaches: action research, appreciative inquiry, large-group inter-
ventions, and parallel learning structures.
Action Research Approach
Along with introducing the force field model, Kurt Lewin recommended an action
research approach to the change process. Action research maintains that meaningful
change is a combination of action orientation (changing attitudes and behavior) and
research orientation (testing theory). 41 On the one hand, the change process needs to
be action-oriented because the ultimate goal is to bring about change. An action ori-
entation involves diagnosing current problems and applying interventions that re-
solve those problems. On the other hand, the change process is a research study
because change agents apply a conceptual framework (such as team dynamics or or-
ganizational culture) to a real situation. As with any good research, the change pro-
cess involves collecting data to diagnose problems more effectively and to
systematically evaluate how well the theory works in practice. 42
Within this dual framework of action and research, the action research approach
adopts an open-systems view. It recognizes that organizations have many interdepen-
dent parts, so change agents need to anticipate both the intended and the unintended
consequences of their interventions. Action research is also a highly participative
action research
A problem-focused
change process that
combines action
orientation (changing
attitudes and behavior)
and research orientation
(testing theory through
data collection and
analysis).
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Chapter 15 Organizational Change 457
process because open-systems change requires both the knowledge and the commit-
ment of members within that system. Indeed, employees are essentially co-researchers
as well as participants in the intervention. Overall, action research is a data-based,
problem-oriented process that diagnoses the need for change, introduces the inter-
vention, and then evaluates and stabilizes the desired changes. The main phases of
action research are illustrated in Exhibit 15.3 and described below: 43
1. Form client-consultant relationship . Action research usually assumes that the change agent
originates outside the system (such as a consultant), so the process begins by forming
the client-consultant relationship. Consultants need to determine the client’s readi-
ness for change, including whether people are motivated to participate in the process,
are open to meaningful change, and possess the abilities to complete the process.
2. Diagnose the need for change. Action research is a problem-oriented activity that care-
fully diagnoses the problem through systematic analysis of the situation. Organiza-
tional diagnosis identifies the appropriate direction for the change effort by gathering
and analyzing data about an ongoing system, such as through interviews and surveys
of employees and other stakeholders. Organizational diagnosis also includes em-
ployee involvement in agreeing on the appropriate change method, the schedule for
the actions involved, and the expected standards of successful change.
3. Introduce intervention. This stage in the action research model applies one or more
actions to correct the problem. It may include any of the prescriptions mentioned
in this textbook, such as building more effective teams, managing conflict, build-
ing a better organizational structure, or changing the corporate culture. An impor-
tant issue is how quickly the changes should occur. 44 Some experts recommend
incremental change, in which the organization fine-tunes the system and takes small
steps toward a desired state. Others claim that quantum change is often required, in
which the system is overhauled decisively and quickly. Quantum change is usually
traumatic to employees and offers little opportunity for correction. But incremen-
tal change is also risky when the organization is seriously misaligned with its envi-
ronment, thereby facing a threat to its survival.
4. Evaluate and stabilize change. Action research recommends evaluating the effective-
ness of the intervention against the standards established in the diagnostic stage.
Unfortunately, even when these standards are clearly stated, the effectiveness of an
intervention might not be apparent for several years or might be difficult to separate
from other factors. If the activity has the desired effect, the change agent and partici-
pants need to stabilize the new conditions. This refers to the refreezing process that
was described earlier. Rewards, information systems, team norms, and other condi-
tions are redesigned so that they support the new values and behaviors.
Diagnose need
for change
Introduce
intervention
Evaluate and
Form
client–
consultant
relationship.
Disengage
consultant’s
services.
Exhibit 15.3 The Action Research Process
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458 Part Four Organizational Processes
The action research approach has dominated organizational change thinking
ever since it was introduced in the 1940s. However, some experts complain that
the problem-oriented nature of action research—in which something is wrong that
must be fixed—focuses on the negative dynamics of the group or system rather
than its positive opportunities and potential. This concern with action research has
led to the development of a more positive approach to organizational change,
called appreciative inquiry . 45
Appreciative Inquiry Approach
Appreciative inquiry tries to break out of the problem-solving mentality of tradi-
tional change management practices by reframing relationships around the positive
and the possible. It searches for organizational (or team) strengths and capabilities
and then adapts or applies that knowledge for further success and well-being. Appre-
ciative inquiry is therefore deeply grounded in the emerging philosophy of positive
organizational behavior, which suggests that focusing on the positive rather than nega-
tive aspects of life will improve organizational success and individual well-being. In
other words, this approach emphasizes building on strengths rather than trying to
directly correct problems. 46
Appreciative inquiry typically directs its inquiry toward successful events and suc-
cessful organizations or work units. This external focus becomes a form of behavioral
modeling, but it also increases open dialogue by redirecting the group’s attention
away from its own problems. Appreciative inquiry is especially useful when partici-
pants are aware of their “problems” or already suffer from negativity in their relation-
ships. The positive orientation of appreciative inquiry enables groups to overcome
appreciative inquiry
An organizational change
strategy that directs the
group’s attention away
from its own problems
and focuses participants
on the group’s potential
and positive elements.
BBC Takes the Appreciative Journey The British Broadcasting
Corporation (BBC) needed more innovative programming to reverse
declining audience numbers, but employees complained that the radio,
television, and Internet broadcaster did not provide a creative work
environment. To discover how to become more creative, the company
sponsored an appreciative inquiry process of employee consultation,
called Just Imagine. More than 10,000 employees (about 40 percent of
BBC’s workforce) participated in 200 meetings held over six months.
At each meeting, employees were paired to ask each other three
questions: (1) What has been the most creative/valued experience in
your time at the BBC? (2) What were the conditions that made that
experience possible? (3) If those experiences were to become the norm,
how would the BBC have to change? The pairs then discussed their
interview results in teams of 10 people, and the most powerful stories
were shared with others at the meeting. These meetings produced
98,000 ideas, which boiled down to 15,000 unique suggestions and
ultimately 35 concrete initiatives. The BBC’s executive publicized the
results and immediately implemented several recommendations,
such as a job swapping and a newcomer orientation program. Greg
Dyke, BBC’s respected director-general at the time, commented that
the appreciative inquiry process provided valuable guidance. “It gave
me a powerful mandate for change,” he stated. “I could look staff in
the eye and say, ‘This is what you told us you wanted.’“ 47
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Chapter 15 Organizational Change 459
these negative tensions and build a more hopeful perspective of their future by focusing
on what is possible. 48
The “Four-D” model of appreciative inquiry (named after its four stages) shown in
Exhibit 15.4 begins with discovery —identifying the positive elements of the observed
events or organization. 49 This might involve documenting positive customer experi-
ences elsewhere in the organization. Or it might include interviewing members of
another organization to discover its fundamental strengths. As participants discuss
their findings, they shift into the dreaming stage by envisioning what might be possible
in an ideal organization. By directing their attention to a theoretically ideal organiza-
tion or situation, participants feel safer revealing their hopes and aspirations than
they would if they were discussing their own organization or predicament.
As participants make their private thoughts public to the group, the process shifts
into the third stage, called designing. Designing involves the process of dialogue, in
which participants listen with selfless receptivity to each other’s models and assump-
tions and eventually form a collective model for thinking within the team. In effect,
they create a common image of what should be. As this model takes shape, group
members shift the focus back to their own situation. In the final stage of appreciative
inquiry, called delivering (also known as destiny ), participants establish specific objectives
and direction for their own organization on the basis of their model of what will be.
Appreciative inquiry was developed 20 years ago, but it really gained popularity
only within the past few years. Several success stories of organizational change from
appreciative inquiry have emerged in a variety of organizational settings, including
British Broadcasting Corporation, Castrol Marine, Canadian Tire, Avon México,
American Express, Green Mountain Coffee Roasters, and Hunter Douglas. 50 How-
ever, experts warn that appreciative inquiry is not always the best approach to
changing teams or organizations, and, indeed, it has not always been successful. Ap-
preciative inquiry requires participants who are willing to let go of the problem-
oriented approach and leaders who are willing to accept appreciative inquiry’s less
structured process. 51 Another concern is that research has not yet examined the con-
tingencies of this approach. 52 In other words, we don’t yet know under what condi-
tions appreciate inquiry is a useful approach to organizational change and under
what conditions it is less effective. Overall, appreciative inquiry has much to offer
the organizational change process, but we are just beginning to understand its poten-
tial and limitations.
1.
Discovery
Identifying the
best of “what is.”
2.
Dreaming
Envisioning
“what might be.”
3.
Designing
Engaging in
dialogue about
“what should be.”
4.
Delivering
Developing
objectives about
“what will be.”
Exhibit 15.4 The Four-D Model of Appreciative Inquiry
Sources: Based on F. J. Barrett and D. L. Cooperrider, “Generative Metaphor Intervention: A New Approach for Working with Systems Divided by
Conflict and Caught in Defensive Perception,” Journal of Applied Behavioral Science 26 (1990), p. 229; D. Whitney and C. Schau, “Appreciative Inquiry:
An Innovative Process for Organization Change,” Employment Relations Today 25 (Spring 1998), pp. 11–21; J. M. Watkins and B. J. Mohr, Appreciative
Inquiry: Change at the Speed of Imagination (San Francisco: Jossey-Bass, 2001), pp. 25, 42–45.
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460 Part Four Organizational Processes
Large-Group Interventions
Appreciative inquiry can occur in small teams, but it is often designed to involve a
large number of people, such as the 10,000 employees who participated in the pro-
cess at the British Broadcasting Corporation. As such, appreciative inquiry is often
identified as one of several large-group organizational change interventions. Another
large-group intervention, known as future search (and its variations— search conferences
and open-space technology ) “puts the entire system in the room,” meaning that the pro-
cess tries to involve as many employees and other stakeholders as possible associated
with the organizational system. 53 Future-search conferences are typically multiday
events at which participants are asked to identify trends or issues and establish strate-
gic solutions for those conditions.
For example, Emerson & Cuming’s chemical manufacturing facility in Canton,
Massachusetts, relied on a future-search conference in which managers, supervisors,
and production employees were organized into five stakeholder teams to identify ini-
tiatives that would improve the plant’s safety, efficiency, and cooperation. Lawrence
Public Schools in Kansas conducted a future-search conference involving parents,
teachers, students, community partners, and other stakeholders to help the board
allocate resources more effectively. “The goals that were developed at the future
search conference reflect what the community envisioned for its school district,” says
superintendent Randy Weseman. Those goals have since become the foundation of
the board’s strategic decision making. 54
Future-search meetings and similar large-group change events potentially mini-
mize resistance to change and assist the quality of the change process, but they also
have limitations. 55 One problem is that involving so many people invariably limits
the opportunity to contribute and increases the risk that a few people will dominate
the process. Another concern is that these events focus on finding common ground,
and this may prevent the participants from discovering substantive differences that
interfere with future progress. A third issue is that these events generate high expecta-
tions about an ideal future state that are difficult to satisfy in practice. Employees be-
come even more cynical and resistant to change if they do not see meaningful
future search
An organizational change
strategy that consists
of systemwide group
sessions, usually lasting
a few days, in which
participants identify
trends and establish
ways to adapt to those
changes.
IKEA Future Searches for the Perfect Sofa IKEA held a three-day
future-search event involving more than four dozen stakeholders,
including the company president, product design staff, sales and
distribution staff, information technology, retail managers, suppli-
ers from three countries, and six customers. The Swedish furni-
ture company, which was growing rapidly, wanted to “build a
quicker, leaner, and simpler” pipeline for its product development
and distribution. Focusing on a single product (the Ektorp sofa),
participants overcame the immense complexity of the system, the
language barriers (for most, English was a second language), and
apprehension and suspicions about change to map out a new
product development process. One year later, IKEA launched a
new sofa line (the Fixhult) based on further iterations of the pro-
cess designed in the future-search workshop. 56
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Chapter 15 Organizational Change 461
decisions and actions resulting from these meetings. The State of Washington Depart-
ment of Corrections held a future-search event that tried to minimize these problems.
The event involved a representation of 75 employees and managers, who reached a
consensus on the department’s future direction. Department executives were then
assigned specific recommendations to ensure that the conference results were put
into place. 57
Parallel Learning Structure Approach
Parallel learning structures are highly participative arrangements composed of
people from most levels of the organization who follow the action research model to
produce meaningful organizational change. They are social structures developed
alongside the formal hierarchy with the purpose of increasing the organization’s
learning. 58 Ideally, participants in parallel learning structures are sufficiently free
from the constraints of the larger organization so that they can more effectively solve
organizational issues.
Royal Dutch/Shell relied on a parallel learning structure to introduce a more
customer-focused organization. 59 Rather than try to change the entire organization
at once, executives held weeklong “retail boot camps” with six country teams of
frontline people (e.g., gas station managers, truck drivers, marketing professionals).
Partici pants learned about competitive trends in their regions and were taught pow-
erful marketing tools to identify new opportunities. The teams then returned home
to study their market and develop proposals for improvement. Four months later,
boot camp teams returned for a second workshop, at which each proposal was cri-
tiqued by Royal Dutch/Shell executives. Each team had 60 days to put its ideas
into action; then the teams returned for a third workshop to analyze what worked
and what didn’t. This parallel learning process did much more than introduce new
marketing ideas. It created enthusiasm in participants that spread contagiously to
their co-workers, including managers above them, when they returned to their
home countries.
Cross-Cultural and Ethical Issues in
Organizational Change
One significant concern with some organizational change interventions is that they
originate in the United States and other Western countries and may conflict with cul-
tural values in some other countries. 60 A few experts point out that this Western per-
spective of change is linear, as is Lewin’s force field model, discussed earlier. It also
assumes that the change process is punctuated by tension and overt conflict. But
these assumptions are incompatible with cultures that view change as a natural cycli-
cal process with harmony and equilibrium as the objectives. 61 This dilemma suggests
that we need to develop a more contingency-oriented perspective concerning the
cultural values of participants.
Some organizational change practices also face ethical issues. 62 One ethical con-
cern is the risk of violating individual privacy rights. The action research model is
built on the idea of collecting information from organizational members, yet this re-
quires that employees provide personal information and emotions that they may not
want to divulge. 63 A second ethical concern is that some change activities potentially
increase management’s power by inducing compliance and conformity in organizational
parallel learning
structure
A highly participative
arrangement composed
of people from most
levels of the organization
who follow the action
research model to
produce meaningful
organizational change.
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members. For instance, action research is a systemwide activity that requires employee
participation rather than allowing individuals to get involved voluntarily. A third concern
is that some organizational change interventions undermine the individual’s self-esteem.
The unfreezing process requires that participants disconfirm their existing beliefs, some-
times including their own competence at certain tasks or interpersonal relations.
Organizational change is usually more difficult than it initially seems. Yet the di-
lemma is that most organizations operate in hyperfast environments that demand
continuous and rapid adaptation. Organizations survive and gain competitive advan-
tage by mastering the complex dynamics of moving people through the continuous
process of change as quickly as the external environment is changing.
Organizational Behavior: The Journey Continues
Nearly 100 years ago, American industrialist Andrew Carnegie said: “Take away my
people, but leave my factories, and soon grass will grow on the factory floors. Take away
my factories, but leave my people, and soon we will have a new and better factory.”
Carnegie’s statement reflects the message woven throughout this textbook: Organiza-
tions are not buildings or machinery or financial assets; rather, they are the people in
them. Organizations are human entities—full of life, sometimes fragile, always exciting.
Chapter Summary
Lewin’s force field analysis model states that all systems
have driving and restraining forces. Change occurs through
the process of unfreezing, changing, and refreezing. Un-
freezing produces disequilibrium between the driving and
restraining forces. Refreezing realigns the organization’s
systems and structures with the desired behaviors.
Restraining forces are manifested as employee
re sistance to change. Resistance to change should be
viewed as a resource, not an inherent obstacle to
change. The main reasons why people resist change are
direct costs, saving face, fear of the unknown, breaking
routines, incongruent team dynamics, and incongruent
organizational systems. Resistance to change may be
minimized by keeping employees informed about what
to expect from the change effort (communicating);
teaching employees valuable skills for the desired future
(learning); involving them in the change process; help-
ing employees cope with the stress of change; negotiat-
ing trade-offs with those who will clearly lose from the
change effort; and using coercion (sparingly and as a
last resort).
Organizational change also requires driving forces.
This means that employees need to have an urgency for
change by becoming aware of the environmental condi-
tions that demand change in the organization. The
change process also requires refreezing the new behav-
iors by realigning organizational systems and team
dynamics with the desired changes. Every successful
change also requires change agents with a clear, well-ar-
ticulated vision of the desired future state. The change
process also often applies a diffusion process in which
change begins as a pilot project and eventually spreads to
other areas of the organization.
Action research is a highly participative, open-systems
approach to change management that combines an action
orientation (changing attitudes and behavior) with research
orientation (testing theory). It is a data-based, problem-
oriented process that diagnoses the need for change,
introduces the intervention, and then evaluates and
stabilizes the desired changes.
Appreciative inquiry embraces the positive organiza-
tional behavior philosophy by focusing participants on the
positive and possible. It tries to break out of the problem-
solving mentality that dominates organizational change
through the action research model. The four stages of
appreciative inquiry include discovery, dreaming, de-
signing, and delivering.
Large-group interventions, such as future-search
conferen ces, are highly participative events that typically
try to get the entire system into the room. A fourth orga-
nizational change approach, called parallel learning struc-
tures, relies on social structures developed alongside the
formal hierarchy with the purpose of increasing the
organization’s learning. They are highly participative
462 Part Four Organizational Processes
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6. Web Circuits is a Malaysian-based custom manu-
facturer for high-technology companies. Senior
management wants to introduce lean management
practices to reduce production costs and remain
competitive. A consultant has recommended that
the company start with a pilot project in one de-
partment and, when successful, diffuse these prac-
tices to other areas of the organization. Discuss the
advantages of this recommendation, and identify
three ways (other than the pilot project’s success) to
make diffusion of the change effort more successful.
7. Suppose that you are vice president of branch services
at the Bank of East Lansing. You notice that several
branches have consistently low customer service rat-
ings even though there are no apparent differences in
resources or staff characteristics. Describe an apprecia-
tive inquiry process in one of these branches that
might help to overcome this problem.
8. This chapter suggests that some organizational
change activities face ethical concerns. Yet several
consultants actively use these processes because
they believe they benefit the organization and do
less damage to employees than it seems on the sur-
face. For example, some activities try to open up the
employee’s hidden area (review the Johari Window
discussion in Chapter 3) so that there is better mu-
tual understanding with co-workers. Discuss this ar-
gument, and identify where you think organizational
change interventions should limit this process.
1. Chances are that the school you are attending is
currently undergoing some sort of change to adapt
more closely to its environment. Discuss the exter-
nal forces that are driving the change. What internal
drivers for change also exist?
2. Use Lewin’s force field analysis to describe the dy-
namics of organizational change at Umpqua Bank
(opening vignette to this chapter).
3. Employee resistance is a symptom , not a problem , in
the change process. What are some of the real prob-
lems that may underlie employee resistance?
4. Senior management of a large multinational corpo-
ration is planning to restructure the organization.
Currently, the organization is decentralized around
geographic areas so that the executive responsible
for each area has considerable autonomy over man-
ufacturing and sales. The new structure will transfer
power to the executives responsible for different
product groups; the executives responsible for each
geographic area will no longer be responsible for
manufacturing in their area but will retain control
over sales activities. Describe two types of resistance
senior management might encounter from this orga-
nizational change.
5. Discuss the role of reward systems in organiza-
tional change. Specifically, identify where reward
systems relate to Lewin’s force field model and
where they undermine the organizational change
process.
Critical Thinking Questions
463
action research, p. 456
appreciative inquiry, p. 458
force field analysis, p. 444
future search, p. 460
parallel learning structure,
p. 461
refreezing, p. 444
unfreezing, p. 444
Key Terms
arrangements, composed of people from most levels of
the organization who follow the action research model to
produce meaningful organizational change.
One significant concern is that organizational change
theories developed with a Western cultural orientation
potentially conflict with cultural values in some other
countries. Also, organizational change practices can
raise one or more ethical concerns, including increasing
management’s power over employees, threatening indi-
vidual privacy rights, undermining individual self-
esteem, and making clients dependent on the change
consultant.
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464
Case Study 15.1 TRANSACT INSURANCE CORPORATION
Steven L. McShane, University of Western Australia, and Terrance Bogyo, WorkSafeBC
TransAct Insurance Corporation (TIC) provides au-
tomobile insurance throughout the southeastern
United States. Last year, a new president was hired
by TIC’s board of directors to improve the compa-
ny’s competitiveness and customer service. After
spending several months assessing the situation, the
new president introduced a strategic plan to strengthen
TIC’s competitive position. He also replaced three
vice presidents. Jim Leon was hired as vice president
of claims, TIC’s largest division, with 1,500 em-
ployees, 50 claims center managers, and 5 regional
directors.
Jim immediately met with all claims managers
and directors, and he visited employees at TIC’s 50
claims centers. As an outsider, this was a formidable
task, but his strong interpersonal skills and uncanny
ability to remember names and ideas helped him
through the process. Through these visits and dis-
cussions, Jim discovered that the claims division had
been managed in a relatively authoritarian, top-
down manner. He could also see that morale was
very low and employee- management relations were
guarded. High workloads and isolation (adjusters
work in tiny cubicles) were two other common com-
plaints. Several managers acknowledged that the
high turnover among claims adjusters was partly due
to these conditions.
Following discussions with TIC’s president, Jim
decided to make morale and supervisory leadership
his top priority. He initiated a divisional newsletter
with a tear-off feedback form for employees to regis-
ter their comments. He announced an open-door
policy in which any claims division employee could
speak to him directly and confidentially without go-
ing first to the immediate supervisor. Jim also fought
organizational barriers to initiate a flextime program
so that employees could design work schedules
around their needs. This program later became a
model for other areas of TIC.
One of Jim’s most pronounced symbols of change
was the “Claims Management Credo” outlining the
philosophy that every claims manager would follow.
At his first meeting with the complete claims man-
agement team, Jim presented a list of what he thought
were important philosophies and actions of effective
managers. The management group was asked to se-
lect and prioritize items from this list. They were told
that the resulting list would be the division’s manage-
ment philosophy and all managers would be held ac-
countable for abiding by its principles. Most claims
managers were uneasy about this process, but they
also understood that the organization was under
competitive pressure and that Jim was using this ex-
ercise to demonstrate his leadership.
The claims managers developed a list of 10 items,
such as encouraging teamwork, fostering a trusting
work environment, setting clear and reasonable goals,
and so on. The list was circulated to senior manage-
ment in the organization for their comments and ap-
proval and sent back to all claims managers for their
endorsement. Once this was done, a copy of the final
document was sent to every claims division employee.
Jim also announced plans to follow up with an annual
survey to evaluate each claims manager’s perfor-
mance. This concerned the managers, but most of
them believed that the credo exercise was a result of
Jim’s initial enthusiasm and that he would be too busy
to introduce a survey after settling into the job.
One year after the credo had been distributed,
Jim announced that the first annual survey would be
conducted. All claims employees would complete
the survey and return it confidentially to the human
resource department where the survey results would
be compiled for each claims center manager. The
survey asked the extent to which the manager had
lived up to each of the 10 items in the credo. Each
form also provided space for comments.
Claims center managers were surprised that a sur-
vey would be conducted, but they were even more
worried about Jim’s statement that the results would
be shared with employees. What results would em-
ployees see? Who would distribute these results?
What happens if a manager gets poor ratings from
his or her subordinates? “We’ll work out the details
later,” said Jim in response to these questions. “Even
if the survey results aren’t great, the information will
give us a good baseline for next year’s survey.”
The claims division survey had a high response
rate. In some centers, every employee completed
and returned a form. Each report showed the claims
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comments should not have been shown to employees.
After discussing the situation with his directors, he
decided that the discussion meetings between claims
managers and their employees should proceed as
planned. To delay or withdraw the reports would
undermine the credibility and trust that Jim was try-
ing to develop with employees. However, the re-
gional director attended the meeting in each claims
center to minimize direct conflict between the claims
center manager and employees.
Although many of these meetings went smoothly,
a few created harsh feelings between managers and
their employees. The sources of some comments
were easily identified by their content, and this cre-
ated a few delicate moments in several sessions. A
few months after the meetings, two claims center
managers quit and three others asked for transfers
back to nonmanagement positions in TIC. Mean-
while, Jim wondered how to manage this process
more effectively, particularly since employees ex-
pected another survey the following year.
Discussion Questions
1. What symptom(s) exist in this case to suggest
that something has gone wrong?
2. What are the root causes that have led to these
symptoms?
3. What actions should the company take to correct
these problems?
Copyright © 2000 Steven L. McShane and Terrance J. Bogyo.
This case is based on actual events, but names, the industry, and
some characteristics have been changed to maintain anonymity.
center manager’s average score for each of the 10
items, as well as how many employees rated the
manager at each level of the 5-point scale. The re-
ports also included every comment made by em-
ployees at that center.
No one was prepared for the results of the first
survey. Most managers received moderate or poor
ratings on the 10 items. Very few managers averaged
above 3.0 (out of the 5 points) on more than a couple
of items. This suggested that, at best, employees
were ambivalent about whether their claims center
manager had abided by the 10 management philoso-
phy items. The comments were even more devastat-
ing than the ratings. Comments ranged from mildly
disappointed to extremely critical of the claims man-
agers. Employees also described their long-standing
frustration with TIC, high workloads, and isolated
working conditions. Several people bluntly stated
that they were skeptical about the changes that Jim
had promised. “We’ve heard the promises before,
but now we’ve lost faith,” wrote one claims adjuster.
The survey results were sent to each claims man-
ager, the regional director, and employees at the
claims center. Jim instructed managers to discuss the
survey data and comments with their regional man-
ager and directly with employees. The claims center
managers, who thought employees would see only
the average scores, went into shock when they real-
ized that the reports included individual comments.
Some managers went to their regional director, com-
plaining that revealing the personal comments would
ruin their careers. Many directors sympathized, but
the results were already available to employees.
When Jim heard about these concerns, he agreed
that the results were lower than expected and that the
465
Case Study 15.2 INSIDE INTEL
For years, Intel thrived on a
business model that cofounder
Andy Grove perfected and re-
inforced under his leadership and the leadership of
his successor, Craig Barrett. But Intel’s latest CEO,
Paul Otellini, has different plans. Rather than con-
tinuing to build faster chips just for PC computers,
Otellini sees bigger opportunities in new “plat-
forms.” Otellini also wants to raise the profile of
marketing, rather than let engineers determine
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466
Team Exercise 15.3 STRATEGIC CHANGE INCIDENTS
PURPOSE This exercise is designed to help you
identify strategies for facilitating organizational
change in various situations.
INSTRUCTIONS
1. The instructor will place students into teams,
and each team will be assigned one of the sce-
narios presented below.
2. Each team will diagnose its assigned scenario to
determine the most appropriate set of change
management practices. Where appropriate, these
practices should (a) create an urgency to change,
(b) minimize resistance to change, and (c) refreeze
the situation to support the change initiative.
Each of these scenarios is based on real events.
3. Each team will present and defend its change
management strategy. Class discussion regard-
ing the appropriateness and feasibility of each
strategy will occur after all teams assigned the
same scenario have presented. The instructor
will then describe what the organizations actu-
ally did in these situations.
SCENARIO 1: GREENER TELCO The board of
directors at a large telephone company wants its ex-
ecutives to make the organization more environ-
mentally friendly by encouraging employees to
reduce waste in the workplace. Government and
other stakeholders expect the company to take this
action and be publicly successful. Consequently, the
managing director wants to significantly reduce pa-
per usage, refuse, and other waste throughout the
company’s many widespread offices. Unfortunately,
a survey indicates that employees do not value envi-
ronmental objectives and do not know how to “re-
duce, reuse, recycle.” As the executive responsible
for this change, you have been asked to develop a
strategy that might bring about meaningful behav-
ioral change toward this environmental goal. What
would you do?
SCENARIO 2: GO FORWARD AIRLINE A major
airline had experienced a decade of rough turbulence,
including two bouts of bankruptcy protection, 10 man-
aging directors, and morale so low that employees
had removed company logos from their uniforms out
of embarrassment. Service was terrible, and the air-
planes rarely arrived or left the terminal on time. This
was costing the airline significant amounts of money
in passenger layovers. Managers were paralyzed by
anxiety, and many had been with the firm so long
that they didn’t know how to set strategic goals that
worked. One-fifth of all flights were losing money,
and the company overall was near financial collapse
(just three months to defaulting on payroll obliga-
tions). You and the newly hired managing director
must get employees to quickly improve operational
efficiency and customer service. What actions would
you take to bring about these changes in time?
which products are developed. Even the famous
Intel logo (with a lowered “e”) is being ditched for
a more contemporary design.
This BusinessWeek case study reviews the changes
that Paul Otellini is introducing at Intel and explains
how he is building momentum toward these changes.
The article also describes how employees are re-
sponding to the changes. Read through this Business-
Week article at www.mhhe.com/mcshane5e , and
prepare for the discussion questions that follow.
Discussion Questions
1. What change management strategies has Paul
Otellini used to help introduce the various
changes at Intel?
2. Discuss evidence that some employees are resist-
ing the changes. What, if anything, can Otellini
do to minimize this resistance?
Source: C. Edwards, “Inside Intel,” BusinessWeek , 9 January 2006, p. 46.
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http://www.mhhe.com/mcshane5e
Self-Assessment 15.4
ARE YOU TOLERANT OF CHANGE?
PURPOSE This exercise is designed to help you
understand how people differ in their tolerance of
change.
INSTRUCTIONS Read each of the statements on
page 468 and circle the response that best fits your
personal belief. Then use the scoring key in Appen-
dix B at the end of this book to calculate your re-
sults. This self-assessment should be completed
alone so that you can rate yourself honestly without
concerns of social comparison. Class discussion will
focus on the meaning of the concept measured by
this scale and its implications for managing change
in organizational settings.
After reading this chapter, if you feel that you need additional information, see www.mhhe.com/
mcshane5e for more in-depth information and interactivities that correspond to this chapter.
467
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http://www.mhhe.com/
To what extent does each
statement describe you?
Indicate your level of agreement
by marking the appropriate
response on the right.
1. An expert who doesn’t come up
with a definite answer probably
doesn’t know too much.
Moderately
agree
Strongly
agree
Slightly
agree
Slightly
disagree
Moderately
disagree
Strongly
disagreeNeutral
2. I would like to live in a
foreign country for a while.
3. There is really no such thing as
a problem that can’t be solved.
4. People who fit their lives into a
schedule probably miss most of
the joy of living.
5. A good job is one where it is
always clear what is to be done
and how it is to be done.
6. It is more fun to tackle a
complicated problem than to
solve a simple one.
7. In the long run, it is possible to
get more done by tackling small,
simple problems rather than
large, complicated ones.
8. Often the most interesting
and stimulating people are
those who don’t mind being
different and original.
9. What we are used to is always
preferable to what is unfamiliar.
10. People who insist on a yes or no
answer just don’t know how
complicated things really are.
11. A person who leads an even,
regular life in which few surprises
or unexpected happenings arise
really has a lot to be grateful for.
12. Many of our most important
decisions are based on
insufficient information.
13. I like parties where I know most
of the people more than ones
where all or most of the people
are complete strangers.
14. Teachers or supervisors who
hand out vague assignments
give people a chance to
show initiative and originality.
15. The sooner everyone acquires
similar values and ideals,
the better.
16. A good teacher is one who
makes you wonder about
your way of looking at things.
Tolerance of Change
Source: Adapted from S. Budner, “Intolerance of Ambiguity as a Personality Variable,” Journal of Personality 30 (1962), pp. 29–50.
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additional cases
Case 1 A Mir Kiss?
Case 2 Arctic Mining Consultants
Case 3 Big Screen’s Big Failure
Case 4 Bridging the Two Worlds—The Organizational Dilemma
Case 5 Fran Hayden Joins Dairy Engineering
Case 6 From Lippert-Johanson Incorporated to Fenway Waste Management
Case 7 Glengarry Medical Regional Center
Case 8 High Noon at Alpha Mills
Case 9 Keeping Suzanne Chalmers
Case 10 Northwest Canadian Forest Products Limited
Case 11 Perfect Pizzeria
Case 12 Simmons Laboratories
Case 13 Treetop Forest Products
Case 1: A MIR KISS?
Steven L. McShane , University of Western Australia
A team of psychologists at Moscow’s Institute for
Biomedical Problems (IBMP) wanted to learn more
about the dynamics of long-term isolation in space.
This knowledge would be applied to the International
Space Station, a joint project of several countries
that would send people into space for more than six
months. It would eventually include a trip to Mars
that would take up to three years.
IBMP set up a replica in Moscow of the Mir space
station. They then arranged for three international
researchers from Japan, Canada, and Austria to spend
110 days isolated in a chamber the size of a train car.
This chamber joined a smaller chamber where four
Russian cosmonauts had already completed half of
their 240 days of isolation. This was the first time an
international crew was involved in the studies. None
of the participants spoke English as their first lan-
guage, yet they communicated throughout their stay
in English at varying levels of proficiency.
Judith Lapierre, a French-Canadian, was the only
female in the experiment. Along with having a PhD
in public health and social medicine, Lapierre had
studied space sociology at the International Space
University in France and conducted isolation re-
search in the Antarctic. This was her fourth trip to
Russia, where she had learned the language. The
mission was supposed to have a second female par-
ticipant from the Japanese space program, but she
was not selected by IBMP.
The Japanese and Austrian participants viewed the
participation of a woman as a favorable factor, says
Lapierre. For example, to make the surroundings
more comfortable, they rearranged the furniture, hung
posters on the wall, and put a tablecloth on the kitchen
table. “We adapted our environment, whereas the
Russians just viewed it as something to be endured,”
she explains. “We decorated for Christmas, because
I’m the kind of person who likes to host people.”
469
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470
New Year’s Eve Turmoil
Ironically, it was at one of those social events, the
New Year’s Eve party, that events took a turn for
the worse. After drinking vodka (allowed by the
Russian space agency), two of the Russian cosmo-
nauts got into a fistfight that left blood splattered on
the chamber walls. At one point, a colleague hid the
knives in the station’s kitchen because of fears that
the two Russians were about to stab each other.
The two cosmonauts, who generally did not get
along, had to be restrained by other men. Soon af-
ter that brawl, the Russian commander grabbed
Lapierre, dragged her out of view of the television
monitoring cameras, and kissed her aggressively—
twice. Lapierre fought him off, but the message
didn’t register. He tried to kiss her again the next
morning.
The next day, the international crew complained
to IBMP about the behavior of the Russian cosmo-
nauts. The Russian institute apparently took no action
against any of the aggressors. Instead, the institute’s
psychologists replied that the incidents were part
of the experiment. They wanted crew members to
solve their personal problems with mature discus-
sion, without asking for outside help. “You have to
understand that Mir is an autonomous object, far
away from anything,” Vadim Gushin, the IBMP
psychologist in charge of the project, explained after
the experiment ended in March. “If the crew can’t
solve problems among themselves, they can’t work
together.”
Following IBMP’s response, the international
crew wrote a scathing letter to the Russian insti-
tute and the space agencies involved in the exper-
iment. “We had never expected such events to take
place in a highly controlled scientific experiment
where individuals go through a multistep selection
process,” they wrote. “If we had known . . . we
would not have joined it as subjects.” The letter
also complained about IBMP’s response to their
concerns.
Informed of the New Year’s Eve incident, the
Japanese space program convened an emergency
meeting on January 2 to address the incidents.
Soon after, the Japanese team member quit, appar-
ently shocked by IBMP’s inaction. He was replaced
with a Russian researcher on the international
team. Ten days after the fight—a little over a month
after the international team began the mission—the
doors between the Russian and international
crew’s chambers were barred at the request of
the international research team. Lapierre later em-
phasized that this action was taken because of
concerns about violence, not the incident involv-
ing her.
A Stolen Kiss or Sexual Harassment?
By the end of the experiment in March, news of the
fistfight between the cosmonauts and the command-
er’s attempts to kiss Lapierre had reached the public.
Russian scientists attempted to play down the kissing
incident by saying that it was one fleeting kiss, a
clash of cultures, and a female participant who was
too emotional.
“In the West, some kinds of kissing are regarded
as sexual harassment. In our culture it’s nothing,”
said Russian psychologist Vadim Gushin in one in-
terview. In another interview, he explained: “The
problem of sexual harassment is given a lot of atten-
tion in North America but less in Europe. In Russia
it is even less of an issue, not because we are more or
less moral than the rest of the world; we just have
different priorities.”
Judith Lapierre says the kissing incident was tol-
erable compared to this reaction from the Russian
scientists who conducted the experiment. “They
don’t get it at all,” she complains. “They don’t
think anything is wrong. I’m more frustrated than
ever. The worst thing is that they don’t realize it
was wrong.”
Norbert Kraft, the Austrian scientist on the in-
ternational team, also disagreed with the Russian
interpretation of events. “They’re trying to protect
themselves,” he says. “They’re trying to put the fault
on others. But this is not a cultural issue. If a woman
doesn’t want to be kissed, it is not acceptable.”
Sources: G. Sinclair, Jr., “If You Scream in Space, Does Anyone
Hear?” Winnipeg Free Press , May 5, 2000, p. A4; S. Martin, “Reining
in the Space Cowboys,” Globe & Mail , 19 April 2000, p. R1;
M. Gray, “A Space Dream Sours,” Maclean’s , 17 April 2000, p. 26;
E. Niiler, “In Search of the Perfect Astronaut,” Boston Globe ,
4 April 2000, p. E4; J. Tracy, “110-Day Isolation Ends in Sullen . . .
Isolation,” Moscow Times , 30 March 2000, p. 1; M. Warren, “A Mir
Kiss?” Daily Telegraph (London), 30 March 2000, p. 22; G. York,
“Canadian’s Harassment Complaint Scorned,” Globe & Mail , 25
March 2000, p. A2; and S. Nolen, “Lust in Space,” Globe & Mail ,
24 March 2000, p. A3.
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471
Tom Parker enjoyed working outdoors. At various
times in the past, he worked as a ranch hand, high
steel rigger, headstone installer, prospector, and geo-
logical field technician. Now 43, Parker is a geological
field technician and field coordinator with Arctic Min-
ing Consultants. He has specialized knowledge and
experience in all nontechnical aspects of mineral explo-
ration, including claim staking, line cutting and grid
installation, soil sampling, prospecting, and trenching.
He is responsible for hiring, training, and supervising
field assistants for all of Arctic Mining Consultants’
programs. Field assistants are paid a fairly low daily
wage (no matter how long they work, which may be
up to 12 hours or more) but are provided meals and
accommodation. Many of the programs are operated
by a project manager who reports to Parker.
Parker sometimes acts as a project manager, as he
did on a job that involved staking 15 claims near
Eagle Lake, Alaska. He selected John Talbot, Greg
Boyce, and Brian Millar, all of whom had previously
worked with Parker, as the field assistants. To stake a
claim, the project team marks a line with flagging
tape and blazes along the perimeter of the claim,
cutting a claim post every 500 yards (called a length ).
The 15 claims would require almost 60 miles of line
in total. Parker had budgeted seven days (plus mobi-
lization and demobilization) to complete the job.
This meant that each of the four stakers (Parker,
Talbot, Boyce, and Millar) would have to complete a
little over seven lengths each day. The following is a
chronology of the project.
Day 1
The Arctic Mining Consultants crew assembled in
the morning and drove to Eagle Lake, from where
they were flown by helicopter to the claim site. On
arrival, they set up tents at the edge of the area to be
staked, and they agreed on a schedule for cooking
duties. After supper, they pulled out the maps and
discussed the job—how long it would take, the order
in which the areas were to be staked, possible heli-
copter landing spots, and the areas that might be
more difficult to stake.
Parker pointed out that with only a week to com-
plete the job, everyone would have to average seven
and a half lengths per day. “I know that is a lot,” he
said, “but you’ve all staked claims before and I’m
confident that each of you is capable of it. And it’s
only for a week. If we get the job done in time,
there’s a $300 bonus for each man.” Two hours later,
Parker and his crew members had developed what
seemed to be a workable plan.
Day 2
Millar completed six lengths, Boyce six lengths, Talbot
eight, and Parker eight. Parker was not pleased with
Millar’s or Boyce’s production. However, he didn’t
make an issue of it, thinking that they would develop
their “rhythm” quickly.
Day 3
Millar completed five and a half lengths, Boyce
four, and Talbot seven. Parker, who was nearly
twice as old as the other three, completed eight
lengths. He also had enough time remaining to
walk over and check the quality of stakes that Millar
and Boyce had completed and then walk back to
his own area for the helicopter pickup back to the
tent site.
That night Parker exploded with anger. “I thought
I told you that I wanted seven and a half lengths a
day!” he shouted at Boyce and Millar. Boyce said
that he was slowed down by unusually thick under-
brush in his assigned area. Millar said that he had
done his best and would try to pick up the pace.
Parker did not mention that he had inspected their
work. He explained that as far as he was concerned,
the field assistants were supposed to finish their as-
signed area for the day, no matter what.
Talbot, who was sharing a tent with Parker, talked
to him later. “I think that you’re being a bit hard on
them, you know. I know that it has been more by luck
than anything else that I’ve been able to do my quota.
Yesterday I only had five lengths done after the first
seven hours and there was only an hour before I was
Case 2: ARCTIC MINING CONSULTANTS
Steven L. McShane , University of Western Australia, and Tim Neale
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472
supposed to be picked up. Then I hit a patch of really
open bush and was able to do three lengths in 70 min-
utes. Why don’t I take Millar’s area tomorrow and he
can have mine? Maybe that will help.”
“Conditions are the same in all of the areas,”
replied Parker, rejecting Talbot’s suggestion. “Millar
just has to try harder.”
Day 4
Millar did seven lengths and Boyce completed six
and a half. When they reported their production that
evening, Parker grunted uncommunicatively. Parker
and Talbot did eight lengths each.
Day 5
Millar completed six lengths, Boyce six, Talbot seven
and a half, and Parker eight. Once again Parker blew
up, but he concentrated his diatribe on Millar. “Why
don’t you do what you say you are going to do? You
know that you have to do seven and a half lengths
a day. We went over that when we first got here,
so why don’t you do it? If you aren’t willing to do
the job, then you never should have taken it in the
first place!”
Millar replied by saying that he was doing his
best, that he hadn’t even stopped for lunch, and that
he didn’t know how he could possibly do any better.
Parker launched into him again: “You have got to
work harder! If you put enough effort into it, you
will get the area done!”
Later Millar commented to Boyce, “I hate get-
ting dumped on all the time! I’d quit if it didn’t
mean that I’d have to walk 50 miles to the high-
way. And besides, I need the bonus money. Why
doesn’t he pick on you? You don’t get any more
done than me; in fact, you usually get less. Maybe
if you did a bit more he wouldn’t be so bothered
about me.”
“I only work as hard as I have to,” Boyce
replied.
Day 6
Millar raced through breakfast, was the first one to
be dropped off by the helicopter, and arranged to be
the last one picked up. That evening the production
figures were Millar eight and a quarter lengths,
Boyce seven, and Talbot and Parker eight each.
Parker remained silent when the field assistants re-
ported their performance for the day.
Day 7
Millar was again the first out and last in. That night,
he collapsed in an exhausted heap at the table, too
tired to eat. After a few moments, he announced in
an abject tone, “Six lengths. I worked like a dog all
day and I only got a lousy six lengths!” Boyce com-
pleted five lengths, Talbot seven, and Parker seven
and a quarter.
Parker was furious. “That means we have to do a
total of 34 lengths tomorrow if we are to finish this
job on time!” With his eyes directed at Millar, he
added: “Why is it that you never finish the job?
Don’t you realize that you are part of a team, and
that you are letting the rest of the team down? I’ve
been checking your lines and you’re doing too much
blazing and wasting too much time making picture-
perfect claim posts! If you worked smarter, you’d get
a lot more done!”
Day 8
Parker cooked breakfast in the dark. The helicopter
drop-offs began as soon as morning light appeared
on the horizon. Parker instructed each assistant to
complete eight lengths and, if they finished early, to
help the others. Parker said that he would finish the
other ten lengths. Helicopter pickups were arranged
for one hour before dark.
By noon, after working as hard as he could, Millar
had completed only three lengths. “Why bother,” he
thought to himself, “I’ll never be able to do another
five lengths before the helicopter comes, and I’ll catch
the same amount of abuse from Parker for doing six
lengths as for seven and a half.” So he sat down and
had lunch and a rest. “Boyce won’t finish his eight
lengths either, so even if I did finish mine, I still
wouldn’t get the bonus. At least I’ll get one more
day’s pay this way.”
That night, Parker was livid when Millar reported
that he had completed five and a half lengths. Parker
had done ten and a quarter lengths, and Talbot had
completed eight. Boyce proudly announced that he
finished seven and a half lengths, but he sheepishly
added that Talbot had helped him with some of it.
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Bill Brosnan stared at the financial statements in
front of him and shook his head. The losses from
Conquistadors, the movie that was supposed to estab-
lish Big Screen Studios as a major Hollywood power,
were worse than anyone had predicted. In fact, the
losses were so huge that Brosnan’s predecessor, Buck
Knox, had been fired as a result of this colossal fail-
ure. Brosnan had wanted to be the head of a big
movie production company for as long as he could
remember, and he was thrilled to have been chosen
by the board of directors to be the new president.
But he had never expected that the first task in his
dream job would be to deal with the fallout from
one of the most unsuccessful movies ever.
The driving force behind Conquistadors was its
director, Mark Frazier. Frazier had made several
profitable movies for other studios and had a repu-
tation as being a maverick with a “vision.” He was
a director with clearly formulated ideas of what his
movies should look like, and he also had no hesita-
tions about being forceful with producers, studios,
actors, and technical staff to ensure that his idea
came to life as he had envisioned it. For several
years, while Frazier had been busy on other proj-
ects, he had also been working on a script about
two Spanish aristocrats in the 16th century who set
out for America to find riches and gold and en-
countered many amazing adventures on their trav-
els. Frazier was something of an amateur historian,
and this led to his interest in the real-life stories of
the Spanish conquistadors and the idea of bringing
those stories to life for a 21st-century audience. But
he also felt that creating an epic tale like this would
establish him as a serious writer and filmmaker
in the eyes of Hollywood, some of whose major
powers had dismissed his past work as unimagina-
tive or clichéd.
When Big Screen Studios approached Frazier to
see if he would be interested in working for them, the
company was going through a rough spot. Through
several years of hard work and mostly successful pro-
ductions, Buck Knox, the president of Big Screen, had
established Big Screen as a studio that produced cost-
efficient and profitable films. The studio also had a
good reputation for being supportive of the creative
side of filmmaking; actors, writers, directors, and pro-
ducers generally felt that Big Screen trusted them
enough to give them autonomy in making decisions
appropriate for their productions. (Other studios had
reputations for keeping an overly tight rein on pro-
duction budgets and for dictating choices based on
cost rather than artistic considerations.) However, in
the last two years Big Screen had invested in several
major productions—a musical, a horror film, and the
sequel to a wildly successful film adaptation of a
comic book—that for various reasons had all per-
formed well below expectations. Knox had also heard
through the grapevine that several of the studio’s
board members were prepared to join together to
force him out of the presidency if Big Screen did not
come up with a hit soon.
Knox knew that Frazier was being wooed by sev-
eral other studios for his next project, and he de-
cided to contact Frazier to see if he was interested in
directing any of the productions Big Screen was con-
sidering in the next year or so. After hearing Knox’s
descriptions of the upcoming productions, Frazier
said, “What I’d really be interested in doing is di-
recting this script I’ve been writing.” He described
the plot of Conquistadors to Knox, and Knox was
Case 3: BIG SCREEN’S BIG FAILURE
Fiona McQuarrie , University of the Fraser Valley, Canada
All that remained were the two and a half lengths
that Millar had not completed.
The job was finished the next morning and the
crew demobilized. Millar has never worked for Arctic
Mining Consultants again, despite being offered work
several times by Parker. Boyce sometimes does
staking for Arctic, and Talbot works full-time with
the company.
Copyright © Steven L. McShane and Tim Neale. This case is
based on actual events, but names and some characteristics have
been changed to maintain anonymity.
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474
enchanted by the possibilities—two strong male lead
characters, a beautiful woman the men encountered
in South America whose affections they fought over,
battles, sea journeys, and challenging journeys over
mountains and through jungles. However, Knox
could also see that this movie might be extremely
expensive to produce. He expressed this concern to
Frazier, and Frazier replied, “Yes, but it will be an
investment that will pay off. I know this movie will
work. And I’ve mentioned it to two other studios
and they are interested in it. I would prefer to make
it with Big Screen, but if I have to, I will go some-
where else to get it made. That is how strongly I be-
lieve in it. However, any studio I work with has to
trust me. I won’t make the film without adequate fi-
nancial commitment from the studio, I want final
approval over casting, and I won’t make the film if I
don’t get final cut.” (“Final cut” means the director,
not the studio, edits the version of the movie that is
released to theaters and that the studio cannot re-
lease a version of the movie that the director does
not approve.)
Knox told Frazier that he would get back to him
later that week, and he asked Frazier not to commit
to any other project until then. He spent several days
mulling over the possibilities. Like Frazier, he be-
lieved that Conquistadors could be a huge success. It
certainly sounded like it had more potential than
anything else Big Screen had in development. How-
ever, Knox was still concerned about the potential
cost and the amount of control over the project that
Frazier was demanding. Frazier’s reputation as a
maverick meant that he likely would not compro-
mise on his demands. Knox was also concerned
about his own vulnerability if the movie failed. But,
on the other hand, Big Screen needed a big hit, and
it needed one soon. Big Screen would look very bad
if it turned down Conquistadors and the movie be-
came a gigantic hit for some other studio. Frazier
had a respectable track record of producing money-
makers, so even if he might be difficult to work with,
the end product usually was successful. At the end of
the week, Knox phoned Frazier and told him that
Big Screen was willing to produce Conquistadors.
Frazier thanked Knox, and he added, “This film is
going to redeem me, and it’s going to redeem Big
Screen as well.”
Preproduction on the film started almost immedi-
ately after Frazier and the studio negotiated a budget
of $50 million. This was slightly higher than Knox
had anticipated, but he believed it was not an exces-
sive amount to permit Frazier to realize the grand
vision he had described. Knox further reassured
himself by assigning John Connor, one of his trusted
vice presidents, to act as the studio’s liaison with
Frazier and to be executive producer on the film.
Connor was a veteran of many years in the movie
production industry and was experienced in work-
ing with directors and budgets. Knox trusted Connor
to be able to make Frazier contain the costs of the
production within the agreed-on limits.
The first major problem the film encountered in-
volved casting. The studio gave Frazier final ap-
proval over casting, as he had requested. Frazier’s
first signing was Cole Rogan, a famous action star, to
be one of the male leads. The studio did not object
to this choice; in fact, Knox and Connor felt that
Rogan was an asset because he had a reputation as a
star who could “open” a film (in other words, audi-
ences would come to a movie just because he was in
it). However, Frazier then decided to cast Frank
Monaco as the other male lead. Monaco had made
only a few films to date, and those were fluffy roman-
tic comedies. Frazier said that Monaco would bring
important qualities of vulnerability and innocence to
the role, which would be a strong contrast to Rogan’s
rugged machismo. However, Connor told Knox he
saw two major problems with Monaco’s casting:
Monaco had never proved himself in an epic adven-
ture role, and he was an accomplished enough actor
that he would make the rather wooden Rogan look
bad. Knox told Connor to suggest to Frazier that
Rogan’s role be recast. Unfortunately, it turned out
that Frazier had signed Rogan to a “pay or play”
deal, meaning that if the studio released Rogan from
the project, the studio would have to pay him a con-
siderable sum of money. Knox was somewhat both-
ered that Frazier had made this deal with Rogan
without consulting either him or Connor, but he told
Connor to instruct Frazier to release Rogan and re-
cast the role, and the studio would just accept the
payment to Rogan as part of the production costs.
Although Frazier complained, he did as the studio
asked and chose as a replacement Marty Jones, an
actor who had had some success in films but mostly
in supporting roles. However, Jones was thrilled to
be cast in a major role, and Connor felt that he
would be capable of convincingly playing the part.
A few weeks after casting was completed, Connor
called Knox and asked to see him immediately.
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475
“Buck,” he told him once he arrived at Knox’s of-
fice, “we have a really big problem.” Connor said
that Frazier was insisting the majority of the produc-
tion be filmed in the jungles of South America,
where most of the action took place, rather than on
a studio soundstage or in a more accessible location
that resembled the South American locale. Not only
that, but Frazier was also insisting that he needed to
bring along most of the crew that had worked on his
previous films, rather than staffing the production
locally. “Why does he want that? That’s going to cost
a hell of a lot,” Knox said. “I know,” Connor said,
“but he says it’s the only way that the film is going to
work. He says it just won’t be the same if the actors
are in a studio or in some swamp in the southern
U.S. According to him, the actors and the crew need
to be in the real location to truly understand what
the conquistadors went through, and audiences
won’t believe it’s a real South American jungle if the
film isn’t made in one.”
Knox told Connor that Frazier had to provide an
amended budget to reflect the increased costs before
he would approve the location filming. Connor took
the request to Frazier, who complained that the studio
was weakening on its promise to support the film
adequately, and he added that he might be tempted
to take the film to another studio if he was not al-
lowed to film on location in South America. After
a few weeks, he produced an amended budget of
$75 million. Knox was horrified that the budget for
Conquistadors had nearly increased by half in a few
weeks. He told Connor that he would accept the
amended budget only under two conditions: one, that
Connor would go on the location shoot to ensure
that costs stayed within the amended budget and,
two, that if the costs exceeded Frazier’s estimates, he
would have to pay any excess himself. Frazier again
complained that the studio was attempting to com-
promise his vision, but he grudgingly accepted the
modified terms.
Frazier, Connor, and the cast and crew then headed
off to the South American jungles for a scheduled
two-month shoot. Immediately it became apparent
that there was more trouble. Connor, who reported
daily to Knox, told him after two weeks had passed
that Frazier was shooting scenes several times over—
not because the actors or the crew were making
mistakes, or because there was something wrong
with the scene, but because the output just didn’t
meet his artistic standards. This attention to detail
meant that the filming schedule was nearly a week
behind after only the first week’s work. Also, be-
cause the filming locations were so remote, the cast
and crew were spending nearly four hours of a sched-
uled seven-hour workday traveling to and from
location, leaving only three hours in which they
could work at regular pay rates. Work beyond those
hours meant they had to be paid overtime, and as
Frazier’s demanding vision required shooting 10 or
12 hours each day, the production was incurring
huge overtime costs. As if that wasn’t bad enough,
the “rushes” (the finished film produced each day)
showed that Monaco and Jones didn’t have any
chemistry as a pair, and Gia Norman, the European
actress Frazier had cast as the love interest, had such
a heavy accent that most of her lines couldn’t be
understood.
Knox told Connor that he was coming to the
location right away to meet with Frazier. After several
days of very arduous travel, Knox, Connor, and
Frazier met in the canvas tent that served as the
director’s office in the middle of the jungle. Knox
didn’t waste any time with pleasantries. “Mark,” he
told Frazier, “there is no way you can bring this film
in for the budget you have promised or within the
deadline you agreed to. John has told me how this
production is being managed, and it’s just not
acceptable. I’ve done some calculations, and at
the rate you are going, this picture is going to cost
$85 million and have a running time of four and a
half hours. Big Screen is not prepared to support
that. We need a film that’s a commercially viable
length, and we need it at a reasonable cost.”
“It needs to be as long as it is,” replied Frazier,
“because the story has to be told. And if it has to cost
this much, it has to cost this much. Otherwise it will
look like crap and no one will buy a ticket to see it.”
“Mark,” replied Knox, “we are prepared to put
$5 million more into this picture, and that is it. You
have the choice of proceeding under those terms,
and keeping John fully informed of the costs so that
he can help you stay within the budget. If you don’t
agree to that, you can leave the production, and we
will hire another director and sue you for breach of
contract.”
Frazier looked as though he was ready to walk
into the jungle and head back to California that
very minute, but the thought of losing his dream
project was too much for him. He muttered, “OK,
I’ll finish it.”
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476
Knox returned to California, nursing several
nasty mosquito bites, and Connor stayed in the jun-
gle and reported to him regularly. Unfortunately, it
didn’t seem like Frazier was paying much attention
to the studio’s demands. Connor estimated that the
shoot would run three months rather than two and
that the total cost of the shoot would be $70 million.
This left only $10 million of the budget for post-
production, distribution, and marketing, which was
almost nothing for an epic adventure. To add to
Knox’s problems, he got a phone call from Richard
Garrison, the chairman of Big Screen’s board of di-
rectors. Garrison had heard gossip about what was
going on with Conquistadors in the jungles of South
America, and he wanted to know what Knox was
going to do to curb Frazier’s excesses. Knox told
Garrison that Frazier was operating under clearly
understood requirements and that Connor was on
the set to monitor the costs. Unfortunately, Knox
thought, Connor was doing a good job of reporting,
but he didn’t seem to be doing much to correct the
problems he was observing.
Frazier eventually came back to California after
three and a half months of shooting, and he started
editing the several hundred hours of film he had
produced. Knox requested that Frazier permit
Connor or himself to participate in the editing, but
Frazier retorted that permitting that would infringe
on his right to “final cut”; he refused to allow anyone
associated with the studio to be in the editing room.
Knox scheduled a release date for the film in six
months’ time and asked the studio’s publicity de-
partment to start working on an ad campaign for the
film, but not much could be done on either of these
tasks without at least a rough cut of the finished
product.
Three weeks into the editing, Connor called
Knox. “I heard from Mark today,” he said. “He
wants to do some reshoots.” “Is that a problem?”
Knox asked. “No,” said Connor, “most of it is inte-
rior stuff that we can do here. But he wants to add a
prologue. He says that the story doesn’t make sense
without more development of how the two lead
characters sailed from Spain to South America. He
wants to hire a ship.”
“He wants to what? ” exclaimed Knox.
“He wants to hire a sailing ship, like the conquis-
tadors traveled on. There are a couple of tall ships
that would do, but the one he wants is in dry dock in
Mexico and would cost at least a million to make
seaworthy and sail up to southern California. And
that’s on top of the cost of bringing the actors and
crew back for a minimum of a week. I suggested to
him that we try some special effects or a computer-
ized animation for the scenes of the ship on the
ocean, and shoot the shipboard scenes in the studio,
but he says that won’t be the same and it needs to be
authentic.”
At this point, Knox was ready to drive over to the
editing studios and take care of Frazier himself. In-
stead, he called Garrison and explained the situa-
tion. “I won’t commit any more money to this
without the board’s approval. But we’ve already in-
vested $80 million into this already, so is a few more
million that much of a deal if it gets the damn thing
finished and gets Frazier out of our hair? If we tell
him no, we’ll have to basically start all over again, or
just dump the whole thing and kiss $80 million
goodbye.” At the other end of the line, Garrison
sighed, and said, “Do whatever you have to do to
get it done.”
Knox told Connor to authorize the reshoots, with
a schedule of two months and the expectation that
Frazier would have a rough cut of the film ready for
the studio executives to view in three months. How-
ever, because of the time Frazier had already spent
on editing, Knox had to change the release date,
which meant changing the publicity campaign as
well—and releasing the film at the same time that
one of Big Screen’s major competitors was releasing
another epic adventure that was considered a sure-
fire hit. However, Knox felt he had no choice. If he
didn’t enforce some deadline, Frazier might sit in
the editing room and tinker with his dream forever.
Connor supervised the reshoots and reported that
they went as well as could be expected. The major
problem was that Gia Norman had had plastic sur-
gery on her nose after the first shoot was completed
and looked considerably different than she had in
the jungles of South America. However, creative
lighting, makeup, and costuming managed to mini-
mize the change in her appearance. By all accounts,
the (very expensive) sailing ship looked spectacular
in the rushes, and Frazier was satisfied that his vision
had been sufficiently dramatized.
Amazingly, Frazier delivered the rough cut of
the film at the agreed-on time. Knox, Connor,
Garrison, and the rest of the studio’s executives
crowded into the screening room to view the real-
ization of Frazier’s dream. Five and a half hours
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477
later, they were in shock. No one could deny that
the movie looked fantastic and that it was an epic
on a grand scale, but there was no way the studio
could commercially release a film that was over
five hours long—plus Frazier had agreed to produce
a movie that was at most two and a half hours long.
Knox was at his wits’ end. He cornered Garrison in
the hallway outside the screening room. “Will you
talk to Mark? He won’t listen to me, he won’t listen
to John. But we can’t release this. It won’t work.”
Garrison agreed, and contacted Frazier the next
day. He reported back to Knox that Frazier, amaz-
ingly, had agreed to cut the film to two hours and
fifteen minutes. Knox, heartened by this news, pro-
ceeded with the previously set release date, which
by now was a month away, and got the publicity
campaign going.
Two days before the scheduled release date, Frazier
provided an advance copy of his shortened version of
Conquistadors for a studio screening. Knox had asked
him to provide a copy sooner, but Frazier said that he
could not produce anything that quickly. As a conse-
quence, the version of the film that the studio execu-
tives were seeing for the first time was the version that
had already had thousands of copies duplicated for
distribution to movie theaters all across North
America. In fact, those copies were on their way by
courier to the theaters as the screening started.
At the end of the screening, the studio executives
were stunned. Yes, the movie was shorter, but now
it made no sense. Characters appeared and disap-
peared randomly, the plot was impossible to follow,
and the dialogue did not make sense at several key
points in the small parts of plot that were discern-
ible. The film was a disaster. Several of the execu-
tives present voiced the suspicion that Frazier had
deliberately edited the movie this way to get revenge
on the studio for not “respecting” his vision and
forcing him to reduce the film’s length. Others sug-
gested that Frazier was simply a lunatic who never
should have been given so much autonomy in the
first place.
Knox, Garrison, and Connor held a hastily called
meeting the next morning. What could the studio do?
Recall the film and force Frazier to produce a more
coherent shorter version? Recall the film and release
the five-and-a-half-hour version? Or let the shorter
version be released as scheduled and hope that it
wouldn’t be too badly received? Knox argued that
the film should be recalled and Frazier should be
forced to produce the product he agreed to produce.
Connor said that he thought Frazier had been doing
his best to do what the studio wanted, based on what
Connor saw on the set, and that making Frazier cut
the movie so short compromised the vision Frazier
wanted to achieve. He said the studio should release
the long version and present it as a “special cinematic
event.” Garrison, as chairman of the board, listened to
both sides, and after figuring out the costs of recalling
and/or reediting the film—not to mention the less tan-
gible costs of further worsening the film’s reputation—
said, “Gentlemen, we really don’t have any choice.
Conquistadors will be released tomorrow.”
Knox immediately canceled the critics’ screen-
ings of Conquistadors, scheduled for that afternoon,
so that bad reviews would not appear on the day of
the film’s release. Despite that preemptive step and
an extensive advertising campaign, Conquistadors
was a complete and utter flop. On a total outlay of
$90 million, the studio recouped less than $9 mil-
lion. The reviews of the film were terrible, and audi-
ences stayed away in droves. The only place
Conquistadors was even close to successful was in
some parts of Europe, where film critics called the
edited version an example of American studios’
crass obsession with making money by compromis-
ing the work of a genius. The studio attempted to
capitalize on this note of hope by releasing the five-
and-a-half-hour version of Conquistadors for screen-
ing at some overseas film festivals and cinema
appreciation societies, but the revenues from these
screenings were so small that they made no differ-
ence to the overall financial results.
Three months after Conquistadors was released,
Garrison called Knox in and told him he was fired.
Garrison told Knox that the board appreciated what
a difficult production Conquistadors had been to man-
age but that the costs of the production had been
unchecked to such a degree that the board no longer
had confidence in Knox’s ability to operate Big
Screen Studios efficiently. Connor was offered a very
generous early retirement package, and he accepted
it. The board then hired Bill Brosnan, a vice presi-
dent at another studio, as Knox’s replacement.
After reviewing Conquistadors’ financial records
and the notes that Knox had kept throughout the
production, Brosnan was determined that a disaster
like this would not undermine his career as it had
Knox’s. But what could he do to ensure this would
not happen?
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478
I had been hired by Aluminum Elements Corp.
(AEC), and it was my first day of work. I was 26
years old, and I was now the manager of AEC’s cus-
tomer service group, which looked after customers,
logistics, and some of the raw material purchasing.
My superior, George, was the vice president of the
company. AEC manufactured most of its products, a
majority of which were destined for the construction
industry, from aluminum.
As I walked around the shop floor, the employees
appeared to be concentrating on their jobs, barely
noticing me. Management held daily meetings, at
which various production issues were discussed. No
one from the shop floor was invited to the meetings,
unless there was a specific problem. Later I learned
that management had separate washrooms and sep-
arate lunchrooms, as well as other perks that floor
employees did not have. Most of the floor employ-
ees felt that the managers, although polite on the
surface, did not really feel they had anything to learn
from the floor employees.
John, who worked on the aluminum slitter, a cru-
cial operation required before any other operations
could commence, had had a number of unpleasant
encounters with George. As a result, George usually
sent written memos to the floor in order to avoid a
direct confrontation with John. Because the directions
in the memos were complex, these memos were
often more than two pages in length.
One morning, as I was walking around, I noticed
that John was very upset. Feeling that perhaps there
was something I could do, I approached John and
asked him if I could help. He indicated that every-
thing was just fine. From the looks of the situation,
and John’s body language, I felt that he was willing
to talk but that he knew this was not the way things
were done at AEC. Tony, who worked at the ma-
chine next to John’s, then cursed and said that the
office guys cared only about schedules, not about
the people down on the floor. I just looked at him,
and then I said that I began working here only last
week and thought I could address some of their is-
sues. Tony gave me a strange look, shook his head,
and went back to his machine. I could hear him still
swearing as I left. Later I realized that most of the
office staff were also offended by Tony’s language.
On the way back to my office, Lesley, a recent-
ly hired engineer from Russia, approached me and
pointed out that the employees were not accustomed
to managers talking to them. Management only is-
sued orders and made demands. As we discussed the
different perceptions between office and floor staffs,
we were interrupted by a very loud lunch bell, which
startled me. I was happy to join Lesley for lunch, but
she asked me why I was not eating in the office lunch-
room. I replied that if I was going to understand how
AEC worked, I had to get to know all the people bet-
ter. In addition, I realized that this was not how things
were done, and wondered about the nature of this
apparent division between the management and the
floor. In the lunchroom, the other workers were
amazed to see me there, commenting that I was just
new and had not learned the ropes yet.
After lunch, when I asked George, my supervisor,
about his recent confrontation with John, George
was surprised that John got upset; he exclaimed, “I
just wanted John to know that he did a great job and,
as a result, we will be able to ship on time one large
order to the West Coast. In fact, I thought I was com-
plimenting him.”
Earlier, Lesley had indicated that certain behavior
was expected from management, and therefore from
me. I reasoned that I do not think that this behavior
works and, besides, it is not what I believe or how I
care to behave. For the next couple of months, I simply
walked around the floor and took every opportunity to
talk to the shop floor employees. Often, when the em-
ployees related specific information about their work-
places, I felt that it went over my head. Frequently, I
had to write down the information and revisit it later. I
made a point of listening to them, identifying where
they were coming from, and trying to understand them.
I needed to keep my mind open to new ideas. Because
the shop employees expected me to make requests and
demands, I made a point of not doing any of that. Soon
enough, the employees became friendly and started to
Case 4: BRIDGING THE TWO WORLDS—THE ORGANIZATIONAL
DILEMMA
William Todorovic , Indiana-Purdue University, Fort Wayne
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accept me as one of their own, or at least as a different
type of management person.
During my third month of work, the employees
showed me how to improve the scheduling of jobs,
especially those on the aluminum slitter. In fact, the
greatest contribution was made by John, who dem-
onstrated better ways to combine the most common
slitting sizes and reduce waste by retaining some of
the “common-size” material for new orders. Seeing
the opportunity, I programmed a spreadsheet to cal-
culate and track inventory. This, in addition to better
planning and forecasting, allowed us to reduce our
new order turnarounds from four to five weeks to a
single day, in by 10 a.m. and out by 5 p.m.
By the time I was employed for four months, I real-
ized that members from other departments were com-
ing to me and asking me to relay messages to the shop
employees. When I asked why they were delegating
this task to me, they stated that I spoke the same lan-
guage as the shop employees. Increasingly, I became
the messenger for the office-to-floor communications.
One morning, George called me into his office
and complimented me on the levels of customer ser-
vice and the improvements that had been achieved.
As we talked, I mentioned that we could not have
done it without John’s help. “He really knows his
stuff, and he is good,” I said. I suggested that we con-
sider him for some type of promotion. Also, I hoped
that this would be a positive gesture that would im-
prove the communication between the office and
shop floor.
George turned and pulled a flyer out of his desk.
“Here is a management skills seminar. Do you think
we should send John to it?”
“That is a great idea,” I exclaimed, “Perhaps it
would be good if he were to receive the news from
you directly, George.” George agreed, and after dis-
cussing some other issues, we parted company.
That afternoon, John came into my office, upset
and ready to quit. “After all my effort and work, you
guys are sending me for training seminars. So, am I
not good enough for you?”
Case 5: FRAN HAYDEN JOINS DAIRY ENGINEERING
Glyn Jones , University of Waikato, New Zealand
Background
Dairy Engineering (NZ) Ltd. has its headquarters in
Hamilton, New Zealand, with manufacturing plants in
South Auckland and Christchurch. The company man-
ufactures equipment for the dairy industry. In its early
years it focused on the domestic market, but in the last
five years it has expanded into the export market. The
company employs 450 people, which makes it a large
company by New Zealand standards.
This case focuses on events in the accounting
department at the head office, which is organized
into two sections: cost accounting and management
information services (MIS). The accounting depart-
ment is structured as shown in Exhibit 1 .
Name Position Description
Rob Poor Chief accountant Rob is the accounting department manager. He is 40 years old and is a qualified
accountant with a chartered accounting (ACA) qualification. He has been with the
company for six years. He is an unassuming person regarded as a bit “soft” by his staff.
Vernon Moore Chief cost accountant Vernon is 30 years old and is a graduate with an ACA qualification. He joined the
company 18 months ago. He is considered an easygoing type and is well liked by
his staff.
Peter Bruton Management
accountant
Peter is 37 years old and has a science degree in dairy technology. He is also
studying part-time for a management degree through Massey University. He is
regarded as “moody” and is not well liked by his staff.
Exhibit 1 Description of Employees in the Case
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Fran, the New Graduate
Fran Hayden was in the final year of her bachelor of
management studies (BMS) degree at the University
of Waikato, where she had proved to be a high
achiever. Fran was interested in a position with Dairy
Engineering because of the opportunity to gain prac-
tical experience, the higher starting salary compared
to the industry average, and the fact that her boy-
friend lived in the community.
Fran sent her curriculum vitae to the company,
and two weeks later she was invited to an interview
with the chief accountant. She was surprised at the
end of the interview to be offered the position of as-
sistant cost accountant. Fran said she would like to
think it over. Two weeks later, Fran had still not re-
plied, so Rob telephoned her to ask if she was going
to take the position. Although not totally convinced
that she would enjoy the job, Fran decided to accept
the offer.
The First Day at Work
Like many of her peers, Fran was glad to be leaving
university after four years of study. She was looking
forward to having money to spend as well as reduc-
ing her student debt. In order to “look the part,” she
had gone further into debt to buy new corporate
clothing. On reporting to the accounting depart-
ment, she got her first shock in the real world. No
one was expecting her! Even worse, she discovered
that there was no vacancy for her in cost accounting!
Instead, she had been assigned to management in-
formation systems (MIS).
Mike, a co-worker in MIS, accompanied Fran to
the department, where she was introduced to two
other colleagues, Tom and Adrian. They seemed to be
a friendly bunch, as apparently was her boss, Peter
Bruton, who explained that her main duties were to
assist with compiling information for the monthly
management report known as “Big Brother.”
After two weeks the time came for compiling Big
Brother. Fran found that her part was almost entirely
clerical and consisted of photocopying, collating,
binding, punching, and stamping the pages of the
report. She then had to hand-deliver copies of the
report to the senior manager at headquarters. After
Big Brother was completed, Fran found that again
she had little to do. She began to wonder why MIS
needed four people.
The Big Opportunity
One afternoon, the chief accountant called Fran to
his office to tell her about an upcoming management
workshop in Auckland on performance measure-
ment. Rob talked about the importance of staff de-
velopment and said that he would like to see one of
his younger staff attend the workshop. He then asked
Fran if she would be interested. She jumped at the
opportunity. Unfortunately, her boss was away on
two weeks’ leave at the time, but Rob said he would
talk with Peter.
Fran enjoyed the workshop, particularly rubbing
shoulders with experienced managers, living in an
Auckland hotel, and generally acting the manage-
ment part. Even before returning to Hamilton, she
wrote a detailed report on the workshop for the chief
accountant.
On her return to Hamilton, however, she found
all was far from well.
On Sunday evening Fran was telephoned by
her colleague Mike with some disturbing news.
When Peter returned to work to find that Fran was in
Auckland, he was furious, complaining that he had
not been consulted and that his authority was being
undermined.
Peter: Fran is no longer employed in this section.
Fran returned to work full of trepidation, only to
find that the expected encounter with her boss did
not take place because he was in Christchurch. She
handed two copies of her report on the workshop to
the chief accountant’s secretary before taking the op-
portunity of her boss’s absence to seek the advice of
her colleagues:
Fran: I am really worried. What do you think I
should do?
Adrian: Stop worrying about it. He’s just letting off
steam. I have seen this all before. He’ll get over it.
Fran: Come on; get serious. He is my boss! He can
make things very difficult for me.
Mike: I think you should talk with Rob. After all,
he’s the one who suggested you go. It’s not like it was
your idea. He has to stick up for you.
The next day Fran managed to get an appoint-
ment with the chief accountant. She started by say-
ing that she found the workshop very useful. She
then brought up her fears about Peter’s displeasure
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with her attendance at the workshop, to which the
chief accountant responded.
Rob: Well, yes, he was a bit upset, but don’t worry,
I will sort it out. The report was really good. By the
way, I think you should treat it as confidential.
Don’t show it to anyone or discuss it with anyone.
Is that okay? Don’t worry about this. I assure you
that I will sort it out.
Fran left the meeting feeling reassured but also a
bit puzzled, wondering how Rob could have read
her report in such a short time.
On Thursday Peter returned to work and just be-
fore lunch called Fran into his office, where he pro-
ceeded to attack her verbally, saying that she had
“connived” behind his back to attend the workshop
and that she had never asked for his permission. He
said that he realized she was an intelligent “girl” but
that she was “sneaky.”
Peter: You better know which side your bread is
buttered on—that for better or worse, you are in my
section. No other section would want you.
He then called Mike in and spoke to him.
Peter: I don’t want Fran wasting any more time—she
is not to make any private calls from work.
Later, in “confidence,” he also spoke to Janet, one
of the administration clerks.
Peter: Don’t go talking with Fran—she has far too
much work to catch up on.
Naturally, Janet did tell Fran!
The following week, Vernon happened to pass
Fran in the corridor and stopped to talk with her.
Fran had met Vernon only briefly during her first
week in the company and was surprised when he
asked her why she looked so miserable. She ex-
plained, and he said that they should talk with the
chief accountant; taking Fran with him, he went to
Rob’s office. Vernon said that they needed a word,
and Fran listened as Vernon outlined the situation to
Rob. Fran made it clear that if Peter continued to
treat her this way, she would have to ask for a trans-
fer. She also said that there was certainly not enough
work in MIS to keep her occupied for more than a
day or so each week.
The chief accountant listened, and then he asked
her to give him a written report of what had happened
since she had joined the company, including the latest
incident with her boss. This, he said, would be brought
up at the next senior management meeting. On the
weekend Fran wrote the report, which included a re-
quest for a transfer out of MIS on the basis of the lack
of work and her boss’s attitude toward her. On Mon-
day morning she handed her report to the chief ac-
countant’s secretary.
Fran expected a reply but by early afternoon had
heard nothing. At the end of the day, however, Peter
called all his staff into his office. He was obviously in
a good mood and told them that he had put his plan
for revising Big Brother to the management meeting
and had received an enthusiastic response. As he
spoke, Fran noticed the color draining out of Mike’s
face. On the way out, he told her that what Peter was
describing were his revision plans, not Peter’s own
plans. Mike resolved never to give his boss another
one of his ideas.
Mike: He just uses other people’s brains—but that’s
the last time he uses mine.
Fran drove home from work feeling despondent.
She wished she had never joined the company. Her
job was boring, almost entirely clerical, and it cer-
tainly did not require a degree. She was also taking
the stresses home, resulting in quarrels with her boy-
friend and roommates.
Fran concluded that she had only two alterna-
tives: a transfer or resignation. But to leave her job
after less than five months would hardly impress any
future employer. In desperation, she went to talk
with Vernon, who she thought would be sympathetic,
but she received more unwelcome news. He told her
about the outcome of the senior management meet-
ing. Contrary to Fran’s expectation, the chief accoun-
tant had not confronted Peter. In fact, it appeared
that he had been eclipsed by Peter’s presentation for
the revision of Big Brother and the chief accountant
had not attempted to raise the issue.
Vernon was frank—she must either transfer or
resign. Then, to Fran’s surprise, he suggested she
apply for a position in his section that would become
vacant in three weeks’ time. One of his assistant ac-
countants was leaving to go overseas at short notice,
and he did not have a replacement. Vernon cautioned,
however, that Fran’s only chance was to apply di-
rectly to the chief accountant; that would force the
issue. With a formal, written application before him,
the chief accountant would have to make a decision.
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Just as certainly, Peter would resist the request. Later
Fran drafted a letter to Rob requesting that she be
transferred from MIS to the upcoming position in
cost accounting.
The Confrontation
The next morning, Fran took her request to the chief
accountant. After he read it, she was surprised by his
comment.
Rob: You really needn’t have done this, you know—I
intended dealing with the situation.
Fran left Rob’s office wondering what to be-
lieve. From her desk she watched as Peter made
his way across to the chief accountant’s office. The
meeting was brief. Five minutes later, he left Rob’s
office, and as he passed by, he spoke to her in a
loud voice.
Peter: Fran—you are finished at this company.
Fran saw her colleagues duck their heads down
and pretend to be working. No one envied her posi-
tion. She wondered how, in such a short time, she
had ended up in such a situation.
Case 6: FROM LIPPERT-JOHANSON INCORPORATED TO
FENWAY WASTE MANAGEMENT
Lisa V. Williams , Jeewon Cho, and Alicia Boisnier, SUNY at Buffalo
Part One
Catherine O’Neill was very excited to finally be
graduating from Flagship University at the end of
the semester. She had always been interested in ac-
counting, following from her father’s lifelong occu-
pation, and she very much enjoyed the challenging
major. She was involved in many highly regarded
student clubs in the business school and worked dili-
gently to earn good grades. Now her commitment to
the profession would pay off, she hoped, as she
turned her attention to her job search. In late fall,
she had on-campus interviews with several firms, but
her interview with the prestigious Lippert-Johanson
Incorporated (LJI) stood out in her mind as offering
the most attractive opportunity. That’s why Catherine
was thrilled to learn she had made it to the next level
of interviews, to be held at the firm’s main office
later that month.
When Catherine entered the elegant lobby of
LJI’s New York City offices, she was immediately
impressed by all there was to take in. Catherine had
always been one to pay attention to detail, and her
acute observations of her environment had always
been an asset. She was able to see how social and
environmental cues told her what was expected of
her, and she always set out to meet and exceed those
expectations. On a tour of the office, she had already
begun to size up her prospective workplace. She
appreciated the quiet, focused work atmosphere.
She liked how everyone was dressed: Most wore
suits, and their conservative apparel supported the
professional attitudes that seemed to be omnipres-
ent. People spoke to her in a formal but friendly
manner, and they seemed enthusiastic. Some of
them even took the time to greet her as she was
guided to the conference room for her individual in-
terview. “I like the way this place feels, and I would
love to come to work here every day,” Catherine
thought. “I hope I do well in my interview!”
Before she knew it, Catherine was sitting in a
well-appointed office with one of the eight managers
in the firm. Sandra Jacobs was the picture of a pro-
fessional woman, and Catherine naturally took her
cue from her about how to conduct herself in the
interview. It seemed to go very quickly, although the
interview lasted an hour. As soon as Catherine left
the office, she could not wait to phone her father
about the interview. “I loved it there and I just know
I’m a good fit!” she told her proud father. “Like
them, I believe it is important to have the highest
ethical standards and quality of work. Ms. Jacobs
really emphasized the mission of the firm, as well as
its policies. She did say that all the candidates have
an excellent skill set and are well qualified for the
job, so mostly they are going to base their hiring
decision on how well they think each of us will fit
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483
into the firm. Reputation is everything to an account-
ing firm. I learned that from you, Dad!”
After six weeks of apprehensive waiting, Cathe-
rine’s efforts were rewarded when LJI and another
firm contacted her with job offers. Catherine knew
she would accept the offer from LJI. She saw the
firm as very ethical, with the highest standards for
work quality and an excellent reputation. Catherine
was grateful to have been selected from such a com-
petitive hiring process. “There couldn’t be a better
choice for me! I’m so proud to become a member of
this company!”
Catherine’s first few days at LJI were a whirlwind
of newcomer experiences. She had meetings with
her supervisor to discuss the firm’s mission state-
ment, her role in the firm, and what was expected of
her. She was also told to spend some time looking at
the employee handbook, which covers many impor-
tant policies of the firm, such as dress code, sick time,
grievances, the chain of command and job descrip-
tions, and professional ethics. Everyone relied on the
handbook to provide clear guidance about what was
expected of each employee. Also, Catherine was in-
formed that she would soon begin participating in
continuing professional education, which would al-
low her to update her skills and knowledge in her
field. “This is great,” thought Catherine, “I’m so glad
to know the firm doesn’t just talk about its high stan-
dards; it actually follows through with action.”
What Catherine enjoyed most about her new job
were her warm and welcoming colleagues who in-
vited her to their group lunches beginning on her
first day. They talked about work and home; they
seemed close, both professionally and personally.
She could see that everyone had a similar attitude
about work: They cared about their work and the
firm, they took responsibility for their own tasks, but
they also helped one another out. Catherine also got
involved in LJI activities outside work, like the com-
pany’s baseball and soccer teams, happy hours, pic-
nics, and parties, and she enjoyed the chance to
mingle with her co-workers. In what seemed like no
time at all, Catherine started to really see herself as a
fully integrated member of LJI.
Before tax season started, Catherine attended some
meetings of the AICPA and other professional ac-
counting societies. There, she met many accountants
from other firms who all seemed very impressed
when she told them where she worked. Catherine’s
pride and appreciation for being a member of LJI
grew as she realized how highly regarded the firm
was among others in the accounting industry.
Part Two
Over the past seven years, Catherine’s career in New
York has flourished. Her reputation as one of the top
tax accountants in her company is well established,
and it is recognized by colleagues outside the firm as
well. However, Catherine entered a new chapter of
her life when she married Ted Lewis, an oncology
intern, who could not turn down an offer of residency
at a top cancer center in upstate New York. Wanting to
support Ted’s once-in-a-lifetime career opportunity,
Catherine decided it was time to follow the path of
many of her colleagues and leave public accounting
for a position that would be more conducive to start-
ing a family. Still, her heart was in the profession, so
she took an available position as a controller of a
small recycling company located a few miles from
Catherine and Ted’s new upstate New York home.
She knew that with this position she could have chil-
dren as well as maintain her career.
Fenway Waste Management is small—about 35 em-
ployees. There are about 25 people who work in
the warehouse, 3 administrative assistants, 2 super-
visors, and 5 people in management. Catherine is
finding that she has to adjust to her new position
and surroundings. Often she has found herself do-
ing work that formally belonged to someone else;
because it is a small company, managers seem to
wear many hats. This was quite different from what
she had experienced at LJI. In addition, the ware-
house workers often have to work with greasy ma-
terials and sometimes track the grease into the
offices. Catherine half-laughed and half-worried
when she saw a piece of paper pinned to the wall
that said, “Clean Up After Yourself!” She supposed
that the nature of the business was why the offices
are functional but furnished with old pieces. She
couldn’t imagine having a business meeting there.
Also, for most of the employees, the casual dress
matches the causal attitudes. But Catherine contin-
ued to wear a dressed-down version of her formal
LJI attire, even though her new co-workers consid-
ered her overdressed.
With all the changes Catherine has experienced,
she has maintained one familiar piece of her past.
Although it is not required for her new position,
Catherine still attends AICPA meetings and makes a
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point to continue updating her knowledge of current
tax laws. At this year’s conference, she told a former
colleague, “Being here, I feel so much more like
myself—I am so much more connected to these
people and this environment than to those at my
new job. It’s too bad I don’t feel this way at Fenway.
I guess I’m just more comfortable with professionals
who are similar to me.”
Case 7: GLENGARRY REGIONAL MEDICAL CENTER
Adapted and updated by Steven L. McShane , University of Western Australia, from a
case written by Donald D. White and H. William Vroman *
Glengarry Regional Medical Center (GlenMed) is an
acute care general hospital located in Scotston, a com-
munity of 35,000 in the southwestern United States.
GlenMed was founded in 1950 with 35 beds and grew
to a capacity of 55 beds within three years. Economic
growth in the region, along with a rapid influx of
people, resulted in additional expansions, and five
years ago the hospital reached its present capacity of
166 beds. The hospital was called Glengarry County
Hospital until a few years ago.
The population of Glengarry County has grown
steadily from approximately 56,800 in 1985 to
86,600 today. However, the hospital size has re-
mained unchanged over this time. Approximately
500 people are employed at Glengarry. The medi-
cal staff consists of 75 doctors and related profes-
sionals. A substantial majority of the medical staff
members are specialists. Therefore, the hospital
offers a wide range of medical services, serving
upward of 15,000 inpatients and approximately
19,000 outpatients each year.
Three years ago, GlenMed’s board of directors
concluded that major expansion of the hospital was
necessary to adequately serve residents in Scotston
and Glengarry County. The situation had become
critical by the time this expansion decision was made.
Hospital managers and board members had received
numerous complaints concerning the hospital’s
overcrowded conditions. New patients experienced
long waits until beds became available; offices and
hallways had become overflow storage space. State
health department officials warned GlenMed’s
administration that if equipment and supplies were
not removed from hallways, the hospital would not
be licensed for the coming year and therefore could
lose its accreditation.
GlenMed would expand from 166 to 248 beds, at
an estimated cost of $75 million. To more accurately
reflect the services available and the population served
by the growing medical complex, the board decided
to change the hospital’s name from Glengarry County
Hospital to Glengarry Regional Medical Center. A
fund-raising drive raised $9 million, enough funds to
launch the expansion. Tax-exempt revenue bonds
would provide most of the remaining funding.
Organizational Background
Glengarry Regional Medical Center, like other county
hospitals in the state, is governed by a seven-member
board of directors. State law provided that the board
be appointed by the local county judge. As with any
political system, appointments are based on a combi-
nation of individual qualifications and the political
postures of board members. Historically, the board
had not provided strong leadership to the hospital.
However, recent appointments, together with strong
leadership from a new board chairman, had greatly
increased the activity and contribution of the board to
the operation of the hospital.
All public hospital administrators face ongoing
pressure from various groups, including civic politi-
cal leaders, patients and their families, medical pro-
fessionals, and hospital staff members. These
pressures can take a toll on hospital leaders, as has
been the case at GlenMed. Over the past decade,
the hospital has been led by no less than four chief
executives, three of them within the past five years.
One administrator was asked to resign after the hos-
pital lost more than $1.6 million in two years. His
replacement tried to stem the losses, but she left af-
ter 18 months. Employees complained that she was
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autocratic and made erratic decisions. It was later
determined that she had a serious illness, which may
have contributed to these decisions and actions. Her
replacement had been the chief financial officer for
the previous two years. He lasted three years as
CEO before the board asked him to resign. Although
never publicly stated, the board concluded that he
lacked initiative to develop the hospital and was
around the hospital less often than a typical full-time
employee.
While searching for a new CEO, the board
appointed Donald Dale as acting CEO. Dale had
served as second in command (i.e., assistant admin-
istrator) under the previous CEO. During this in-
terim period, Dale worked closely with Louise
Ogbonna, GlenMed’s human resource director. Both
managers were acutely aware of employee morale
and motivation problems within the medical center,
which they attributed to ineffective leadership over
the past few years and ongoing employee concerns
about the hospital’s next administrator.
Dale and Ogbonna had recently attended a
seminar on improving management competencies
for health care organizations. They were convinced
that Glengarry Regional Medical Center needed to
develop management skills, so they contacted
Dr. Vinkat Chandry, the university professor and
management consultant who had conducted the
seminar. Over the next month, the two administra-
tors met on four occasions with Dr. Chandry to dis-
cuss the problems and needs of the hospital.
Dale and Ogbonna were emphatic that they
wanted to develop a more employee-oriented culture,
and they had taken a few steps in that direction. For
example, to enhance two-way communication, they
created a nonsupervisory employee council that met
once a month to discuss with Dale and Ogbonna
problems and conditions throughout the hospital.
Each department elected one person to represent it
on the council. Initially, most of the communication
was from the top down. However, shortly after the
council had been created, a core of employees rose
to take leadership of the group. They elected a
spokesman and requested that they be permitted to
meet once a month without either Dale or Ogbonna
present. Thereafter, the employee representatives
met twice monthly, once with the administrators and
once without them.
Louise Ogbonna also suggested to Dr. Chandry
that some form of management training should be
developed and conducted for department heads and
hospital supervisors. Both Dale and Chandry were
hesitant about the training program at this time be-
cause they didn’t want to saddle a new CEO with a
program that he or she might not favor. However,
Ogbonna felt strongly that the program should be ini-
tiated “as soon as possible.” Such a program was de-
signed by Dr. Chandry with agreement by Dale and
Ogbonna regarding its content. Shortly thereafter, the
board announced the selection of Arnold Benson as
GlenMed’s next CEO. Dale, Ogbonna, and Chandry
agreed to postpone the management training pro-
gram until Benson took over the following month, but
Dale indicated from his initial meeting with Benson
that the new training initiative would be supported.
A New Leader for the “Troops”
From a pool of 70 applicants, the board selected
Arnold Benson as GlenMed’s new CEO. At only
36 years old, Benson was among the youngest appli-
cants and the youngest administrator to head the
hospital. He held bachelor’s and master’s degrees in
business administration and had considerable expe-
rience working in hospital organizations. After serv-
ing four years in the Marine Corps, Benson began
his health care management career as director of
purchasing and human resources in a 78-bed hospital.
He then moved to a 156-bed Catholic hospital,
where he rose from assistant administrator to associ-
ate administrator and finally to CEO, all within
three years. Four years ago, Benson accepted the
CEO position at a multihospital complex in St. Louis,
Missouri, which included 144-bed and 134-bed
facilities. There, he had overseen a major expansion
of the hospital facilities. In Benson’s words, “My objec-
tive was to become a professional hospital administra-
tor. I realized that since I did not yet have a master’s
degree in hospital administration I would have to go
with a ‘back door approach’ by working my way up
the ranks.”
Benson accepted the CEO job at GlenMed be-
cause he wanted to relocate to a smaller, safer commu-
nity in the southwestern United States. The St. Louis
hospital where he worked was in a rough part of the
city. Also, the hospital had been a prime target for
numerous union drives (none of which was success-
ful). Benson’s salary expectations were high, given
his considerable experience in hospital administra-
tion, so he was pleased when the board made him a
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486
reasonable offer to lead Glengarry Regional Medical
Center.
Benson was a tall, athletic-looking man whose mild
manners and easygoing Texas drawl tended to hide
his “down-to-business” approach to administration.
Soon after arriving, he realized that he would be fac-
ing many problems inside and outside the hospital in
the next few months. He knew that the most pressing
of these was the hospital expansion. Moreover, it was
clear to him that the primary concern of some board
members was the hospital’s financial health.
Financial concerns plagued Benson from the mo-
ment he arrived at GlenMed. During his first weeks
on the job, the building program finances consumed
almost half his time. In addition, Benson was advised
three weeks after his arrival that employees had
been promised a 7 percent across-the-board pay in-
crease at the beginning of the year (in a few months).
The total cost of the increase was more than $1.2
million. Benson felt that the hospital could not af-
ford this amount of payroll increase, so he reduced
the increase to 2 percent.
“When I came aboard, the board charged me
with the financial responsibility of the medical cen-
ter,” Benson explained to his managers. “If the
troops were to get their pay increase in January, it
would throw the entire budget out of kilter. I have
only been here three weeks, and quite frankly the
current budget didn’t get the attention it deserved.”
Benson had his clerical assistant send staff an
e-mail announcing the decision to cut the amount of
the pay increase. He also stressed that the total fi-
nancial posture of the hospital would be reevaluated.
Benson’s message was also posted on bulletin boards.
Over the following week, several of the posted mes-
sages were slashed and rude comments were written
on them. Soon after, a rumor circulated that the hos-
pital board of directors planned to buy Benson a
new luxury car. Pictures of Mercedes and BMWs were
e-mailed around, with suggestions that Benson had
expensive taste in automobiles. (In reality, Benson was
given the Mercury Grand Marquis purchased for the
previous CEO a year earlier.)
Recognizing the discontent over his decision,
Benson met with members of the employee advisory
council to discuss the pay question. Several members
of the group quoted statistics showing that, on the
average, blue-collar workers throughout the United
States were being paid more than were most hospi-
tal employees. Benson replied that it was unfair to
quote blue-collar statistics because they are in a dif-
ferent industry, adding that hospital employees earn
enough to live comfortably. He then asked the mem-
bers of the advisory council if they would work
harder if they had received the full increase. Accord-
ing to Benson, “When all responded negatively, I
told them point blank that it would be foolish to pay
people more with no increase in productivity.” He
reminded those present that he had approved some
pay increase and that he planned to put in effect a
new compensation plan in the near future.
The employee council also voiced complaints
about other conditions at GlenMed. Over the next few
weeks, Benson saw to it that many of the problems
were corrected to the group’s satisfaction. However,
when the last “demand” was met, Benson announced
that the advisory group was no longer necessary. A
question was raised by one of the employees concern-
ing whether the group would be permitted to re-form
if subsequent problems arose. Benson replied that it
would not be permitted to do so.
Benson was confronted by a second important
decision not long after the incident involving the pay
increase. The hospital had obtained most of its funds
for expansion through tax-exempt revenue bonds.
However, the building program excluded much-
needed parking lots. Benson therefore found it nec-
essary to ask the local banking community for an
additional $5.7 million so that parking lots could be
built. Although the bankers agreed to underwrite the
project, the feasibility study on which their decision
was based indicated that the parking lots would have
to generate revenue, whereas all hospital parking
was currently provided without charge to the medi-
cal staff, employees, and visitors. Benson was con-
cerned about how employees would react to pay
parking so soon after learning that their pay in-
creases had been reduced. The commitment to in-
troduce pay parking had been made to the bankers,
but Benson postponed announcement of this news.
Management Development Program
In early January, department heads throughout the
hospital attended the management development pro-
gram that Dr. Chandry had developed with the
approval of Donald Dale and Louise Ogbonna.
The program consisted of seven two-hour sessions
held over one month. A similar program would be
conducted for supervisors a few months later. The
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487
program included many elements of traditional
management training, with particular emphasis on
interpersonal skill development. Dale and Ogbonna
also hoped the program would identify high-potential
managers. Attendance in the program was volun-
tary, but Benson personally recommended that de-
partment heads and supervisors should participate.
Benson, Dale, and Ogbonna received all materials
for the program, but they agreed not to attend the
sessions due to concerns that their presence might
reduce participation.
One event dramatized the high level of distrust
among department heads throughout the hospital.
Participants were asked to complete evaluation
forms that were to be used in connection with an
exercise known as the Johari Window. The purpose
of the exercise was to help the managers see them-
selves more clearly as others saw them and to help
others in the group in a similar manner by providing
them with “image feedback” information. The the-
ory behind the exercise, together with its purpose,
was explained to those present. Each manager was
asked to write the name of every department head
(including himself or herself) and to list at least
one asset and one liability of each person listed.
Dr. Chandry requested that the completed forms be
returned to him at the beginning of the next session.
The name of the individual providing the “feedback”
information was not to be placed on the sheet itself.
Dr. Chandry explained that he would facilitate the
exchange of feedback at the next session by reading
the name of a participant followed by the assets and
liabilities that were identified by his or her peers.
Dr. Chandry began the next session by asking
that all feedback sheets be passed in to him. Much to
his surprise, only about half of the sheets were re-
turned, and most of them were insufficiently com-
pleted. After a short pause, he asked those present to
explain why they had failed to complete the assign-
ment. Following a brief discussion, it was evident
that the department heads had decided in another
meeting that they would not complete the feedback
sheet. Some managers explained that they did not
know one another well enough. (Prior to the man-
agement program many of the department heads
did not know one another by name, although a “get
acquainted” exercise was used in the first session.)
Others expressed fear that the information assem-
bled on each individual would in some way be used
against him or her.
One woman openly expressed concern that other
department heads at the meeting might misuse the in-
formation. Another head privately suggested that some
of those in attendance thought Dr. Chandry himself
might take the information to the CEO. The discus-
sion that followed had a cathartic effect on the group.
For the first time, many of the managers “opened up”
and talked about the lack of communication and trust
that existed between the department heads and be-
tween the department heads and Benson.
Dr. Chandry ended the session by again explain-
ing that the purpose of the exercise was to “improve
our understandings of ourselves as well as of those
with whom we associate throughout the hospital.”
Participants then agreed to complete and return the
feedback sheets at the next session. At the next ses-
sion, the exercise was completed smoothly. Many of
the managers commented afterward that they be-
lieved that the exercise had been beneficial and had
helped to open up the group. One department head
did comment, however, “To tell you the truth, I think
our refusal to complete the feedback sheets helped to
break the ice between us. You know, it is the first time
we really ever got together and agreed on something.”
The remainder of the management development pro-
gram for departmental managers was well received.
The Retreat
A few days after the department heads’ program was
completed, Benson asked Dr. Chandry to meet with
him. He began their conference by stating that he
was pleased with what he had heard about the ses-
sions and was anxious to ensure that the momentum
that had been created would not be lost. He asked
Dr. Chandry what he thought of bringing all the
department heads together for a weekend retreat at
a resort area not far from Scotston. Dr. Chandry was
pleased with the suggestion, saying that he had
considered recommending such an event but was
concerned about the hospital’s financial situation.
Benson replied that the money for the retreat could
be found since he anticipated that it would have a
positive impact on the hospital’s operations.
The following week Benson advised department
heads that a retreat had been scheduled for the
weekend of February 14 and 15. He went on to
explain that the department heads would gather on
Friday morning at the hospital and would drive
directly to the resort. All expenses would be paid by
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488
the medical center. He told them that he hoped that
the meeting would permit a free exchange of ideas.
A week before the scheduled retreat, Dr. Chandry
met alone with the department heads who attended
the training program to conduct a brief follow-up ses-
sion. As he walked into the room, Dr. Chandry noticed
that many managers were voicing their frustrations to
one another. Thinking that the concerns were about
this follow-up session, Dr. Chandry explained his pres-
ence and told them that he was interested in their feed-
back and application of the management training.
One manager stated that their anger had nothing
to do with this meeting or with Dr. Chandry. Others
then spoke up, most of them about the upcoming
retreat. A few department heads stated that they did
not want to attend the retreat. One newly married
woman stated that it was Valentine’s Day and her
husband did not want her to go. Two other heads
said they already had plans to attend a previously
reserved Valentine’s Day event at the country
club that Friday evening. As discussion continued, it
became apparent that the department heads had
been told rather than consulted about the retreat.
Some expressed displeasure with being “forced” into
going to the retreat and using part of their weekend
without first being asked their opinion.
Dr. Chandry listened carefully and explained to the
managers that he believed the retreat was a good idea.
He told them that he had considered such an event
but that the CEO suggested the idea on his own. Fur-
thermore, Dr. Chandry told them that the department
heads should give Benson “a chance” during the week-
end to see what might come out of the retreat. There
were a few supportive comments made by one or two
department heads and the meeting broke up.
Dr. Chandry left the meeting both perplexed
and concerned. He had not anticipated the frustra-
tion that he witnessed from department heads
throughout the hospital. As he walked toward the
entrance of the hospital, Dr. Chandry asked himself
whether he should provide further assistance to
Benson before the retreat. He decided to stop in
and see the CEO before leaving the hospital.
* The original version of this case was published in Donald D.White
and H. William Vroman, Action in Organizations, 1977. Reprinted
with permission of Donald D. White.
Case 8: HIGH NOON AT ALPHA MILLS
Arif Hassan and Thivagar Velayutham , International Islamic University, Malaysia
Alpha Plantations Sdn. Bhd. is an oil palm planta-
tion located in Malaysia. It consists of an oil palm
estate and one palm oil mill. It is a wholly owned
subsidiary of a British multinational company and
was founded with the purpose of supplying crude
palm oil for its parent company’s detergent manu-
facturing business. Since its formation, most of the
managers have been recruited from the United
Kingdom, with many British ex-soldiers and police-
men joining up. Ang Siow Lee joined Alpha Mill in
1965 at the age of 15 as a laborer, and he rose
through the ranks to become the most senior non-
managerial staff member at Alpha. Ang was the se-
nior production supervisor in Alpha’s palm oil mill.
His immediate superior was the mill manager, and
he had two junior supervisors to assist him. The
mill operated on a three-shift cycle of 25 operators
each, and each supervisor (including Ang) was in
charge of one shift.
Ang was responsible for the smooth daily palm
oil processing operations. He coordinated the activi-
ties of all three shifts with the two supervisors, pre-
pared the daily production reports, dealt with
short-term human resource planning issues, handled
minor discipline issues, and set and evaluated short-
term performance targets for all three shifts. In addi-
tion, he acted as the “gatekeeper,” which meant that
any mill personnel who wished to see the mill man-
ager must first see Ang, who tried to solve the prob-
lem, which may be anything from house repairs to a
request for an advance on wages. In rare cases when
Ang could not resolve the issue, the matter was
brought to the mill manager. Ang ran a tight ship,
and he never let anyone forget it. His superb
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technical competency helped him keep the mill in
top shape. He was accustomed to receiving the high-
est appraisal ratings from the mill manager, who ap-
preciated his firm, methodical, almost militarily
efficient way of running the mill. The palm oil in-
dustry in Malaysia faced many challenges in 1999.
World oil prices plunged due to oversupply, and
palm oil prices hit a 15-year low. This cut the profit
margins of all palm oil producers and caused Alpha
Mill to post losses regularly.
Captain Chubb, the 54-year-old ex-Royal Engineer
and mill manager, was at a loss as to how to improve
performance. “We are doing nothing wrong, and
have met all our efficiency targets. It’s this market
that is killing us!” he exasperatedly explained during
the annual year-end visit of the directors from London.
Very soon, Chubb was given his marching orders. In
early 2000 a new mill manager was appointed who
was very different from all his predecessors. Ian
Davison, a 32-year-old who hailed from Edinburgh,
Scotland, was not a career plantation engineer and
had never managed an agricultural product process-
ing mill before. He was actually an electronics engi-
neer, with an Ivy League MBA, on the fast track to a
top management position. His previous appointment
was manager of a detergent factory in Egypt, where
he managed to streamline and modernize operations
and increase financial performance drastically. Head-
quarters in London had high hopes that he would be
able to do the same with Alpha Mill and return it to
profitability. His first action was to analyze opera-
tions at Alpha Mill and look for ways to reduce pro-
duction costs and increase profits. He arrived at the
following conclusions:
• Current performance standards allowed too
much machine breakdown and changeover
time. Better standards were achievable with the
latest technology.
• Wastage could be reduced and yield improved
drastically by installing machinery based on
new technology.
• Personnel numbers were too high—they could
be reduced with technology and multitasking,
thereby unleashing the full potential of workers.
• Personnel were just “cruising along”—they
were not fully committed to achieving better
performance.
• Hygiene needs were not being met.
• The old colonial and hierarchical company
culture was not conducive to performance
improvement.
• Information was not shared across the mill.
Operators knew about only their own little area
in the mill and almost nothing about the com-
pany as a whole.
Davison proposed to remedy the situation with the
following initiatives:
• Empower operators by reorganizing the shifts
into self-directed production teams, with the
supervisors playing the role of “facilitators,”
and thereby gain commitment.
• Install new technology and automation.
• Adopt more stringent performance measures.
Davison began to implement and execute these
initiatives by organizing an excursion to a local picnic
spot for the entire factory. After the icebreakers,
games, and lunch, he held a briefing session on the
beach, where he explained the situation Alpha
Mill was in and the need to make changes. He then
unveiled his plan for the first time. The response was
enthusiastic, although some operators privately con-
fessed to not understanding some of the terminology
Davison used. At the end of the excursion, when there
was some time allocated for feedback, Ang expressed
his full support for Davison’s plan. “We in Alpha Mill
have full confidence in you, our new leader, and we
assure you of our 110 percent support to make your
plan a success!” he said at the end of his speech.
When the new machinery had been installed and
each shift had been reorganized into self-directed
work teams, the plan was put into motion. When-
ever the team faced a problem during processing
and tried to find a solution using the techniques that
had been taught, Ang would step in after some time,
issue instructions, and take over the process. “This is
a simple problem, no need to waste time over it. Just
do it. . . .” His instructions were always followed,
and the immediate problem was always solved.
However, the production team reverted to the old
ways of working, and none of the expected benefits
of teaming were realized. Given the new, tighter
performance standards and reduced manpower, the
team consistently underperformed. Team meetings
were one-way affairs at which Ang would tell every-
one else what had gone wrong.
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Case 9: KEEPING SUZANNE CHALMERS
Steven L. McShane , University of Western Australia
Thomas Chan hung up the telephone and sighed.
The vice president of software engineering at
Advanced Photonics Inc. (API) had just spoken to
Suzanne Chalmers, who called to arrange a meeting
Ang’s response to this was to push himself harder.
He was always the first to arrive and the last to leave.
He would spend a lot of time troubleshooting process
problems. He pushed his operators even harder, but
he felt that he had less of a “handle” on his operators
now that they had direct access to the mill manager
and most of their minor needs were seen to by him.
Sometimes he became annoyed because of his opera-
tors’ mistakes and would resort to shouting and curs-
ing, which had the immediate effect of moving people
in the direction he wanted. This was in contrast to the
mere glare that would have sufficed previously.
The continued poor performance of Alpha Mill
affected Ang’s midyear appraisal rating, which fell
from “excellent” to merely “adequate.” During the
appraisal interview, an annoyed Davison bluntly
told Ang that he needed to understand clearly what
the initiatives were all about and that he had to let
the team take some responsibility, make mistakes,
and learn from them. “With your knowledge of this
mill, you should be able to provide them with all the
technical input they need,” he said. Davison also
added, “It might help if you treated our people with a
little more respect. We aren’t living in the 1940s any-
more, you know.” Ang was thunderstruck by the
appraisal but did not raise any objections on the
spot. He silently deferred to Davison’s judgment and
promised to do better. He also reiterated his utmost
support for Davison and his plan.
After the midyear appraisal, there was a noticeable
change in Ang’s demeanor. He became very quiet and
began to take a less active role in the daily running of
the mill. He was superficially polite to the operators
and answered most requests for help with “Get the
team together and discuss it among yourselves. Show
the boss that you can solve it for yourselves.” At first
the teams were at a loss and mill performance suffered
badly, but within two weeks the team had found its
feet and performance began to improve. One of Ang’s
junior supervisors, Raman, was able to coordinate
between production teams to ensure that the perfor-
mance gains were maintained. The effect on Ang was
devastating. He became withdrawn and began to
drink more than usual. His presence at team meetings
became a mere formality, and he contributed next to
nothing, taking a backseat to other team members. He
spoke very little to mill personnel and became a mere
shadow of his former self.
Davison was very aware of the changes taking place
on the mill floor. He decided that it was time to have
Ang removed from his position. He began to plan for
a reshuffle of Alpha Mill’s organization chart: Ang
would be promoted to the new position of mill execu-
tive, a staff position with a small pay raise. His re-
sponsibility would be to advise the mill manager on
technical, quality, and efficiency problems faced by
the mill. He would be assigned to carry out minor im-
provement projects and performance audits from time
to time. Raman would be promoted as supervisor and
report directly to the mill manager. Ang would no lon-
ger have any line authority over the production team.
This reorganization was quickly approved by head
office, and Davison proceeded to lay the groundwork
for the announcements and the necessary paperwork.
Little did he foresee what was to follow.
Ang was in the head office one morning when the
personnel executive’s clerk congratulated him on his
imminent promotion. A surprised Ang enquired fur-
ther and learned of the plans that Davison had in store
for him. That was the final straw. He rushed back to
Alpha Mill just as Davison was about to conduct his
noon mill inspection. The confrontation was very loud,
acrimonious, and public. It ended with Ang being ter-
minated for insubordination and gross misconduct.
After Ang left, Davison felt that the obstacle to
better commitment and morale was gone and that
performance would improve greatly. He was very
wrong. Team performance began to deteriorate, and
no amount of pep talks could improve it. He began
to wonder what had gone wrong.
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with Chan later that day. She didn’t say what the
meeting was about, but Chan almost instinctively
knew that Suzanne was going to quit after working
at API for the past four years. Chalmers was a soft-
ware engineer in Internet protocol (IP), the data
transmission standard that directs information in the
form of fiber-optic light through API’s routers. It is
very specialized work, and Suzanne was one of API’s
top talents in that area.
Thomas Chan had been through this before. A
valued employee would arrange a private meeting.
The meeting would begin with a few pleasantries,
and then the employee announces that he or she
wants to quit. Some employees say they are leaving
because of the long hours and stressful deadlines.
They say they need to decompress, get to know the
kids again, or whatever. But that’s not usually the
real reason. Almost every organization in this indus-
try is scrambling to keep up with technological ad-
vances and the competition. Employees would just
leave one stressful job for another one.
Also, many of the people who leave API join a
start-up company a few months later. The start-up
firms can be pressure cookers where everyone works
16 hours each day and has to perform a variety of
tasks. For example, engineers in these small firms
might have to meet customers or work on venture
capital proposals rather than focus on specialized
tasks related to their knowledge. API now has over
6,000 employees, so it is easier to assign people to
work that matches their technical competencies.
No, the problem isn’t the stress or long hours,
Chan thought. The problem is money—too much
money. Most of the people who leave are million-
aires. Suzanne Chalmers is one of them. Thanks to
generous stock options that have skyrocketed on the
stock markets, many employees at API have more
money than they can use. Most are under 40 years
old, so it’s too early for them to retire. But their
financial independence gives them less reason to
remain with API.
The Meeting
The meeting with Suzanne Chalmers took place a
few hours after the telephone call. It began like the
others, with the initial pleasantries and brief discus-
sion about progress on the latest fiber-optic router
project. Then Suzanne made her well-rehearsed
statement: “Thomas, I’ve really enjoyed working
here, but I’m going to leave Advanced Photonics.”
Suzanne took a breath and then looked at Chan.
When he didn’t reply after a few seconds, she con-
tinued: “I need to take time off. You know, get away
to recharge my batteries. The project’s nearly done,
and the team can complete it without me. Well, any-
way, I’m thinking of leaving.”
Chan spoke in a calm voice. He suggested that
Suzanne should take an unpaid leave for two or
maybe three months, complete with paid benefits,
and then return refreshed. Suzanne politely rejected
that offer, saying that she needs to get away from work
for a while. Thomas then asked Suzanne whether
she was unhappy with her work environment—
whether she was getting the latest computer tech-
nology to do her work and whether there were
problems with co-workers. The workplace was fine,
Suzanne replied. The job was getting a bit routine,
but she had a comfortable workplace with excellent
co-workers.
Chan then apologized for the cramped work-
space, due mainly to the rapid increase in the num-
ber of people hired over the past year. He suggested
that if Suzanne took a couple of months off, API
would give her special treatment when she returned:
a larger workspace with a better view of the park
behind the campuslike building. She politely
thanked Chan for that offer but said it wasn’t what
she needed. Besides, it wouldn’t be fair to have a
large workspace when other team members work in
smaller quarters.
Chan was running out of tactics, so he tried his
last hope: money. He asked whether Suzanne had
higher offers. Suzanne replied that she regularly re-
ceived calls from other companies and some of
them offered more money. Most were start-up firms
that offered a lower salary but higher potential gains
in stock options. Chan knew from market surveys
that Suzanne was already paid well in the industry.
He also knew that API couldn’t compete on share
option potential. Employees working in start-up
firms sometimes saw their shares increase by five or
ten times their initial value, whereas shares at API
and other large firms increased more slowly. How-
ever, Chan promised Suzanne that he would rec-
ommend that she receive a significant raise—maybe
25 percent more—and more stock options. Chan
added that Chalmers was one of API’s most valu-
able employees and that the company would suffer
if she left the firm.
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The meeting ended with Chalmers promising to
consider Chan’s offer of higher pay and stock op-
tions. Two days later, Chan received her resignation
in writing. Five months later, Chan learned that after
a few months traveling with her husband, Chalmers
joined a start-up software firm in the area.
Copyright © 2001 Steven L. McShane.
Case 10: NORTHWEST CANADIAN FOREST PRODUCTS LIMITED
Peter Seidl , British Columbia Institute of Technology, Canada
Northwest Canadian Forest Products Limited owns
and operates five sawmills in British Columbia (BC)
and Alberta, Canada. These mills produce high-
quality lumber for use in the manufacture of window
frames, doors, and moldings for markets in the
United States and Japan in addition to lower-quality,
commodity-type lumber used in the Canadian con-
struction industry. Currently, the president of the
company is thinking about the long-term prospects
of each of the mills and is paying particular attention
to the Jackson Sawmill located in the small town of
Jackson, BC.
The Jackson Sawmill was originally built in 1950
and was last upgraded in 1986. The president
knows she will soon (in 2007) have to decide
whether or not to invest substantial sums of money
($50 million) in new plant and equipment at the
Jackson Sawmill. New investment is required in or-
der to keep the mill up-to-date and competitive
with similar mills throughout North America. How-
ever, the mill has consistently been the poorest per-
former (in terms of productivity and product
quality) in the company since 1986 even though its
equipment is of similar age, type, and quality to
that found in the other mills.
The president would like to invest the money
needed because the alternative to re-investing in
Jackson would be to downsize the Jackson Sawmill
by reducing production capacity and permanently
laying off over half the 200-person workforce. The
remaining part of the mill would serve the domestic
market only. A new mill would then be built in
Alberta in order to serve the more demanding,
quality-conscious export markets. A new mill in
Alberta would cost more than the $50 million invest-
ment required at the Jackson Sawmill. However, the
president is willing to seriously consider implementing
this alternative because she thinks that the labor rela-
tions climate in Alberta is much better than the one
found at Jackson.
In fact, she attributes most, if not all, of the prob-
lems at Jackson to its poor labor-management rela-
tions. During the last round of collective bargaining,
there was a strike at all four of the company’s BC
mills. The strike was, however, much more bitter at
Jackson than elsewhere. Company buildings suffered
minor damage during the strike at the hands of some
striking employees. Since then, there were two sepa-
rate occasions when the entire workforce walked off
the job for a day to protest the company’s decision
to fire two employees for insubordination.
The Jackson Sawmill has the worst safety record of
all the company’s mills. There is a joint management-
management safety committee (as required by law),
but it is viewed as a waste of time by both sides.
One management member of the safety committee,
Des, the production manager and the second high-
est manager at the mill, has said: “The union guys
start each safety committee meeting by complain-
ing about safety but they just can’t wait to complain
about everything else they can possibly think of.
Their whining and complaining is so predictable
that I go to every safety meeting ready for a fight
on workload and production issues as well as for a
fight on safety. Of course, safety is everyone’s re-
sponsibility but production issues are none of their
business. Production is a management responsibil-
ity. Plans, budgets, and other management con-
cerns are very definitely not part of the committee’s
job. Most of what’s said at these meetings isn’t
worth listening to.”
The union is also dissatisfied with the function-
ing of the safety committee. Ivan, the chief union
steward who also serves on the committee, observes:
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“If the safety committee wasn’t mandatory by law,
management wouldn’t even pretend to listen to us.
We put forward our safety concerns but manage-
ment says that we are mixing safety in with work-
load and production issues. They only want to talk
about what they think are safety issues—like serious
accidents. Thankfully, we don’t have too many of
those! But safety is more than just avoiding major
accidents. We get far too many ‘little accidents’ and
‘near-accidents’ here. At least that’s what manage-
ment calls them. They just want us to work faster
and faster. We complain and complain at the meet-
ings but they just say ‘that’s a production issue and
this is a safety committee.’ They accuse us of trying
to run the company when we ask for better equip-
ment. They say we don’t understand things like costs
and limited budgets. We don’t care about their bud-
gets, we’ve got work issues to talk about and we’ll
keep speaking out for the crew no matter what.
That’s what the union is for.”
Big Bad John, one of the mill’s toughest and most
experienced supervisors, describes his job as follows:
“The job of supervisor is to keep a close watch on
every move the crew makes. If I look away for a
second, some guy is going to be doing something
wrong—either with the equipment or with the logs.
They’re always making mistakes. Lots of mistakes!
Some of these guys are just plain dumb. And lazy,
too! Any chance they can get to steal some company
time, they take. They start work late, they take long
lunch breaks, they talk too much during their shifts.
A minute here, a minute there—it all adds up. The
younger guys are the worst. They always want to
talk back to me, they can’t follow my orders like
most of the older guys can. Lousy attitude, that’s
what they’ve got.”
Vic, the youngest union steward, gives his view of
labor-management relations: “The supervisors and
the managers, they know it all. They think they’re so
smart. They treat the guys on the crew like children.
Almost everyone on the crew has a high school edu-
cation. Some even have college backgrounds. Most
are raising families. We’re not stupid! Sure, some
guys come in late and miss a day of work now and
then. Who can blame them? The pace of work is
exhausting. How can you do a good job when you’re
tired and rushing all the time?” He adds: “Of course,
we’re not perfect. We make mistakes just like every-
one else does. But nobody ever explains anything to
the crew members. The supervisors just watch
everyone like hawks and jump all over them, criti-
cize them, and make them feel stupid when they use
a piece of equipment the wrong way. We’re always so
rushed and busy here that the senior crew members
don’t have much time to explain things to the newer
workers, the younger guys. Also, the equipment
could be in better shape, that would help.”
The production manager, Des, observes that “the
union just doesn’t understand—or even care about—
the connection between the poor work ethic, the
poor attitude on the part of the crew members here,
and the mill’s mediocre productivity and product
quality. The union and the crew only take their very
narrow ‘employee-view’ of how things are done
around here. They don’t understand the bigger pic-
ture. Well, it’s very competitive out there. They don’t
understand what tight budgets, increasing costs, de-
clining quality, missed production targets, and com-
plaining customers mean to a business. They just sit
back and complain about our management style.
What they don’t realize is that their attitude makes
our management style necessary. Complaining is
easy, no responsibility is needed. Managing, on the
other hand, is challenging. And it’s especially tough
to control and manage this particular crew. We’ve
currently got 30 unresolved grievances—that’s a lot
of formal complaints for a mill of our size. Some of
the union stewards actually go out among the crew
and look for grievances just because they’re mad
they can’t run the mill the way they want to. Some-
times I think the stewards want to create grievances
where no real problems exist. They want to create
headaches for those of us in management.”
The president of the company has recently in-
formed Digby, the mill’s new general manager (he
started at Jackson last month after a career in east-
ern Canada), of the decision she will soon have to
make regarding the mill’s future. She told Digby
that significant improvements in mill productivity
and product quality are required if the mill is to
receive the $50 million investment in new plant
and equipment. Without such improvements, the
mill would be downsized and over half of the work-
force would be permanently laid off. Half the super-
visory and managerial personnel would also lose
their jobs.
Digby has just telephoned Moe (the president of
the local union who does not work at the mill but
who is very familiar with developments at the mill)
to tell him about the message from the company
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president. Upon hearing of the potential job losses,
Moe was troubled and asked to meet with Digby to
discuss the situation. However, Moe was also some-
what skeptical because the previous general man-
ager once told him that some permanent layoffs
would occur unless productivity was improved. No
layoffs subsequently occurred. Therefore, Moe is un-
certain if the company is serious about these poten-
tial future layoffs or merely bluffing in order to get
the employees to work harder.
Case 11: PERFECT PIZZERIA
John E. Dittrich and Robert A. Zawacki
Perfect Pizzeria in Southville, deep in southern Illinois,
is the chain’s second-largest franchise. The headquar-
ters is located in Phoenix, Arizona. Although the busi-
ness is prospering, it has employee and managerial
problems.
Each operation has one manager, an assistant
manager, and from two to five night managers. The
managers of each pizzeria work under an area super-
visor. There are no systematic criteria for being a
manager or becoming a manager trainee. The fran-
chise has no formalized training period for the man-
ager. No college education is required. The managers
for whom the case observer worked during a four-
year period were relatively young (ages 24 to 27),
and only one had completed college. They came
from the ranks of night managers, assistant manag-
ers, or both. The night managers were chosen for
their ability to perform the duties of the regular em-
ployees. The assistant managers worked a two-hour
shift during the luncheon period five days a week to
gain knowledge about bookkeeping and manage-
ment. Those becoming managers remained at that
level unless they expressed interest in investing in
the business.
The employees were mostly college students,
with a few high school students performing the less
challenging jobs. Because Perfect Pizzeria was lo-
cated in an area with few job opportunities, it was
relatively easy for it to fill its employee quotas. All
the employees, with the exception of the manager,
were employed part-time. Consequently, they earned
only the minimum wage.
The Perfect Pizzeria system is devised so that food
and beverage costs and profits are set up according
to a percentage. If the percentage of food unsold or
damaged in any way is very low, the manager gets a
bonus. If the percentage is high, the manager does
not receive a bonus; rather, he or she receives only
his or her normal salary.
There are many ways in which the percentage
can fluctuate. Because the manager cannot be in the
store 24 hours a day, some employees make up for
their paychecks by helping themselves to the food.
When a friend comes in to order a pizza, extra in-
gredients are put on the friend’s pizza. Occasional
nibbles by 18 to 20 employees throughout the day at
the meal table also raise the percentage figure. An
occasional bucket of sauce may be spilled or a pizza
accidentally burned. Sometimes the wrong-size pizza
may be made.
In the event of an employee mistake or a burned
pizza by the oven person, the expense is supposed
to come from the individual. Because of peer pres-
sure, the night manager seldom writes up a bill for
the erring employee. Instead, the establishment
takes the loss, and the error goes unnoticed until the
end of the month when the inventory is taken. That’s
when the manager finds out that the percentage is
high and that there will be no bonus.
In the present instance, the manager took retalia-
tory measures. Previously, each employee was enti-
tled to a free pizza, salad, and all the soft drinks he
or she could drink for every six hours of work. The
manager raised this figure from six to twelve hours
of work. However, the employees had received these
six-hour benefits for a long time. Therefore, they
simply took advantage of the situation whenever the
manager or the assistant was not in the building.
Although the night managers theoretically had com-
plete control of the operation in the evenings, they
did not command the respect that the manager
or assistant manager did. That was because night
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managers received the same pay as the regular em-
ployees, could not reprimand other employees, and
were basically the same age or sometimes even
younger than the other employees.
Thus, apathy grew within the pizzeria. There
seemed to be a further separation between the man-
ager and his workers, who started out to be a closely
knit group. The manager made no attempt to allevi-
ate the problem, because he felt it would iron itself
out. Either the employees who were dissatisfied
would quit or they would be content to put up with
the new regulations. As it turned out, there was a rash
of employee dismissals. The manager had no prob-
lem in filling the vacancies with new workers, but the
loss of key personnel was costly to the business.
With the large turnover, the manager found he
had to spend more time in the building, supervising
and sometimes taking the place of inexperienced
workers. This was in direct violation of the franchise
regulation, which stated that a manager would act as
a supervisor and at no time take part in the actual
food preparation. Employees were not placed under
strict supervision with the manager working along-
side them. The operation no longer worked smoothly
because of differences between the remaining experi-
enced workers and the manager concerning the way
in which a particular function should be performed.
Within a two-month period, the manager was
again free to go back to his office and leave his subor-
dinates in charge of the entire operation. During this
two-month period, in spite of the differences between
experienced workers and the manager, the unsold/
damaged food percentage returned to the previous
low level and the manager received a bonus each
month. The manager felt that his problems had been
resolved and that conditions would remain the same,
since the new personnel had been properly trained.
It didn’t take long for the new employees to be-
come influenced by the other employees. Immedi-
ately after the manager returned to his supervisory
role, the unsold/damaged food percentage began to
rise. This time the manager took a bolder step. He
cut out any benefits that the employees had—no free
pizzas, salads, or drinks. With the job market at an
even lower ebb than usual, most employees were
forced to stay. The appointment of a new area super-
visor made it impossible for the manager to work
behind the counter, because the supervisor was cen-
trally located in Southville.
The manager tried still another approach to alle-
viate the rising unsold/damaged food percentage
problem and maintain his bonus. He placed a no-
tice on the bulletin board, stating that if the percent-
age remained at a high level, a lie detector test
would be given to all employees. All those found
guilty of taking or purposefully wasting food or
drinks would be immediately terminated. This did
not have the desired effect on the employees, be-
cause they knew if they were all subjected to the
test, all would be found guilty and the manager
would have to dismiss all of them. This would leave
him in a worse situation than ever.
Even before the following month’s unsold/dam-
aged food percentage was calculated, the manager
knew it would be high. He had evidently received
information from one of the night managers about
the employees’ feelings toward the notice. What he
did not expect was that the percentage would reach
an all-time high. That is the state of affairs at the
present time.
Source: John E. Dittrich and Robert A. Zawacki, People and Organi-
zations (Plano, TX: Business Publications, 1981), pp. 126–128.
Used by permission of McGraw-Hill/Irwin.
Case 12: SIMMONS LABORATORIES
Adapted by William Starbuck from a case written by Alex Bavelas
Brandon Newbridge was sitting alone in the confer-
ence room of the laboratory. The rest of the group
had gone. One of the secretaries had stopped
and talked for a while about her husband’s coming
enrollment in graduate school, then went home.
Brandon, alone in the laboratory, slid a little farther
down in his chair, looking with satisfaction at the
results of the first test run of the new photon unit.
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He liked to stay after the others had gone. His ap-
pointment as project head was still new enough to
give him a deep sense of pleasure. His eyes were on
the graphs before him, but in his mind he could hear
Dr. William Goh, the project head, saying again,
“There’s one thing about this place you can bank
on. The sky is the limit for anyone who can pro-
duce!” Newbridge felt again the tingle of happiness
and embarrassment. Well, dammit, he said to him-
self, he had produced. He wasn’t kidding anybody.
He had come to Simmons Laboratories two years
ago. During a routine testing of some rejected Clanson
components, he had stumbled on the idea of the
photon correlator, and the rest just happened. Goh
had been enthusiastic: A separate project had been
set up for further research and development of the
device, and Newbridge had gotten the job of run-
ning it. The whole sequence of events still seemed a
little miraculous to him.
He shrugged out of the reverie and bent deter-
minedly over the sheets when he heard someone
come into the room behind him. He looked up ex-
pectantly; Goh often stayed late himself and now
and then dropped in for a chat. This always made
the day’s end especially pleasant for Newbridge. It
wasn’t Goh. The man who had come in was a
stranger. He was tall and thin. He wore steel-rimmed
glasses and had a very wide leather belt with a large
brass buckle. Lucy remarked later that it was the
kind of belt the Pilgrims must have worn.
The stranger smiled and introduced himself.
“I’m Lester Zapf. Are you Brandon Newbridge?”
Newbridge said yes, and they shook hands. “Doctor
Goh said I might find you in. We were talking about
your work, and I’m very much interested in what
you are doing.” Newbridge waved to a chair.
Zapf didn’t seem to belong in any of the standard
categories of visitors: customer, visiting fireman,
stockholder. Newbridge pointed to the sheets on the
table. “There are the preliminary results of a test
we’re running. We have a new gadget by the tail,
and we’re trying to understand it. It’s not finished,
but I can show you the section we’re testing.”
He stood up, but Zapf was deep in the graphs.
After a moment, Zapf looked up with an odd grin.
“These look like plots of a Jennings surface. I’ve been
playing around with some autocorrelation functions
of surfaces—you know that stuff.” Newbridge, who
had no idea what he was referring to, grinned back
and nodded, and immediately felt uncomfortable.
“Let me show you the monster,” he said, and he led
the way to the workroom.
After Zapf left, Newbridge slowly put the graphs
away, feeling vaguely annoyed. Then, as if he had
made a decision, he quickly locked up and took the
long way out so that he would pass Goh’s office. But
the office was locked. Newbridge wondered whether
Goh and Zapf had left together.
The next morning, Newbridge dropped into
Goh’s office, mentioned that he had talked with
Zapf, and asked who he was.
“Sit down for a minute,” Goh said. “I want to
talk to you about him. What do you think of him?”
Newbridge replied truthfully that he thought Zapf
was very bright and probably very competent. Goh
looked pleased.
“We’re taking him on,” he said. “He’s had a very
good background in a number of laboratories, and
he seems to have ideas about the problems we’re
tackling here.” Newbridge nodded in agreement,
instantly wishing that Zapf would not be placed
with him.
“I don’t know yet where he will finally land,”
Goh continued, “but he seems interested in what
you are doing. I thought he might spend a little time
with you by way of getting started.” Newbridge
nodded thoughtfully. “If his interest in your work
continues, you can add him to your group.”
“Well, he seemed to have some good ideas even
without knowing exactly what we are doing,”
Newbridge answered. “I hope he stays; we’d be
glad to have him.”
Newbridge walked back to the lab with mixed
feelings. He told himself that Zapf would be good
for the group. He was no dunce; he’d produce.
Newbridge thought again of Goh’s promise when
he had promoted him: “The man who produces
gets ahead in this outfit.” The words seemed to
carry the overtones of a threat now.
That day Zapf didn’t appear until midafternoon.
He explained that he had had a long lunch with
Goh, discussing his place in the lab. “Yes,” said
Newbridge, “I talked with Jerry this morning about
it, and we both thought you might work with us for
a while.”
Zapf smiled in the same knowing way that he had
smiled when he mentioned the Jennings surfaces.
“I’d like to,” he said.
Newbridge introduced Zapf to the other members
of the lab. Zapf and Link, the group’s mathematician,
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hit it off well and spent the rest of the afternoon dis-
cussing a method for analyzing patterns that Link
had been worrying about over the last month.
It was 6:30 when Newbridge finally left the lab
that night. He had waited almost eagerly for the end
of the day to come—when they would all be gone
and he could sit in the quiet rooms, relax, and think
it over. “Think what over?” he asked himself. He
didn’t know. Shortly after 5 p.m., they had almost all
gone except Zapf, and what followed was almost a
duel. Newbridge was annoyed that he was being
cheated out of his quiet period and finally resentfully
determined that Zapf should leave first.
Zapf was sitting at the conference table reading,
and Newbridge was sitting at his desk in the little
glass-enclosed cubby he used during the day when
he needed to be undisturbed. Zapf had gotten the
last year’s progress reports out and was studying
them carefully. The time dragged. Newbridge doo-
dled on a pad, the tension growing inside him. What
the hell did Zapf think he was going to find in the
reports?
Newbridge finally gave up, and they left the lab
together. Zapf took several of the reports with him to
study in the evening. Newbridge asked him if he
thought the reports gave a clear picture of the lab’s
activities.
“They’re excellent,” Zapf answered with obvious
sincerity. “They’re not only good reports; what they
report is damn good, too!” Newbridge was surprised
at the relief he felt and grew almost jovial as he said
good-night.
Driving home, Newbridge felt more optimistic
about Zapf’s presence in the lab. He had never fully
understood the analysis that Link was attempting. If
there was anything wrong with Link’s approach,
Zapf would probably spot it. “And if I’m any judge,”
he murmured, “he won’t be especially diplomatic
about it.”
He described Zapf to his wife, who was amused
by the broad leather belt and brass buckle.
“It’s the kind of belt that Pilgrims must have
worn,” she laughed.
“I’m not worried about how he holds his pants
up,” he laughed with her. “I’m afraid that he’s the
kind that just has to make like a genius twice each
day. And that can be pretty rough on the group.”
Newbridge had been asleep for several hours
when he was jerked awake by the telephone. He re-
alized it had rung several times. He swung off the
bed muttering about damn fools and telephones. It
was Zapf. Without any excuses, apparently oblivious
of the time, he plunged into an excited recital of how
Link’s patterning problem could be solved.
Newbridge covered the mouthpiece to answer his
wife’s stage-whispered “Who is it?” “It’s the genius,”
replied Newbridge.
Zapf, completely ignoring the fact that it was two
in the morning, went on in a very excited way, start-
ing in the middle of an explanation of a completely
new approach to some of the photon lab problems
that he had stumbled on while analyzing past ex-
periments. Newbridge managed to put some enthu-
siasm in his own voice and stood there, half-dazed
and very uncomfortable, listening to Zapf talk end-
lessly about what he had discovered. It was proba-
bly not only a new approach but also an analysis
that showed the inherent weakness of the previous
experiment and how experimentation along that
line would certainly have been inconclusive. The
following day Newbridge spent the entire morning
with Zapf and Link, the mathematician, the custom-
ary morning meeting of Newbridge’s group having
been called off so that Zapf’s work of the previous
night could be gone over intensively. Zapf was very
anxious that this be done, and Newbridge was not
too unhappy to call the meeting off for reasons of
his own.
For the next several days Zapf sat in the back of-
fice that had been turned over to him and did noth-
ing but read the progress reports of the work that
had been done in the last six months. Newbridge
caught himself feeling apprehensive about the reac-
tion that Zapf might have to some of his work. He
was a little surprised at his own feelings. He had al-
ways been proud—although he had put on a convinc-
ingly modest face—of the way in which new ground
in the study of photon measuring devices had been
broken in his group. Now he wasn’t sure, and it
seemed to him that Zapf might easily show that the
line of research they had been following was un-
sound or even unimaginative.
The next morning (as was the custom) the mem-
bers of the lab, including the secretaries, sat around
a conference table. Newbridge always prided him-
self on the fact that the work of the lab was guided
and evaluated by the group as a whole, and he was
fond of repeating that it was not a waste of time to
include secretaries in such meetings. Often, what
started out as a boring recital of fundamental
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assumptions to a naive listener uncovered new ways
of regarding these assumptions that would not have
occurred to the researcher, who had long ago ac-
cepted them as a necessary basis for his work.
These group meetings also served Brandon in an-
other sense. He admitted to himself that he would
have felt far less secure if he had had to direct the
work out of his own mind, so to speak. With the
group meeting as the principle of leadership, it was
always possible to justify the exploration of blind
alleys because of the general educative effect on the
team. Zapf was there; Lucy and Martha were there;
Link was sitting next to Zapf, their conversation con-
cerning Link’s mathematical study apparently con-
tinuing from yesterday. The other members, Bob
Davenport, Georgia Thurlow, and Arthur Oliver,
were waiting quietly.
Newbridge, for reasons that he didn’t quite un-
derstand, proposed for discussion this morning a
problem that all of them had spent a great deal of
time on previously, with the conclusion that a solu-
tion was impossible—there was no feasible way of
treating the problem in an experimental fashion.
When Newbridge proposed the problem, Davenport
remarked that there was hardly any use of going
over it again and that he was satisfied that there was
no way of approaching the problem with the equip-
ment and the physical capacities of the lab.
This statement had the effect of a shot of adrena-
line on Zapf. He said he would like to know what
the problem was in detail. Walking to the blackboard,
he began writing down the “factors” as various mem-
bers of the group began discussing the problem and
simultaneously listing the reasons why it had been
abandoned.
Very early in the description of the problem it
was evident that Zapf was going to disagree about
the impossibility of attacking it. The group realized
this, and finally the descriptive materials and their
recounting of the reasoning that had led to its aban-
donment dwindled away. Zapf began his statement,
which, as it proceeded, might well have been pre-
pared the previous night, although Newbridge knew
this was impossible. He couldn’t help being im-
pressed with the organized and logical way that Zapf
was presenting ideas that must have occurred to him
only a few minutes before.
Zapf had some things to say, however, that left
Newbridge with a mixture of annoyance and irrita-
tion and, at the same time, a rather smug feeling of
superiority over Zapf in at least one area. Zapf held
the opinion that the way that the problem had been
analyzed was very typical of group thinking. With
an air of sophistication that made it difficult for a
listener to dissent, he proceeded to comment on the
American emphasis on team ideas, satirically de-
scribing the ways in which they led to a “high level
of mediocrity.”
During this time Newbridge observed that Link
stared studiously at the floor, and he was very con-
scious of Thurlow’s and Davenport’s glances toward
him at several points of Zapf’s little speech. In-
wardly, Newbridge couldn’t help feeling that this
was one point at least in which Zapf was off on the
wrong foot. The whole lab, following Goh’s lead,
talked, if not practiced, the theory of small research
teams as the basic organization for effective re-
search. Zapf insisted that the problem could be ap-
proached and that he would like to study it for a
while himself.
Newbridge ended the morning session by remark-
ing that the meetings would continue and that the
very fact that a supposedly insoluble experimental
problem was now going to get another chance was
another indication of the value of such meetings.
Zapf immediately remarked that he was not at all
averse to meetings to inform the group about the
progress of its members. The point he wanted to
make was that creative advances were seldom ac-
complished in such meetings—they were made by an
individual “living with” a problem closely and con-
tinuously, in a rather personal relationship with it.
Newbridge went on to say to Zapf that he was very
glad that Zapf had raised these points and that he was
sure the group would profit by reexamining the basis
on which they had been operating. Newbridge agreed
that individual effort was probably the basis for mak-
ing major advances. He considered the group meet-
ings useful primarily because they kept the group
together and they helped the weaker members of
the group keep up with the ones who were able to
advance more easily and quickly in the analysis of
problems.
It was clear as days went by and meetings contin-
ued that Zapf came to enjoy them because of the
pattern that the meetings assumed. It became typical
for Zapf to hold forth, and it was unquestionably
clear that he was more brilliant, better prepared on
the various subjects that were germane to the prob-
lem being studied, and more capable of going ahead
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499
than anyone else there. Newbridge grew increas-
ingly disturbed as he realized that his leadership of
the group had been, in fact, taken over.
Whenever the subject of Zapf was mentioned in
occasional meetings with Goh, Newbridge would com-
ment only on the ability and obvious capacity for work
that Zapf had. Somehow he never felt that he could
mention his own discomforts, not only because they
revealed a weakness on his part but also because it
was quite clear that Goh himself was considerably im-
pressed with Zapf’s work and with the contacts he had
with him outside the photon laboratory.
Newbridge now began to feel that perhaps the in-
tellectual advantages that Zapf had brought to the
group did not quite compensate for what he felt were
evidences of a breakdown in the cooperative spirit
he had seen in the group before Zapf’s arrival. More
and more of the morning meetings were skipped.
Zapf’s opinion concerning the abilities of others in
the group, except for Link, was obviously low. At
times during morning meetings or in smaller discus-
sions he had been on the point of rudeness, refusing
to pursue an argument when he claimed it was based
on another person’s ignorance of the facts involved.
His impatience with others led him to also make sim-
ilar remarks to Goh. Newbridge inferred this from a
conversation with Goh in which Goh asked whether
Davenport and Oliver were going to be kept on;
his failure to mention Link, the mathematician, led
Newbridge to feel that this was the result of private
conversations between Zapf and Goh.
It was not difficult for Newbridge to make quite a
convincing case of whether the brilliance of Zapf
was sufficient recompense for the beginning of this
breaking up of the group. He spoke privately with
Davenport and with Oliver, and it was quite clear
that both of them were uncomfortable because of
Zapf. Newbridge didn’t press the discussion beyond
the point of hearing them say that they did feel awk-
ward and that it was sometimes difficult to under-
stand the arguments Zapf advanced but often
embarrassing to ask him to fill in the basis for his
arguments. Newbridge did not interview Link in this
manner.
About six months after Zapf had joined the pho-
ton lab, a meeting was scheduled in which the spon-
sors of the research were visiting to get some idea
of the work and its progress. It was customary at
these meetings for project heads to present the re-
search being conducted in their groups. The members
of each group were invited to other meetings
that were held later in the day and open to all, but
the special meetings were usually made up only of
project heads, the head of the laboratory, and the
sponsors.
As the time for the special meeting approached, it
seemed to Newbridge that he must avoid the presen-
tation at all costs. His reasons for this were that he
could not trust himself to present the ideas and work
that Zapf had advanced because of his apprehension
about whether he could present them in sufficient
detail and answer such questions about them as
might be asked. On the other hand, he did not feel
he could ignore these newer lines of work and pres-
ent only the material that he had done or that had
been started before Zapf’s arrival. He felt also that it
would not be beyond Zapf at all, in his blunt and
undiplomatic way—if he were at the meeting, that
is—to comment on his [Newbridge’s] presentation
and reveal Newbridge’s inadequacy. It also seemed
quite clear that it would not be easy to keep Zapf
from attending the meeting, even though he was not
on the administrative level of those invited.
Newbridge found an opportunity to speak to Goh
and raised the question. He told Goh that, with the
meetings coming up and with the interest in the
work and with Zapf’s contributions to the work, Zapf
would probably like to come to the meetings but
there was a question of how the others in the group
would feel if only Zapf were invited. Goh passed this
over very lightly by saying that he didn’t think the
group would fail to understand Zapf’s rather differ-
ent position and that Zapf certainly should be in-
vited. Newbridge immediately said he agreed: Zapf
should present the work because much of it was
work he had done, and this would be a nice way to
recognize Zapf’s contributions and to reward him,
because he was eager to be recognized as a produc-
tive member of the lab. Goh agreed, and so the mat-
ter was decided.
Zapf’s presentation was very successful and in
some ways dominated the meeting. He attracted the
interest and attention of many of those who had
come, and a long discussion followed his presenta-
tion. Later in the evening—with the entire laboratory
staff present—in the cocktail period before the dinner,
a little circle of people formed around Zapf. One of
them was Goh himself, and a lively discussion took
place concerning the application of Zapf’s theory. All
of this disturbed Newbridge, but his reaction and
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Case 13: TREETOP FOREST PRODUCTS
Steven L. McShane , University of Western Australia, and David Lebeter
Treetop Forest Products, Inc. is a sawmill operation
in Oregon that is owned by a major forest products
company but operates independently of headquar-
ters. It was built 30 years ago and completely up-
dated with new machinery five years ago. Treetop
receives raw logs from the area for cutting and plan-
ing into building-grade lumber, mostly 2-by-4 and
2-by-6 pieces of standard lengths. Higher-grade logs
leave Treetop’s sawmill department in finished form
and are sent directly to the packaging department.
The remaining 40 percent of sawmill output consists
of cuts from lower-grade logs, requiring further work
by the planing department.
Treetop has 1 general manager, 16 supervisors
and support staff, and 180 unionized employees.
The unionized employees are paid an hourly rate
specified in the collective agreement, whereas man-
agement and support staff are paid a monthly salary.
The mill is divided into six operating departments:
boom, sawmill, planer, packaging, shipping, and
maintenance. The sawmill, boom, and packaging
departments operate a morning shift starting at 6
a.m. and an afternoon shift starting at 2 p.m. Em-
ployees in these departments rotate shifts every two
weeks. The planer and shipping departments oper-
ate only morning shifts. Maintenance employees
work the night shift (starting at 10 p.m.).
Each department, except for packaging, has a su-
pervisor on every work shift. The planer supervisor
is responsible for the packaging department on the
morning shift, and the sawmill supervisor is respon-
sible for the packaging department on the afternoon
behavior were characteristic. He joined the circle,
praised Zapf to Goh and to others, and remarked on
the brilliance of the work.
Newbridge, without consulting anyone, began at
this time to take some interest in the possibility of a
job elsewhere. After a few weeks he found that a
new laboratory of considerable size was being orga-
nized in a nearby city and that the kind of training
he had would enable him to get a project-head job
equivalent to the one he had at the lab with slightly
more money.
He immediately accepted it and notified Goh by
letter, which he mailed on a Friday night to Goh’s
home. The letter was quite brief, and Goh was stunned.
The letter merely said that he had found a better posi-
tion, that he didn’t want to appear at the lab any more
for personal reasons, that he would be glad to come
back at a later time to assist if there was any mix-up
in the past work, that he felt sure Zapf could supply
any leadership that the group required, and that his
decision to leave so suddenly was based on personal
problems—he hinted at problems of health in his
family, his mother and father. All of this was fictitious,
of course. Goh took it at face value but still felt that this
was very strange behavior and quite unaccountable,
for he had always felt his relationship with Newbridge
had been warm and that Newbridge was satisfied and,
in fact, quite happy and productive.
Goh was considerably disturbed, because he had
already decided to place Zapf in charge of another
project that was going to be set up very soon. He had
been wondering how to explain this to Newbridge,
in view of the obvious help Newbridge was getting
from Zapf and the high regard in which he held him.
Goh had, indeed, considered the possibility that
Newbridge could add to his staff another person with
the kind of background and training that had been
unique in Zapf and had proved so valuable.
Goh did not make any attempt to meet New-
bridge. In a way, he felt aggrieved about the whole
thing. Zapf, too, was surprised at the suddenness of
Newbridge’s departure. When Goh asked Zapf
whether he preferred to stay with the photon group
instead of heading the new project for the Air Force,
Zapf chose the Air Force project and went on to that
job the following week. The photon lab was hard
hit. The leadership of the lab was given to Link with
the understanding that this would be temporary until
someone could come in to take over.
Source: Adaptation of Bob Knowlton case written by Alex Baveals,
revised in 2000 by William Starbuck. Reprinted with permission
of William Starbuck.
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501
shift. However, the packaging operation is housed in
a separate building from the other departments, so
supervisors seldom visit the packaging department.
This is particularly true for the afternoon shift be-
cause the sawmill supervisor is the farthest distance
from the packaging building.
Packaging Quality
Ninety percent of Treetop’s product is sold on the
open market through Westboard Co., a large market-
ing agency. Westboard represents all forest products
mills owned by Treetop’s parent company, as well as
several other clients in the region. The market for
building-grade lumber is very price-competitive
because there are numerous mills selling a relatively
undifferentiated product. However, some differen-
tiation does occur in product packaging and pre-
sentation. Buyers will look closely at the packaging
when deciding whether to buy from Treetop or an-
other mill.
To encourage its clients to package their products
better, Westboard sponsors a monthly package qual-
ity award. The marketing agency samples and rates
its clients’ packages daily, and the sawmill with the
highest score at the end of the month is awarded a
plaque. Package quality is a combination of how the
lumber is piled (e.g., defects turned in), where the
bands and dunnage are placed, how neatly the sten-
cil and seal are applied, the stencil’s accuracy, and
how neatly and tightly the plastic wrap is attached.
Treetop Forest Products won Westboard’s pack-
age quality award several times over the past five
years and received high ratings in the months that it
didn’t win. However, the mill’s ratings have started
to decline over the past year or two, and several cli-
ents have complained about the appearance of the
finished product. A few large customers switched to
competitors’ lumber, saying that the decision was
based on the substandard appearance of Treetop’s
packaging when it arrived in their lumberyard.
Bottleneck in Packaging
The planing and sawmilling departments have sig-
nificantly increased productivity over the past cou-
ple of years. The sawmill operation recently set a
new productivity record on a single day. The planer
operation has increased productivity to the point
where last year it reduced operations to just one
(rather than two) shift per day. These productivity
improvements are due to better operator training,
fewer machine breakdowns, and better selection of
raw logs. (Sawmill cuts from high-quality logs usu-
ally do not require planing work.)
Productivity levels in the boom, shipping, and
maintenance departments have remained constant.
However, the packaging department has recorded
decreasing productivity over the past couple of
years, with the result that a large backlog of fin-
ished product is typically stockpiled outside the
packaging building. The morning shift of the pack-
aging department is unable to keep up with the
combined production of the sawmill and planer de-
partments, so the unpackaged output is left for the
afternoon shift. Unfortunately, the afternoon shift
packages even less product than the morning shift,
so the backlog continues to build. The backlog adds
to Treetop’s inventory costs and increases the risk
of damaged stock.
Treetop has added Saturday overtime shifts as
well as extra hours before and after the regular shifts
for the packaging department employees to process
this backlog. Last month, the packaging department
employed 10 percent of the workforce but accounted
for 85 percent of the overtime. This is frustrating to
Treetop’s management because time-and-motion
studies recently confirmed that the packaging de-
partment is capable of processing all of the daily
sawmill and planer production without overtime.
Moreover, with employees earning one and a half or
two times their regular pay on overtime, Treetop’s
cost competitiveness suffers.
Employees and supervisors at Treetop are aware
that people in the packaging department tend to ex-
tend lunch by 10 minutes and coffee breaks by 5 min-
utes. They also typically leave work a few minutes
before the end of the shift. This abuse has wors-
ened recently, particularly on the afternoon shift.
Employees who are temporarily assigned to the
packaging department also seem to participate in
this time-loss pattern after a few days. Although
they are punctual and productive in other depart-
ments, these temporary employees soon adopt the
packaging crew’s informal schedule when assigned
to that department.
Copyright © 1995 Steven L. McShane and David Lebeter. This
case is based on actual events, but names and some characteristics
have been changed to maintain anonymity.
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video cases
VIDEO CASES FOR PART ONE
WAL-MART’S PUBLIC IMAGE CAMPAIGN
After years of criticism from various groups, Wal-
Mart is paying more attention to its stakeholders.
“We’ve talked to environmentalists; we’ve talked
to NGOs; we’ve talked to people in neighbor-
hoods. We’ve really reached out to say: What
should we be doing differently?” says Mona Williams,
Wal-Mart’s VP of corporate communications. In
Aurora, Colorado, the world’s largest retailer has
introduced numerous environmental initiatives,
including solar and wind energy and recycled
tires. Wal-Mart also claims that it has removed
managers who acted unethically due to pressures
to reduce costs. “We are light-years ahead of
where we were even two or three years ago,” says
Williams. This PBS program details some of the ini-
tiatives Wal-Mart has developed to change its rela-
tionship with stakeholders. We also hear from
critics who explain why Wal-Mart’s recent public
image campaign doesn’t correct the company’s
underlying problems.
Discussion Questions
1. Which stakeholders does Wal-Mart seem to be
serving better now than in the past? Why does
this shift make a difference to Wal-Mart?
2. Are the ongoing criticisms about Wal-Mart justi-
fied? Is it possible to satisfy stakeholders more
fully than Wal-Mart is currently attempting to do?
GOOD BUSINESS DEEDS
You might not expect to see British American
Tobacco, McDonald’s, and Microsoft at a meeting on
corporate social responsibility, but in their own way
these firms are taking steps to become better employ-
ers and citizens in the community. This video pro-
gram describes how these and other firms are
embracing values and corporate social responsibility. It
particularly highlights a few firms that serve as role
models in this regard. One of these is Greyston Bakery,
a multimillion-dollar gourmet operation that takes
people who need help and turns them into contribut-
ing members of the organization and society. Another
is Eileen Fisher Company, which promotes good la-
bor practices both at home and overseas and helps
customers meet their needs. At each firm, the compa-
ny’s values are aligned more closely with employee
values than is the case at a typical organization.
Discussion Questions
1. Employees at Greyston Bakery, Eileen Fisher
Company, Feed the Children, Green@Work,
and other organizations described in this video
program seem to have a strong congruence of
their personal values with the organization’s
values. What are the apparent benefits of this
value congruence?
2. Discuss the implications of corporate social respon-
sibility in terms of organizational effectiveness.
502
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VIDEO CASES FOR PART TWO
JOHNSON & JOHNSON: (A) CREATING A
GLOBAL LEARNING ORGANIZATION: THE
CREDO; (B) MANAGEMENT FUNDAMENTALS
TRAINING AT JOHNSON & JOHNSON
Johnson & Johnson ( J&J) is a family-oriented health
care and personal products company with about 330
operating units and more than 150,000 employees
around the world. The company is well known for
“the Credo,” a set of value statements introduced in
1938 to help J&J’s executives and employees make
better decisions. The Credo helps J&J staff to con-
tinuously be aware of and serve the needs of its core
stakeholders. It also serves as the glue that holds the
company’s geographically and industrially diverse
operating units together. This program introduces
Johnson & Johnson’s Credo and shows how the
company instills the Credo values in its managers.
Discussion Questions
1. Why does Johnson & Johnson place so much
importance on the Credo?
2. How does Johnson & Johnson ensure that man-
agers understand and apply the Credo in their
daily decisions and actions?
PIKE PLACE FISH MARKET
Fifteen years ago, Pike Place Fish Market in Seattle
had unhappy employees and was in financial trouble.
Rather than close shop, owner John Yokoyama
sought help from consultant Jim Bergquist to im-
prove his leadership and energize the workforce.
Rather than rule as a tyrant, Yokoyama learned how
to actively involve employees in the business. Soon,
employees felt more empowered and gained more
enjoyment from their work. They also began to ac-
tively have fun at work, doing things such as setting
goals as a game, throwing fish to each other as sport,
and pretending they are “world famous.” Today,
thanks to these and other strategies described in this
video case, Pike Place is world famous. The little
shop has become a tourist attraction, and customers
from California to New York call in orders.
Discussion Questions
1. On the basis of the model of emotions and atti-
tudes in Chapter 4, explain how the changes at
Pike Place Fish Market improved job satisfac-
tion and reduced turnover. How did these atti-
tude changes affect customer satisfaction?
2. Goal setting is discussed as an important activity
at Pike Place. Evaluate the effectiveness of the
firm’s goal setting process in the context of the
characteristics of effective goals described in
Chapter 5 of this textbook.
3. How is coaching applied at Pike Place, and
how does this coaching influence employee
performance?
STRESS IN JAPAN
Stress from overwork has become an epidemic in
Japan. This video program consists of two seg-
ments that illustrate the degree to which some
Japanese employees are overworked, as well as
the consequences of their overwork. The first seg-
ment follows a typical day of a Japanese manager,
from his two-hour morning commute to his late-
night working hours. The program also shows that
he is under constant pressure to improve effi-
ciency and experiences a heavy burden and
responsibility to do better. The second segment
describes how karoshi —death from overwork—took
the life of 23-year-old Yoshika. It reconstructs
Yoshika’s work life as a graphic artist up to the
time when she died suddenly on the job due to a
brain hemorrhage.
Discussion Questions
1. Identify the various sources of stress (i.e., stress-
ors) that the Japanese manager in the first seg-
ment likely experiences each day. Does he do
anything to try to manage his stress?
2. What conditions led up to the karoshi death of
Yoshika? Are these conditions commonly found
in the country where you live?
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CLOCKLESS OFFICE: BEST BUY’S ROWE
PROGRAM
Kelly McDevitt has a busy job as online promotions
manager for Best Buy. But McDevitt doesn’t have to
worry about punching a time clock because of the
retailer’s results-only work environment (ROWE).
“I don’t count my hours—I don’t have hours,” she
says. McDevitt attends office meetings, but even at-
tending those events is optional. “It’s not how many
hours somebody puts in face time at the office; it’s
are they getting their work done” explains Calli
Ressler. This BusinessWeek TV program describes the
ROWE initiative, explains why it was introduced,
and outlines its apparent benefits.
Discussion Questions
1. Why would productivity jump at Best Buy un-
der ROWE, compared to the traditional em-
ployment arrangement where employees are
expected to be at the office?
2. What effect would the ROWE program have on
workplace stress? Explain your answer.
3. What are the limitations and risks of the ROWE
program? Which jobs and employees would be
poorly suited to this work arrangement?
VIDEO CASES FOR PART THREE
TEAM WORK: TEAM ACTIVITIES FOR
CO-WORKERS
Companies have more ways than ever before to help
employees with team building. Cooking classes, hula
hoops, human-size Chinese checkers, and horse rid-
ing are just a few of the activities that help employ-
ees work more effectively together. This NBC program
reveals three team-building activities— rodeos, field
games, and hula hoops. We also hear the opinions of
participants in these activities.
Discussion Questions
1. This program shows employees in three team-
building activities: rodeo, field games, and
hula hoops. Which of these three appeals to
you the most as a team-building activity? Ex-
plain why.
2. What individual and team-building skills do
participants believe will be improved by the
hula hoops?
3. To what extent would each of these activities
influence team dynamics back on the job?
What conditions might further improve the
transfer of team dynamics from these activities
to the workplace?
GENERATION NEXT CHANGES THE FACE
OF THE WORKPLACE
Jo Muse is baffled. The CEO of Muse Communica-
tions received requests from younger staff for vaca-
tion time after just two months on the job. “Why do
you think that you can work places for a couple
months and then get a vacation?” Muse asks his
Generation-X and -Y staff. “And unpaid! You don’t
care if you get paid. What’s up with that?” Baby-
boomer managers such as Jo Muse face the chal-
lenge of figuring out the needs and expectations of
young employees. The differences—which range
from subtle to stark—also produce conflict in the
workplace. “There is a clash,” suggests 24-year-old
X-ray technician Doan Phan. Phan points to differ-
ences in technology skills as one source of conflict.
Another is the urgency to change the workplace.
“We want to bring in new ideas. We want to change
things,” Phan says. This PBS program peeks into
several organizations to see how younger- and
older-generation employees are getting along. The
program examines how Gen-X and -Y employees
view their employment differently than do baby
boomers. It also describes the actions of companies
that are addressing these conflicts and changing
expectations.
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Discussion Questions
1. In this program, in what ways are Generation-
X and -Y employees depicted differently from
baby-boomer employees? Are the differences
a reasonably accurate representation of gen-
erational differences in the workplace today?
2. What steps have Deloitte and other companies
taken to adjust to the expectations of younger
employees and to reduce potential generational
conflict in the workplace?
CELEBRITY CEO CHARISMA
Does the cult of CEO charisma really make a dif-
ference to company profits? This NBC program
takes a brief look at chief executives who acted
like superheroes but failed to deliver, as well as a
few low-key executives who really made a differ-
ence. The program hears from Harvard Business
School professor Rakesh Khurana, author of
Searching for a Corporate Savior, a book warning
that charismatic leaders are not necessarily effec-
tive leaders.
Discussion Questions
1. Why do company boards tend to hire charis-
matic CEOs?
2. What can corporate boards do to minimize the
charisma effect when filling chief executive offi-
cer and other senior executive positions?
SOUTHWEST CEO: GET TO KNOW GARY KELLY
Southwest Airlines remains one of the most success-
ful airlines in the United States. Its secret to success?
Treat customers as kings and queens, and treat em-
ployees even better. This video program shows how
Southwest Airlines CEO Gary Kelly keeps in touch
with day-to-day activities at the airline. It also de-
scribes some of the challenges that Kelly and his ex-
ecutive team have ahead of them.
Discussion Questions
1. Discuss the transactional and transformational
leadership of Gary Kelly.
2. How does Gary Kelly’s leadership reinforce
Southwest Airlines’ organizational culture?
VIDEO CASE FOR PART FOUR
LINDBLAD EXPEDITIONS: UNDER THE
SURFACE
Traveling around the world for six months as a
crew member of an expedition ship is a dream job
in many respects. But as this recruitment video
from Lindblad Expeditions describes, working on
the National Geographic Sea Bird and other cruise
ships requires a dedicated crew, and that means a
real working day. This video program provides
viewers with a realistic picture of what it is like
to work on board one of these vessels. Crew mem-
bers offer their candid thoughts about why they
joined and what they experienced, including
the most exciting and most arduous aspects of
the job.
Discussion Questions
1. In your opinion, is this program effective in
providing a realistic job preview of working life
on board an expedition cruise ship? Why or
why not?
2. Discuss the effectiveness of this video program
in terms of the learning and adjustment of new
employees. Are the risks of discouraging some
job applicants offset by the positive effects on
those who apply and are hired?
3. If you were responsible for the hiring and induc-
tion of new employees at Lindblad Expeditions
or a similar organization, what other means
would you apply to ensure that employees expe-
rience an effective socialization process?
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506
RICARDO SEMLER: BRAZIL’S CARING
CAPITALIST
This video program gives the viewer a rare glimpse
inside the fabled operations of the Brazilian con-
glomerate, SEMCO SA. Two decades ago, Ricardo
Semler transformed his father’s rigidly hierarchical
shipbuilding supplies business into an organization
that embraces egalitarianism and worker auton-
omy. Today, almost all of SEMCO’s 3,000 employ-
ees set their own work schedules. They are
encouraged to move around to different worksta-
tions, in part so that supervisors have difficulty
knowing who is at work and who has gone home.
Employees are also key decision makers, choosing
everything from the office furniture to how much
they should get paid. But SEMCO is not a laid-
back country club. Employees are rewarded for
how well their work unit performs, so co-workers
will not tolerate those who fail to pull their weight.
Also, although employees can set their own salaries,
those who ask for too much money find themselves
without a team willing to keep them on the payroll.
This video program also describes Ricardo Sem-
ler’s recent initiatives in education and ecotourism,
both of which also give employees authority and
responsibility.
Discussion Questions
1. Describe SEMCO’s organizational culture.
What artifacts are mentioned in this program
that represent and reinforce this culture? What
strategies or practices does SEMCO apply to
specifically support its culture?
2. SEMCO is apparently a very successful com-
pany. Which of the four perspectives of organi-
zational effectiveness described in Chapter 1
best explain this organization’s success?
3. SEMCO SA is featured in Chapter 12 of this
book as an example of shared leadership. What
information in this video program indicated that
SEMCO encourages shared leadership?
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Theory Building
People need to make sense of their world, so they form
theories about the way the world operates. A theory
is a general set of propositions that describes interrela-
tionships among several concepts. We form theories
for the purpose of predicting and explaining the world
around us. 1 What does a good theory look like? First,
it should be stated as clearly and simply as possible so
that the concepts can be measured and there is no am-
biguity regarding the theory’s propositions. Second,
the elements of the theory must be logically consistent
with each other, because we cannot test anything that
doesn’t make sense. Third, a good theory provides
value to society; it helps people understand their world
better than they would without the theory. 2
Theory building is a continuous process that typi-
cally includes the inductive and deductive stages
shown in Exhibit A.1 . 3 The inductive stage draws on
personal experience to form a preliminary theory,
whereas the deductive stage uses the scientific
method to test the theory.
The inductive stage of theory building involves
observing the world around us, identifying a pattern
of relationships, and then forming a theory from
these personal observations. For example, you might
casually notice that new employees want their super-
visor to give direction, whereas this leadership style
irritates long-service employees. From these obser-
vations, you form a theory about the effectiveness of
directive leadership. (See Chapter 12 for a discus-
sion of this leadership style.)
Positivism versus Interpretivism Research
requires an interpretation of reality, and researchers
tend to perceive reality in one of two ways. A
common view, called positivism , is that reality
exists independent of people. It is “out there” to be
discovered and tested. Positivism is the foundation
for most quantitative research (statistical analysis). It
assumes that we can measure variables and that
those variables have fixed relationships with other
variables. For example, the positivist perspective
says that we could study whether a supportive style
of leadership reduces stress. If we find evidence that
it does, then someone else studying leadership and
stress would “discover” the same relationship.
Interpretivism takes a different view of reality. It
suggests that reality comes from shared meaning
Theory Building and Systematic
Research Methods
appendix A
Exhibit A.1 Theory Building and Theory Testing
Inductive
Deductive
Personal
observation
Forming
hypothesis
Testing
hypothesis
Defining and
measuring
constructs
Preliminary
theory
507
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508 Appendix A
among people in a particular environment. For ex-
ample, supportive leadership is a personal interpre-
tation of reality, not something that can be measured
across time and people. Interpretivists rely mainly
on qualitative data, such as observation and nondi-
rective interviews. They particularly listen to the
language people use to understand the common
meaning that people have toward various events or
phenomena. For example, they might argue that you
need to experience and observe supportive leader-
ship to effectively study it. Moreover, you can’t
really predict relationships because the specific situ-
ation shapes reality. 4
Most OB scholars identify themselves somewhere
between the extreme views of positivism and inter-
pretivism. Many believe that inductive research
should begin with an interpretivist angle. We should
consider a new topic with an open mind and search
for the shared meaning among people in the situa-
tion being studied. In other words, researchers
should let the participants define reality rather than
let the researcher’s preconceived notions shape that
reality. This process involves gathering qualitative
information and letting this information shape the
theory. 5 After the theory emerges, researchers shift
to the positivist perspective by quantitatively testing
relationships in that theory.
Theory Testing: The Deductive Process Once
a theory has been formed, we shift into the deduc-
tive stage of theory building. This process includes
forming hypotheses, defining and measuring con-
structs, and testing hypotheses (see Exhibit A.1).
Hypotheses make empirically testable declarations
that certain variables and their corresponding mea-
sures are related in a specific way proposed by the
theory. For instance, to find support for the direc-
tive leadership theory described earlier, we need to
form and then test a specific hypothesis from that
theory. One such hypothesis might be “New em-
ployees are more satisfied with supervisors who ex-
hibit a directive rather than nondirective leadership
style.” Hypotheses are indispensable tools of scien-
tific research, because they provide the vital link
between the theory and empirical verification.
Defining and Measuring Constructs Hypotheses are
testable only if we can define and then form measur-
able indicators of the concepts stated in the hypothe-
ses. Consider the hypothesis in the previous paragraph
about new employees and directive leadership. To
test this hypothesis, we first need to define the con-
cepts, such as new employees, directive leadership, and
supervisor. These are known as constructs , because
they are abstract ideas constructed by the researcher
that can be linked to observable information. Organi-
zational behavior researchers developed the construct
called directive leadership to help them understand the
different effects that leaders have on followers. We
can’t directly see, taste, or smell directive leadership;
instead, we rely on indirect indicators of its existence
by, for example, observing someone giving direc-
tions, maintaining clear performance standards, and
ensuring that procedures and practices are followed.
As you can see, defining constructs well is very
important because these definitions become the
foundation for finding or developing acceptable
measures of those constructs. We can’t measure di-
rective leadership if we have only a vague idea about
what this concept means. The better the construct is
defined, the better our chances of finding or devel-
oping a good measure of that construct. However,
even with a good definition, constructs can be diffi-
cult to measure because the empirical representation
must capture several elements in the definition. A
measure of directive leadership must be able to iden-
tify not only people who give directions but also
those who maintain performance standards and en-
sure that procedures are followed.
Testing Hypotheses The third step in the deductive
process is to collect data for the empirical measures
of the variables. Following our directive leadership
example, we might conduct a formal survey in which
new employees indicate the behavior of their super-
visors and their attitudes toward their supervisors.
Alternatively, we might design an experiment in
which people work with someone who applies either
a directive or a nondirective leadership style. When
the data have been collected, we can use various
procedures to statistically test our hypotheses.
A major concern in theory building is that some
researchers might inadvertently find support for
their theory simply because they use the same infor-
mation used to form the theory during the inductive
stage. Consequently, the deductive stage must collect
new data that are completely independent of the data
used during the inductive stage. For instance, you
might decide to test your theory of directive leader-
ship by studying employees in another organization.
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Appendix A 509
Moreover, the inductive process may have relied
mainly on personal observation, whereas the deduc-
tive process might use survey questionnaires. By
studying different samples and using different mea-
surement tools, we minimize the risk of conducting
circular research.
Using the Scientific Method Earlier, we said that
the deductive stage of theory building follows the
scientific method. The scientific method is a system-
atic, controlled, empirical, and critical investigation of
hypothetical propositions about the presumed rela-
tionships among natural phenomena. 6 There are
several elements to this definition, so let’s look at each
one. First, scientific research is systematic and controlled
because researchers want to rule out all but one
explanation for a set of interrelated events. To rule out
alternative explanations, we need to control them in
some way, such as by keeping them constant or
removing them entirely from the environment.
Second, we say that scientific research is empirical
because researchers need to use objective reality—or
as close as we can get to it—to test a theory. They mea-
sure observable elements of the environment, such as
what a person says or does, rather than relying on
their own subjective opinion to draw conclusions.
Moreover, scientific research analyzes these data us-
ing acceptable principles of mathematics and logic.
Third, scientific research involves critical investiga-
tion. This means that the study’s hypotheses, data,
methods, and results are openly described so that
other experts in the field can properly evaluate the
research. It also means that scholars are encouraged
to critique and build on previous research. The sci-
entific method encourages the refinement and even-
tually the replacement of a particular theory with
one that better suits our understanding of the world.
Grounded Theory: An Alternative Approach The
scientific method dominates the quantitative approach
to systematic research, but another approach, called
grounded theory , dominates research using qualita-
tive methods. 7 Grounded theory is a process of devel-
oping knowledge through the constant interplay of
data collection, analysis, and theory development. It
relies mainly on qualitative methods to form catego-
ries and variables, analyze relationships among these
concepts, and form a model based on the observa-
tions and analysis. Grounded theory combines the
inductive stages of theory development by cycling
back and forth between data collection and analysis to
converge on a robust explanatory model. This ongo-
ing reciprocal process results in theory that is grounded
in the data (thus, the name “grounded theory”).
Like the scientific method, grounded theory is a
systematic and rigorous process of data collection and
analysis. It requires specific steps and documentation,
and it adopts a positivist view by assuming that the
results are generalizable to other settings. However,
grounded theory also takes an interpretivist view by
building categories and variables from the perceived
realities of the subjects rather than from an assumed
universal truth. 8 It also recognizes that personal biases
are not easily removed from the research process.
Selected Issues in Organizational Behavior
Research
There are many issues to consider in theory build-
ing, particularly when we use the deductive process
to test hypotheses. Some of the more important is-
sues are sampling, causation, and ethical practices in
organizational research.
Sampling in Organizational Research When
finding out why things happen in organizations, we
typically gather information from a few sources and
then draw conclusions about the larger population.
If we survey several employees and determine that
older employees are more loyal to their company,
then we would like to generalize this statement to all
older employees in our population, not just those
whom we surveyed. Scientific inquiry generally re-
quires that researchers engage in representative
sampling , that is, sampling a population in such a
way that we can extrapolate the results of the sample
to the larger population.
One factor that influences representativeness is
whether the sample is selected in an unbiased way
from the larger population. Let’s suppose that you
want to study organizational commitment among
employees in your organization. A casual procedure
might result in sampling too few employees from the
head office and too many located elsewhere in the
country. If head office employees actually have
higher loyalty than employees located elsewhere,
the biased sampling would cause the results to un-
derestimate the true level of loyalty among employ-
ees in the company. If you repeat the process again
next year but somehow overweight employees from
the head office, the results might wrongly suggest
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510 Appendix A
that employees have increased their organizational
commitment over the past year. In reality, the only
change may be the direction of sampling bias.
How do we minimize sampling bias? The answer
is to randomly select the sample. A randomly drawn
sample gives each member of the population an
equal probability of being chosen, so there is less
likelihood that a subgroup within that population
will dominate the study’s results.
The same principle applies to random assignment
of subjects to groups in experimental designs. If we
want to test the effects of a team development train-
ing program, we need to randomly place some em-
ployees in the training group and randomly place
others in a group that does not receive training.
Without this random selection, each group might
have different types of employees, so we wouldn’t
know whether the training explains the differences
between the two groups. Moreover, if employees re-
spond differently to the training program, we
couldn’t be sure that the training program results are
representative of the larger population. Of course,
random sampling does not necessarily produce a
perfectly representative sample, but we do know that
it is the best approach to ensure unbiased selection.
The other factor that influences representativeness
is sample size. Whenever we select a portion of the
population, there will be some error in our estimate of
the population values. The larger the sample, the less
error will occur in our estimate. Let’s suppose that you
want to find out how employees in a 500-person firm
feel about smoking in the workplace. If you asked 400
of those employees, the information would provide a
very good estimate of how the entire workforce in that
organization feels. If you survey only 100 employees,
the estimate might deviate more from the true popula-
tion. If you ask only 10 people, the estimate could be
quite different from what all 500 employees feel.
Notice that sample size goes hand in hand with
random selection. You must have a sufficiently large
sample size for the principle of randomization to
work effectively. In our example of attitudes toward
smoking, we would do a poor job of random selec-
tion if our sample consisted of only 10 employees
from the 500-person organization. The reason is that
these 10 people probably wouldn’t capture the di-
versity of employees throughout the organization. In
fact, the more diverse the population, the larger the
sample size should be to provide adequate represen-
tation through random selection.
Causation in Organizational Research Theories
present notions about relationships among constructs.
Often, these propositions suggest a causal relation-
ship, namely, that one variable has an effect on
another variable. When discussing causation, we refer
to variables as being independent or dependent.
Independent variables are the presumed causes of
dependent variables, which are the presumed effects. In
our earlier example of directive leadership, the main
independent variable (there might be others) would
be the supervisor’s directive or nondirective leader-
ship style because we presume that it causes the
dependent variable (satisfaction with supervision).
In laboratory experiments (described later), the
independent variable is always manipulated by the
experimenter. In our research on directive leader-
ship, we might have subjects (new employees) work
with supervisors who exhibit directive or nondirec-
tive leadership behaviors. If subjects are more satis-
fied under the directive leaders, we would be able to
infer an association between the independent and
dependent variables.
Researchers must satisfy three conditions to pro-
vide sufficient evidence of causality between two vari-
ables. 9 The first condition of causality is that the
variables are empirically associated with each other.
An association exists whenever one measure of a vari-
able changes systematically with a measure of another
variable. This condition of causality is the easiest to
satisfy because there are several well-known statistical
measures of association. A research study might find,
for instance, that heterogeneous groups (in which
members come from diverse backgrounds) produce
more creative solutions to problems. This might be
apparent because the measure of creativity (such as
number of creative solutions produced within a fixed
time) is higher for teams that have a high score on the
measure of group heterogeneity. They are statistically
associated or correlated with each other.
The second condition of causality is that the inde-
pendent variable precedes the dependent variable in
time. Sometimes, this condition is satisfied through
simple logic. In our group heterogeneity example,
it doesn’t make sense to say that the number of
creative solutions caused the group’s heterogeneity,
because the group’s heterogeneity existed before the
group produced the creative solutions. In other situ-
ations, however, the temporal relationship among
variables is less clear. One example is the ongoing
debate about job satisfaction and organizational
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Appendix A 511
commitment. Do companies develop more loyal
employees by increasing their job satisfaction, or do
changes in organizational loyalty cause changes in
job satisfaction? Simple logic does not answer these
questions; researchers must use sophisticated longi-
tudinal studies to build up evidence of a temporal
relationship between these two variables.
The third requirement for evidence of a causal
relationship is that the statistical association between
two variables cannot be explained by a third variable.
There are many associations that we quickly dismiss
as being causally related. For example, there is a
statistical association between the number of storks in
an area and the birthrate in that area. We know that
storks don’t bring babies, so something else must
cause the association between these two variables.
The real explanation is that both storks and birthrates
have a higher incidence in rural areas.
In other studies, the third-variable effect is less
apparent. Many years ago, before polio vaccines
were available, a study in the United States reported
a surprisingly strong association between consump-
tion of a certain soft drink and the incidence of polio.
Was polio caused by drinking this pop, or did people
with polio have a unusual craving for this beverage?
Neither. Both polio and consumption of the pop
drink were caused by a third variable: climate. There
was a higher incidence of polio in the summer
months and in warmer climates, and people drink
more liquids in these climates. 10 As you can see from
this example, researchers have a difficult time
supporting causal inferences because third-variable
effects are sometimes difficult to detect.
Ethics in Organizational Research Organizational
behavior researchers need to abide by the ethical
standards of the society in which the research is con-
ducted. One of the most important ethical consider-
ations is the individual subject’s freedom to participate
in the study. For example, it is inappropriate to force
employees to fill out a questionnaire or attend an ex-
perimental intervention for research purposes only.
Moreover, researchers have an obligation to tell po-
tential subjects about any possible risks inherent in
the study so that participants can make an informed
choice about whether to be involved.
Finally, researchers must be careful to protect the
privacy of those who participate in the study. This
usually includes letting people know when they are
being studied as well as guaranteeing that their
individual information will remain confidential (un-
less publication of identities is granted). Researchers
maintain anonymity through careful security of data.
The research results usually aggregate data in num-
bers large enough that they do not reveal the opin-
ions or characteristics of any specific individual. For
example, we would report the average absenteeism
of employees in a department rather than state the
absence rate of each person. When researchers are
sharing data with other researchers, it is usually nec-
essary to specially code each case so that individual
identities are not known.
Research Design Strategies
So far, we have described how to build a theory, in-
cluding the specific elements of empirically testing
the theory within the standards of scientific inquiry.
But what are the different ways to design a research
study so that we get the data necessary to achieve
our research objectives? There are many strategies,
but they mainly fall under three headings: labora-
tory experiments, field surveys, and observational
research.
Laboratory Experiments A laboratory experi-
ment is any research study in which independent
variables and variables outside the researcher’s main
focus of inquiry can be controlled to some extent.
Laboratory experiments are usually located outside
the everyday work environment, such as in a class-
room, simulation lab, or any other artificial setting in
which the researcher can manipulate the environ-
ment. Organizational behavior researchers sometimes
conduct experiments in the workplace (called field
experiments ) in which the independent variable is ma-
nipulated. However, the researcher has less control
over the effects of extraneous factors in field experi-
ments than he or she has in laboratory situations.
Advantages of Laboratory Experiments There are
many advantages of laboratory experiments. By
definition, this research method offers a high degree
of control over extraneous variables that would
otherwise confound the relationships being studied.
Suppose we wanted to test the effects of directive
leadership on the satisfaction of new employees.
One concern might be that employees are influ-
enced by how much leadership is provided, not just
the type of leadership style. An experimental design
would allow us to control how often the supervisor
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512 Appendix A
exhibited this style so that this extraneous variable
does not confound the results.
A second advantage of lab studies is that the inde-
pendent and dependent variables can be developed
more precisely than is possible in a field setting. For
example, the researcher can ensure that supervisors
in a lab study apply specific directive or nondirective
behaviors, whereas real-life supervisors would use a
more complex mixture of leadership behaviors. By
using more precise measures, we are more certain
that we are measuring the intended construct. Thus, if
new employees are more satisfied with supervisors in
the directive leadership condition, we are more confi-
dent that the independent variable was directive lead-
ership rather than some other leadership style.
A third benefit of laboratory experiments is that the
independent variable can be distributed more evenly
among participants. In our directive leadership study,
we can ensure that approximately half of the subjects
have a directive supervisor and the other half have a
nondirective supervisor. In natural settings, we might
have trouble finding people who have worked with a
nondirective leader, and consequently we might have
difficulty determining the effects of this condition.
Disadvantages of Laboratory Experiments With these
powerful advantages, you might wonder why labo-
ratory experiments are the least appreciated form of
organizational behavior research. 11 One obvious
limitation of this research method is that it lacks real-
ism, and thus the results might be different in the
real world. One argument is that laboratory experi-
ment subjects are less involved than their counter-
parts in an actual work situation. This is sometimes
true, although many lab studies have highly moti-
vated participants. Another criticism is that the ex-
traneous variables controlled in the lab setting might
produce a different effect of the independent vari-
able on the dependent variables. This might also be
true, but remember that the experimental design
controls variables in accordance with the theory and
its hypotheses. Consequently, this concern is really a
critique of the theory, not the lab study.
Finally, there is the well-known problem that par-
ticipants are aware they are being studied and this
causes them to act differently than they normally
would. Some participants try to figure out how the
researcher wants them to behave and then deliber-
ately try to act that way. Other participants try to
upset the experiment by doing just the opposite of
what they believe the researcher expects. Still others
might act unnaturally simply because they know
they are being observed. Fortunately, experimenters
are well aware of these potential problems and are
usually (although not always) successful at disguising
the study’s true intent.
Field Surveys Field surveys collect and analyze
information in a natural environment—an office, a
factory, or some other existing location. The re-
searcher takes a snapshot of reality and tries to de-
termine whether elements of that situation (including
the attitudes and behaviors of people in that situa-
tion) are associated with each other as hypothesized.
Everyone does some sort of field research. You might
think that people from some states are better drivers
than others, so you “test” your theory by looking at
the way people with out-of-state license plates drive.
Although your methods of data collection might not
satisfy scientific standards, this is a form of field re-
search because it takes information from a naturally
occurring situation.
Advantages and Disadvantages of Field Surveys One
advantage of field surveys is that the variables often
have a more powerful effect than they would in a
laboratory experiment. Consider the effect of peer
pressure on the behavior of members within the
team. In a natural environment, team members
would form very strong cohesive bonds over time,
whereas a researcher would have difficulty replicat-
ing this level of cohesiveness and corresponding
peer pressure in a lab setting.
Another advantage of field surveys is that the re-
searcher can study many variables simultaneously,
thereby permitting a fuller test of more complex theo-
ries. Ironically, this is also a disadvantage of field sur-
veys because it is difficult for the researcher to contain
his or her scientific inquiry. There is a tendency to shift
from deductive hypothesis testing to more inductive
exploratory browsing through the data. If these two
activities become mixed together, the researcher can
lose sight of the strict covenants of scientific inquiry.
The main weakness with field surveys is that it is
very difficult to satisfy the conditions for causal con-
clusions. One reason is that the data are usually col-
lected at one point in time, so the researcher must rely
on logic to decide whether the independent variable
really preceded the dependent variable. Contrast this
with the lab study in which the researcher can usually
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Appendix A 513
be confident that the independent variable was ap-
plied before the dependent variable occurred. Increas-
ingly, organizational behavior studies use longitudinal
research to provide a better indicator of temporal rela-
tions among variables, but this is still not as precise as
the lab setting. Another reason why causal analysis is
difficult in field surveys is that extraneous variables are
not controlled as they are in lab studies. Without this
control, there is a higher chance that a third variable
might explain the relationship between the hypothe-
sized independent and dependent variables.
Observational Research In their study of brain-
storming and creativity, Robert Sutton and Andrew
Hargadon observed 24 brainstorming sessions at
IDEO, a product design firm in Palo Alto, California.
They also attended a dozen “Monday morning meet-
ings,” conducted 60 semistructured interviews with
IDEO executives and designers, held hundreds of in-
formal discussions with these people, and read through
several dozen magazine articles about the company. 12
Sutton’s and Hargadon’s use of observational re-
search and other qualitative methods was quite ap-
propriate for their research objective, which was to
reexamine the effectiveness of brainstorming beyond
the number of ideas generated. Observational re-
search generates a wealth of descriptive accounts
about the drama of human existence in organizations.
It is a useful vehicle for learning about the complex
dynamics of people and their activities, such as brain-
storming. (The results of Sutton and Hargadon’s study
are discussed in the decision-making chapter.)
Participant observation takes the observation
method one step further by having the observer take
part in the organization’s activities. This experience
gives the researcher a fuller understanding of the ac-
tivities, compared to just watching others participate
in those activities.
In spite of its intuitive appeal, observational
research has a number of weaknesses. The main prob-
lem is that the observer is subject to the perceptual
screening and organizing biases that we discuss in
Chapter 3 of this textbook. There is a tendency to
overlook the routine aspects of organizational life,
even though they may prove to be the most important
data for research purposes. Instead, observers tend to
focus on unusual information, such as activities that
deviate from what the observer expects. Because
observational research usually records only what the
observer notices, valuable information is often lost.
Another concern with the observation method is
that the researcher’s presence and involvement may
influence the people whom he or she is studying.
This can be a problem in short-term observations,
but in the long term people tend to return to their
usual behavior patterns. With ongoing observations,
such as Sutton and Hargadon’s study of brainstorm-
ing sessions at IDEO, employees eventually forget
that they are being studied.
Finally, observation is usually a qualitative pro-
cess, so it is more difficult to empirically test hypoth-
eses with the data. Instead, observational research
provides rich information for the inductive stages of
theory building. It helps us to form ideas about the
way things work in organizations. We begin to see
relationships that lay the foundation for new per-
spectives and theory. We must not confuse this in-
ductive process of theory building with the deductive
process of theory testing.
Notes
1 F.N. Kerlinger, Foundations of Behavioral Research
(New York: Holt, Rinehart & Winston, 1964), p. 11.
2 J.B. Miner, Theories of Organizational Behavior
(Hinsdale, IL: Dryden, 1980), pp. 7–9.
3 Ibid., pp. 6–7.
4 J. Mason, Qualitative Researching (London: Sage,
1996).
5 A. Strauss and J. Corbin, eds., Grounded Theory in
Practice (London: Sage, 1997); B.G. Glaser and A.
Strauss, The Discovery of Grounded Theory: Strategies for
Qualitative Research (Chicago: Aldine, 1967).
6 Kerlinger, Foundations of Behavioral Research , p. 13.
7 Strauss and Corbin, Grounded Theory in Practice ;
Glaser and Strauss, The Discovery of Grounded Theory .
8 W.A. Hall and P. Callery, “Enhancing the Rigor
of Grounded Theory: Incorporating Reflexivity and
Relationality,” Qualitative Health Research 11 (March
2001), pp. 257–272.
9 P. Lazarsfeld, Survey Design and Analysis (New
York: Free Press, 1955).
10 This example is cited in D.W. Organ and T.S.
Bateman, Organizational Behavior , 4th ed. (Home-
wood, IL: Irwin, 1991), p. 42.
11 Ibid., p. 45.
12 R.I. Sutton and A. Hargadon, “Brainstorming
Groups in Context: Effectiveness in a Product
Design Firm,” Administrative Science Quarterly 41
(1996), pp. 685–718.
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The following pages provide scoring keys for self-
assessments that are fully presented in this text-
book. These self-assessments, as well as the self-
assessments that are only summarized in this book,
can also be scored automatically at the student On-
line Learning Center.
Chapter 2
Scoring Key for “Are You Introverted or
Extroverted?”
Scoring Instructions: Use the table below to assign
numbers to each box you checked. For example, if
you checked “Moderately inaccurate” for statement 1
(“I feel comfortable around people”), you would as-
sign a “1” to that statement. After assigning numbers
for all 10 statements, add up the numbers to estimate
your extroversion-introversion personality.
characteristics of being quiet, shy, and cautious.
Extroverts get their energy from the outer world
(people and things around them), whereas introverts
get their energy from the internal world, such as per-
sonal reflection on concepts and ideas. Introverts are
more inclined to direct their interests to ideas rather
than to social events.
This is the short version of the IPIP Introversion-
Extroversion Scale, so it estimates overall introversion-
extroversion but not specific facets within the
personality dimension. Scores range from 0 to 40. Low
scores indicate introversion; high scores indicate ex-
troversion. The norms in the following table are esti-
mated from results of early adults (under 30 years old)
in Scotland and undergraduate psychology students in
the United States. However, introversion-extroversion
norms vary from one group to the next; the best norms
are likely based on the entire class you are attending
or on past students in this course.
Scoring Keys for
Self-Assessment Activities
appendix B
For statement items
1, 2, 6, 8, 9
Very accurate description of
me � 4
Moderately accurate � 3
Neither accurate nor
inaccurate � 2
Moderately inaccurate � 1
Very inaccurate description
of me � 0
For statement items
3, 4, 5, 7, 10
Very accurate description of
me � 0
Moderately accurate � 1
Neither accurate nor
inaccurate � 2
Moderately inaccurate � 3
Very inaccurate description
of me � 4
Interpreting Your Score: Extroversion characterizes
people who are outgoing, talkative, sociable, and asser-
tive. It includes several facets, such as friendliness,
gregariousness, assertiveness, activity level, excite-
ment seeking, and cheerfulness. The opposite of extro-
version is introversion, which refers to the personality
IPIP introversion-
extroversion Interpretation
35 to 40 High extroversion
28 to 34 Moderate extroversion
21 to 27 Between extroversion and
introversion
7 to 20 Moderate introversion
0 to 6 High introversion
Chapter 3
Scoring Key for “How Much Personal
Structure Do You Need?”
Scoring Instructions: Use the table below to assign
numbers to each box you checked. For example, if
514
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Appendix B 515
Interpreting Your Score: Some people need to “make
sense” of things around them more quickly or com-
pletely than do other people. This personal need for
perceptual structure relates to selective attention as
well as perceptual organization and interpretation. For
instance, people with a strong personal need for clo-
sure might form first impressions, fill in missing pieces,
and rely on stereotyping more quickly than people
who don’t mind incomplete perceptual situations.
This scale, called the personal need for structure
(PNS) scale, assesses the degree to which people are
motivated to structure their world in a simple and
unambiguous way. Scores range from 12 to 72, with
higher scores indicating a high personal need for
structure. PNS norms vary from one group to the
next. For instance, a study of Finnish nurses reported
a mean PNS score of 34, whereas a study of 236
male and 303 female undergraduate psychology stu-
dents in the United States had a mean score of 42.
The norms in the following table are based on scores
from these undergraduate students.
Chapter 4
Scoring Key for “Are You Committed to
Your School?”
Scoring Instructions: Use the table below to assign
numbers to each box you checked. Insert the num-
ber for each statement on the appropriate line be-
low the table. For example, if you checked
“Moderately disagree” for statement 1 (“I would
be very happy . . .”), you would write a “2” on the
line with “(1)” underneath it. After assigning num-
bers for all 12 statements, add up your scores to
estimate your affective and continuance school
commitment.
you checked “Moderately disagree” for statement 3
(“I enjoy being spontaneous”), you would assign a
“5” to that statement. After assigning numbers for all
12 statements, add up your scores to estimate your
personal need for structure.
For statement items
1, 5, 6, 7, 8, 9, 10, 12
Strongly agree � 6
Moderately agree � 5
Slightly agree � 4
Slightly disagree � 3
Moderately disagree � 2
Strongly disagree � 1
For statement items
2, 3, 4, 11
Strongly agree � 1
Moderately agree � 2
Slightly agree � 3
Slightly disagree � 4
Moderately disagree � 5
Strongly disagree � 6
Personal need for
structure scale Interpretation
58 to 72 High need for personal structure
47 to 57 Above-average need for personal
structure
38 to 46 Average need for personal structure
27 to 37 Below-average need for personal
structure
12 to 26 Low need for personal structure
Affective commitment:
� � � � � �
(1) (3) (5) (7) (9) (11)
Continuance commitment:
� � � � � �
(2) (4) (6) (8) (10) (12)
Interpreting Your Affective Commitment Score: This
scale measures both affective commitment and con-
tinuance commitment. Affective commitment refers to
a person’s emotional attachment to, identification
with, and involvement in a particular organization.
In this scale, the organization is the school you are
attending. How high or low is your affective com-
mitment? The ideal would be to compare your
score with the collective results of other students in
your class. You can also compare your score with
the following results, which are based on a sample
of employees.
For statement items 1,
2, 3, 4, 6, 8, 10, 11, 12
Strongly agree � 7
Moderately agree � 6
Slightly agree � 5
Neutral � 4
Slightly disagree � 3
Moderately disagree � 2
Strongly disagree � 1
For statement items
5, 7, 9
Strongly agree � 1
Moderately agree � 2
Slightly agree � 3
Neutral � 4
Slightly disagree � 5
Moderately disagree � 6
Strongly disagree � 7
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516 Appendix B
Interpreting Your Continuance Commitment Score: Con-
tinuance commitment occurs when employees believe
it is in their own personal interest to remain with the
organization. People with a high continuance com-
mitment have a strong calculative bond with the or-
ganization. In this scale, the organization is the
school you are attending. How high or low is your
continuance commitment? The ideal would be to
compare your score with the collective results of
other students in your class. You can also compare
your score with the following results, which are
based on a sample of employees.
Need for achievement:
� � � � � � �
(2) (3) (6) (7) (9) (12) (14)
Need for social approval:
� � � � � �
(1) (4) (5) (8) (10) (11)
� �
(13) (15)
Although everyone has the same innate drives,
our secondary or learned needs vary on the basis of
our self-concept. This self-assessment provides an
estimate of your need strength on two secondary
needs: need for achievement and need for social
approval.
Interpreting Your Need for Achievement Score: This
scale, formally called achievement striving, estimates
the extent to which you are motivated to take on and
achieve challenging personal goals. This includes a
desire to perform better than others and to reach
one’s potential. The scale ranges from 0 to 28. How
high or low is your need for achievement? The ideal
would be to compare your score with the collective
results of other students in your class. Otherwise, the
following exhibit offers a rough set of norms with
which you can compare your score on this scale.
Affective
commitment score Interpretation
Above 37 High level of affective commitment
32 to 36 Above-average level of affective
commitment
28 to 31 Average level of affective
commitment
20 to 27 Below-average level of affective
commitment
Below 20 Low level of affective commitment
Continuance
commitment score Interpretation
Above 32 High level of continuance
commitment
26 to 31 Above-average level of
continuance commitment
21 to 25 Average level of continuance
commitment
13 to 20 Below-average level of continuance
commitment
Below 12 Low level of continuance
commitment
Chapter 5
Scoring Key for “What Needs Are Most
Important to You?”
Scoring Instructions: Use the table below to assign
numbers to each box you checked. Insert the num-
ber for each statement on the appropriate line below
the table. For example, if you checked “Moderately
inaccurate” for statement 1 (“I would rather be my-
self than be well thought of”), you would write a “3”
on the line with “(1)” underneath it. After assigning
numbers for all 15 statements, add up your scores to
estimate your results for the two learned needs mea-
sured by this scale.
For statement items
2, 3, 4, 5, 6, 8, 9, 12,
14, 15
Very accurate description of
me � 4
Moderately accurate � 3
Neither accurate nor
inaccurate � 2
Moderately inaccurate � 1
Very inaccurate description
of me � 0
For statement items
1, 7, 10, 11, 13
Very accurate description of
me � 0
Moderately accurate � 1
Neither accurate nor
inaccurate � 2
Moderately inaccurate � 3
Very inaccurate description
of me � 4
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Appendix B 517
Interpreting Your Need for Social Approval Score: The
need for social approval scale estimates the extent to
which you are motivated to seek favorable evalua-
tion from others. Founded on the drive to bond, the
need for social approval is a secondary need in that
people vary in this need on the basis of their self-
concept, values, personality, and possibly socialized
social norms. This scale ranges from 0 to 32. How
high or low is your need for social approval? The
ideal would be to compare your score with the collec-
tive results of other students in your class. Otherwise,
the following exhibit offers a rough set of norms with
which you can compare your score on this scale.
Chapter 6
Scoring Key for “What Is Your Attitude
toward Money?”
Scoring Instructions: This instrument presents three
dimensions with a smaller set of items from the orig-
inal money attitude scale. To calculate your score on
each dimension, write the number that you circled
in the scale above the corresponding item number
in the scoring key at the bottom of this page. For ex-
ample, write the number you circled for the scale’s
first statement (“I sometimes purchase things . . .”) on
the line above “(1).” Then add up the numbers for
that dimension. The money attitude total score is cal-
culated by adding up all scores on all dimensions.
Interpreting Your Score: The three money attitude
scale dimensions measured here, as well as the total
score, are defined as follows:
Money as power/prestige: People with higher scores on
this dimension tend to use money to influence and
impress others.
Retention time: People with higher scores on this dimen-
sion tend to be careful financial planners.
Money anxiety: People with higher scores on this dimen-
sion tend to view money as a source of anxiety.
Money attitude total: This is a general estimate of how
much respect and attention you give to money.
The table on page 518 shows how a sample of MBA
students scored on the money attitude scale. The table
shows percentiles, that is, the percentage of people with
the same or lower score. For example, the table indi-
cates that a score of 12 on the retention scale is quite
low because only 20 percent of the MBA students
scored at this level or lower (80 percent scored higher).
However, a score of 12 on the prestige scale is quite
high because 80 percent of the MBA students scored at
or below this number (only 20 percent scored higher).
Need for
achievement score Interpretation
24 to 28 High level of need for achievement
18 to 23 Above-average level of need for
achievement
12 to 17 Average level of need for
achievement
6 to 11 Below-average level of need for
achievement
0 to 5 Low level of need for achievement
Need for social
approval score Interpretation
28 to 32 High need for social approval
20 to 27 Above-average need for social
approval
12 to 19 Average need for social approval
6 to 11 Below-average need for social
approval
0 to 5 Low need for social approval
Money attitude dimension Calculation Your score
Money as power/prestige � � � �
(1) (4) (7) (10)
Retention time � � � �
(2) (5) (8) (11)
Money anxiety � � � �
(3) (6) (9) (12)
Money attitude total Add up all dimension scores �
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518 Appendix B
Chapter 7
Scoring Key for “Do You Have a Creative
Personality?”
Scoring Instructions: Assign a positive point (�1)
after each of the following words that you checked
off in the self-assessment:
Capable Inventive
Clever Original
Confident Reflective
Egotistical Resourceful
Humorous Self-confident
Individualistic Sexy
Informal Snobbish
Insightful Unconventional
Intelligent Wide interests
Assign a negative point (�1) after each of the
following words that you checked off in the self-
assessment:
Affected Cautious
Commonplace Mannerly
Conservative Narrow interests
Conventional Sincere
Dissatisfied Submissive
Honest Suspicious
Words without a check mark receive a zero.
Add up the total score, which will range from �12
to �18.
Interpreting Your Score: This instrument estimates
your creative potential as a personal characteristic.
The scale recognizes that creative people are intel-
ligent and persistent and possess an inventive
thinking style. Creative personality varies some-
what from one occupational group to the next. The
table below provides norms based on undergraduate
and graduate university students.
Percentile (% with scores at
or below this number) Prestige score Retention score Anxiety score
Total money
score
Average score 9.89 14.98 12.78 37.64
Highest score 17 20 18 53
90 13 18 16 44
80 12 17 15 42
70 11 17 14 40
60 10 16 14 39
50 10 15 13 38
40 9 14 12 36
30 8 14 11 34
20 7 12 10 32
10 7 11 8 29
Lowest score 4 8 6 23
Creative
disposition Interpretation
Above �9 You have a high creative
personality
�1 to �9 You have an average creative
personality
Below �1 You have a low creative personality
Chapter 8
Scoring Key for “What Team Roles Do
You Prefer?”
Scoring Instructions: Write the score circled for each
item on the appropriate line below (statement num-
bers are in parentheses), and add up each scale.
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Appendix B 519
Encourager � � �
(6) (9) (11)
Gatekeeper � � �
(4) (10) (13)
Harmonizer � � �
(3) (8) (12)
Initiator � � �
(1) (5) (14)
Summarizer � � �
(2) (7) (15)
Interpreting Your Score: The five team roles mea-
sured here are based on scholarship over the years.
The following table defines these five roles and pre-
sents the range of scores for high, medium, and low
levels of each role. These norms are based on results
from a sample of MBA students.
the score for each item on the appropriate line
below the table (statement numbers are in paren-
theses), and add up each subscale. For example, if
you checked “Very much” for statement 1 (“I keep
an open mind . . .”), you would write a “3” on the
line with “(1)” underneath it. Then calculate the
overall active listening inventory score by summing
all subscales.
Team role and definition Interpretation
Encourager: People who score high on
this dimension have a strong tendency
to praise and support the ideas of other
team members, thereby showing
warmth and solidarity to the group.
High: 12 and
above
Medium: 9 to 11
Low: 8 and below
Gatekeeper: People who score high on
this dimension have a strong tendency
to encourage all team members to
participate in the discussion.
High: 12 and
above
Medium: 9 to 11
Low: 8 and below
Harmonizer: People who score high on
this dimension have a strong tendency
to mediate intragroup conflicts and
reduce tension.
High: 11 and
above
Medium: 9 to 10
Low: 8 and below
Initiator: People who score high on this
dimension have a strong tendency to
identify goals for the meeting, including
ways to work on those goals.
High: 12 and
above
Medium: 9 to 11
Low: 8 and below
Summarizer: People who score high on
this dimension have a strong tendency
to keep track of what was said in the
meeting (i.e., act as the team’s
memory).
High: 10 and
above
Medium: 8 to 9
Low: 7 and below
Chapter 9
Scoring Key for “Are You an Active Listener?”
Scoring Instructions: Use the table below to score
the response you circled for each statement. Write
For statement items
3, 4, 6, 7, 10, 13
Not at all � 3
A little � 2
Somewhat � 1
Very much � 0
For statement items 1,
2, 5, 8, 9, 11, 12, 14, 15
Not at all � 0
A little � 1
Somewhat � 2
Very much � 3
Avoiding � � �
interruption (AI) (3) (7) (15)
Maintaining � � �
interest (MI) (6) (9) (14)
Postponing � � �
evaluation (PE) (1) (5) (13)
Organizing � � �
information (OI) (2) (10) (12)
Showing � � �
interest (SI) (4) (8) (11)
Active listening (total score)
Interpreting Your Score: The five active listening
dimensions and the overall active listening scale
measured here are defined below, along with the
range of scores for high, medium, and low levels of
each dimension based on a sample of MBA students.
Active listening dimension
and definition
Score
interpretation
Avoiding interruption: People with high
scores on this dimension have a strong
tendency to let a speaker finish his or
her statements before responding.
High: 8 to 9
Medium: 5 to 7
Low: Below 5
Maintaining interest: People with high
scores on this dimension have a strong
tendency to remain focused and
concentrate on what a speaker is
saying even when the conversation is
boring or the information is well known.
High: 6 to 9
Medium: 3 to 5
Low: Below 3
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520 Appendix B
Note: The active listening inventory does not explic-
itly measure two other dimensions of active listen-
ing, namely, empathizing and providing feedback.
Empathizing is difficult to measure with behaviors;
providing feedback involves behaviors similar to
showing interest.
Chapter 10
Scoring Key for “How Do You Infl uence
Your Boss?”
Scoring Instructions: To calculate your scores on the
upward influence scale, write the number circled for
each statement on the appropriate line below (state-
ment numbers are in parentheses), and add up each
scale.
Assertiveness � � �
(8) (15) (16)
Exchange � � �
(2) (5) (13)
Coalition formation � � �
(1) (11) (18)
Upward appeal � � �
(4) (12) (17)
Ingratiation � � �
(3) (6) (9)
Persuasion � � �
(7) (10) (14)
Interpreting Your Score: Influence refers to any behavior
that attempts to alter someone’s attitudes or behavior.
There are several types of influence, including the fol-
lowing six measured by this instrument: assertiveness,
exchange, coalition formation, upward appeal, ingra-
tiation, and persuasion. This instrument assesses your
preference for using each type of influence on your
boss or other people at higher levels in the organiza-
tion. Each scale has a potential score ranging from 3 to
15 points. A higher score on a scale indicates that you
have a higher preference for that particular tactic. The
six upward influence dimensions measured here are
defined below, along with the range of scores for high,
medium, and low levels of each tactic.
Active listening dimension
and definition
Score
interpretation
Postponing evaluation: People with high
scores on this dimension have a strong
tendency to keep an open mind and
avoid evaluating what the speaker is
saying until the speaker has finished.
High: 7 to 9
Medium: 4 to 6
Low: Below 4
Organizing information: People with
high scores on this dimension have a
strong tendency to actively organize
the speaker’s ideas into meaningful
categories.
High: 8 to 9
Medium: 5 to 7
Low: Below 5
Showing interest: People with high
scores on this dimension have a strong
tendency to use nonverbal gestures
or brief verbal acknowledgments to
demonstrate that they are paying
attention to the speaker.
High: 7 to 9
Medium: 5 to 6
Low: Below 5
Active listening (total): People with high
scores on this total active listening
scale have a strong tendency to actively
sense a sender’s signals, evaluate
them accurately, and respond
appropriately.
High: Above 31
Medium: 26 to 31
Low: Below 26
Influence tactic and definition
Score
interpretation
Assertiveness: Assertiveness involves
actively applying legitimate and
coercive power to influence others. This
tactic includes persistently reminding
others of their obligations, frequently
checking their work, confronting them,
and using threats of sanctions to force
compliance.
High: 8 to 15
Medium: 5 to 7
Low: 3 to 4
Exchange: Exchange involves the
promise of benefits or resources in
exchange for the target person’s
compliance with your request. This
tactic also includes reminding the target
of past benefits or favors with the
expectation that the target will now
make up for that debt. Negotiation is
also part of the exchange strategy.
High: 10 to 15
Medium: 6 to 9
Low: 3 to 5
Coalition formation: Coalition formation
occurs when a group of people with
common interests band together to
influence others. This tactic pools the
power and resources of many people,
so the coalition potentially has more
influence than would be the case if
each person operated alone.
High: 11 to 15
Medium: 7 to 10
Low: 3 to 6
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Appendix B 521
Chapter 11
Scoring Key for the Dutch Test for Confl ict
Handling
Scoring Instructions: To calculate your scores on the
Dutch test for conflict handling, write the number
circled for each statement on the appropriate line
below (statement numbers are in parentheses), and
add up each scale.
Yielding � � + �
(1) (6) (11) (16)
Compromising � � � �
(2) (7) (12) (17)
Forcing � � � �
(3) (8) (13) (18)
Problem solving � � � �
(4) (9) (14) (19)
Avoiding � � � �
(5) (10) (15) (20)
Interpreting Your Score: The five conflict-handling
dimensions are defined below, along with the range
Chapter 12
Scoring Key for “What’s Your Boss’s Approach
to Leadership?”
Transactional Leadership
Scoring Instructions: Add up scores for the odd-
numbered items (i.e., 1, 3, 5, 7, 9, 11, 13, 15). The
maximum score is 40.
Influence tactic and definition
Score
interpretation
Upward appeal: Upward appeal occurs
when you rely on support from a
higher-level person to influence others.
In effect, this is a form of coalition in
which one or more members are
people with higher authority or
expertise.
High: 9 to 15
Medium: 6 to 8
Low: 3 to 5
Ingratiation: Flattering your boss in
front of others, helping your boss with
his or her work, agreeing with your
boss’s ideas, and asking for your boss’s
advice are all examples of ingratiation.
This tactic increases the perceived
similarity of the source of ingratiation
to the target person.
High: 13 to 15
Medium: 9 to 12
Low: 3 to 8
Persuasion: Persuasion refers to using
logical and emotional appeals to
change others’ attitudes. According
to several studies, it is also the
most common upward influence
strategy.
High: 13 to 15
Medium: 9 to 12
Low: 3 to 8
Conflict-handling dimension and
definition
Score
interpretation
Yielding: Yielding involves giving in
completely to the other side’s wishes
or at least cooperating with little or no
attention to your own interests. This
style involves making unilateral
concessions or unconditional promises
and offering help with no expectation
of reciprocal help.
High: 14 to 20
Medium: 9 to 13
Low: 4 to 8
Compromising: Compromising involves
looking for a position in which your
losses are offset by equally valued
gains. It involves matching the other
party’s concessions, making conditional
promises or threats, and actively
searching for a middle ground between
the interests of the two parties.
High: 17 to 20
Medium: 11 to 16
Low: 4 to 10
Forcing: Forcing involves trying to win the
conflict at the other’s expense. It includes
“hard” influence tactics, particularly
assertiveness, to get one’s own way.
High: 15 to 20
Medium: 9 to 14
Low: 4 to 8
Problem solving: Problem solving tries
to find a mutually beneficial solution for
all parties. Information sharing is an
important feature of this style because
all parties need to identify common
ground and potential solutions that
satisfy all of them.
High: 17 to 20
Medium: 11 to 16
Low: 4 to 10
Avoiding: Avoiding tries to smooth over
or avoid conflict situations altogether. It
represents a low concern for both self
and the other party. In other words,
avoiders try to suppress thinking about
the conflict.
High: 13 to 20
Medium: 8 to 12
Low: 4 to 7
of scores for high, medium, and low levels of each
dimension.
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522 Appendix B
Interpreting Your Score: Transactional leadership
is “managing”—helping organizations to achieve their
current objectives more efficiently, such as by linking
job performance to valued rewards and ensuring that
employees have the resources needed to get the job
done. The following table shows the range of scores
for high, medium, and low levels of transactional
leadership.
Chapter 13
Scoring Key for “What Organizational
Structure Do You Prefer?”
Scoring Instructions: Use the table below to assign
numbers to each response you circled. Insert the
number for each statement on the appropriate line
below the table. For example, if you checked “Not at
all” for item 1 (“A person’s career ladder . . .”), you
would write a “0” on the line with “(1)” underneath it.
After assigning numbers for all 15 statements, add up
the scores to estimate your degree of preference for a
tall hierarchy, formalization, and centralization. Then
calculate the overall score by summing all scales.
Transformational Leadership
Scoring Instructions: Add up scores for the even-
numbered items (i.e., 2, 4, 6, 8, 10, 12, 14, 16). The
maximum score is 40. A higher score indicates that
your supervisor has a strong inclination toward
transformational leadership.
Interpreting Your Score: Transformational leader-
ship involves changing teams or organizations by
creating, communicating, and modeling a vision for
the organization or work unit and inspiring employ-
ees to strive for that vision. The following table
shows the range of scores for high, medium, and low
levels of transformational leadership.
Transformational
leadership score Interpretation
32 to 40 The person you evaluated seems
to be a highly transformational
leader.
25 to 31 The person you evaluated
seems to be a moderately
transformational leader.
Below 25 The person you evaluated seems
to display few characteristics of a
transformational leader.
For statement items 2,
3, 8, 10, 11, 12, 14, 15
Not at all � 3
A little � 2
Somewhat � 1
Very much � 0
For statement items 1,
4, 5, 6, 7, 9, 13
Not at all � 0
A little � 1
Somewhat � 2
Very much � 3
Tall hierarchy � � � � �
(H) (1) (4) (10) (12) (15) (H)
Formalization � � � � �
( F ) (2) (6) (8) (11) (13) (F)
Centralization � � � � �
( C ) (3) (5) (7) (9) (14) (C)
Total score � � �
( mechanistic ) (H) (F) (C) Total
Interpreting Your Score: The three organizational
structure dimensions and the overall score are de-
fined below, along with the range of scores for high,
medium, and low levels of each dimension based on
a sample of MBA students.
Organizational structure
dimension and definition Interpretation
Tall hierarchy: People with high scores
on this dimension prefer to work in
organizations with several levels of
hierarchy and a narrow span of control
(few employees per supervisor).
High: 11 to 15
Medium: 6 to 10
Low: Below 6
Transactional
leadership score Interpretation
32 to 40 The person you evaluated seems
to be a highly transactional leader.
25 to 31 The person you evaluated seems
to be a moderately transactional
leader.
Below 25 The person you evaluated seems
to display few characteristics of a
transactional leader.
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Appendix B 523
Chapter 14
Scoring Key for “What Are Your Corporate
Culture Preferences?”
Scoring Instructions: On each line below, write a
“1” if you circled the statement and a “0” if you did
not. Then add up the scores for each subscale.
Interpreting Your Score: These corporate cultures
may be found in many organizations, but they rep-
resent only four of many possible organizational cul-
tures. Also, keep in mind that none of these cultures
Chapter 15
Scoring Key for “Are You Tolerant of Change?”
Scoring Instructions: Use the table below to assign
numbers to each box you checked. For example, if
you checked “Moderately disagree” for statement 1
(“An expert who doesn’t come up . . .”), you would
write a “6” beside that statement. After assigning
numbers for all 16 statements, add up your scores to
estimate your tolerance for change.
Organizational structure
dimension and definition Interpretation
Formalization: People with high scores
on this dimension prefer to work in
organizations where jobs are clearly
defined with limited discretion.
High: 12 to 15
Medium: 9 to 11
Low: Below 9
Centralization: People with high scores
on this dimension prefer to work in
organizations where decision making
occurs mainly among top management
rather than being spread out to lower-
level staff.
High: 10 to 15
Medium: 7 to 9
Low: Below 7
Total score (mechanistic): People with
high scores on this dimension prefer
to work in mechanistic organizations,
whereas those with low scores prefer
to work in organic organizational
structures. Mechanistic structures
are characterized by a narrow span
of control and high degree of
formalization and centralization.
Organic structures have a wide span
of control, little formalization, and
decentralized decision making.
High: 30 to 45
Medium: 22 to 29
Low: Below 22
Control culture � � � � � �
(2a) (5a) (6b) (8b) (11b) (12a)
Performance culture � � � � � �
(1b) (3b) (5b) (6a) (7a) (9b)
Relationship culture � � � � � �
(1a) (3a) (4b) (8a) (10b) (12b)
Responsive culture � � � � � �
(2b) (4a) (7b) (9a) (10a) (11a)
Corporate culture dimension
and definition
Score
interpretation
Control culture: This culture values the
role of senior executives to lead the
organization. Its goal is to keep
everyone aligned and under control.
High: 3 to 6
Medium: 1 to 2
Low: 0
Performance culture: This culture
values individual and organizational
performance and strives for
effectiveness and efficiency.
High: 5 to 6
Medium: 3 to 4
Low: 0 to 2
Relationship culture: This culture values
nurturing and well-being. It considers
open communication, fairness,
teamwork, and sharing to be a vital part
of organizational life.
High: 6
Medium: 4 to 5
Low: 0 to 3
Responsive culture: This culture values
its ability to keep in tune with the external
environment, including being competitive
and realizing new opportunities.
High: 6
Medium: 4 to 5
Low: 0 to 3
is inherently good or bad. Each is effective in differ-
ent situations. The four corporate cultures are de-
fined below, along with the range of scores for high,
medium, and low levels of each dimension based on
a sample of MBA students.
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524 Appendix B
Interpreting Your Score: This measurement instru-
ment is formally known as the tolerance of ambiguity
scale. Although it was developed 40 years ago, the
instrument is still used today in research. People with
a high tolerance of ambiguity are comfortable with
uncertainty, sudden change, and new situations.
These are characteristics of the hyperfast changes
occurring in many organizations today. The table
below indicates the range of scores for high, me-
dium, and low tolerance for change. These norms
are based on results for MBA students.
For statement items 2,
4, 6, 8, 10, 12, 14, 16
Strongly agree � 7
Moderately agree � 6
Slightly agree � 5
Neutral � 4
Slightly disagree � 3
Moderately disagree � 2
Strongly disagree � 1
For statement items 1,
3, 5, 7, 9, 11, 13, 15
Strongly agree � 1
Moderately agree � 2
Slightly agree � 3
Neutral � 4
Slightly disagree � 5
Moderately disagree � 6
Strongly disagree � 7
Tolerance for
change score Interpretation
81 to 112 You seem to have a high
tolerance for change.
63 to 80 You seem to have a moderate
level of tolerance for change.
Below 63 You seem to have a low degree of
tolerance for change. Instead, you
prefer stable work environments.
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glossary
A
ability The natural aptitudes and learned
capabilities required to successfully com-
plete a task. (2)
absorptive capacity The ability to rec-
ognize the value of new information, as-
similate it, and use it for value-added
activities. (1)
achievement-nurturing orientation A
cross-cultural value describing the degree
to which people in a culture emphasize
competitive versus cooperative relations
with other people. (2)
action research A problem-focused
change process that combines action ori-
entation (changing attitudes and behavior)
and research orientation (testing theory
through data collection and analysis). (15)
adaptive culture An organizational
culture in which employees are receptive
to change, including the ongoing align-
ment of the organization to its environment
and continuous improvement of internal
processes. (14)
alternative dispute resolution (ADR)
An orderly process of third-party dispute
resolution, typically including mediation
followed by arbitration. (11)
anchoring and adjustment heuristic A
natural tendency for people to be influenced
by an initial anchor point such that they do
not sufficiently move away from that point
as new information is provided. (7)
appreciative inquiry An organizational
change strategy that directs the group’s at-
tention away from its own problems and
focuses participants on the group’s poten-
tial and positive elements. (15)
artifacts The observable symbols and
signs of an organization’s culture. (14)
attitudes The cluster of beliefs, assessed
feelings, and behavioral intentions toward a
person, object, or event (called an attitude
object ). (4)
attraction-selection-attrition (ASA)
theory A theory which states that orga-
nizations have a natural tendency to at-
tract, select, and retain people with values
and personality characteristics that are
consistent with the organization’s charac-
ter, resulting in a more homogeneous or-
ganization and a stronger culture. (14)
attribution process The perceptual
process of deciding whether an observed
group of people, typically those at the top
of the organizational hierarchy. (13)
ceremonies Planned displays of organi-
zational culture, conducted specifically for
the benefit of an audience. (14)
coalition A group that attempts to
influence people outside the group by
pooling the resources and power of its
members. (10)
cognitive dissonance A condition that
occurs when we perceive an inconsistency be-
tween our beliefs, feelings, and be havior. (4)
collectivism A cross-cultural value de-
scribing the degree to which people in a
culture emphasize duty to groups to which
people belong and to group harmony. (2)
communication The process by which
information is transmitted and understood
between two or more people. (9)
competencies Skills, knowledge, apti-
tudes, and other personal characteristics
that lead to superior performance. (2)
concurrent engineering The organi-
zation of employees from several de-
partments into a temporary team for
the purpose of developing a product or
service. (13)
conflict A process in which one party
perceives that his or her interests are being
opposed or negatively affected by another
party. (11)
conscientiousness A personality di-
mension describing people who are care-
ful, dependable, and self-disciplined. (2)
constructive conflict A type of conflict
in which people focus their discussion on
the issue while maintaining respect for
people having other points of view. (8, 11)
contact hypothesis A theory stating
that the more we interact with someone,
the less prejudiced or perceptually biased
we will be against that person. (3)
continuance commitment An em-
ployee’s calculative attachment to the or-
ganization, whereby the employee is
motivated to stay only because leaving
would be costly. (4)
corporate social responsibility (CSR)
Organizational activities intended to ben-
efit society and the environment beyond
the firm’s immediate financial interests or
legal obligations. (1)
counterproductive work behaviors
(CWBs) Voluntary behaviors that have
behavior or event is caused largely by
internal or external factors. (3)
autonomy The degree to which a job
gives employees the freedom, indepen-
dence, and discretion to schedule their
work and determine the procedures used
in completing it. (6)
availability heuristic A natural tendency
to assign higher probabilities to objects or
events that are easier to recall from mem-
ory, even though ease of recall is also
affected by nonprobability factors (e.g.,
emotional response, recent events). (7)
B
balanced scorecard (BSC) A goal-
setting and reward system that translates
the organization’s vision and mission into
specific, measurable performance goals
related to financial, customer, internal,
and learning/growth (i.e., human capital)
processes. (5, 6)
behavior modification A theory that
explains learning in terms of the anteced-
ents and consequences of behavior. (3)
bicultural audit A process of diagnosing
cultural relations between companies and
determining the extent to which cultural
clashes will likely occur. (14)
bounded rationality The view that peo-
ple are bounded in their decision-making
capabilities, including access to limited in-
formation, limited information processing,
and tendency toward satisficing rather than
maximizing when making choices. (7)
brainstorming A freewheeling, face-to-
face meeting where team members aren’t
allowed to criticize but are encouraged to
speak freely, generate as many ideas as pos-
sible, and build on the ideas of others. (8)
Brooks’s law The principle that adding
more people to a late software project only
makes it later. Also called the mythical
man-month. (8)
C
categorical thinking Organizing people
and objects into preconceived categories
that are stored in our long-term memory. (3)
centrality A contingency of power per-
taining to the degree and nature of inter-
dependence between the power holder
and others. (10)
centralization The degree to which for-
mal decision authority is held by a small
525
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526 Glossary
the potential to directly or indirectly harm
the organization. (1)
countervailing power The capacity of
a person, team, or organization to keep a
more powerful person or group in the ex-
change relationship. (10)
creativity The development of original
ideas that make a socially recognized
contribution. (7)
D
decision making The conscious process
of making choices among alternatives with
the intention of moving toward some de-
sired state of affairs. (7)
deep-level diversity Differences in the
psychological characteristics of employees,
including personalities, beliefs, values, and
attitudes. (1)
distributive justice Perceived fair-
ness in the individual’s ratio of out-
comes to contributions compared with a
comparison other’s ratio of outcomes to
contributions. (5)
divergent thinking Reframing a prob-
lem in a unique way and generating differ-
ent approaches to the issue. (7)
divisional structure An organizational
structure in which employees are orga-
nized around geographic areas, outputs
(products or services), or clients. (13)
drives Hardwired characteristics of the
brain that correct deficiencies or maintain
an internal equilibrium by producing emo-
tions to energize individuals. (5)
E
electronic brainstorming A recent
form of brainstorming that relies on net-
worked computers for submitting and
sharing creative ideas. (8)
emotional contagion The noncon-
scious process of “catching” or sharing
another person’s emotions by mimicking
that person’s facial expressions and other
nonverbal behavior. (9)
emotional dissonance The conflict be-
tween required and true emotions. (4)
emotional intelligence (EI) A set of
abilities to perceive and express emotion,
assimilate emotion in thought, understand
and reason with emotion, and regulate
emotion in oneself and others. (4)
emotional labor The effort, planning,
and control needed to express organiza-
tionally desired emotions during interper-
sonal transactions. (4)
the name, that employees respond to job
dissatisfaction. (4)
expectancy theory A motivation the-
ory based on the idea that work effort is
directed toward behaviors that people be-
lieve will lead to desired outcomes. (5)
extroversion A personality dimension
describing people who are outgoing, talk-
ative, sociable, and assertive. (2)
F
false-consensus effect A perceptual
error in which we overestimate the extent
to which others have beliefs and character-
istics similar to our own. (3)
Fiedler’s contingency model Developed
by Fred Fiedler, an early contingency lead-
ership model that suggests that leader effec-
tiveness depends on whether the person’s
natural leadership style is appropriately
matched to the situation. (12)
five-factor model (FFM) The five abstract
dimensions representing most personality
traits: conscientiousness, emotional stability,
openness to experience, agreeableness, and
extroversion. (2)
force field analysis Kurt Lewin’s
model of systemwide change that helps
change agents diagnose the forces that
drive and restrain proposed organiza-
tional change. (15)
formalization The degree to which or-
ganizations standardize behavior through
rules, procedures, formal training, and re-
lated mechanisms. (13)
four-drive theory A motivation theory
that is based on the innate drives to acquire,
bond, learn, and defend and that incorpo-
rates both emotions and rationality. (5)
functional structure An organizational
structure in which employees are orga-
nized around specific knowledge or other
resources. (13)
fundamental attribution error The
tendency to see the person rather than the
situation as the main cause of that person’s
behavior. (3)
future search An organizational change
strategy that consists of systemwide group
sessions, usually lasting a few days, in which
participants identify trends and establish
ways to adapt to those changes. (15)
G
gainsharing plan A team-based re-
ward that calculates bonuses from the
work unit’s cost savings and productivity
improvement. (6)
emotions Physiological, behavioral,
and psychological episodes experienced
toward an object, person, or event that
create a state of readiness. (4)
empathy A person’s understanding of
and sensitivity to the feelings, thoughts,
and situations of others. (3)
employee engagement The employee’s
emotional and cognitive motivation, self-
efficacy to perform the job, perceived clar-
ity of the organization’s vision and his or
her specific role in that vision, and belief
that he or she has the resources to get the
job done. (5)
employee involvement The degree to
which employees influence how their
work is organized and carried out. (7)
employee stock ownership plan (ESOP)
A reward system that encourages employ-
ees to buy company stock. (6)
empowerment A psychological con-
cept in which people experience more
self-determination, meaning, competence,
and impact regarding their role in the or-
ganization. (6)
equity sensitivity An individual’s
outcome/input preferences and reaction
to various outcome/input ratios. (5)
equity theory A theory explaining how
people develop perceptions of fairness in the
distribution and exchange of resources. (5)
ERG theory A needs hierarchy theory
consisting of three fundamental needs—
existence, relatedness, and growth. (5)
escalation of commitment The tenden cy
to repeat an apparently bad decision or
allocate more resources to a failing course
of action. (7)
ethical sensitivity A personal character-
istic that enables people to recognize the
presence of an ethical issue and determine
its relative importance. (2)
ethics The study of moral principles or
values that determine whether actions are
right or wrong and outcomes are good
or bad. (1)
evaluation apprehension A decision-
making problem that occurs when indi-
viduals are reluctant to mention ideas that
seem silly because they believe (often cor-
rectly) that other team members are si-
lently evaluating them. (8)
evidence-based management The prac-
tice of making decisions and taking actions
based on research evidence. (1)
exit-voice-loyalty-neglect (EVLN)
model The four ways, as indicated in
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general adaptation syndrome A
model of the stress experience, consisting
of three stages: alarm reaction, resistance,
and exhaustion. (4)
global mindset The capacity for com-
plex perceiving and thinking characterized
by superior awareness of and openness to
different ways that others perceive their
environment. (3)
globalization Economic, social, and
cultural connectivity with people in other
parts of the world. (1)
globally integrated enterprise An or-
ganizational structure in which work pro-
cesses and executive functions are
distributed around the world through
global centers, rather than developed in a
home country and replicated in satellite
countries or regions. (13)
goal setting The process of motivat-
ing employees and clarifying their role
perceptions by establishing performance
objectives. (5)
grapevine An unstructured and infor-
mal network founded on social relation-
ships rather than organizational charts or
job descriptions. (9)
groupthink The tendency of highly co-
hesive groups to value consensus at the
price of decision quality. (8)
H
halo effect A perceptual error whereby
our general impression of a person, usually
based on one prominent characteristic, col-
ors our perception of other characteristics of
that person. (3)
high-performance work practices
(HPWP) A perspective which holds that
effective organizations incorporate several
workplace practices that leverage the po-
tential of human capital. (1)
human capital The stock of knowl-
edge, skills, and abilities among employ-
ees that provides economic value to the
organization. (1)
I
implicit favorite A preferred alternative
that the decision maker uses repeatedly as
a comparison with other choices. (7)
implicit leadership theory A theory
stating that people evaluate a leader’s ef-
fectiveness in terms of how well that per-
son fits preconceived beliefs about the
features and behaviors of effective leaders
(leadership prototypes) and that people
job specialization The result of divi-
sion of labor in which work is subdivided
into separate jobs assigned to different
people. (6)
Johari Window A model of mutual un-
derstanding that encourages disclosure
and feedback to increase our own open
area and reduce the blind, hidden, and un-
known areas. (3)
L
leadership Influencing, motivating, and
enabling others to contribute toward the
effectiveness and success of the organiza-
tions of which they are members. (12)
leadership substitutes A theory iden-
tifying contingencies that either limit a
leader’s ability to influence subordinates
or make a particular leadership style un-
necessary. (12)
lean management A cluster of practices
to improve organizational efficiency by con-
tinuously reducing waste, unevenness, and
overburden in the production process. (1)
learning A relatively permanent change
in behavior (or behavioral tendency) that
occurs as a result of a person’s interaction
with the environment. (3)
learning orientation An individual at-
titude and organizational culture in which
people welcome new learning opportuni-
ties, actively experiment with new ideas
and practices, view reasonable mistakes as
a natural part of the learning process, and
continuously question past practices. (3)
legitimate power An agreement among
organizational members that people in
certain roles can request certain behaviors
of others. (10)
locus of control A person’s general
belief about the amount of control he or
she has over personal life events. (2)
M
Machiavellian values The beliefs that
deceit is a natural and acceptable way to
influence others and that getting more
than one deserves is acceptable. (10)
management by walking around
(MBWA) A communication practice in
which executives get out of their offices
and learn from others in the organization
through face-to-face dialogue. (9)
Maslow’s needs hierarchy theory A
motivation theory of needs arranged in a
hierarchy, whereby people are motivated
to fulfill a higher need as a lower one be-
comes gratified. (5)
tend to inflate the influence of leaders on
organizational events. (12)
impression management The practice
of actively shaping our public images. (10)
individualism A cross-cultural value de-
scribing the degree to which people in a
culture emphasize independence and per-
sonal uniqueness. (2)
influence Any behavior that attempts to
alter someone’s attitudes or behavior. (10)
information overload A condition in
which the volume of information received
exceeds the person’s capacity to process
it. (9)
ingratiation Any attempt to increase
liking by, or perceived similarity to, some
targeted person. (10)
inoculation effect A persuasive com-
munication strategy of warning listeners
that others will try to influence them in the
future and that they should be wary about
the opponent’s arguments. (10)
intellectual capital A company’s stock of
knowledge, including human capital, struc-
tural capital, and relationship capital. (1)
intuition The ability to know when a
problem or opportunity exists and to se-
lect the best course of action without con-
scious reasoning. (7)
J
job burnout The process of emotional
exhaustion, cynicism, and reduced per-
sonal accomplishment that results from
prolonged exposure to stressors. (4)
job characteristics model A job design
model that relates the motivational prop-
erties of jobs to specific personal and orga-
nizational consequences of those
properties. (6)
job design The process of assigning
tasks to a job, including the interdepen-
dency of those tasks with other jobs. (6)
job enlargement The practice of add-
ing more tasks to an existing job. (6)
job enrichment The practice of giving
employees more responsibility for sched-
uling, coordinating, and planning their
own work. (6)
job evaluation Systematically rating the
worth of jobs within an organization by
measuring their required skill, effort,
responsibility, and working conditions. (6)
job rotation The practice of moving
employees from one job to another. (6)
job satisfaction A person’s evaluation
of his or her job and work context. (4)
Glossary 527
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528 Glossary
matrix structure An organizational
structure that overlays two structures (such
as a geographic divisional and a functional
structure) in order to leverage the benefits
of both. (13)
mechanistic structure An organiza-
tional structure with a narrow span of con-
trol and a high degree of formalization
and centralization. (13)
media richness A medium’s data-
carrying capacity, that is, the volume and
variety of information that can be trans-
mitted during a specific time. (9)
mental imagery The process of men-
tally practicing a task and visualizing its
successful completion. (6)
mental models Visual or relational im-
ages in our mind that represent the exter-
nal world. (3)
moral intensity The degree to which an
issue demands the application of ethical
principles. (2)
motivation The forces within a person
that affect his or her direction, intensity, and
persistence of voluntary behavior. (2, 5)
motivator-hygiene theory Herzberg’s
theory stating that employees are primar-
ily motivated by growth and esteem needs,
not by lower-level needs. (6)
multisource (360-degree) feedback
Information about an employee’s perfor-
mance collected from a full circle of people,
including subordinates, peers, supervisors,
and customers. (5)
Myers-Briggs Type Indicator (MBTI)
An instrument designed to measure the
elements of Jungian personality theory,
particularly preferences regarding perceiv-
ing and judging information. (2)
N
need for achievement (nAch) A need
in which people want to accomplish rea-
sonably challenging goals and desire un-
ambiguous feedback and recognition for
their success. (5)
need for affiliation (nAff) A need in
which people seek approval from others,
conform to their wishes and expectations,
and avoid conflict and confrontation. (5)
need for power (nPow) A need in
which people want to control their envi-
ronment, including people and material
resources, to benefit either themselves
(personalized power) or others (socialized
power). (5)
ability to satisfy the needs of key stake-
holders. (1)
organizational efficiency The amount
of outputs relative to inputs in the organi-
zation’s transformation process. (1)
organizational learning A perspective
which holds that organizational effective-
ness depends on the organization’s capac-
ity to acquire, share, use, and store
valuable knowledge. (1)
organizational memory The storage
and preservation of intellectual capital. (1)
organizational politics Behaviors that
others perceive as self-serving tactics for
personal gain at the expense of other peo-
ple and possibly the organization. (10)
organizational socialization The pro-
cess by which individuals learn the values,
expected behaviors, and social knowledge
necessary to assume their roles in the
organization. (14)
organizational strategy The way the
organization positions itself in its setting
in relation to its stakeholders, given the
organization’s resources, capabilities, and
mission. (13)
organizational structure The division
of labor as well as the patterns of coordi-
nation, communication, workflow, and
formal power that direct organizational
activities. (13)
organizations Groups of people who
work interdependently toward some
purpose. (1)
P
parallel learning structure A highly
participative arrangement composed of
people from most levels of the organiza-
tion who follow the action research model
to produce meaningful organizational
change. (15)
path-goal leadership theory A contin-
gency theory of leadership based on the
expectancy theory of motivation that relates
several leadership styles to specific em-
ployee and situational contingencies. (12)
perception The process of receiving in-
formation about and making sense of the
world around us. (3)
personality The relatively enduring pat-
tern of thoughts, emotions, and behaviors
that characterize a person, along with the
psychological processes behind those
characteristics. (2)
persuasion The use of facts, logical ar-
guments, and emotional appeals to change
needs Goal-directed forces that people
experience. (5)
negotiation The process whereby two
or more conflicting parties attempt to re-
solve their divergent goals by redefining
the terms of their interdependence. (11)
network structure An alliance of sev-
eral organizations for the purpose of creat-
ing a product or serving a client. (13)
neuroticism A personality dimension
describing people with high levels of
anxiety, hostility, depression, and self-
consciousness. (2)
nominal group technique A variation
of brainstorming consisting of three stages:
Participants (1) silently and independently
document their ideas, (2) collectively de-
scribe these ideas to the other team mem-
bers without critique, and then (3) silently
and independently evaluate the ideas
presented. (8)
norms The informal rules and shared
expectations that groups establish to regu-
late the behavior of their members. (8)
O
open systems A perspective which
holds that organizations depend on the ex-
ternal environment for resources, affect
that environment through their output,
and consist of internal subsystems that
transform inputs to outputs. (1)
organic structure An organizational
structure with a wide span of control, little
formalization, and decentralized decision
making. (13)
organizational (affective) commitment
The employee’s emotional attachment to,
identification with, and involvement in a
particular organization. (4)
organizational behavior (OB) The
study of what people think, feel, and do in
and around organizations. (1)
organizational citizenship behaviors
(OCBs) Various forms of cooperation
and helpfulness to others that support the
organization’s social and psychological
context. (1)
organizational culture The values
and assump tions shared within an
organization. (14)
organizational effectiveness A broad
concept represented by several perspec-
tives, including the organization’s fit with the
external environment, internal-subsystems
configuration for high performance, em-
phasis on organizational learning, and
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another person’s beliefs and attitudes, usu-
ally for the purpose of changing the per-
son’s behavior. (9, 10)
positive organizational behavior A
perspective of organizational behavior that
focuses on building positive qualities and
traits within individuals or institutions as
opposed to focusing on what is wrong with
them. (3)
postdecisional justification The ten-
dency to support the selected alternative
in a decision by forgetting or downplay-
ing the negative features of that alterna-
tive, emphasizing its positive features,
and doing the opposite for alternatives
not selected. (7)
power The capacity of a person, team,
or organization to influence others. (10)
power distance A cross-cultural value
describing the degree to which people in a
culture accept unequal distribution of
power in a society. (2)
primacy effect A perceptual error in
which we quickly form an opinion of peo-
ple on the basis of the first information we
receive about them. (3)
procedural justice Perceived fairness of
the procedures used to decide the distribu-
tion of resources. (5)
process losses Resources (including
time and energy) expended toward team
development and maintenance rather than
the task. (8)
production blocking A time constraint
in team decision making due to the proce-
dural requirement that only one person
may speak at a time. (8)
profit-sharing plan A reward system
that pays bonuses to employees on the ba-
sis of the previous year’s level of corporate
profits. (6)
prospect theory A natural tendency to
feel more dissatisfaction from losing a par-
ticular amount than satisfaction from gain-
ing an equal amount. (7)
psychological harassment Repeated
and hostile or unwanted conduct, verbal
comments, actions, or gestures that affect
an employee’s dignity or psychological
or physical integrity and that result in
a harmful work environment for the
employee. (4)
R
rational choice paradigm The view in
decision making that people should—and
typically do—use logic and all available in-
smallest elements and standardizing tasks
to achieve maximum efficiency. (6)
selective attention The process of atten-
ding to some information received by our
senses and ignoring other information. (3)
self-concept An individual’s self-beliefs
and self-evaluations. (2)
self-directed teams (SDTs) Cross-
functional work groups that are organized
around work processes, complete an en-
tire piece of work requiring several inter-
dependent tasks, and have substantial
autonomy over the execution of those
tasks. (8)
self-efficacy A person’s belief that he or
she has the ability, motivation, correct role
perceptions, and favorable situation to
complete a task successfully. (2)
self-fulfilling prophecy The percep-
tual process in which our expectations
about another person cause that person to
act in a way that is consistent with those
expectations. (3)
self-leadership The process of influenc-
ing oneself to establish the self-direction
and self-motivation needed to perform a
task. (6)
self-reinforcement Reinforcement that
occurs when an employee has control over
a reinforcer but doesn’t “take” it until com-
pleting a self-set goal. (3)
self-serving bias The tendency to attri-
bute our favorable outcomes to internal fac-
tors and our failures to external factors. (3)
self-talk The process of talking to
ourselves about our own thoughts or
actions. (6)
servant leadership The view that lead-
ers serve followers, rather than vice versa;
leaders help employees fulfill their needs
and are coaches, stewards, and facilitators
of employee performance. (12)
sexual harassment Unwelcome conduct
of a sexual nature that detrimentally affects
the work environment or leads to adverse
job-related consequences for its victims. (4)
shared leadership The view that lead-
ership is broadly distributed, rather than
assigned to one person, such that people
within the team and organization lead
each other. (12)
situational leadership theory A com-
mercially popular but poorly supported
leadership model stating that effective
leaders vary their style (telling, selling,
participating, delegating) with the “readi-
ness” of followers. (12)
formation to choose the alternative with
the highest value. (7)
realistic job preview (RJP) A method
of improving organizational socialization
in which job applicants are given a bal-
ance of positive and negative information
about the job and work context. (14)
reality shock The stress that results
when employees perceive discrepancies
between their preemployment expecta-
tions and on-the-job reality. (14)
recency effect A perceptual error in
which the most recent information domi-
nates our perception of others. (3)
referent power The capacity to influ-
ence others on the basis of an identifica-
tion with and respect for the power
holder. (10)
refreezing The latter part of the change
process, in which systems and conditions
are introduced that reinforce and maintain
the desired behaviors. (15)
relationship conflict A type of conflict
in which people focus on characteristics of
other individuals, rather than on the is-
sues, as the source of conflict. (11)
representativeness heuristic A natural
tendency to evaluate probabilities of
events or objects by the degree to which
they resemble (are representative of) other
events or objects rather than on objective
probability information. (7)
resilience The capability of individuals
to cope successfully in the face of signifi-
cant change, adversity, or risk. (4)
rituals The programmed routines of
daily organizational life that dramatize the
organization’s culture. (14)
role A set of behaviors that people are ex-
pected to perform because of the positions
they hold in a team and organization. (8)
role perceptions The extent to which
people understand the job duties (roles)
assigned to or expected of them. (2)
S
satisficing Selecting an alternative that
is satisfactory or “good enough,” rather
than the alternative with the highest value
(maximization). (7)
scenario planning A systematic process
of thinking about alternative futures and
what the organization should do to antici-
pate and react to those environments. (7)
scientific management The practice of
systematically partitioning work into its
Glossary 529
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skill variety The extent to which em-
ployees must use different skills and tal-
ents to perform tasks within their jobs. (6)
social capital The knowledge and other
resources available to people or social
units (teams, organizations) from a dura-
ble network that connects them to others.
(8, 10)
social identity theory A theory that ex-
plains self-concept in terms of the person’s
unique characteristics (personal identity)
and membership in various social groups
(social identity). (2)
social learning theory A theory stating
that much learning occurs by observing
others and then modeling the behaviors
that lead to favorable outcomes and avoid-
ing behaviors that lead to punishing con-
sequences. (3)
social loafing The problem that occurs
when people exert less effort (and usually
perform at a lower level) when working in
teams than when working alone. (8)
span of control The number of people
directly reporting to the next level in the
hierarchy. (13)
stakeholders Individuals, organizations,
and other entities who affect, or are af-
fected by, the organization’s objectives
and actions. (1)
stereotyping The process of assigning
traits to people on the basis of their mem-
bership in a social category. (3)
stock option A reward system that gives
employees the right to purchase company
stock at a future date at a predetermined
price. (6)
strength-based coaching A positive
organizational behavior approach to
coaching and feedback that focuses on
building and leveraging the employee’s
strengths rather than trying to correct his
or her weaknesses. (5)
stress An adaptive response to a situa-
tion that is perceived as challenging or
threatening to a person’s well-being. (4)
stressors Any environmental conditions
that place a physical or emotional demand
on a person. (4)
subjective expected utility The prob-
ability (expectation) of satisfaction (utility)
resulting from choosing a specific alterna-
tive in a decision. (7)
the organization or work unit and inspiring
employees to strive for that vision. (12)
trust A psychological state comprising
the intention to accept vulnerability on the
basis of positive expectations of the intent
or behavior of another person. (4, 8)
U
uncertainty avoidance A cross-cultural
value describing the degree to which peo-
ple in a culture tolerate ambiguity (low
uncertainty avoidance) or feel threatened
by ambiguity and uncertainty (high uncer-
tainty avoidance). (2)
unfreezing The first part of the change
process, in which the change agent pro-
duces disequilibrium between the driving
and restraining forces. (15)
upward appeal A type of influence in
which someone with higher authority or ex-
pertise is called on in reality or symbolically
to support the influencer’s position. (10)
V
values Relatively stable, evaluative be-
liefs that guide a person’s preferences for
outcomes or courses of action in a variety
of situations. (1)
virtual teams Teams whose members
operate across space, time, and organiza-
tional boundaries and are linked through
information technologies to achieve orga-
nizational tasks. (8)
virtual work Work performed away
from the traditional physical workplace by
means of information technology. (1)
W
wikis Collaborative Web spaces at which
anyone in a group can write, edit, or re-
move material from the Web site. (9)
win-lose orientation The belief that
conflicting parties are drawing from a
fixed pie, so the more one party receives,
the less the other party will receive. (11)
win-win orientation The belief that con-
flicting parties will find a mutually benefi-
cial solution to their disagreement. (11)
work–life balance The degree to which
a person minimizes conflict between work
and nonwork demands. (1)
workaholic A person who is highly in-
volved in work, feels compelled to work,
and has a low enjoyment of work. (4)
substitutability A contingency of
power pertaining to the availability of
alternatives. (10)
surface-level diversity The observable
demographic or physiological differences
in people, such as their race, ethnicity,
gender, age, and physical disabilities. (1)
T
tacit knowledge Knowledge that is em-
bedded in our actions and ways of think-
ing and is transmitted only through
observation and experience. (3)
task identity The degree to which a job
requires completion of a whole or an iden-
tifiable piece of work. (6)
task interdependence The extent to
which team members must share materi-
als, information, or expertise in order to
perform their jobs. (8)
task significance The degree to which a
job has a substantial impact on the organi-
zation and/or larger society. (6)
team-based structure An organizational
structure built around self-directed teams
that complete an entire piece of work. (13)
team building A process that consists of
formal activities intended to improve the
development and functioning of a work
team. (8)
team cohesion The degree of attraction
people feel toward the team and their mo-
tivation to remain members. (8)
teams Groups of two or more people
who interact and influence each other, are
mutually accountable for achieving com-
mon goals associated with organizational
objectives, and perceive themselves as a
social entity within an organization. (8)
third-party conflict resolution Any
attempt by a relatively neutral person
to help conflicting parties resolve their
differences. (11)
transactional leadership Leadership
that helps organizations achieve their cur-
rent objectives more efficiently, such as by
linking job performance to valued rewards
and ensuring that employees have the re-
sources needed to get the job done. (12)
transformational leadership A leader-
ship perspective that explains how leaders
change teams or organizations by creating,
communicating, and modeling a vision for
530 Glossary
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531
CHAPTER 1
1. “The Pixar Principle,” The Age
( Melbourne, AU ), 28 May 2006 ; C. Eller ,
“Ed Catmull: Pixar’s Superhero Shakes
Up Disney,” Los Angeles Times , 12 June
2006 ; W. C. Taylor and P. LaBarre , “How
Pixar Adds a New School of Thought to
Disney,” New York Times , 29 January
2006 ; B. Barnes , “Disney and Pixar: The
Power of the Prenup,” New York Times ,
1 June 2008 ; S. Leith , “How Pixar Found
Its Shiny Metal Soul,” Sunday Telegraph
(London), 22 June 2008 ; H. Rao and
R. I. Sutton , “Innovation Lessons from
Pixar: An Interview with Oscar-Winning
Director Brad Bird,” McKinsey Quarterly,
April 2008 , pp. 1–9 .
2. M. Warner , “Organizational Behavior
Revisited,” Human Relations 47 (October
1994 ), pp. 1151–1166 ; R. Westwood and
S. Clegg , “The Discourse of Organization
Studies: Dissensus, Politics, and Paradigms,”
in Debating Organization: Point-Counterpoint
in Organization Studies , ed. R. Westwood
and S. Clegg ( Malden, MA: Blackwood ,
2003 ), pp. 1–42 .
3. D. Katz and R. L. Kahn , The Social Psy-
chology of Organizations ( New York: Wiley ,
1966 ), chap. 2; R. N. Stern and S. R.
Barley , “Organizations as Social Systems:
Organization Theory’s Neglected
Mandate,” Administrative Science Quarterly
41 ( 1996 ), pp. 146–162 .
4. L. E. Greiner , “A Recent History of
Organizational Behavior,” in Organiza-
tional Behaviour , ed. S. Kerr ( Columbus,
OH: Grid , 1979 ), pp. 3–14 ; J. Micklethwait
and A. Wooldridge , The Company: A Short
History of a Revolutionary Idea ( New York:
Random House , 2003 ).
5. B. Schlender , “The Three Faces of
Steve,” Fortune , 9 November 1998 ,
pp. 96–101 .
6. Some of the historical bases of OB
mentioned in this paragraph are described
in J. A. Conger , “Max Weber’s Conceptu-
alization of Charismatic Authority: Its
Influence on Organizational Research,”
The Leadership Quarterly 4, no. 3–4 ( 1993 ),
pp. 277–288 ; R. Kanigel , The One Best
Way: Frederick Winslow Taylor and the
Enigma of Efficiency ( New York: Viking ,
1997 ); J. H. Smith , “The Enduring Legacy
of Elton Mayo,” Human Relations 51, no. 3
( 1998 ), pp. 221–249 ; T. Takala , “Plato on
Leadership,” Journal of Business Ethics 17
(May 1998 ), pp. 785–798 ; J. A. Fernandez ,
“The Gentleman’s Code of Confucius:
Leadership by Values,” Organizational
Dynamics 33, no. 1 (February 2004 ),
pp. 21–31 .
7. T. R. Mitchell and W. G. Scott , “The
Universal Barnard: His Micro Theories of
Organizational Behavior,” Public Adminis-
tration Quarterly, Fall 1985 , pp. 239–259 ;
A. M. Davis , “Liquid Leadership: The
Wisdom of Mary Parker Follett
(1868–1933),” http://sunsite.utk.edu/
FINS/Mary_Parker_Follett/Fins-MPF-03.
txt , 1997 (accessed 18 July 2008).
8. S. L. Rynes et al. , “Behavioral Course-
work in Business Education: Growing
Evidence of a Legitimacy Crisis,” Academy
of Management Learning & Education 2,
no. 3 ( 2003 ), pp. 269–283 ; R. P. Singh and
A. G. Schick , “Organizational Behavior:
Where Does It Fit in Today’s Management
Curriculum?” Journal of Education for Busi-
ness 82, no. 6 ( July 2007 ), p. 349.
9. P. R. Lawrence and N. Nohria , Driven:
How Human Nature Shapes Our Choices
( San Francisco: Jossey-Bass , 2002 ), chap. 6.
10. P. R. Lawrence “Historical Develop-
ment of Organizational Behavior,” in
Handbook of Organizational Behavior ,
ed. L. W. Lorsch ( Englewood Cliffs, NJ:
Prentice Hall , 1987 ), pp. 1–9 ; S. A.
Mohrman , C. B. Gibson , and A. M.
Mohrman Jr. , “Doing Research That Is
Useful to Practice: A Model and Empirical
Exploration,” Academy of Management Journal
44 (April 2001 ), pp. 357–375 . For a contrary
view, see: A. P. Brief and J. M. Dukerich ,
“Theory in Organizational Behavior: Can
It Be Useful?” Research in Organizational
Behavior 13 ( 1991 ), pp. 327–352 .
11. M. S. Myers , Every Employee a Manager
( New York: McGraw-Hill , 1970 ).
12. D. Yankelovich , “Got to Give to Get,”
Mother Jones 22 ( July 1997 ), pp. 60–63 ;
D. MacDonald , “Good Managers Key to
Buffett’s Acquisitions,” Montreal Gazette ,
16 November 2001 . The two studies on
OB and financial performance are B. N.
Pfau and I. T. Kay , The Human Capital
Edge ( New York: McGraw-Hill , 2002 ); I. S.
Fulmer , B. Gerhart , and K. S. Scott , “Are
the 100 Best Better? An Empirical Investi-
gation of the Relationship between Being
a ‘Great Place to Work’ and Firm Perfor-
mance,” Personnel Psychology 56, no. 4
(Winter 2003 ), pp. 965–993 .
13. Mohrman, Gibson , and Mohrman Jr. ,
“Doing Research That Is Useful to Prac-
tice” ; J. P. Walsh et al. , “On the Relation-
ship between Research and Practice:
Debate and Reflections,” Journal of Man-
agement Inquiry 16, no. 2 ( June 2007 ),
pp. 128–154 . Similarly, in 1961, Harvard
business professor Fritz Roethlisberger
proposed that the field of OB is con-
cerned with human behavior “from the
points of view of both (a) its determina-
tion . . . and (b) its improvement.” See
P. B. Vaill , “F. J. Roethlisberger and the
Elusive Phenomena of Organizational
Behavior,” Journal of Management Education
31, no. 3 ( June 2007 ), pp. 321–338 .
14. R. H. Hall , “Effectiveness Theory and
Organizational Effectiveness,” Journal of
Applied Behavioral Science 16, no. 4 (Octo-
ber 1980 ), pp. 536–545 ; K. Cameron ,
“Organizational Effectiveness: Its Demise
and Re-emergence through Positive Orga-
nizational Scholarship,” in Great Minds in
Management , ed. K. G. Smith and M. A.
Hitt ( New York: Oxford University Press ,
2005 ), pp. 304–330 .
15. J. L. Price , “The Study of Organiza-
tional Effectiveness,” The Sociological
Quarterly 13 ( 1972 ), pp. 3–15 .
16. S. C. Selden and J. E. Sowa , “Testing
a Multi-dimensional Model of Organiza-
tional Performance: Prospects and Prob-
lems,” Journal of Public Administration
Research and Theory 14, no. 3 ( July 2004 ),
pp. 395–416 .
17. F. E. Kast and J. E. Rosenweig , “General
Systems Theory: Applications for Organi-
zation and Management,” Academy of
Management Journal 15, no. 4 ( 1972) ,
pp. 447–465 ; P. M. Senge , The Fifth Disci-
pline: The Art and Practice of the Learning
Organization ( New York: Doubleday
Currency , 1990 ); A. De Geus, The Living
Company (Boston: Harvard Business School
Press, 1997 ); R. T. Pascale , M. Millemann ,
and L. Gioja , Surfing on the Edge of Chaos
(London: Texere, 2000 ).
18. V. P. Rindova and S. Kotha , “Contin-
uous ‘Morphing’: Competing through
Dynamic Capabilities, Form, and Func-
tion,” Academy of Management Journal
44 ( 2001 ), pp. 1263–1280 ; J. McCann ,
“Organizational Effectiveness: Changing
Concepts for Changing Environments,”
Human Resource Planning 27, no. 1 ( 2004 ),
pp. 42–50 .
531
references
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http://sunsite.utk.edu/
532 References
19. J. Arlidge , “McJobs That All the Family
Can Share,” Daily Telegraph (London),
26 January 2006 , p. 1.
20. C. Ostroff and N. Schmitt , “Configu-
rations of Organizational Effectiveness
and Efficiency,” Academy of Management
Journal 36, no. 6 ( 1993 ), p. 1345. There
are different ways of defining efficiency,
as well as some disagreement whether
work efficiency and productivity are the
same thing.
21. J. P. Womack and D. T. Jones , Lean
Thinking , 2d ed. ( New York: Free Press ,
2003 ); J. K. Liker , The Toyota Way ( New
York: McGraw-Hill , 2004 ); T. Melton ,
“The Benefits of Lean Manufacturing:
What Lean Thinking Has to Offer the
Process Industries,” Chemical Engineering
Research and Design 83, no. 6 ( 2005 ),
pp. 662–673 .
22. F. A. Kennedy and S. K. Widener ,
“A Control Framework: Insights from Evi-
dence on Lean Accounting,” Management
Accounting Research, in press ( 2008 ).
23. P. S. Adler et al. , “Performance Improve-
ment Capability: Keys to Accelerating
Performance Improvement in Hospitals,”
California Management Review 45, no. 2
( 2003 ), pp. 12–33 ; J. Jamrog , M. Vickers ,
and D. Bear , “Building and Sustaining a
Culture That Supports Innovation,”
Human Resource Planning 29, no. 3 ( 2006 ),
pp. 9–19 . Klaus Kleinfeld’s quotation is
from “Siemens CEO Klaus Kleinfeld:
‘Nobody’s Perfect, but a Team Can Be,’ ”
Knowledge@Wharton, 19 April 2006 .
24. K. E. Weick , The Social Psychology of
Organizing (Reading, MA: Addison-Wesley,
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aging Knowledge in Loosely Coupled
Networks: Exploring the Links between
Product and Knowledge Dynamics,”
Journal of Management Studies 38, no. 7
(November 2001 ), pp. 1019–1035 ;
D. Pinelle and C. Gutwin , “Loose Coupling
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CHAPTER 3
1. IBM, “Sam Palmisano Discusses
IBM’s New Corporate Service Corps,”
(news release), Armonk, NY, 25 July 2007 ;
G. Hills and A. Mahmud , Volunteering for
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rate Volunteering ( Boston: FSG Social Im-
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Economic Growth While Developing
Global Leaders” (news release), Armonk,
NY, 26 March 2008 ; M. Jackson , “Corpo-
rate Volunteers Reaching Worldwide,”
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2. O. Levy et al., “What We Talk about
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S. J. Black , W. H. Mobley , and E. Weldon ,
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S. Beechler and D. Baltzley , “Creating a
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3. The effect of the target in selective at-
tention is known as “bottom-up selection” ;
the effect of the perceiver’s psychodynam-
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4. A. Mack et al., “Perceptual Organiza-
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C. Frith , “A Framework for Studying the
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M. Shermer , “The Political Brain,” Scien-
tific American 295, no. 1 ( July 2006 ), p. 36 ;
D. Westen , The Political Brain: The Role of
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5. Confirmation bias is defined as “unwit-
ting selectivity in the acquisition and use
of evidence.” R. S. Nickerson , “Confirma-
tion Bias: A Ubiquitous Phenomenon in
Many Guises,” Review of General Psychology
2, no. 2 ( 1998 ), pp. 175–220 . This occurs
in a variety of ways, including over-
weighting positive information, perceiv-
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restricting cognitive attention to a favored
hypothesis. Research has found that con-
firmation bias is typically unconscious
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6. S. Lewandowsky et al., “Memory for
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7. D. J. Simons and C. F. Chabris , “Gorillas
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8. K. A. Lane , J. Kang , and M. R. Banaji ,
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10. C. N. Macrae and G. V. Bodenhausen ,
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about Others,” Annual Review of Psychology
51 ( 2000 ), pp. 93–120 . For literature on
the automaticity of the perceptual organi-
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CHAPTER 4
1. C. Foster , “Turning Ha-Ha into A-Ha!”
Employee Benefit News Canada , December
2007 ; M. Labash , “Are We Having Fun
Yet?” Weekly Standard , 17 September 2007 ;
Mott MacDonald, Meridian: Mott MacDonald
Annual Review 2006–2007 (Croydon, UK:
Mott MacDonald, 2007 ); F. Oliver , “Greet-
ings From: The Happiest Place in the
World,” Professional Builder , August 2007,
p. 44; “Mott MacDonald: Multidisciplinary
Consultancy,” Sunday Times: 100 Best Com-
panies to Work For 2008 (London), 9 March
2008, p. 18; C. Eggleston, “Dixon Schwabl
#1 to Work for in America,” R-News
(Rochester, NY), 23 June 2008; Great Place
to Work Institute, They Made It Happen:
Dixon Schwabl Is #1 ( San Francisco: Great
Place to Work Institute , 23 June 2008 );
S. Leonard , “Keeping Staff Happy Is the
Bottom Line,” Sunday Times: Best Companies
Guide 2009 (London), 29 June 2008, p. 8;
Mott MacDonald, Meridian: Mott MacDonald
Annual Review 2007–2008 ( Croydon, UK:
Mott MacDonald , 2008 ).
2. The centrality of emotions in market-
ing, economics, and sociology is discussed
in G. Loewenstein , “Emotions in Eco-
nomic Theory and Economic Behavior,”
American Economic Review 90, no. 2 (May
2000), pp. 426–432; D.S. Massey , “A
Brief History of Human Society: The
Origin and Role of Emotion in Social
Life,” American Sociological Review 67 (Feb-
ruary 2002 ), pp. 1–29; J. O’Shaughnessy
and N. J. O’Shaughnessy, The Marketing
Power of Emotion ( New York: Oxford
University Press , 2003 ).
3. The definition presented here is con-
structed from the following sources:
N.M. Ashkanasy , W. J. Zerbe , and
C.E. J. Hartel , “Introduction: Managing
Emotions in a Changing Workplace,” in
Managing Emotions in the Workplace, ed.
N.M. Ashkanasy , W. J. Zerbe , and
C. E. J. Hartel ( Armonk, NY: Sharpe ,
2002 ), pp. 3–18; H.M. Weiss , “Concep-
tual and Empirical Foundations for the
Study of Affect at Work,” in Emotions in the
Workplace , ed. R.G. Lord , R. J. Klimoski ,
and R. Kanfer ( San Francisco: Jossey-Bass ,
2002 ), pp. 20–63. However, the meaning
of emotions is still being debated. See, for
example, M. Cabanac , “What Is Emotion?”
Behavioral Processes 60 ( 2002 ), pp. 69–83.
4. R. Kanfer and R. J. Klimoski , “Affect
and Work: Looking Back to the Future,”
in Emotions in the Workplace, ed. R.G. Lord ,
R. J. Klimoski , and R. Kanfer ( San
Francisco: Jossey-Bass , 2002 ), pp. 473–490;
J.A. Russell, “Core Affect and the Psycho-
logical Construction of Emotion,”
Psychological Review 110, no. 1 (2003),
pp. 145–172.
5. R.B. Zajonc , “Emotions,” in Handbook
of Social Psychology , ed. D.T. Gilbert ,
S.T. Fiske , and L. Gardner ( New York:
Oxford University Press , 1998 ),
pp. 591–634.
6. N.A. Remington , L.R. Fabrigar , and
P.S. Visser , “Reexamining the Circum-
plex Model of Affect,” Journal of Personality
and Social Psychology 79, no. 2 (2000),
pp. 286–300; R. J. Larsen , E. Diener , and
R.E. Lucas , “Emotion: Models, Measures,
and Individual Differences,” in Emotions in
the Workplace, ed. R.G. Lord, R. J. Klimoski,
and R. Kanfer ( San Francisco: Jossey-Bass ,
2002 ), pp. 64–113; L.F. Barrett et al.,
“The Experience of Emotion,” Annual
Review of Psychology 58, no. 1 (2007),
pp. 373–403.
7. A.H. Eagly and S. Chaiken , The Psy-
chology of Attitudes ( Orlando, FL: Harcourt
Brace Jovanovich , 1993 ); A.P. Brief , Atti-
tudes in and around Organizations ( Thousand
Oaks, CA: Sage , 1998 ). There is an amaz-
ing lack of consensus on the definition
of attitudes. This book adopts the three-
component model, whereas some experts
define attitude as only the “feelings” com-
ponent, with “beliefs” as a predictor and
“intentions” as an outcome. Some writers
specifically define attitudes as an “evalua-
tion” of an attitude object, whereas others
distinguish attitudes from evaluations of
an attitude object. For some of these
definitional variations, see I. Ajzen ,
“Nature and Operation of Attitudes,”
Annual Review of Psychology 52 (2001),
pp. 27–58; D. Albarracín et al. , “Attitudes:
Introduction and Scope,” in The Handbook
of Attitudes , ed. D. Albarracín, B.T.
Johnson , and M.P. Zanna ( Mahwah, NJ:
Lawrence Erlbaum , 2005 ), pp. 3–20;
W.A. Cunningham and P.D. Zelazo ,
“Attitudes and Evaluations: A Social
Cognitive Neuroscience Perspective,”
Trends in Cognitive Sciences 11, no. 3 ( 2007 ),
pp. 97–104.
8. C.D. Fisher , “Mood and Emotions
While Working: Missing Pieces of Job Satis-
faction?” Journal of Organizational Behavior
21 (2000), pp. 185–202; Cunningham
and Zelazo, “Attitudes and Evaluations”;
M.D. Lieberman , “Social Cognitive Neu-
roscience: A Review of Core Processes,”
Annual Review of Psychology 58, no. 1 ( 2007 ),
pp. 259–289.
9. S. Orbell, “Intention-Behavior Rela-
tions: A Self-Regulation Perspective,” in
Contemporary Perspectives on the Psychology of
Attitudes , ed. G. Haddock and G.R. Maio
( East Sussex, UK: Psychology Press ,
2004 ), pp. 145–168.
10. H.M. Weiss and R. Cropanzano ,
“Affective Events Theory: A Theoretical
Discussion of the Structure, Causes, and
Consequences of Affective Experiences at
Work,” Research in Organizational Behavior
18 (1996), pp. 1–74; J. Wegge et al., “A
Test of Basic Assumptions of Affective
Events Theory (AET) in Call Centre
Work,” British Journal of Management 17
( 2006 ), pp. 237–254.
11. J.A. Bargh and M. J. Ferguson , “Be-
yond Behaviorism: On the Automaticity
of Higher Mental Processes,” Psychological
References 543
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544 References
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R.H. Fazio , “On the Automatic Activa-
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12. A.R. Damasio , Descartes’ Error: Emo-
tion, Reason, and the Human Brain ( New
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The Feeling of What Happens (New York:
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Emotion , ed. T. Dalgleish and M. Power
( San Francisco: Jossey-Bass , 1999 ),
pp. 45–60; J.E. LeDoux , “Emotion Cir-
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Neuroscience 23 (2000), pp. 155–184;
R. J. Dolan , “Emotion, Cognition, and
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13. N. Schwarz , “Emotion, Cognition, and
Decision Making,” Cognition and Emotion 14,
no. 4 (2000), pp. 433–440; M.T. Pham ,
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Psychology 14, no. 4 ( 2004 ), pp. 360–369.
14. G.R. Maio , V.M. Esses , and D.W. Bell ,
“Examining Conflict between Components
of Attitudes: Ambivalence and Inconsis-
tency Are Distinct Constructs,” Canadian
Journal of Behavioural Science 32, no. 2
( 2000 ), pp. 71–83.
15. P.C. Nutt , Why Decisions Fail ( San
Francisco: Berrett-Koehler , 2002 );
S. Finkelstein , Why Smart Executives Fail
( New York: Viking , 2003 ); P.C. Nutt,
“Search during Decision Making,”
European Journal of Operational Research
160 ( 2005 ), pp. 851–876.
16. Weiss and Cropanzano, “Affective
Events Theory.”
17. L. Festinger , A Theory of Cognitive Disso-
nance ( Evanston, IL: Row, Peterson , 1957 );
G.R. Salancik , “Commitment and the
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A.D. Galinsky , J. Stone , and J. Cooper ,
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18. T.A. Judge , E.A. Locke , and
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19. C.M. Brotheridge and A.A. Grandey ,
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20. J. Schaubroeck , D.C. Ganster , and
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21. R. Corelli , “Dishing Out Rudeness,”
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D. Zapf , “Emotion Work and Psychologi-
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and Some Conceptual Considerations,”
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12 ( 2002 ), pp. 237–268.
24. K.B. Mathis , “Puttin’ on the Ritz,”
Florida Times-Union ( Jacksonville),
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25. “Imagekampagne ‘Das Schönste
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26. E. Forman , “‘Diversity Concerns
Grow as Companies Head Overseas,’
Consultant Says,” Sun-Sentinel (Fort
Lauderdale, FL), 26 June 1995. Cultural
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International Conflict: Culture and Busi-
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no. 3 (Autumn 1996), pp. 51–68;
F. Trompenaars and C. Hampden-Turner ,
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York: McGraw-Hill , 1998 ), chap. 6;
A.E. Raz and A. Rafaeli , “Emotion Man-
agement in Cross-Cultural Perspective:
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Research on Emotion in Organizations 3
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27. This relates to the automaticity of
emotion, which is summarized in
P. Winkielman and K.C. Berridge , “Un-
conscious Emotion,” Current Directions
in Psychological Science 13, no. 3 (2004),
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28. W.J. Zerbe , “Emotional Dissonance
and Employee Well-Being,” in Manag-
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Ashkanasy , W. J. Zerbe , and C.E. J. Hartel
( Armonk, NY: Sharpe , 2002 ), pp. 189–214;
R. Cropanzano , H.M. Weiss , and S.M.
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Emotional Labor on Psychological Well-
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29. J. Verdon , “They Can Hardly Contain
Themselves,” The Record (Bergen, NJ),
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M. Clayton , “Long Hours Hurt Business
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Labor and Burnout”; Zapf, “Emotion
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intelligence are discussed in detail in
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in The Emotionally Intelligent Workplace,
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abilities is debated in several sources, in-
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Be Fixed? ( Mahwah, NJ: Lawrence
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the Ability to Eavesdrop on Feelings,”
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CHAPTER 5
1. E. Pofeldt, “What Makes a Great
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of Work Motivation Theory,” Academy of
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3. W.H. Macey and B. Schneider, “The
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Industrial and Organizational Psychology
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4. N.P. Rothbard, “Enriching or Depleting?
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in Business Success,” Workspan, Novem-
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R.L. Gilson, and L.M. Harter, “The Psy-
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Safety and Availability and the Engage-
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of Occupational and Organizational Psychol-
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F. Catteeuw, E. Flynn, and J. Vonderhorst,
“Employee Engagement: Boosting Pro-
ductivity in Turbulent Times,” Organiza-
tion Development Journal 25, no. 2 (Summer
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5. G. Ginsberg, ed., Essential Techniques
for Employee Engagement, The Practi-
tioner’s Guide To . . . (London: Melcrum,
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11. The confusing array of definitions about
drives and needs has been the subject
of criticism for a half century. See, for ex-
ample, R.S. Peters, “Motives and Motiva-
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H. Cantril, “Sentio, Ergo Sum: ‘Motiva-
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5. P.F. Wernimont and S. Fitzpatrick , “The
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“The Money Taboo: Its Effects in Everyday
Life and in the Practice of Psychotherapy,”
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pp. 275–288 ; S. Lea, “Money: Motiva-
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6. A. Furnham and R. Okamura , “Your
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Human Relations 52 (September 1999 ),
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7. Tang et al., “The Love of Money and
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Help or Not to Help? The Good Samaritan
Effect and the Love of Money on Helping
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T. Tang and Y.-J. Chen , “Intelligence vs.
Wisdom: The Love of Money, Machiavel-
lianism, and Unethical Behavior across
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17. R. J. Long , “Paying for Knowledge:
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search on Group Work,” Human Relations
51 (March 1998), pp. 347–388. Several
popular books in the 1980s encouraged
teamwork, based on the Japanese economic
miracle. These books include W. Ouchi,
Theory Z: How American Management Can
Meet the Japanese Challenge (Reading, MA:
Addison-Wesley, 1981); R.T. Pascale and
A.G. Athos, Art of Japanese Management
(New York: Simon and Schuster, 1982).
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http://www.ihaveanidea.org
http://www.serviceuntitled.com/interview-david-bryce-part-3-of-3/2006/10/13/
http://www.serviceuntitled.com/interview-david-bryce-part-3-of-3/2006/10/13/
http://www.serviceuntitled.com/interview-david-bryce-part-3-of-3/2006/10/13/
http://www.serviceuntitled.com/interview-david-bryce-part-3-of-3/2006/10/13/
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Third Eye: Exploring Guanxi and Rela-
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tics has become the dominant perspective
over the past 15 years. See G. R. Ferris
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tics and Support to Work Behaviors, Atti-
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because it overlaps too much with the
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CHAPTER 11
1. L. Belkin, “When Whippersnappers
and Geezers Collide,” New York Times,
26 July 2007; J.J. Deal, Retiring the Genera-
tion Gap: How Employees Young and Old
Can Find Common Ground (San Francisco:
Jossey-Bass, 2007); L. Gravett and
R. Throckmorton, Bridging the Generation
Gap (Franklin Lakes, NJ: Career Press,
2007); D. Kadlec, “Don’t Trust Anyone
under Thirty,” Money, November 2007,
pp. 50–52; P. Fogg, “When Generations
Collide,” Chronicle of Higher Education 54,
no. 45 (2008), pp. B18–B20; B. Ott,
N. Blacksmith, and K. Royal, “What Gen-
eration Gap? Job Seekers from Different
Generations Often Look for the Same
Things from Prospective Employers,
According to Recent Gallup Research,”
Gallup Management Journal Online, 2008,
pp. 1–4; N. Weil, “Welcome to the Gen-
eration Wars,” CIO, 1 February 2008.
2. D. Tjosvold, Working Together to Get Things
Done (Lexington, MA: Lexington, 1986),
pp. 114–115; J.A. Wall and R.R. Callister,
“Conflict and Its Management,” Journal of
Management 21 (1995), pp. 515–558; M.A.
Rahim, “Toward a Theory of Managing
Organizational Conflict,” International Jour-
nal of Conflict Management 13, no. 3 (2002),
pp. 206–235; D. Tjosvold, “Defining Con-
flict and Making Choices about Its Man-
agement,” International Journal of Conflict
Management 17, no. 2 (2006), pp. 87–95.
3. For example, see L. Urwick, The Ele-
ments of Administration, 2d ed. (London:
Pitman, 1947); C. Argyris, “The Individ-
ual and Organization: Some Problems
of Mutual Adjustment,” Administrative
Science Quarterly 2, no. 1 (1957), pp. 1–24;
K.E. Boulding, “Organization and
Conflict,” Conflict Resolution 1, no. 2
( June 1957), pp. 122–134; R.R. Blake,
H.A. Shepard, and J.S. Mouton, Managing
Intergroup Conflict in Industry (Houston:
Gulf, 1964).
4. C.K.W. De Dreu and L.R. Weingart, “A
Contingency Theory of Task Conflict and
Performance in Groups and Organiza-
tional Teams,” in International Handbook of
Organizational Teamwork and Cooperative
Working, ed. M.A. West, D. Tjosvold,
and K.G. Smith (Chichester, UK: Wiley,
2003), pp. 151–166; K.A. Jehn and
C. Bendersky, “Intragroup Conflict in
Organizations: A Contingency Perspective
on the Conflict-Outcome Relationship,”
Research in Organizational Behavior 25 (2003),
pp. 187–242.
5. N. Oudeh, “Functional Harmony—
Assessing the Impact of Conflict on Orga-
nizational Health,” paper presented at
Workplace Health in a Tight Labour
Market, Toronto, 7 March 2007.
6. M.P. Follett, “Constructive Conflict,” in
Dynamic Administration: The Collected Papers
of Mary Parker Follett, ed. H.C. Metcalf
and L. Urwick (New York: Harper and
Brothers, 1942), pp. 30–37.
7. Rahim, “Toward a Theory of Manag-
ing Organizational Conflict”; M. Duarte
and G. Davies, “Testing the Conflict-
Performance Assumption in Business-to-
Business Relationships,” Industrial Marketing
Management 32 (2003), pp. 91–99. Although
the 1970s marked a point when the bene-
fits conflict became widely acknowledged,
this view was expressed earlier by some
writers. See L.A. Coser, The Functions of
Social Conflict (New York: Free Press,
1956); J.A. Litterer, “Conflict in Organiza-
tion: A Reexamination,” Academy of Man-
agement Journal 9 (1966), pp. 178–186;
H. Assael, “Constructive Role of Interorga-
nizational Conflict,” Administrative Science
Quarterly 14, no. 4 (1969), pp. 573–582. A
much earlier statement in support of con-
flict comes from American poet and jour-
nalist Walt Whitman, who wrote in 1860:
“Have you learned lessons only of those
who admired you, and were tender with
you, and stood aside for you? Have you
not learned great lessons from those who
braced themselves against you, and dis-
puted the passage with you?” Cited in
D. Taras and P. Steel, “We Provoked
Business Students to Unionize: Using
Deception to Prove an IR Point,” British
Journal of Industrial Relations 45, no. 1
(March 2007), pp. 179–198.
8. K.M. Eisenhardt, J.L. Kahwajy, and
L. J. Bourgeois III, “How Management
Teams Can Have a Good Fight,” Harvard
Business Review, July–August 1997,
pp. 77–85; K.M. Eisenhardt, J.L.
Kahwajy, and L. J. Bourgeois III, “Con-
flict and Strategic Choice: How Top
Man agement Teams Disagree,” California
Management Review 39 (Winter 1997),
pp. 42–62; T. Greitemeyer et al., “Infor-
mation Sampling and Group Decision
Making: The Effects of an Advocacy
Decision Procedure and Task Experience,”
Journal of Experimental Psychology—Applied
12, no. 1 (March 2006), pp. 31–42;
U. Klocke, “How to Improve Decision
Making in Small Groups: Effects of Dis-
sent and Training Interventions,” Small
Group Research 38, no. 3 ( June 2007),
pp. 437–468.
9. H. Guetzkow and J. Gyr, “An Analysis
of Conflict in Decision-Making Groups,”
Human Relations 7, no. 3 (August 1954),
pp. 367–382; L.H. Pelled, K.M. Eisenhardt,
and K.R. Xin, “Exploring the Black Box:
An Analysis of Work Group Diversity,
Conflict, and Performance,” Administrative
Science Quarterly 44 (March 1999), pp. 1–28;
Jehn and Bendersky, “Intragroup Conflict
in Organizations.” The notion of two
types of conflict dates back to the 1950s,
but it became the dominant perspective
in the 1990s. We have avoided using the
“cognitive” and “affective” conflict labels
because each type of conflict includes
both cognitive and emotional elements.
10. C.K.W. De Dreu, “When Too Little or
Too Much Hurts: Evidence for a Cur-
vilinear Relationship between Task Con-
flict and Innovation in Teams,” Journal of
Management 32, no. 1 (February 2006),
pp. 83–107.
11. C.K.W. De Dreu and L.R. Weingart,
“Task versus Relationship Conflict, Team
Performance, and Team Member Satisfac-
tion: A Meta-Analysis,” Journal of Applied
Psychology 88 (August 2003), pp. 587–604;
A.C. Mooney, P. J. Holahan, and A.C.
Amason, “Don’t Take It Personally: Ex-
ploring Cognitive Conflict as a Mediator
of Affective Conflict,” Journal of Manage-
ment Studies 44, no. 5 (2007), pp. 733–758.
12. J. Yang and K.W. Mossholder, “Decou-
pling Task and Relationship Con flict:
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CHAPTER 12
1. “Driving the Engine,” Broadcasting &
Cable 133, no. 16 (21 April 2003 ), p. 6A ;
S. Pappu , “The Queen of Tween,” Atlantic
Monthly , November 2004 , pp. 118–125 ;
A. Becker , “The Wonderful World of
Sweeney,” Broadcasting & Cable , 25 Feb-
ruary 2008 , p. 19 ; J. R. Littlejohn ,
“Distinguished Vanguard Award for
Leadership,” Multichannel News , 19 May
2008 .
2. R. House , M. Javidan , and P. Dorfman ,
“Project GLOBE: An Introduction,” Ap-
plied Psychology: An International Review 50
( 2001 ), pp. 489–505 ; R. House et al.,
“Understanding Cultures and Implicit
Leadership Theories across the Globe:
An Introduction to Project GLOBE,”
Journal of World Business 37 ( 2002 ),
pp. 3–10 .
3. R. G. Isaac , W. J. Zerbe , and D. C. Pitt ,
“Leadership and Motivation: The Effec-
tive Application of Expectancy Theory,”
Journal of Managerial Issues 13 (Summer
2001 ), pp. 212–226 ; C. L. Pearce and J. A.
Conger , eds., Shared Leadership: Reframing
the Hows and Whys of Leadership ( Thousand
Oaks, CA: Sage , 2003 ); J. S. Nielson , The
Myth of Leadership ( Palo Alto, CA: Davies-
Black , 2004 ); J. A. Raelin , “We the Lead-
ers: In Order to Form a Leaderful
Organization,” Journal of Leadership &
O rganizational Studies 12, no. 2 ( 2005 ),
pp. 18–30 .
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5. A. Deutschman , “The Fabric of Cre-
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6. “Powered by Frontline People,” Em-
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7. Many of these perspectives are summa-
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8. The history of the trait perspective of
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corporate Web sites and annual reports.
These organizations typically rely on a
mixture of other structures, so the charts
shown have been adapted for learning
purposes.
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more complex than we have described
here. Its “four pillars” also include global
business services and corporate functions.
See P&G Corporate Info, Corporate
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CHAPTER 14
1. L. M. Fisher , “How Dell Got Soul,”
strategy�business, Fall 2004 , pp. 1–14 ;
N. Byrnes , P. Burrows , and L. Lee , “Dark
Days at Dell,” BusinessWeek , 4 September
2006 , p. 26 ; M. Kessler , “Dell Reverses,
Steps into Wal-Mart,” USA Today , 25 May
2007 , p. B1 ; S. Lohr , “Can Michael Dell
Refocus His Namesake?” New York Times ,
9 September 2007 , p. 1 ; D. Zehr , “Dell
Challenge: New Ideas and Less Red Tape,”
Austin American-Statesman , 4 February
2007 , p. A1 ; Waterstone Human Capital
and National Post, Canada’s 10 Most
Admired Corporate Cultures, 2007 ( Toronto:
Waterstone Human Capital and National
Post , February 2008 ).
2. A. Williams , P. Dobson , and M. Walters ,
Changing Culture: New Organizational Ap-
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Is Culture?” in Reframing Organizational
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CA: Sage , 1991 ), pp. 243–253 .
3. B. M. Meglino and E. C. Ravlin , “Indi-
vidual Values in Organizations: Concepts,
Controversies, and Research,” Journal of
Management 24, no. 3 ( 1998 ), pp. 351–389 ;
B. R. Agle and C. B. Caldwell , “Under-
standing Research on Values in Business,”
Business and Society 38, no. 3 (September
1999 ), pp. 326–387 ; S. Hitlin and J. A.
Pilavin , “Values: Reviving a Dormant Con-
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pp. 359–393 .
4. N. M. Ashkanasy , “The Case for
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R. Westwood and S. Clegg ( Malden,
MA: Blackwell , 2003 ), pp. 300–310 .
5. B. Kabanoff and J. Daly , “Espoused
Values in Organisations,” Australian Jour-
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pp. 89–104 .
6. K. Axtman , “Inside the Culture and
Collapse of Enron,” Christian Science Moni-
tor 96, no. 222 (12 October 2004 ), p. 3 ;
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http://www.expeditions.com/Theater17
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595
name index
A
Abel, M. H., 549
Abrahamson, E., 570
Abusah, D., 565
Ackerman, F., 533
Ackley, Ray, 22
Adams, J. S., 553
Adams, L., 562
Adams, Lisa, 254
Aditya, R. N., 576
Adler, P. S., 532, 570
Adomdza, G. K., 560
Agle, B. R., 533, 538, 551, 582
Agor, W. H., 559
Ai, S., 566
Aiello, J. R., 562
Ajzen, I., 543
Akgün, A. E., 532
Aksoy, L, 538
Akter, M., 580
Alam, K., 579
Alam, K. F., 539
Albarracín, D., 543
Alderfer, C. P., 550
Alexander, G. S., 583
Alexander, P., 411
Allen, D. G., 585
Allen, L. A., 547
Allen, M., 539
Allen, N. J., 128, 533, 562
Allen, R. W., 572
Allen, T. J., 568
Aloysius, J. A., 559
Alsop, R., 537
Altmann, E. M., 540, 558
Amabile, T. M., 560, 561
Amason, A. C., 572, 573
Ambady, N., 540, 545
Ambrose, M. L., 553
Ambwani, Narendra, 44
Anders, G., 580
Anderson, B., 124
Anderson, Dave, 374
Anderson, J., 571
Anderson, J. W., 540
Anderson, N., 562, 585, 586
Andrew, S., 547
Andrews, M., 553
Andrews, M. C., 571
Andriopoulos, C., 560
Ang, S., 546
Ang, S. H., 554
Angle, H. L., 572
Anglim, J., 563
Anhalt, R. L., 541
Ante, S. E., 552
Anthony, S., 585
Anthony, W. P., 567
Appelbaum, E., 532
Applebaum, S. H., 534, 550
Argyris, C., 560, 572
Ariely, D., 558
Aritzeta, A., 563
Arlidge, J., 532
Armour, S., 549
Armstrong, R. W., 538
Arndt, M., 554, 586
Aronson, E., 539, 564
Aronson, N., 588
Arrow, H., 562
Arunski, Karl, 308
Ash, L., 540
Ashford, S. J., 547, 552
Ashforth, B. E., 537, 544, 584,
585, 586
Ashkanasy, N. M., 543, 545, 550,
557, 582
Ashton, M. C., 63, 162
Assael, H., 572
Assanand, S., 537
Åsterbro, T., 560
Athos, A. G., 561
Atuahene-Gima, K., 570
Atwater, L. E., 542, 552
Atzeni, T., 567
Au, K., 546
Aubé, C., 244, 563
Auh, S., 546
Avolio, B. J., 382, 577
Axelrod, E., 588
Axtell, C. M., 542
Axtell, R. E., 568
Axtman, K., 582
Aycan, Z., 538
Ayers, S., 547
B
Baba, V. V., 547–548, 577
Babcock, P., 541, 588
Baber, A., 586
Bacharach, S. B., 535
Bachman, Greg, 249
Backover, A., 319
Bacon, N., 540
Bader, P., 576
Bagozzi, R. P., 551
Bailey, D. E., 535, 565, 573
Bailor, C., 551
Baker, G., 573
Baker, V., 537
Baker, W. E., 543, 584
Bakker, A., 548
Baldwin, C., 582
Balfour, F., 293
Balkundi, P., 561
Ballard, Geoffrey, 218
Ballmer, Steve, 150
Balser, D., 533
Balsillie, Jim, 428
Baltazar, R., 563
Balthazard, P. A., 583
Baltzley, D., 539
Bamberger, P., 535
Banaji, M. R., 539
Bandura, A., 537, 542
Bansal, P., 532
Barak, Eran, 308
Barbaro, M., 551–552
Barbuto, J. E., Jr., 545, 578
Bardi, A., 533, 538
Barger, P. B., 546
Bargh, J. A., 539, 540, 542,
543–544, 558
Barker, B. A., 563
Barki, H., 566, 573
Barley, S. R., 531
Barling, J., 547, 578, 588
Barnard, Chester, 5, 270, 566, 569
Barnash, Jim, 365
Barnes, B., 531
Barnes, J. W., 584
Barnes, V. A., 549
Barnett, M. L., 533
Barnett, W. P., 564
Barney, J. B., 532, 533
Barnlund, D. C., 568
Baron, R. A., 571
Barrett, F. J., 459, 588
Barrett, L. F., 552
Barrett, R., 584
Barrick, M. R., 536, 563
Barry, B., 567
Barsade, S. G., 550, 559, 567
Bartol, K. M., 554
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596 Name Index
Bartram, D., 535
Bartunek, J. M., 552
Basch, R., 532, 534
Bass, B. M., 382, 557, 577, 578, 584
Bass, Carl, 374
Bastianutti, L. M., 566
Basuroy, S., 551
Bateman, T. S., 513, 540
Bauer, T. N., 585–586
Baum, A., 547
Baum, J. R., 578
Bauman, J., 557
Baumeister, R. F., 550, 551, 562,
566, 569
Baumruk, R., 549
Bavelas, Alex, 495
Bazerman, M. H., 574
Beach, L. R., 557
Beal, D. J., 564
Bear, D., 532
Beasley, M., 548
Beatty, C. A., 563
Beavers, Brad, 274
Bechara, A., 557
Bechky, B. A., 584
Beckenbauer, Franz, 104
Becker, A., 575, 578
Becker, B., 548
Becker, B. E., 532
Becker, F., 568
Becker, G. S., 580
Beckerle, C. A., 569
Beddows, Justin, 274
Bedeian, A. G., 546, 553, 572, 580
Beechler, S., 539
Beehr, T. A., 538
Beer, J. S., 550
Beer, M., 555, 587
Beersma, B., 336, 357
Behling, O., 559
Beith, M., 566
Bélanger, F., 567
Belkin, L., 572
Bell, B. S., 565
Bell, D. W., 544
Bell, S. J., 546
Belz, Dorothee, 377
Benady, A., 561
Benbow, C. P., 538
Bendersky, C., 572, 573
Bendick, M., 541
Bendt, Steve, 276
Benesh, P., 578
Bengtsson, U., 588
Bennett, J., 566
Bennett, Steve, 451
Bennis, W. G., 534, 578
Benson, G. S., 532
Benson, J., 578
Benzing, C. D., 573
Berdahl, J. L., 562
Berend, D., 560
Beresford, Dennis R., 319
Beresford, Peter, 289
Berg, Achim, 377
Berg, J., 554
Bergman, T. J., 573
Bergquist, Jim, 503
Berlew, D. E., 578
Bernard, M. M., 538
Bernstel, J. B., 586
Berridge, K. C., 544, 550, 551,
557, 567
Berrisford, S., 588
Berson, Y., 578, 585
Beshears, J., 558
Bettis, R., 581
Betz, E. L., 550
Bexton, W. H., 551
Beyer, J. M., 586
Bhagwati, J., 534
Bianco, A., 533
Bielski, L., 586
Bijttebier, P., 557
Billing, Sean, 32
Bilovsky, F., 546
Bingham, L. B., 575
Binkert, Jacqueline, 125, 552
Bird, Brad, 2, 109
Birkenshaw, J., 582
Birritteri, A., 534
Bitti, M. T., 535
Black, D., 548
Black, S. J., 539
Blacksmith, N., 572
Blagg, H., 568
Blake, R. R., 336, 356, 572
Blakely, G., 553
Blanchard, Ken H., 369, 577
Blank, W., 577
Blanton, H., 541
Blasi, A., 550
Blau, G., 553
Blayney, D., 534
Blazejewski, S., 571
Blickle, G., 571
Bliese, P. D., 551
Bloom, M. C., 553
Bloomberg, Michael R., 146
Blossom, D., 587
Blotnicky, K., 539
Bluedorn, A. C., 547
Blyton, P., 540
Bobko, P., 547
Bobocel, D. R., 544
Bock, Laszlo, 196, 220
Bodenhausen, G. V., 539, 540
Boehnke, K., 538
Böger, Klaus, 104
Bogner, W. C., 532
Bogyo, Terrance, 464, 465
Boies, K., 561
Boisnier, Alicia, 482, 583
Bolch, M., 554, 569
Bolden, R., 576
Bolino, M. C., 571
Boman, Pär, 164
Bonanno, G. A., 548
Bonaparte, Napoleon, 390
Bonasia, J., 581
Bond, S. D., 541, 558
Bong, Angela, 243
Bong, M., 577
Bono, J. E., 537, 552
Boos, M., 567–568
Bopp, M. I., 556
Borch, C., 570
Bordass, B., 568
Bordia, P., 565
Borghans, L., 580
Borkenau, P., 536
Borrill, C. S., 562
Boss, J., 539
Boss, R. W., 324, 571
Bossidy, Lawrence A., 210, 363,
559, 576
Boswell, W. R., 553
Botero, I. C., 546
Botti, S., 558
Bouchard, T., 536
Boucher, H. C., 562
Bouckenooghe, D., 538
Boudens, C. J., 583
Boulding, K. E., 572
Boulding, W., 559
Boulton, C., 567
Bourgeois, L. J., III, 565, 572, 574
Bouvin, Anders, 182
Bouw, B., 585
Bowness, S., 552
Boyatzis, R. E., 105, 542, 545,
568, 576
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Name Index 597
Boyle, M., 546
Bozon, I. J., 587
Brackett, M. A., 545
Bradbury, H., 587
Bradfield, R., 559
Brady, D., 570, 586
Bragger, J. D., 559
Braica, P., 585
Brand, R., 585
Brandon, Yvonne, 147
Brandstadter, J., 557
Brannick, T., 586, 587
Branson, Richard, 371
Brantmeier, C., 575
Brass, D. J., 569, 570
Bravo, Rose Marie, 236
Brazil, J. J., 587
Breaugh, J. A., 586
Brechu, M. B., 579
Breeze, J. D., 580
Brender, Y., 551
Brett, J., 552
Brett, J. M., 573, 574, 575
Brew, F. P., 574
Brewer, N., 574
Brickson, S., 574
Bridwell, L. G., 550
Brief, A. P., 531, 543, 571
Bright, D. S., 588
Brimble, S., 585
Brockner, J., 559
Brodbeck, F. C., 579
Brodt, S. E., 541, 575
Brodzinski, C., 554
Bromiley, P., 555
Brooker, K., 578
Brooks, F. P., 562
Brotheridge, C. M., 544
Brown, B. R., 575
Brown, D. A., 569, 571
Brown, D. J., 576, 579
Brown, K. S., 561
Brown, R. P., 541
Brown, S. P., 552
Brown, V. R., 566
Brownstein, A. L., 558
Brtek, M. D., 555
Brusoni, S., 532
Brutus, S., 552
Bryant, B., 562
Bryant, Elizabeth, 42
Bryman, A., 578
Buchanan, D., 587
Buchanan, L., 586
Buckingham, M., 125, 552, 555
Buckler, G., 565
Buckley, M. R., 548
Buckley, N., 578, 581
Budner, S., 468
Buelens, M., 580
Buffett, Warren, 6
Bulkeley, W. M., 567
Burbach, M. E., 545
Burke, C., 559, 576
Burke, C. S., 578
Burke, L. A., 536
Burke, R. J., 534, 548–549
Burkes Erickson, P., 585, 586
Burkhardt, M. E., 570
Burnes, B., 586
Burnham, D. H., 551
Burns, B. D., 540, 558
Burns, J. M., 577
Burns, T., 581, 582
Burrows, P., 582
Burton, M., 561, 584
Burton, Pierre, 154
Busch, Heike, 104
Bushe, G. R., 563, 588
Bushey, D., 570
Bussey, N., 570
Butera, F., 567
Butler, A. B., 552
Butler, K. M., 536
Buttermore, N. R., 537
Butz, D. A., 540
Butz, H. R., 587
Bycio, P., 546
Byham, W. C., 542
Byrne, J. C., 532
Byrnes, N., 411, 554, 582
Byron, E., 539
Byron, K., 566
C
Cabanac, M., 543
Cable, D. M., 547, 585
Cacioppo, J. T., 567, 571
Cai, D. A., 574
Cairns, D. R., 574
Cairns, G., 559
Calabrese, G., 581–582
Calcraft, Stef, 220
Caldwell, C. B., 533, 538, 551, 582
Caldwell, D. E., 564
Caldwell, D. F., 419, 583
Caldwell, R., 587
Caldwell, S., 586
Callan, Patricia, 137
Callanan, Gerard A., 352, 356, 573
Callery, P., 513
Callister, R. R., 545, 572
Cameron, A. F., 567
Cameron, K., 531, 588
Campbell, A., 581, 582
Campbell, E. A., 575
Campbell, J. D., 537
Campbell, J. P., 533, 535, 551
Campbell-Sills, L., 548
Campion, M. A., 546, 552, 555, 562,
563, 580
Cannon, M. D., 555
Cantril, H., 550
Capraro, M. M., 536
Capraro, R. M., 536
Carapiet, L., 585
Card, Sharon, 322
Carey, B., 534
Caritat, M.-J.-A.-N. (Marquis de
Condorcet), 214
Carli, L. L., 579
Carlson, J. R., 566, 567
Carmeli, A., 584
Carnegie, Andrew, 462
Carpenter, M. A., 570
Carr, S., 567
Carroll, J. S., 559
Carroll, S. A., 545
Carroll, Tom, 305
Carron, A. V., 564
Carson, K. D., 569
Carson, K. P., 565
Carson, P. P., 569
Carter, Maurice, 179
Caruso, D. R., 544–545, 568
Carver, C. S., 536
Casciaro, T., 533
Case, J., 554
Caspi, A., 536
Castleberry, S. B., 568
Catan, T., 319
Catmull, Ed, 2
Catteeuw, F., 537, 549
Cavusgil, S. T., 543, 584
Cawsey, T. F., 587
Cegarra-Navarro, J. G., 532, 543
Cha, S. E., 584
Chabris, C. F., 539
Chaiken, S., 543
Challagalla, G., 552
Champagne, M. V., 574
Champoux, J. E., 555
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598 Name Index
Chan, J. W. K., 563
Chan, L. Y., 581
Chandler, A. D., 582
Chang-Schneider, C., 537
Chao, G. T., 585
Chapman, D. S., 585
Chapman, P., 568
Charan, R., 559, 576, 585, 586
Charles, A. C., 552
Chartrand, T. L., 540, 558
Chatman, J. A., 419, 583, 584
Chebat, J.-C., 556
Chelius, J., 554
Chemers, M. M., 577
Chen, C.-I. B., 585
Chen, C.-J., 581
Chen, G., 537
Chen, S., 562
Chen, Y.-J., 553–554
Chen, Z. X., 547
Cheng, A., 535
Cheng, Albert, 358
Cheong, M., 543
Chermack, T. J., 540
Cherniss, C., 545
Cherrington, David J., 350
Chesbrough, H., 582
Chesley, N., 548
Cheung-Judge, M.-Y., 588
Cheyne, J. A., 556
Chia, S.-A., 549
Chiat, Jay, 202, 307
Chidambaram, L. L., 562
Child, P. N., 587
Chmiel, N., 548
Cho, H., 535
Cho, Jeewon, 482
Choi, I., 540–541
Choi, J., 558
Choi, J. N., 562, 565
Chordes, L., 549
Chow, Terence, 87
Chreim, S., 586
Christensen, C., 585
Christensen, C. M., 535
Christiansen, N. D., 537, 554
Christie, P. M. J., 582
Christie, R., 572
Christman, S. D., 558
Churchill, G. A. J., 535
Churchill, Winston, 422, 583
Cialdini, R. B., 569, 570
Ciampa, D., 582
Cicchetti, D., 548
Ciriacks, T., 575
Clancy, Ann L., 125, 552
Clark, Carolyn, 32
Clark, K., 582
Clark, S. C., 545
Claydon, T., 587
Clayton, M., 544
Clegg, C. W., 556, 580
Clegg, S. R., 531, 569
Clement, R. W., 541
Clifton, D. O., 552, 555
Cloninger, C. R., 63, 162
Cobb, A. T., 570–571
Cobbin, D. M., 539
Coetzer, G. H., 563
Coffman, C., 125
Coghlan, D., 586, 587
Cohan, S. L., 548
Cohen, D. S., 587
Cohen, N., 557
Cohen, S., 561, 566
Cohen, S. G., 561, 564
Cohen, W., 532
Cohen-Charash, Y., 553
Colbert, A. E., 552, 576
Coleman, Bob, 331
Coleman, D. F., 544
Colias, M., 542
Collingwood, H., 565
Collins, C. J., 551
Collins, D., 559
Collins, J. C., 584
Combs, J., 532
Comer, L. B., 568
Condorcet, Marquis de, 214
Cone, E., 568
Confucius, 5
Conger, J. A., 531, 575, 576, 578
Conley, L., 586
Conlin, M., 190, 293, 534, 549
Conlon, D. E., 575
Connellan, T. K., 83, 542
Connelly, M., 555, 564
Connon, H., 555
Connor, C. E., 539
Constantino, M. J., 537
Conway, N., 554–555
Cook, Mimi, 307
Cooke, R. A., 583
Coombs, T., 542
Coon, H. M., 51, 538
Cooper, B. J., 585
Cooper, C. L., 533
Cooper, H., 536
Cooper, J., 544
Cooper, W. H., 541, 545, 566
Cooperrider, D. L., 459, 588
Cooper-Thomas, H. D., 585, 586
Copper, C., 556, 564
Corace, C. J., 537
Corbin, J., 513
Cordery, J. L., 555, 556, 580
Corelli, R., 544
Corning, P. A., 550
Corts, Paul R., 452
Coser, L. A., 572
Costa, P. T., 536, 537, 552
Costello, T. W., 541–542
Coughlin, K., 534
Covey, Stephen, 345
Cowiea, H., 548
Cox, A., 587
Cox, D., 574
Cox, K., 567
Cox, T., 570
Coyle, John, 274
Craig, S., 583
Crano, W. D., 571
Crant, J. M., 540
Crawford, M., 568
Cremer, J., 576
Crispin, S. W., 560
Cronshaw, S. F., 579
Croon, M. A., 579
Cropanzano, R., 543, 544, 547, 552,
553, 571, 575
Crosby, Nick, 184
Cross, R., 561, 581, 586
Crowther, S., 588
Croyle, M. H., 544
Crump, J., 536
Crundwell, N., 575
Cruthirds, K. W., 549
Cruz, S., 585
Cummings, A., 561
Cummings, L. L., 549, 557, 560, 587
Cummings, T. G., 587
Cunningham, W. A., 543
Cyr, L. A., 538, 547
D
Daft, R. L., 279, 567
Dahl, R. A., 569
Dallnera, M., 581
Daly, J., 582
Daly, J. P., 584
Damasio, A. R., 539, 544, 551, 557
D’Amelio, A., 586
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Name Index 599
Dane, E., 559
Danna, K., 548
D’Annunzio, L. S., 582
Darce, K., 565
Darlin, D., 587
Darrow, B., 583
Das, T. K., 557
Dastmalchian, A., 579
Daus, C. S., 545
Davenport, T. H., 557, 581
Davidoff, Jeffrey, 148
Davidovitz, R., 576
Davidson, Diane, 361
Davidson, J., 548
Davidson, J. E., 560
Davidson, N., 547
Davies, G., 572
Davis, A. M., 531
Davis, G. M.-T., 554
Davis, J., 535
Davis, K., 568, 569
Davis, R., 586
Davis, R. C., 555
Davis, Ray, 442, 444, 449, 454, 455
Davis, W. L., 569
Davu, Jovie, 249
Dawes, P. L., 569
Dawley, D. D., 567
Day, A. L., 545
Day, Christine, 431
Day, D. V., 542
Day, T. A., 547
Deal, J. J., 572
Deal, T. E., 584
Deaner, C. M. D., 588
De Blasio, P., 568
DeChurch, L. A., 573
DeConinck, J. B., 542
DeCotiis, T., 546
DeCourcy, Colleen, 305
De Dreu, C. K. W., 336, 357, 534,
563, 564, 565, 572, 573, 574
DeFelice, A., 570
DeFrank, R. S., 547
De Geus, A., 531
De Grassi, A., 588
DeGross, R., 586
Delbecq, A. L., 557, 566, 580
Delbridge, R., 569
Delio, M., 568
Dell, Michael, 414, 420, 425,
426, 429
Dellaportas, S., 585
Dell’Orto, G., 554
DelVecchio, W. F., 536
DeMatteo, J. S., 555, 562
Demerouti, E., 548
Denend, L., 533
DeNeve, K. M., 536
Den Hartog, D. N., 382, 579
DeNisi, A. S., 552, 553
Denning, S., 583
Dennis, A. R., 566, 567
Dennison, Richard, 293
Dent, E. B., 586
Depledge, G., 559
De Pree, Max, 430–431, 585
Derayeh, M., 552
DeRosa, D. M., 566
de Ruyter, K., 568
Dessein, W., 581
Deszca, G., 587
Detar, J., 573
Detillion, C. E., 561
Deutschman, A., 576
DeVore, C. J., 574
DeVries, A. C., 561
De Vries, R. E., 578
Dewe, P., 554–555
Dhall, A., 583
Dholakia, U. M., 551
Diamond, M. L., 124
Dickens, L., 587
Dickson, M. W., 551, 561, 585
Diefendorf, J. M., 544
Diehl, M., 565
Diener, E., 99, 543
Dierdorff, E. C., 554
Digh, P., 61
Digman, J. M., 536
Dilchert, S., 536
DiLiello, T. C., 560
DiMicco, Dan, 391
Dimon, James L., 155
D’Innocenzio, A., 584
Dionne, S. D., 562, 577
Di Paula, A., 537
Dirks, K. T., 560, 564, 587
DiTomasco, N., 584
Dittrich, J. E., 494, 495
Dixon, J., 542, 574
Dixon, Lauren, 96, 111
Djukastein, Erik, 150
Doane, D., 534
Dobbs, S. M., 587
Dobson, P., 582
Doctoroff, S., 574
Dodd, N. G., 555
Doehrman, M., 583
Dolan, R. J., 544
Dollinger, S. J., 560
Dolliver, M., 576
Donahue, L. M., 564
Donaldson, L., 582
Doolen, T. L., 562
Doosje, B., 566
Dorfman, P., 534, 575, 579, 585
Dormann, C., 544
Dorow, W., 571
Dose, J. J., 564
Dougall, A. L., 547
Douglas, C., 581
Doukas, J. A., 537
Dowling, G. R., 569
Dowling, S., 544
Dowling, W. F., 555
Doyle, K. O., 554
Doyle, M., 587
Drach-Zahavy, A., 570
Drago, R., 548
Drexler, A. B., 562
Drickhamer, D., 580
Driscoll, J. E., 556
Drollinger, T., 568
Drucker, Peter F., 148–149, 535, 552,
557, 569
Du, R., 566
Duarte, D. L., 564
Duarte, M., 572
Ducheneaut, N. B., 566
Dudenhoeffer, Ferdinand, 334
Dudley, B., 573
Duerden Comeau, T., 573
Dugosh, K. Leggett, 566
Duguid, P., 542
Dukerich, J. M., 531
Duncan, R. M., 556
Dunckel, H., 565
Dunford, R., 580
Dunlop, P. D., 533
Dunphy, D., 562
Durham, C. C., 544
Durisin, B., 532
Durrheim, K., 542, 574
Dutton, J. E., 556, 588
Dutton, J. M., 573
Duxbury, L., 535
Dvir, T., 585
Dwyer, D., 547
Dwyer, J., 582
Dye, K., 550
Dye, R., 557
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600 Name Index
Dyer, B., 573
Dyer, W. G., 563
Dyke, Greg, 458
Dzieweczynski, J. L., 537
E
Eagly, A. H., 543, 579
Earley, P. C., 538, 573
Eastman, K. K., 578–579
Eber, H. W., 63, 162
Eby, L. T., 537, 549, 555, 562
Eccles, J., 541
Eckel, N. L., 559
Edelson, S., 550
Eden, C., 533
Eden, D., 537, 541
Edison, Thomas, 216, 218
Edmunds, A., 568
Edwards, C., 466
Edwards, J. R., 555, 585
Edwards, M. R., 538
Egan, M. L., 541
Egan, T. M., 587
Egeth, H. E., 539
Eggen, D., 587
Eggins, R. A., 537
Eggleston, C., 543
Egri, C. P., 579
Ehrlich, P., 536
Einstein, Albert, 200
Eisenhardt, K. M., 565,
572, 574
Eisenstat, R. A., 587
Eisler, R., 549, 561
Ekman, P., 544, 567
Elangovan, A. R., 575
Elfenbein, H. A., 545
Elfering, A., 586
Elias, S. M., 544
Ellemers, N., 564, 566
Eller, C., 531
Ellis R. E., 564
Ellis, Steve, 429
Ellison, Jay, 274
Ellison, S., 578
Elloy, D. F., 577
Elsbach, K. D., 584
Ely, R. J., 534, 560
Emans, B. J. M., 573
Emans, J. M., 562
Emden, Z., 543, 584
Emerson, R. M., 569
Emery, C. R., 562, 565
Enge, R. S., 564
Engen, J., 550
Engen, J. R., 586
Enrich, D., 582
Ensari, N., 579
Ensel, W. M., 549
Ensign, P. C., 581
Epitropaki, O., 579
Epley, N., 558, 566
Erez, A., 533
Erez, M., 562
Erickson, T. J., 563
Esser, J. K., 565
Esses, V. M., 544
Estabrooks, C. A., 583
Estabrooks, P. A., 564
Evans, G., 568
Evans, M. G., 577
Evers, A., 336, 357
Ezzamel, M., 553
Ezzedeen, S. R., 546
F
Fabish, L., 539
Fabrigar, L. R., 543
Fackler, M., 559
Fairhurst, G. T., 578
Falbe, C. M., 569, 571
Falkenberg, L., 540
Fallows, D., 568
Fan, Y., 571
Fanelli, A., 578
Fanning, M. M., 581
Farmer, S. M., 572
Farrell, B., 539
Farrell, H. M., 539
Farrell, Peter, 374
Farson, R., 543
Fassina, N. E., 585
Fawcett, A., 557
Fayol, Henri, 390, 555, 580
Fazio, R. H., 544
Fedor, D. B., 586
Feeley, T. H., 541
Fehr, E., 564
Fehr, E. E., 550
Feinberg, J. M., 562
Feist, G. J., 560
Feldman, D. C., 544, 545–546,
563–564, 586
Feldman, J. M., 540
Feldman, M. W., 536
Feldman Barrett, L., 548
Felfe, J., 579
Fells, R. E., 574
Fend, R., 579
Fenton, N. E., 583
Fenton, T., 568–569
Fenton, Traci, 213
Fenton-O’Creevy, M., 559–560, 581
Ferguson, M. J., 539, 542, 543–544
Ferguson, R. B., 567
Fernandes, Tony, 303
Fernandez, J. A., 531
Ferrin, D. L., 564
Ferris, G. R., 571, 572
Festinger, L., 544
Fetters, M. D., 568
Fiedler, Fred E., 369–370, 577
Field, R. H. G., 541, 557
Figart, D. M., 554
Filipczak, B., 534, 550
Finchilescu, G., 542
Findley, K. A., 539
Findley, Keith, 70
Finegan, J. E., 547, 556
Fink, E. L., 574
Finkelstein, S., 544, 558, 565
Finlay, K. A., 542
Finnegan, R. P., 549
Fischbacher, U., 564
Fischer, S., 534
Fisher, A., 560
Fisher, C. D., 543
Fisher, L. M., 556, 579, 582, 584
Fisher, R. J., 564
Fishman, C., 533, 561, 563, 586
Fiske, S. T., 540
Fitzpatrick, S., 553
Fizel, J., 553
Flavelle, D., 585
Fleeson, W., 536
Fleetwood, S., 533
Fleishman, E. A., 576–577
Fleming, Ann, 10
Florea, N. B., 574
Flynn, E., 537, 549
Fogg, P., 572
Foley, Stephen R., 247, 540
Follett, Mary Parker, 5, 329, 336,
572, 573
Foo, Douglas, 367
Ford, J. D., 586
Ford, L. W., 586
Ford, P., 540
Ford, R. C., 581
Forgas, J. P., 558
Forman, E., 544
Forrester, R., 556, 562
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Name Index 601
Forsyth, D. R., 579
Fortier, J., 539
Foster, C., 543
Foster, E. K., 569
Foust, D., 293
Fox, A., 533
Fox, C., 545
Fox, M., 547
Fragale, A. R., 567
Francesco, A. M., 547
Frank, F. D., 549
Frank, R., 583
Frankel, S., 566
Fraser, Peter (Lord Fraser of
Carmyllie QC), 559
Fraser, R., 553
Frayne, C. A., 542
Fredenhall, L. D., 562, 565
Fredrickson, B. L., 548
Freeman, R. E., 533
French, J. R. P., 569
Frey, B. H., 539
Frey, B. S., 554
Frey, W., 542
Fried, Y., 555
Friedman, A. L., 533, 540
Friedman, Milton, 16
Friedman, R. A., 573
Frink, D. D., 534
Frith, C., 539
Frost, Harriet, 219
Frost, P. J., 583
Fu, H.-Y., 574
Fu, P. P., 571
Fujio, M., 568
Fulmer, I. S., 531, 563, 567
Funder, D. C., 588
Furnham, A., 536, 537, 553,
554, 583
Furukawa, M. F., 554
Fussell, S. R., 566
Fyfe, Rob, 81
G
Gable, S. L., 550, 588
Gachuru, David, 137
Gaertner, L., 551
Gailliot, M. T., 566
Gaines, S. O., 540
Galbraith, J., 387
Galbraith, J. R., 580, 581, 582
Galbraith, John Kenneth, 447
Galimba, M., 556
Galinsky, A. D., 544, 569, 570
Galinsky, E., 548
Galloway, W. B., 588
Gallupe, R. B., 565, 566
Galt, V., 535
Gammage, K. L., 564
Gander, Mary, 294
Ganesan, S., 552, 563
Ganster, D. C., 544, 547, 555
Ganzach, Y., 559, 586
Garda, G., 581
Gardner, D. G., 554
Gardner, M., 559, 568
Gardner, R., 581
Gardner, W. L., 541, 576, 581
Garud, R., 543
Garvin, D. A., 532
Gates, D., 570
Gebauer, J. E., 538
Geis, F., 572
Geister, S., 562, 565, 566, 582
Gelade, G. A., 546
Gellatly, I. R., 546–547
Geller, E. S., 557
Gemmell, J. M., 575
Gentner, D., 540
George, B., 541, 576
George, J., 576
George, J. M., 546, 558
Gephart, M. A., 587
Gerdes, L., 159
Gerhardt, M. W., 536, 579
Gerhart, B., 531, 554, 555
Geringer, J. M., 542
Gerwin, D., 582
Gherardi, S., 542
Ghosh, D., 559
Ghosn, Carlos, 371
Giancola, F., 554
Giberson, T. R., 585
Gibson, C., 557, 563
Gibson, C. B., 531, 538
Gibson, D., 542
Gibson, D. E., 550, 567
Gibson, F. Y., 580
Gilbert, D. T., 540
Gilder, G., 565
Gill, D., 549
Gillespie, T. L., 574
Gilmor, D., 571
Gilmour, D., 588
Gilovich, T., 558
Gilson, L. L., 565
Gilson, R. L., 549
Ginsberg, G., 549
Gioja, L., 531, 588
Gittell, J. H., 580
Glader, P., 554, 580
Gladstone, D., 580
Gladwell, M., 536, 539, 544
Glaser, B. G., 513
Glasper, E. R., 561
Glomb, T. M., 544
Glunk, U., 584
Gluyas, R., 585
Glynn, S. J., 556
Godard, J., 533, 556
Goddard, P., 556
Gogoi, P., 59
Goldberg, L. R., 63, 162
Goldberg, S. G., 586
Golden, B. R., 570
Goldstein, N. J., 569, 570
Goleman, D., 105, 545, 568, 576
Gollan, P. J., 532
Gomez-Mejia, L. R., 554
Good, D. H., 575
Goodenow, Bob, 339
Goodnight, Jim, 418
Goodstein, L. D., 587
Goodwin, G. F., 563
Goodwin, P., 559
Goodwin, V. L., 577
Goold, M., 581, 582
Gordon, G. G., 584
Gordon, J., 565
Gordon, L. A., 568
Gordon, S., 552
Gosling, J., 576
Gosserand, R. H., 544
Goudreau, J., 124
Gough, H. C., 63, 162
Gough, H. G., 230
Gould, Claire, 243
Gouldner, A. W., 571
Graeff, C. L., 577
Grandey, A. A., 544, 546
Granka, L., 566
Grant, A. M., 562
Gratton, L., 563
Gravett, Linda, 326, 572
Gray, M., 470
Grayson, K., 567
Green, H., 567
Green, I., 532
Green, S. G., 577
Green, W., 541
Greenaway, N., 569
Greenberg, J., 552, 553
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602 Name Index
Greenblatt, E. D. Y., 534
Greenburg, L., 547
Greene, J., 190, 573
Greengard, S., 539, 584
Greenhouse, S., 553
Greenwald, A. G., 541
Greenwald, J., 580
Greenwood, R., 580
Gregg, A. P., 537
Greguras, G. J., 546
Greiner, L. E., 531
Greitemeyer, T., 572
Gresham, L., 549
Griffin, D., 558
Griffin, M., 568
Griffin, M. A., 534, 535, 578
Griffin, R. W., 548, 556
Griffiths, K., 567
Griswold, M., 534
Griswold, W., 584
Gross, R. L., 541
Grossi, David, 70
Grossman, L., 587
Grove, A., 573
Grove, Andy, 331
Grow, B., 586
Gruber, J., 562
Gruenfeld, D. H., 570
Guenzi, P., 546
Guest, D., 554–555
Guest, R. H., 555
Guetzkow, H., 572
Guillén, M. F., 534
Guinn, J. S., 537
Gulati, R. R., 569, 580
Gully, S. M., 537, 562–563
Gumbel, P., 540
Gunter, B., 583
Gushin, Vadim, 470
Gustafson, D. H., 566
Gutwin, C., 532
Guzzo, R. A., 561, 562
Gyr, J., 572
H
Haas, C., 573
Hacker, M. E., 562
Hackett, R. D., 533, 546
Hacki, R., 582
Hackman, J. R., 189, 192, 555,
556, 562, 563, 570, 586
Hadley, L., 553
Hagel, J., III, 582
Hagey, R., 553
Haidt, J., 550, 588
Haka, S., 568
Halbesleben, J. R. B., 548
Hall, A., 264
Hall, C., 585
Hall, D. T., 550
Hall, J., 542
Hall, R. H., 531
Hall, R. J., 576, 579
Hall, W. A., 513
Hambrick, D. C., 537, 570
Hamel, G., 554, 576
Hamilton, Chuck, 268
Hamilton, K. L., 573
Hamilton, Michael, 55
Hamilton, R. A., 557
Hamilton, T., 585
Hamm, S., 566
Hammarström, O., 553
Hammer, W. C., 555
Hampden-Turner, C., 544
Hanacek, A., 587
Hance, Steve, 120
Haner, U.-E., 560
Hanna, R., 557
Hannah, D. R., 586
Hansen, M. T., 561, 566
Hanson, J. R., 569, 570
Hantula, D. A., 566
Hara, N., 566
Haratani, T., 547
Hardin, C. D., 542
Harding, Jack, 183–184
Hardy, C., 569, 571
Hardy, J., 557
Hare, A. P., 563
Hargadon, Andrew, 513, 561,
565–566
Harley, B., 533
Harnischfeger, U., 555
Harpaz, I., 548
Harrington, S. D., 570
Harris, J., 555
Harris, J. G., 581
Harris, L. C., 583
Harris, P., 568
Harris, S. G., 584
Harrison, D. A., 534, 545, 546
Harrison, J. S., 533
Hart, C. M., 561
Hart, S., 533
Härtel, C. E. J., 543, 550, 557, 563
Harter, L. M., 549
Hartwick, J., 573
Harvey, Cheryl, 412
Hashimoto, K., 570
Haslam, S. A., 534, 537, 540, 566
Hassan, Arif, 488
Hassard, J., 580
Hatch, S., 566
Hatfield, E., 567
Hattrup, K., 537
Haukelid, K., 583
Hausdorf, P. A., 546
Hautaluoma, J. E., 564
Havlovic, S. J., 548
Hawranek, D., 573
Hayashi, A. M., 559
Hayford, S. L., 575
Hayward, Lani, 444
Hayward, M. L. A., 579
Head, T. C., 588
Healy, P. J., 537
Heath, C., 535
Hechler, D., 561
Hecht, T. D., 562
Hedlund, J., 576
Heffernan, M., 585
Heffner, T. S., 547
Heilbrun, A. B., Jr., 230
Heilman, M. E., 579
Heinsman, H., 535
Helfrich, C., 583
Helft, M., 557
Helms Mills, J. C., 584
Hemphill, T. A., 533
Hemsley, S., 561
Henderson, D. R., 586
Hendrix, Diana, 347
Hendry, C., 547
Hendry, D., 552
Henning, R. A., 556
Henningsen, D. D., 565
Henry, P. J., 542
Herman, S., 579
Herold, D. M., 586
Heron, J., 587
Heron, W., 551
Hersey, Paul, 369, 577
Hershcovis, M. S., 548
Hertel, G., 562, 565, 566, 582
Hertting, A., 556
Hertzfeld, Andy, 312
Herzberg, Frederick, 177, 555
Hesketh, A., 533
Heskett, J. L., 546, 584
Heslin, P. A., 552
Hettema, J., 536
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Name Index 603
Hewes, C., 558
Hewstone, M., 540, 573
Heymann, J., 549
Heywood, Mark, 288
Hiam, A., 561
Hibbard, J. D., 546
Hickman, J. S., 557
Hickson, D. J., 570
Higgins, C., 535
Higgins, C. A., 571
Higgins, J. M., 585
Hill, S., Jr., 578
Hiller, N. J., 537
Hills, G., 539
Hilton, T. F., 571
Hiltzik, M., 571
Hilzenrath, D. S., 319
Hinds, P., 565, 573
Hinings, C. R., 570, 580, 582
Hinkin, T. R., 324, 542
Hirschman, A. O., 546
Hirsh, L., 562
Hitlin, S., 533, 538, 550, 551, 582
Hitt, M., 581
Ho, D., 584
Ho, Elizabeth, 188
Hochwarter, W. A., 571
Hock, M., 557
Hoe, S. L., 578
Hoffmann, E. A., 546
Hofling, C. K., 569
Hofmann, W., 541
Hofstede, G., 51, 538, 583
Hogan, D. E., 541
Hogan, J., 536
Hogan, R., 63, 162, 537
Hogg, M. A., 537, 540, 561, 571
Hohmann, G., 556
Holahan, C., 581
Holahan, P. J., 559, 572
Holden, L., 570
Holecek, A., 555
Holland, B., 536
Holland, R. W., 538, 551
Holliday, K. K., 539
Hollman, L., 552
Holmes, Deborah K., 66
Holmes, Josh, 114
Holt, J. L., 574
Holtom, B. C., 546
Homan, A. C., 534, 563, 564
Homburg, C., 581
Hong, Koh Ching, 118
Hook, C. S., 587
Hook, J., 549
Hoops, Jeffrey, 55
Hoover, N. J., 567
Hope, J., 553
Hoque, M., 580
Horng, E., 567
Hornyak, K., 538
Horvitz, T., 564
Horwitt, E., 574
Hosford, C., 555, 576
Hotchkiss, Harley, 339
Houghton, J. D., 556, 557, 560, 577
Houlder, V., 582
House, Robert J., 356, 534, 572, 575,
576, 577, 578, 579, 585
Howard, A., 557
Howe, N., 534
Howell, D., 586
Howell, J. M., 561
Hoyer, M., 536
Hrycaiko, D. W., 557
Hsieh, Y.-M., 580
Hu, C., 585
Huang, J.-W., 581
Huang, Y. M., 546
Huber, G., 532
Huber, V. L., 542
Huberman, G., 558
Huettel, S., 585
Hughes, Ian, 271
Humphrey, R. H., 544
Hunger, J. D., 574
Hunnicutt, B. K., 548
Hunt, J. G., 577
Hunt, S. D., 539
Hunter, J. E., 551
Hunter, L. W., 547
Huo, Y. J., 569
Hurd, Mark, 392, 403
Hurst, C., 537
Huselid, M. A., 532
Huszczo, G. E., 563
Hutton, R., 573
Huxham, C., 587
Huy, Q. N., 580
Hyde, C. M., 546
Hyde, M., 575
Hymowitz, C., 534
Hyten, C., 564
I
Igbaria, M., 535
Iger, Robert, 2
Ignatius, A., 532
Ilgen, D. R., 564
Ilies, R., 536, 576, 577, 579
Illegems, V., 535
Indvik, J., 577
Inglis, S., 583
Ingram, Harry, 80
Inkson, K., 568
Intagliata, J., 576
Irmer, B. E., 565
Irving, P. G., 544, 575
Isaac, R. G., 575, 577
Ishiwatari, Mina, 446
Itakura, H., 568
Ivancevich, J. M., 547
Ivcevic, Z., 545
Ive, Jonathon, 221
Iverson, Ken, 391
Ivry, B., 570
Iyengar, S. S., 558
Iyer, B., 557
J
Jackson, J. W., 540
Jackson, M., 539, 567
Jacob, N., 538
Jacobs, R., 576
Jacobson, D., 561
Jago, A. G., 224, 560, 565
Jako, R. A., 541
Jakobson, L., 550
Jamal, M., 547–548
James, A., 570
James, T. A., 560
Jamrog, J., 532
Jang, K. L., 536
Janis, I. L., 557, 565
Janoff, S., 588
Janssen, O., 562
Jarvenpaa, S. L., 564
Jasper, J. D., 558
Javidan, M. M., 534, 575, 579, 585
Jefferson, S., 557–558
Jeffrey, S. A., 560
Jehn, K. A., 564, 572, 573
Jenkins, R., 547
Jensen, M. A. C., 563
Jensen, O., 581
Jesiuno, J. C., 579
Jetten, J., 540, 573
Jex, S. M., 556
Jiang, W., 558
Jiménez-Jiménez, D., 532, 543
Jinkerson, D. L., 557
Jobs, Steven, 5, 312, 451
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604 Name Index
Johannesen-Schmidt, M. C., 579
Johannessen, J. A., 532
Johanson, J.-E., 580
John, O. P., 536
Johne, M., 533
Johns, G., 535
Johnson, C., 565
Johnson, D., 228, 568
Johnson, D. E., 533
Johnson, D. W., 573
Johnson, E. C., 585
Johnson, F., 228
Johnson, J. A., 63, 162
Johnson, M. J., 549
Johnson, R., 545
Johnson, R. E., 537
Johnson, S. K., 567
Johnson, W. L., 536
Johnson-Cramer, M., 586
Johnson-Laird, P. N., 540
Joiner, T. A., 538
Joll, M., 570
Jones, B. F., 561
Jones, D., 576
Jones, D. A., 553
Jones, D. T., 532
Jones, Glyn, 479
Jones, M. O., 583
Jones, T. J., 54, 539
Jonsson, P., 567
Joseph, J., 536
Jovic, E., 573
Joyce, A., 556
Judge, T. A., 536, 537, 544, 546, 547,
571, 576, 577, 585
Jung, Carl G., 41–42, 536
Jurado, M., 536
Jussim, L., 541
Justin, J. E., 577
K
Kabanoff, B., 582, 584
Kacmar, K. M., 571
Kadlec, Dan, 326, 572
Kadue, D. D., 548
Kahn, R. L., 531
Kahneman, Daniel, 205, 558
Kahwajy, J. L., 565, 572, 574
Kalliath, T. J., 547
Kammeyer-Mueller, J. D., 586
Kane, K. F., 535
Kanfer, R., 543
Kang, J., 539
Kanigel, R., 531, 555
Kanter, R. M., 570
Kanungo, R. N., 538, 576
Kaplan, D., 570
Karambayya, R., 575
Karasek, R., 548
Karau, S. J., 562, 579
Karena, C., 567
Karraker, K., 536
Kasell, Brad, 276
Kassam, A. F., 588
Kast, F. E., 531
Katz, D., 531
Katzenbach, J. R., 563
Katzenbach, Nicholas deB., 319
Kavajecz, Kurt, 450
Kawakami, K., 540
Kay, I. T., 531, 554
Kayworth, T., 583
Kazi, Sumaya, 255
Keenen, J. P., 548
Keil, M., 559
Keil, R. M. K., 547
Keis, K., 545
Kelleher, Herb, 371, 423
Keller, M., 555
Keller, R. T., 577
Keller, T., 579
Kelley, A. E., 550
Kelley, H. H., 540
Kelley, J. G., 581
Kelley, J. R., 561
Kelley, T., 561, 566
Kelloway, E. K., 578
Kelly, Gary, 505
Kelly, J. R., 567
Kelly, Paul, 339
Keltner, D., 570
Kemmelmeier, M., 51, 538
Kemmerer, B., 544
Kemp, C., 576
Kennedy, A. A., 584
Kennedy, D. A., 536
Kennedy, E., 559
Kennedy, F. A., 532
Kennedy, J. J. K., 579
Kennedy, R. B., 536
Kenny, D. A., 542
Keown-Gerrard, J. L., 549
Kerlinger, F. N., 513
Kerr, J., 585
Kerr, N. L., 562
Kerr, S., 555, 576, 577
Kessler, M., 582
Kessler, R. C., 547
Ketcham, J. D., 554
Keyes, R., 543
Khanna, V., 557
Khurana, Rakesh, 505, 578
Kiger, P. J., 576
Kilduff, M., 570
Kiley, D., 352
Kilmann, R. H., 582
Kim, M. U., 565
Kim, N. H., 575
Kimball-Stanley, A., 561
Kincade, D. H., 580
King, C. L., 567
King, N., 555
King, R., 28
King, R. C., 567
Kipnis, D., 570
Kirkcaldy, B. D., 554
Kirkpatrick, D., 566
Kirkpatrick, S. A., 576, 578
Kirsch, D. A., 581
Kirsch, I., 542
Kivimaki, M., 547
Klawitter, N., 579
Klayman, N., 559
Klehe, U.-C., 562
Klein, A., 584
Klein, G., 559
Klein, K. J., 563
Kleinfeld, Klaus, 532
Kleinke, C. L., 541
Klimoski, R. J., 533, 543, 564
Kline, T., 549
Klocke, U., 572
Kluger, A. N., 552, 559
Kluwer, E. S., 336, 357
Knight, D. J., 588
Knoch, D. D., 550
Knudsen, E. I., 539
Koberg, C. S., 556
Kochan, T., 534, 573
Kock, N., 567
Koelling, Gary, 276
Koenig, R. J., Jr., 580
Kohli, A. K., 581
Kohn, A., 555
Kolb, D. A., 542
Kollias, P., 556
Komaki, J., 542
Konradt, U., 562, 565,
566, 582
Koopman, P. L., 382
Koppell, T., 560
Koput, K. W., 559
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Name Index 605
Korman, A. K., 576
Koski, T., 568
Koslowski, S. W. J., 586
Kotha, S., 531
Kotropoulos, C., 551
Kotter, J. P., 452, 584, 587
Kouzes, J. M., 538, 542, 564,
576, 584
Kowske, B., 559, 576
Koys, D. J., 546
Kozak, B., 536
Kozlowski, W. J., 564, 565
Krackhardt, D., 569, 570
Kraft, Norbert, 470
Krause, A., 565
Krauss, R. M., 566, 568
Krautman, A. C., 553
Kray, L., 541
Kreitner, R., 83, 542
Krill, P., 567
Krishnan, A., 584
Kriska, S. D., 570
Kristensen, T., 560
Kristof, A. L., 538
Kristof-Brown, A. L., 585
Krohne, H. W., 557
Kropko, M. R., 560
Krueger, D. W., 553
Krueger, J., 541
Krueger, J. I., 588
Krug, Dan, 303
Kruger, J., 566, 568
Kruglanski, A. W., 540
Krull, D. S., 541
Krummert, B., 585
Kshanika, A., 559, 576
Kudisch, J. D., 569
Kuiper, N. A., 549
Kulik, C. T., 541, 553
Kumar, N., 546
Kumaraswamy, A., 543
Kunda, Z., 540
Kurland, N. B., 535
Kwon, S., 575
Kwon, S.-W., 570
Kwun, S. K., 556
L
LaBarre, P., 531
Labash, M., 543
Labrador, J. R., 537
Lachnit, C., 550
Ladkin, D., 569
Lafley, Alan George, 371, 372, 373, 430
Laghi, B., 570
Laibson, D., 558
Laliberté, Guy, 421
Lam, A., 581
Lam, S. S. K., 562
Lancaster, C. M., 587
Landler, M., 573
Lane, F. C., 555
Lane, H. W., 579, 584
Lane, K. A., 539
Langan-Fox, J., 533, 563
Langfred, C., 564
Langlois, R., 535
Lao-tzu, 361
Lapierre, Judith, 469–470
LaPlante, M. D., 124
Larson, J., 99
Larson, J. R., Jr., 59
Larson, L. L., 577
Larson, R. J., 543
Laschinger, H. K. S., 556
Lashinsky, A., 580
Lasseter, John, 2
Lath, S., 537
Latham, G. P., 535, 542, 551,
552, 557
Latour, A., 319
Lau, C.-M., 588
Lau, D. C., 563
Laucius, J., 571
Laurin, K. R., 546
Lavie, N., 539
Lavoie, Paul, 394, 581
Lawler, Edward E., III, 532, 535,
551, 554, 555, 562, 564, 580,
581, 586, 587
Lawrence, M., 577
Lawrence, Paul R., 140, 141, 452,
531, 551, 561, 582
Lazarsfeld, P., 513
Le, H., 536, 579
Lea, S. E. G., 553
Leaman, A., 568
Leary, M. R., 537, 550, 551,
552, 562
Leavitt, H. J., 580
Lebeter, David, 500, 501
Leblanc, P., 554
Ledford, G., 554
Ledford, G. E., Jr., 532
LeDoux, J. E., 544, 551
Lee, C., 547
Lee, D. Y., 569
Lee, F., 541
Lee, H., 566
Lee, Joyce, 367
Lee, K., 533
Lee, L., 582
Lee, T. W., 546
Lee, W. B., 563
Lee, W. L., 550
Legge, Dave, 107
Lehrer, P. M., 547
Leidner, D. E., 564, 583
Leiter, John, 66
Leiter, M. P., 548
Leith, S., 531
Lengel, R. H., 279, 567
Lensvelt-Mulders, G., 536
Lent, R. M., 588
Leonard, S., 543, 544
LePine, J. A., 533
Lepper, M. R., 558
Lepsinger, R., 578
Lerner, J. S., 558
Lester, W., 547
Leung, S. H. N., 563
Leute, J., 564
Levary, R., 582
Levesque, L. C., 587
Levin, I. M., 578
Levine, D. S., 549, 561
Levinthal, D., 532
Levy, O., 539
Levy, P. E., 537
Levy, S., 587
Lewandowsky, S., 539
Lewicki, R. J., 574, 575
Lewin, Kurt, 444–445, 449, 455,
456, 461, 462, 574, 586
Lewis, Jim, 39
Lewis, M., Jr., 560
Lewis, Ron, 311
Li, A., 547, 552
Li, F., 538
Li, H., 570
Li, T. C., 543
Libby, T., 553
Liden, R. C., 562
Lieberman, M. D., 543, 559
Liedtke, M., 532
Lighton, J., 582
Liker, J. K., 532
Likert, R., 560
Lim, B. C., 563
Lim, M., 544
Lim, V. K. G., 554
Limberg, Ann M., 22
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606 Name Index
Lin, N., 549
Lind, E. A., 541, 552, 553
Lindeman, T. F., 539
Lindemann, B., 548
Lindsay, R. M., 553
Lindstrom, K., 581
Linehan, M., 570
Linn, A., 573
Linn, V. D. D., 554
Linzmayer, O. W., 558
Lipnack, J., 565
Lipshitz, R., 559
Liska, L. Z., 577
Litman, J., 551
Litt, S., 560
Litterer, J. A., 572
Littlejohn, J. R., 575
Littler, C. R., 580
Lituchy, T. R., 548
Liu, Y., 532
Livesley, W. J., 536
Lo, Raymond, 423
Loan-Clarke, J., 546
Lochhead, Christopher, 116–117
Locke, E. A., 541, 544, 545, 551, 552,
562, 576, 578
Locke, L. A., 532
Locke, W., 584
Lodewijkx, H. F. M., 565
Loehlin, J., 536
Loewenstein, G., 543, 550,
551, 558
Lofhjelm, S. M., 541
Logue, A. W., 556
Loh, T., 566
Lohr, S., 582
London, M., 552
Long, D., 570
Long, R. J., 554
Lopes, P. N., 545
Lopez, Dave, 453
Lord, R. G., 576, 579
Lorinc, J., 559
Lorsch, J. W., 582
Loughridge, Ken, 308
Loughry, M. L., 244, 563, 577
Louis, M. R., 584, 586
Løvås, B., 561, 566
Low, D. R., 560
Lowry, T., 293
Lowy, Frank, 344
Lubart, T. I., 560
Lubinski, D., 538
Lucas, R. E., 99, 543
Lucas, W., 566
Luchak, A. A., 546–547
Lucy, M., 554
Luft, Joseph, 80, 542
Luthans, F. F., 83, 542, 548, 550,
551, 587
Luthar, S. S., 548
Lyne, S. R., 540
Lynn, B. E., 581
Lynn, G. S., 532
Lynn, R., 554
Lyons, M., 559
Lytle, A. L., 573
M
Macauley, Fraser, 298
MacBride-King, J., 548
MacCharles, T., 569
MacDermid, G., 549
MacDonald, D., 531
MacDougall, M. P., 557
Macey, W. H., 549
Machiavelli, Niccolò, 316
Mack, A., 539
Mackenzie, S. B., 577
Mackey, A., 533
Mackey, J., 561, 564
Mackey, John, 232, 254
Mackey, T. B., 533
MacKizer, Mark, 70
Macrae, C. N., 539, 540
Macwhirter, I., 559
Madell, R., 570
Madon, S., 541
Madrian, B., 558
Madsen, S. R., 549
Mael, F., 537, 584
Maertz, C. P., 546
Maggs, A. J., 554
Mahmud, A., 539
Maier, N. R. F., 535
Mainemelis, C., 542
Maio, G. R., 538, 544
Maitland, A., 584
Maitlis, S., 557, 570
Majchrzak, A., 567
Makhijani, M. G., 579
Maki, A., 574
Malekazedeh, A. R., 428, 584
Malhotra, D., 564, 575
Mallott, M., 541
Malmendier, U., 537
Malone, P. S., 540
Man, D. C., 562
Manfield, L., 578
Manikonda, P., 549
Mannion, P., 556
Mannix, E., 560, 563
Mannix, E. A., 571
Manz, C. C., 556–557, 565, 577
March, J. G., 557
Marchington, M., 587
Marcum, T. M., 575
Margo, J., 574
Markel, K. S., 553
Markman, A. B., 540
Marks, M. A., 562
Marks, M. L., 584
Marling, S., 581
Marshak, R. J., 588
Marshall, Bill, 172
Marshall, V., 560
Marsick, V. J., 587
Martin, G. E., 573
Martin, G. L., 557
Martin, H. J., 162
Martin, J., 583, 584, 585
Martin, R., 579
Martin, S., 470
Martins, L. L., 565
Martinussen, M., 548–549
Martocchio, J. J., 534
Masada, G., 581
Masisak, C., 574
Maslach, C., 548
Maslow, Abraham H., 132, 135–136,
138, 156, 550
Maslowski, R., 584
Mason, C. M., 534
Mason, J., 513
Massey, D. S., 543, 544
Massoud, M. F., 584
Matheson, D., 544
Mathieu, J. E., 562, 563
Mathis, K. B., 544
Matsui, T., 551
Matthews, G., 545
Matthiesen, S., 549
Matzek, MaryBeth, 293
Maurer, R., 586
Mausner, B., 555
Max, S., 264
Maxham, J. G., III, 548
Maxwell, J. C., 578
May, D. R., 539, 549
May, K., 569
Mayeda, A., 570
Mayer, J. D., 544–545
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Name Index 607
Mayfield, J., 574
Maynard, M. T., 565
Mayo, Elton, 5
McAdams, D. P., 536
McAllister, D. J., 564
McCall, A., 549
McCann, J., 531
McCann, L., 580
McCarthy, M., 532
McCarthy, S., 535, 570
McClarty, K. L., 537
McClelland, C. L., 555
McClelland, David C., 132, 139,
156, 551
McCloskey, D. W., 535
McClusky, J., 533
McConnell, R., 580
McCormick, M. T., 588
McCracken, D. M., 570
McCrae, R. R., 536, 537, 552
McCreaddie, M., 549
McDavid, Doug, 268
McDevitt, Kelly, 504
McDonald, Greg, 208
McDonald, K. A., 538
McFarland, L. A., 570
McGaw, N., 539
McGill, M. E., 532
McGinn, D., 545
McGrath, J. E., 562
McGrath, Kevin, 37
McGraw, P., 563
McGregor, D., 560
McGregor, J., 91, 293, 570
McHale, Brian, 38
McHugh, M., 587
McKee, A., 105, 545, 568, 576
McKendall, M., 588
McKenzie, M., 536
McKersie, R. B., 574
McKey, John, 436
McLean, B., 585
McMains, A., 570
McMullin, J. A., 573
McNabb, R., 554
McPherson, Stephen, 358
McQuarrie, Fiona, 473
McRae, B., 574
McShane, Steven L., 27, 158, 161,
188, 224, 225, 263, 266, 296,
297, 380, 413, 439, 441, 464,
465, 469, 471, 473, 484, 490,
492, 500, 501, 571, 578
Mealiea, L., 563
Meaney, M., 587
Means, S. P., 568
Medsker, G. J., 562
Medvec, V. H., 558
Meek, C. B., 548
Meglino, B. M., 533, 538, 582
Mehra, A., 570
Meindl, J. R., 579
Melhem, Y., 556
Melia, J. L., 569
Mellers, B. A., 551
Meloy, M. G., 558
Melton, T., 532
Mencius, 176
Menon, S. T., 556
Meso, R. J., 535
Meyer, A. D., 582
Meyer, J. C., 583
Meyer, J. P., 128, 546, 547, 575
Meyer, R. M., 580
Meznar, M. B., 587
Michael, J., 537
Michinov, E., 561
Michinov, N., 561
Mickel, A. E., 553
Micklethwait, J., 531
Milani, L., 568
Miles, J. N. V., 536
Miles, R. F., 582
Miles, S., 533
Milkovich, G. T., 553
Mill, John Stuart, 167, 554
Millar, M., 550
Millemann, M., 531, 588
Miller, C. C., 582
Miller, D., 565, 582
Miller, D. L., 563
Miller, D. T., 552–553
Miller, John, 448
Miller, L. C., 542
Miller, M., 583
Miller, P. A., 556
Mills, A. J., 550, 584
Mills, Deborah, 258
Mills, J., 564
Milne, A. B., 540
Milstein, M., 533
Miltenberger, R. G., 542
Miner, J. B., 513, 552, 576
Minette, K. A., 554
Ming, S., 557
Mintzberg, H., 387, 557, 569, 571,
580, 581, 582
Miron, D., 551
Mischel, W., 536
Mitchell, A., 532
Mitchell, P., 574
Mitchell, T. R., 59, 531, 535, 546,
553, 557, 577
Mitsuhashi, H., 581
Miyahara, K., 569
Moberg, D. J., 575
Mobley, W. H., 539
Mohr, B. J., 459, 588
Mohrman, A. M., Jr., 531, 561, 564
Mohrman, S. A., 531, 532, 561, 564
Moin, D., 411
Moldaschl, M., 561, 565
Molleman, E., 534, 565
Molloy, S., 580
Monden, Y., 580
Mone, E. M., 552
Monetta, D. J., 588
Monin, B., 550
Montague, Ty, 305
Montealegre, R., 559
Mooney, A. C., 572
Moore, Alf, 107
Moore, C., 532–533, 535
Moore, D. A., 537, 574
Moore, D. D., 244, 563
Moore, O., 570
Moorey, Alison, 105
Moorman, R., 553
Moran, A., 556
Moran, R., 568
Moreland, S., 549
Morgan, G., 568, 582
Morgan, Gill, 10
Morgan, John Pierpont, 155
Morgan, R., 559
Morgeson, F. P., 537, 552,
555 , 563
Morin, L., 557
Morouney, Kim, 412
Morrell, K., 546
Morrill, C., 583
Morris, A., 568
Morris, B., 580
Morris, F. C. J., 548
Morris, J., 580
Morris, J. A., 544
Morris, M. W., 574
Morrison, E. W., 547
Mors, M. L., 561, 566
Mortensen, M., 573
Moss, D., 546
Mossholder, K. W., 572–573
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608 Name Index
Motowidlo, S. J., 533
Moultrie, J., 561
Mount, I., 585
Mount, M. K., 536
Moutafi, J., 536
Mouton, J. S., 336, 356, 572
Mowday, R. T., 546, 549, 553
Moyes, Christopher, 171
Muetzel, M. R., 534
Mulac, A., 568
Mullen, B., 564, 565
Muller, D., 567
Mulvey, P. W., 551
Mumford, M. D., 560, 578
Mumford, T. V., 552
Murnighan, J. Keith, 563, 564
Murphy, B., 553
Murphy, K., 537
Murphy, K. M., 580
Murphy, K. R., 541, 545
Murphy, S. E., 579
Murphy, V., 573
Murray, B., 561
Murray, G., 533
Murray, S. R., 566
Muse, Jo, 504
Muthusamy, S. K., 564
Muzyka, Ray, 384, 401, 402, 580
Mwaura, N., 550
Myers, I. B., 536
Myers, M. S., 531
Myerson, J., 583
N
Nabatchi, T., 575
Naccarato, M. E., 93
Nadler, D. A., 387, 551, 561, 580,
582, 586, 587
Nahavandi, A., 428, 584
Namy, L. L., 568
Nanus, B., 578, 587
Nardelli, Robert, 282, 431,
445, 454
Nasurdin, A. A. M., 581
Nauta, A., 336, 357
Neal, A., 535
Neale, M. A., 560, 563, 564, 566
Neale, Tim, 471, 473
Neck, C. P., 556–557, 577
Neff, J., 561
Neider, L. L., 577
Neil, D., 532
Neilson, G. L., 581, 586
Nelson, D. L., 547, 586
Nelson, Randy, 2
Nemeth, C. J., 565
Netemeyer, R. G., 548
Newman, D. A., 545, 546
Newman, K., 534
Newman, V., 587
Newstrom, J. W., 568
Ng, E., 534
Ng, T. W. H., 537
Ngo, H. Y., 588
Nguyen, H., 584
Nguyen, Trung, 432
Nicholls, C. E., 579
Nicholson, N., 569, 577, 585
Nicholson-Crotty, S., 580
Nickerson, R. S., 539, 560
Nicolas, Peter, 255
Nicolini, D., 542, 587
Niehoff, B. J., 556
Nielson, J. S., 575
Niepce, W., 565
Niiler, E., 470
Niimi, A., 562
Nijstad, B. A., 565
Nikolaou, I., 548
Nilekani, Nandan, 373, 578
Niles, F. S., 538
Nilsen, D., 559, 576
Nisbett, R. E., 540–541, 557
Nobel, R., 582
Nohria, N., 561
Nohria, Nitin, 140, 141, 531, 551
Nolen, S., 470
Nonaka, I., 542
Noon, M., 569
Norenzayan, A., 540–541
Norris, Ralph, 111
Northcraft, G. B., 552, 564, 573
Northouse, P. G., 576
Nosek, B. A., 541
Notarianni, R., 264
Nottingham, John, 217
Nougaim, K. E., 550
Nugent, P. S., 575
Nukman, Y., 580
Nur, Y. A., 578
Nussbaum, B., 578
Nutt, P. C., 544, 557, 558, 559
Nye, J. L., 579
Nygaard, L. C., 568
O
Oakley, J. G., 579
O’Brien, J., 555
Ochsner, K. N., 544
Ockenden, K., 550
O’Connell, M. S., 537
O’Connor, J. R., 569
Odella, F., 542
O’Donnell, J., 319
O’Donnell, M., 555
Oels, A., 588
Offermann, L. R., 561, 579
Ogbonna, E., 583
O’Hara, L. A., 560
Ohland, M. W., 244, 563
Ohmae, K., 534
Ohtaki, S., 568
Ohtaki, T., 568
Okamura, R., 553
O’Keefe, D. J., 571, 575
Olaisen, J., 532
Oldham, G. R., 189, 192, 555, 556,
560, 561
O’Leary, N., 581
Olive, D., 578
Oliver, F., 543
Oliver, J., 541
Oliviera, Patricia, 284
Olsen, B., 532
Olson, J. M., 538, 541
Olson-Buchanan, J. B., 553
O’Neil, J., 571
O’Neill, O. A., 583
Ones, D. S., 536
Orbell, S., 543
Oreg, S., 585
O’Reilly, C. A., III, 419, 564,
583, 584
Orem, Sara L., 125, 552
Organ, D. W., 513, 533
Ormond, W. E., 549
Orr, L. M., 553
Osbom, R. N., 577
Osborn, A. F., 565
O’Shaughnessy, J., 543
O’Shaughnessy, N. J., 543
Osland, J. S., 538
Osman, M. R., 580
Osono, E., 583
Osterman, P., 556
Ostroff, C., 532, 586
O’Toole, J., 563
Ott, B., 572
Ott, J. S., 583
Ouchi, W., 561, 569
Oudeh, N., 572
Overman, S., 542, 549
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Name Index 609
Owens, D. A., 566
Oyserman, D., 51, 538
Ozcelik, H., 557
P
Pai, H.-H., 554
Paik, Y., 575
Paine, L. S., 533
Pakizeh, A., 538
Palabrica, R. J., 554
Palanski, M. E., 576
Palmer, K., 560
Palmisano, Samuel J., 67, 268, 372,
399, 581
Pals, J. L., 536
Panchak, P., 564
Panipucci, D., 563
Panteli, N., 566
Papaioannou, A., 557
Papper, E. M., 562
Pappu, S., 575
Parise, S., 586
Park, W.-W., 565
Parker, C. P., 532 , 554
Parker, K. E., 93
Parker, S. K., 535, 542, 555
Parker, V. L., 554
Parks, L., 555
Parloff, R., 548
Parmar, B., 533
Paroush, J., 560
Pasa, S. F., 570
Pascale, R. T., 531, 561, 588
Passyn, K., 550
Pasternack, B. A., 581, 586
Paton, N., 566
Patriquin, M., 540
Patten, R. M., 533
Patterson, Scott, 256
Pauli, K. P., 539
Paulson, Dawn, 120
Paulus, P. B., 566
Pawar, B. S., 578–579
Peach, E. B., 554
Peale, C., 580
Pearce, C. L., 575, 577
Pearce, D. S., 588
Pearson, C. M., 548
Peck, Deborah, 96
Pederson, J. S., 583
Peiperl, M. A., 552
Peiro, J. M., 569
Pelled, L. H., 572
Pelloni, O., 546
Pelton, L. E., 571
Pennington, R., 568
Pepper, M. B., 541
Periasamy, Yoganathan, 243
Perri, David F., 352, 356, 573
Perrow, C., 582
Perry, P. M., 555
Perryer, Chris, 535
Peruche, B. M., 540
Pescuric, A., 542
Peters, R. S., 550
Peters, T., 569, 571
Petersen, L.-E., 579
Peterson, E., 575
Petmezas, D., 537
Petrie, C., 554
Pettigrew, A. M., 569
Pettigrew, T. F., 542, 574
Pettit, B., 549
Petty, Bill, 105
Petty, R., 571
Peyrefitte, J., 566
Pfaff, D. W., 550
Pfau, B. N., 531, 554
Pfau, M., 571
Pfeffer, J., 532, 533, 535, 550, 554,
559, 569, 571, 579
Phair, T., 588
Pham, M. T., 544, 558
Phan, Doan, 504
Phillips, C., 61
Phillips, J. M., 586
Phillips, N., 568
Piccolo, R. F., 577
Piëch, Ferdinand, 333, 334
Piekkari, R., 568
Pierce, B. D., 561
Pierce, J. L., 554, 560, 587
Pilavin, J. A., 533, 538, 551, 582
Pillutla, M. M., 564
Pinder, C. C., 535, 549, 552
Pinel, E. C., 541
Pinelle, D., 532
Pinsonneault, A., 566
Piper, W., 564
Piskorski, M. J., 533
Pitt, D. C., 575, 577
Pizarro, D. A., 550
Plambeck, E. L., 533
Plank, R. E., 535
Plant, E. A., 540
Plato, 5, 176, 198, 361
Platow, M. J., 578
Podsakoff, P. M., 569, 577
Pofeldt, E., 549
Polanyi, M. F. D., 588
Pollock, T. G., 579
Pomerantz, E. M., 536
Pondel, E., 576
Pondy, L., 573
Popper, M., 576
Porath, C. L., 548
Porras, D., 534
Porras, J. I., 584
Porretto, J., 563
Porsche, Wolfgang, 334
Porter, C. O. L. H., 563
Porter, L. W., 535, 546,
572, 586
Posner, B. Z., 538, 542, 564,
576, 584
Postmes, T., 540, 573
Poteet, M. L., 569
Potter, R. E., 583
Pouder, R. W., 584
Powell, D. M., 547
Powell, G. N., 579
Powell, L. A., 553
Powley, E. H., 588
Poynter, K., 582
Prasad, S., 581
Pratt, M. G., 559
Pratt, M. K., 566
Prelec, A., 558
Premeaux, S. E., 546
Prencipe, A., 532
Price, J. L., 531
Prislin, R., 571
Pritchard, R. D., 535
Prystay, C., 577
Przybys, J., 548
Psihountas, D., 534
Pugh, D. S., 582
Pulliam, S., 319
Pullig, C., 548
Pung, C., 587
Putnam, L. L., 568, 575
Q
Quick, J. C., 547
Quinn, R. E., 556, 578, 583,
587, 588
R
Rabinovich-Einy, O., 575
Rabung, S., 567–568
Radford, A., 588
Rae, J., 224
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610 Name Index
Raelin, J. A., 575, 576
Rafaeli, A., 544
Rafferty, A. E., 578
Ragavan C., 587
Raghuram, S., 535
Ragins, B. R., 570
Rahim, M. A., 336, 572, 573
Rai, A., 559
Raiborn, C. A., 584
Rain, J. S., 541
Raines, C., 534
Raisinghani, D., 557
Ramstad, E., 58
Randolph, A., 577
Randolph, W. A., 556, 581
Ranson, S., 580
Rao, A., 570
Rao, H., 531, 545, 583
Rapson, R. L., 567
Rauch, M., 567
Rauschenberger, J., 551
Raven, B. H., 569
Ravlin, E. C., 533, 538, 582
Raynor, M. E., 535
Raz, A. E., 544
Razak, Datuk Nazir, 86
Ready, D. A., 576
Reason, P., 587
Reed, E. S., 540
Reed, S., 322, 555
Regan, C., 580
Reicher, S., 566
Reichheld, F. F., 555
Reid, D. A., 535
Reider, M. H., 563
Reilly, R. R., 552
Reingold, J., 570
Reinsch, N. L., Jr., 567
Reio, T. G., Jr., 551
Reis, D. L., 545
Remington, N. A., 543
Rempel, M., 564
Ren, Y., 566
Renn, R. W., 557
Rentfrow, P. J., 537
Rentsch, J. R., 547
Repetti, R. L., 547
Resick, C. J., 585
Ressler, Calli, 504, 587
Revine, Denise, 298
Reyes, George, 11
Reynolds, B., 536
Reynolds, K. J., 537
Rhee, K. S., 545
Rhodes, N., 571
Riccomini, B., 569
Rice, R. E., 567
Richard, O. C., 534
Richardson, A. M., 548–549
Richardson, H. A., 581
Riche, M. F., 534
Richtel, M., 567, 571
Rico, R., 563
Ridderstrâle, J., 582
Ridnour, R., 568
Riggio, R. E., 577, 584
Riketta, M., 546
Rimmer, M., 539
Rindova, V. P., 531, 579
Ringer, R. C., 324, 571
Rink, F., 564
Risberg, A., 573
Ritov, I., 558
Robbins, A. S., 548
Roberson, L., 541
Robert, L. P., 567
Roberto, M. A., 587
Roberts, B. W., 536
Roberts, J. A., 194
Roberts, K., 553
Roberts, P., 584
Roberts, R. D., 545
Roberts, Stephen, 51
Robey, D., 559
Robinson, A. G., 560
Robinson, S. L., 547, 564, 586
Rode, J. C., 545
Rodwell, R., 569
Roe, R. A., 578
Roese, N. J., 541
Roethlisberger, Fritz J., 531
Rogers, C. B., Jr., 319
Rogers, E. M., 587
Rogers, M., 532
Rogerson, L. J., 557
Rokeach, Milton, 48, 558
Rollins, K., 584
Rollins, Kevin, 414, 425, 426
Romero, E. J., 549
Romero, S., 571
Rondeau, K. V., 550
Roome, N., 533
Rose, G. M., 553
Rosen, C., 554
Rosen, C. C., 537
Rosen, H., 574
Rosen, R., 61
Rosenberg, E., 567
Rosenbush, S., 319
Rosengren, A., 547
Rosenthal, R., 540
Rosenweig, J. E., 531
Rosenzweig, P., 541
Rosnow, R. L., 569
Ross, E., 536
Ross, Rich, 358
Ross, W. H., 575
Rosselli, M., 536
Rossmo, D. K., 539
Roth, D., 583
Roth, P. L., 545, 546
Rothbard, N. P., 549
Rothenberg, R., 558
Rothermund, K., 557
Rotundo, M., 533
Rousos, R., 569
Rousseau, D. M. H., 535, 547,
564, 586
Rousseau, V., 244, 563
Royal, K., 572
Rubin, J. Z., 574, 575
Rubin, M., 540, 573
Rubini, M., 568
Ruble, T. L., 336, 573
Runco, M. A., 560
Runningen, Christy, 120
Russell, J. A., 99, 543
Russell, S., 581
Russo, F., 568
Russo, J. E., 558
Ryan, A. M., 570
Rynes, S., 555
Rynes, S. L., 531, 554
S
Saari, L., 546
Saavedra, R., 556
Sabatini, P., 571
Saccomando, John, 247
Sackett, P., 533
Sage, A., 540
Sagie, G., 48
Ste-Croix, Gilles, 421
Saint-Onge, H., 532
Saks, A. M., 532–533, 535, 549, 550,
585, 586
Salacuse, J. W., 574
Salancik, G. R., 533, 544, 550
Salas, E., 565
Salaysay, Nick, 117
Salovey, P., 544–545, 568
Salter, S. B., 559
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Name Index 611
Saltzman, M., 580
Sanchez, Eduardo, 453
Sánchez-Manzanares, M., 563
Sandahl, D., 558
Santora, Joseph C., 319, 321
Santos, T., 581
Sapienza, H. J., 573
Sappenfield, M., 579
Sapuan, S. M., 580
Saranow, J., 549
Sarr, R. A., 578
Sarwono, S. S., 538
Saskin, Ted, 339
Sassenberg, K., 567–568
Sasser, W. E., 546
Sauerteig, D., 568
Sauleya, K. S., 553, 572
Saunders, C. S., 570
Saunders, Craig, 217
Savoie, A., 244, 563
Savoie, Patrick, 103
Savoye, C., 538, 576
Scarbrough, H., 580
Schachaf, P., 566
Schachter, H., 567
Schacter, S., 561
Schaper, D., 567
Schaubroeck, J., 544
Schaufeli, W. B., 548
Scheier, M. F., 536
Schein, E. H., 582, 583, 584, 585
Schepman, S., 542
Schettler, J., 538, 576
Schick, A. G., 531, 568
Schiessl, M., 579
Schiller, M., 588
Schilling, M. A., 582
Schleicher, D. J., 546
Schlender, B., 531, 573
Schlesinger, L. A., 452, 546, 587
Schlosser, J., 578
Schmidt, D. B., 538
Schmidt, Eric, 196
Schmidt, Herb, 18
Schmidt, S. M., 570, 573
Schmidt, W. H., 577
Schminke, M., 552, 553
Schmitt, N., 532, 551
Schnake, M. E., 542
Schnau, C., 459
Schneider, B., 549, 585
Schnitzer, Ken, 432
Schoorman, F. D., 559
Schorg, C. A., 584
Schriesheim, C. A., 324, 542,
569, 577
Schroeder, D. M., 560
Schulman, Amy, 117
Schumann, P. L., 539
Schuster, J. R., 554
Schwab, Charles, 386
Schwalm, Cynthia, 49
Schwartz, N. D., 573
Schwartz, Shalom H., 48, 533, 538
Schwarz, John, 340
Schwarz, N., 544, 557,
558–559
Schweizer, T. S., 560
Schyns, B., 579
Scott, D., 557
Scott, J. C., 552
Scott, K. A., 579
Scott, K. S., 531
Scott, M., 539
Scott, T., 583
Scott, T. H., 551
Scott, W. B., 563
Scott, W. G., 531
Scott-Findlay, S., 583
Scott-Ladd, B., 560
Scudamore, Brian, 81, 289
Sculley, John, 202
Scully, J. A., 555
Seabright, M. A., 553
Secret, M., 549
Sedikedes, C., 537
Seeman, T., 547
Segal, N. L., 536
Seidl, Peter, 492
Selden, S. C., 531
Seligman, M. E. P., 550, 588
Sels, L., 532
Selye, Hans, 114, 115, 547
Semler, Ricardo, 376, 506, 556
Senge, P. M., 531, 540
Senior, B., 563
Senni, Hamid, 74, 540
Seo, M.-G., 552
Sepulveda, C. J., 194
Serena, M., 534, 550
Sewards, M. A., 550
Sewards, T. V., 550
Shah, Arpan, 243
Shahin, A. I., 569
Shalley, C. E., 560, 561
Shamian, J., 556
Shamir, B., 578
Shane, S., 551
Shani, A. B., 588
Shannon, C. E., 566
Shapiro, B. T., 534, 550
Shapiro, D. L., 549, 573, 574
Shapley, T., 588
Sharma, R. R., 586
Sharp, D. J., 559
Sharpe, R., 579
Shaw, George Bernard, 281
Shaw, J. D., 554
Shaw, M. E., 561
Shea, G. P., 562
Sheehan, M., 559
Shelton, R., 565
Shepard, H. A., 336, 572
Shepherd, C. D., 568
Sheppard, B. H., 575
Sherif, M., 574
Sherman, J. W., 540
Shermer, M., 539
Sherwood, J. J., 563
Shi, J., 548
Shields, M., 547
Shimizu, K., 586
Shimizu, N., 583
Shin, A., 551
Shiner, R. L., 536
Shipton, H., 532, 543
Shirodkar, Vikas, 44
Shrinate, S., 583
Shrine, Logan, 331
Shull, F. A., Jr., 557
Siegall, M., 549
Siehl, C., 583, 584
Siekman, P., 555, 582
Sigall, H., 568
Silver, H., 583
Silverman, Fred, 358
Simanoff, D., 534
Simmons, B. L., 547, 564
Simon, E., 586
Simon, Herbert A., 203, 557,
558, 559
Simon, Serge, 74
Simons, D. J., 539
Simons, T., 538, 564, 578
Simonson, I., 559
Simpson, B., 570
Sims, H., Jr., 577
Sinclair, A., 583
Sinclair, G., Jr., 470
Sinclair, L., 540
Sine, W. D., 581
Sinegal, Jim, 155
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612 Name Index
Singer, J. A., 538
Singer, M., 61, 582
Singh, R. P., 531
Sinha, J. B. P., 538
Sinha, K. K., 582
Sink, D. S., 588
Sinkula, J. M., 543, 584
Sitkin, S. B., 535
Sjöberg, L., 559
Skarlicki, D. P., 553
Skinner, B. F., 542
Skinner, C., 576
Slocum, J. W., Jr., 532, 535, 585
Sluss, D. M., 585
Small, D. A., 558
Smalley, K., 546
Smallwood, N., 576
Smeltzer, Phil, 85
Smith, A. E., 541
Smith, Adam, 5, 176, 555
Smith, C. A., 128
Smith, C. L., 566
Smith, D. K., 563
Smith, E. R., 540
Smith, J., 564, 587
Smith, J. H., 531
Smith, K. W., 428, 584–585
Smith, M., 560
Smith, Mark, 254
Smith, Nina, 308
Smith, R. J., 558
Smith, R. S., 554
Smith, T. W., 545
Smither, J. W., 552
Smith-Holladay, Jennifer, 80
Smyrlis, L., 534
Snell, R. S., 571
Snir, R., 548
Snow, C. C., 582
Snyder, N. T., 564, 583
Snyderman, B. B., 555
Soelberg, P. O., 558
Sohn, D. W., 575
Somech, A., 562, 570
Sommer, S. M., 551
Song, S., 587
Song, X. M., 573
Sonnby-Borgstrom, M., 567
Sorensen, J. S., 583
Sorensen, K. L., 537
Sorensen, P. F., 588
Southard, Katie, 111
Sowa, J. E., 531
Sparks, J. R., 539
Spears, L. C., 577
Spears, R., 540, 566, 573
Spector, B., 584, 587
Spector, M., 574
Spector, P. E., 537, 553, 556
Spence, J. T., 548
Spencer, L. M., 535
Spencer, S. M., 535
Spiers, L., 554
Spini, D., 538
Spirk, John, 217
Spiros, R. K., 561
Spitzer, D. R., 555
Spoor, J. R., 561
Spors, K. K., 544, 554
Spreitzer, G. M., 556
Springer, Jim, 39
Spurgeon, P., 576
Srinivas, Singu, 274
Sriram, N., 541
Srivastava, A., 554
Srivastava, S., 536
Staelin, R., 559
Stagner, R., 574
Stahl, G. K., 584
Stalker, G., 581, 582
Stamps, J., 565
Starbuck, William, 495
Starke, M., 586
Stasser, G., 563
Staubus, M., 554
Staw, B. M., 559
Steel, P., 572
Steene, G. V., 557
Steensma, H. K., 582
Steers, R. M., 546, 549
Stein, E. W., 567
Stein, M. B., 548
Steiner, D. D., 541
Steiner, I. D., 562
Stelter, N. Z., 579
Stephen, W. G., 542
Stephenson, J., Jr., 580
Stern, C., 319
Stern, L. W., 546, 574
Stern, R. N., 531
Sternberg, R. J., 560, 576
Stevens, M., 585
Stewart, G. L., 556, 563, 565
Stewart, John, 430, 431
Stewart, T. A., 532
Stogdill, R. M., 576
Stone, J., 544
Stoneman, B., 539
Strange, J. M., 578
Strauss, A., 513
Strauss, W., 534
Strebel, P., 586–587
Strelau, J., 536
Strickland, O. J., 556
Stroebe, W., 565
Strube, M. J., 547
Strutton, D., 571
Stuermer, Christoph, 334
Stuhlmacher, A. F., 574
Su, H.-C., 585
Sujan, M., 550
Suleman, Razor, 280
Summers, T. P., 553
Sundstrom, E., 555, 561,
562, 570
Sunstein, C. R., 560
Surface, E. A., 554
Sussman, N. M., 568
Sutton, Robert I., 513, 531,
535, 545, 559, 560, 561,
565–566
Svensson, O., 567
Swailes, S., 563
Swann, W. B., Jr., 537
Swanson, I., 559
Swap, W., 583
Sweeney, Anne, 358, 360, 367,
371, 374
Sy, T., 582
Sya, L. S., 569
Sylvain, L., 581
Sytch, M., 569
Szabo, E. A., 571, 579
T
Taggar, S., 560, 564
Taillieu, T. C. B., 578
Tajfel, H., 537
Takala, T., 531
Takeda, H., 543
Takeuchi, H., 542, 583
Tan, D., 571
Tan, N. T., 587
Tan, T., 561
Tang, T., 553–554
Tang, T. L.-P., 554
Tanguay, Ray, 418
Tannen, D., 568
Tannenbaum, R., 577
Tanner, J., Jr., 571
Tapias, M. P., 562
Taras, D., 572
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Name Index 613
Tarrant, D., 577
Tasa, K., 565
Tata, J., 581
Tate, G., 537
Taxel, L., 560
Taylor, C. R., 549
Taylor, Frederick Winslow,
5, 176, 555
Taylor, R. N., 559
Taylor, S. E., 547, 549
Taylor, T., 548
Taylor, W. C., 531
Teece, D. J., 582
Teerikangas, S., 584
Tellier, Paul, 345
Templer, D., 194
Teng, B. S., 557
Tepper, B. J., 586
Terai, T., 551
Teresko, J., 562
Terracciano, A., 536, 552
Terry, D. J., 537 , 571
Tetrick, L. E., 555
Tett, R. P., 537
Tews, M. J., 544
Tharenou, P., 532–533, 535
Thatcher, S. M. B., 547
Theobald, N. A., 580
Theorell, T., 548
Théorét, A., 557
Theresianto, N., 577
Thieme, R. J., 573
Thom, R., 581
Thomas, D., 569
Thomas, D. A., 534, 560
Thomas, D. C., 546, 568
Thomas, G., 542, 546
Thomas, G. F., 567
Thomas, H. D. C., 586
Thomas, J. L., 551
Thomas, K., 336, 573
Thomas, K. W., 573
Thomas, R. J., 534
Thompson, J., 587
Thompson, John, 446–447
Thompson, Kris, 435
Thompson, L., 541, 574, 575
Thompson, L. L., 574
Thompson, M. M., 93
Thompson, T., 548
Thomson, J., 545
Thornburgh, Dick, 319
Thornton, E., 381
Thornton, John, 331
Thottam, J., 587
Throckmorton, Robin,
326, 572
Thurstone, L. L., 535
Tiedens, L. Z., 541, 567
Tiegs, R. B., 555
Tien-Hsieh, A., 580
Tindale, S. R., 562
Tinsley, C. H., 567, 574
Tishler, A., 584
Tjosvold, D., 572
Toczek-Capelle, M.-C., 561
Todorova, G., 532
Todorovic, William, 478
Toffler, Alvin, 206, 558
Toh, E., 549
Toomey, S., 548
Torlini, Fabio, 130
Torraco, R. J., 564
Tosi, H. L., 535
Tourigny, L., 548
Tourish, D., 583
Trachtman, R., 553
Tracy, J., 470
Trattner, D., 560
Tredoux, C., 542
Treiber, F. A., 549
Trevino, L. K., 542, 567
Triandis, H. C., 574
Tribble, Guy (“Bud”), 312
Trinca, H., 538
Trompenaars, F., 544
Tropp, L. R., 542
Trosten-Bloom, A., 588
Trotman, K. T., 541
Trouilloud, D. O., 541
Tsai, W. C., 546
Tsang, E. W. K., 541
Tsaousis, I., 548
Tseng, S.-F., 560
Tsui, A. B. M., 568
Tsui, A. S., 582, 585
Tuckman, B. W., 563
Tugade, M. M., 548
Tung, R. L., 575
Tunley, W. H., 571
Turner, G., 583
Turner, J. C., 540
Turner, J. W., 567
Turner, M. E., 564
Turner, N., 548, 588
Turnley, W. H., 545–546
Tushman, M. L., 387, 580, 582
Tversky, Amos, 205, 558
Tylee, J., 578
Tyler, K., 539
Tyson, D. H., 568
U
Uchino, B. N., 566
Uggerslev, K. L., 585
Ulich, E., 565
Ullman, Myron “Mike,” 133
Ulrich, D., 576
Unsworth, K. L., 562
Urban, K. K., 560
Urwick, L., 572
Useem, J., 584
Uzzi, B., 561
V
Vaananen, A., 534
Vaas, L., 573
Vaill, P. B., 531
Valenze, D., 553
Vamos, Steve, 365
Van Aken, E. M., 562, 588
Van Alphen, T., 580
Vancouver, J. B., 542
Vandenberg, R. J., 566
Vander Doelen, C., 564, 583
van der Mark, I. L., 542
Van der Vegt, G. S., 562, 573
Van de Ven, A. H., 566,
580, 582
Van de Ven, F., 537
Van de Vliert, E., 562 , 573
van Diggelen, A., 565
Van-Dijk, D., 552
Van Doorn, J. R., 578
van Dyne, L., 546
van Engen, M. L., 579
Van Fleet, D. D., 580
Vangen, S., 587
Vanhonacker, W. R., 571
van Knippenberg, D., 534,
563, 564
Van Lee, R., 539
Van Maanan, J., 585, 586
van Marrewijk, M., 533
van Mierlo, H., 565
van Muijen, J. J., 382, 583
Van Nuys, K. E., 586
Van Patten, J., 588
Van Seters, D. A., 541
Van Vianen, A. E. M.,
574, 585
Van Vugt, M., 561
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614 Name Index
Vassileva, Vesselka, 107
Vatcha, N., 583
Vavra, B., 564
Vecchio, R. P., 577
Velasquez, M. G., 539
Velayutham, Thivagar, 488
Verbeke, A., 535
Verbeke, W., 548, 561
Verdon, J., 544
Vernon, P. A., 536
Verplanken, B., 538, 551
Verquer, M. L., 538
Ververidis, D., 551
Very, P., 584
Vextommen, H., 557
Vickers, M., 532
Vidal, D., 540
Vigoda, E., 571
Villa, J. R., 577
Visser, P. S., 543
Viswesvaran, C., 536
Vohs, K. D., 558, 569
Voight, J., 570
Voigt, A., 584
Vonderhorst, J., 537, 549
Von Glinow, M. A., 573, 574
Vonk, R., 571
Voronov, M., 538
Voss, A., 557
Voss, K., 565
Vranica, S., 581
Vredenburgh, D., 551
Vreeke, G. J., 542
Vroman, H. William, 484, 488
Vroom, V. H., 224, 535, 551,
560, 565
W
Wagar, T. H., 550
Wageman, R., 562, 573
Wagner, C., 567
Wagner, S. H., 532, 538, 554
Wahba, M. A., 550
Walker, C. J., 569
Walker, C. R., 555
Wall, J. A., 572, 575
Wall, T. D., 555, 556, 580
Wallace, D., 532
Wallace, J., 570
Wallace, R., 545
Wallander, Jan, 164
Wallas, Graham, 216, 560
Walls, M., 548
Walsh, J. P., 531, 560
Walsh, K., 580
Walsh, T., 568
Walter, G. A., 588
Walters, M., 582
Walther, J. B., 566
Walton, R. E., 573, 574, 587
Walton, Sam, 422
Wanberg, C. R., 586
Wang, Tony, 185
Wanous, J. P., 551, 586
Ward, B., 549
Warner, M., 531
Warner, S., 582
Warren, M., 470
Wartzman, R., 553
Waterman, R., 569
Watkins, J. M., 459, 588
Watkins, K., 587
Watkins, M., 582
Watson, Jonathan, 182
Watson, R., 553
Watson-Manheim, M. B., 567
Watt, J. D., 546
Watts, L. A., 566
Waung, M., 549
Waymon, L., 586
Weatherbee, T. G., 550
Weaver, W., 566
Webb, M., 578
Webber, S. S., 564
Weber, Max, 5
Weber, N., 574
Weber, R., 579
Weber, T., 578
Weber, W., 561, 565
Weber, W. G., 565
Weberg, B., 554
Webley, P., 553
Webster, J., 567
Wecsler, H., 542
Wedley, W. C., 557
Weel, B., 580
Wegge, J., 543, 552
Wei, L., 577
Weick, K. E., 532, 587
Weigand, R. A., 534
Weil, N., 572
Weiner, B., 540
Weingart, L. R., 565, 572, 575
Weinstein, M., 536, 540
Weintraub, A., 440
Weisberg, R. W., 560
Weisbord, M., 588
Weiss, H. M., 543, 544, 545
Weitzel, J. R., 577
Welbourne, T. M., 554
Welch, D., 568, 583
Welch, L., 568
Weldon, E., 539, 574
Weldon, William, 407
Wells, J., 585
Wells, Mark, 120
Welsh, D. H. B., 551
Wernimont, P. F., 553
Weseman, Randy, 460
West, M. A., 561, 562
Westen, D., 539
Westerman, J. W., 538, 547
Westhead, R., 574
Westin, David, 358
Weston, Graham, 130
Westwood, R., 531, 560
Wetlaufer, S., 581
Wetzels, M. G. M., 568
Wexler, M. N., 532
Wheeler, J. V., 564
Whetten, D. A., 538
Whipp, G., 568
White, Donald D., 484, 488
White, E., 552
White, K. M., 571
White, M. C., 264
White, R., 552, 561
White, Ray, 149
White, S. S., 541
Whitener, E. M., 564
Whitfield, K., 554
Whitford, D., 555
Whitman, Walt, 572
Whitney, D., 459, 588
Whitney, K., 539
Whittington, J. L., 577
Whitworth, B., 569
Whyte, G., 559, 565
Wicks, A. C., 533
Widener, S. K., 532
Wiedeking, Wendelin, 333, 334
Wiesenfeld, B., 535
Wiesner, R., 580
Wiggins, S., 549
Wijen, F., 533
Wilderom, C. P. M., 584
Wilkins, A. L., 583
Wilkinson, A., 546
Wilkinson, I., 570
Willem, A., 580
Willemsen, T. M., 579
Willer, D., 569
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Name Index 615
Williams, A., 582
Williams, B. A., 542
Williams, J. R., 552
Williams, K. D., 562
Williams, Lisa V., 482
Williams, M., 564
Williams, Mona, 502
Williams, S., 557, 566, 567
Williamson, O. E., 564
Willis, H., 540, 573
Wilson, Dennis J. (“Chip”), 431
Wilson, E. V., 567
Winkielman, P., 544, 551, 557,
558, 567
Wirtz, P. W., 579
Wirtz, R. A., 554
Wise, P., 563
Wiseman, R. M., 554
Withey, M. J., 545, 546
Witt, A., 536
Witt, L. A., 571
Witte, E., 558
Wixom, B. H., 566
Wofford, J. C., 577
Wojcik, J., 549
Wolf, M., 534
Womack, J. P., 532
Wong, C.-S., 545
Wood, G., 539
Wood, W., 571
Wooden, M., 548
Woodman, R. W., 563
Woodruff, D., 568
Woodward, S., 586
Wooldridge, A., 531
Woolfolk, R. L., 547
Workman, J. P., Jr., 581
Wren, D. A., 554, 580
Wright, G., 559
Wright, P. L., 569
Wright, P. M., 552
Wrzesniewski, A., 556
Wuchty, S., 561
Wuyts, S., 561
X
Xile, J., 573
Xin, K. R., 572
Y
Yaeger, T. F., 588
Yamada, H., 568
Yamauchi, K., 194
Yammarino, F. J., 576, 577
Yang, J., 572–573
Yang, J. L., 573
Yankelovich, D., 531
Yantis, S., 539
Yaprak, A., 543, 584
Ybarra, O., 541
Yeatts, D. E., 564
Yoho, S. K., 557, 577
Yokoyama, John, 503
Yoon, J., 556
York, G., 470
You, N., 548
Young, S., 546
Young, S. M., 532
Youssef, Yasmeen, 32
Yrizarry, Magda, 20–21
Yukl, G. A., 569, 571, 576, 577, 578
Yun, Jong-Yong, 219
Z
Zaccardelli, Giuliano, 298
Zaccaro, S. J., 562, 576
Zacharatos, A., 588
Zadek, S., 533
Zagelmeyer, S., 587
Zajonc, R. B., 543
Zald, M. N., 535, 583
Zaleznik, A., 578
Zalkind, S. S., 541–542
Zapf, D., 544
Zawacki, R. A., 494, 495
Zeelenberg, M., 551
Zehr, D., 582
Zeidner, M., 545
Zelazo, P. D., 543
Zeller, S., 551
Zemke, J., 534
Zemke, R., 534, 550, 583
Zerbe, W. J., 543, 544, 550, 575, 577
Zeschuk, Greg, 384, 401, 402, 580
Zetik, D. C., 574
Zhang, L., 569
Zhao, J. J., 575
Zhongtuo, W., 557
Zhou, J., 546, 560, 561
Zimbalist, K., 561
Zimmerman, R. D., 585
Zingheim, P. K., 554
Zmud, R. W., 566, 567
Zollinger, Cindy, 390–391
Zwany, A. A., 551
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616
subject index
A
Ability(ies), 35–36, 105, 369
Ability to communicate, 279
Absenteeism, 19
Absenteeism reduction plans, 84
Absorption, 305
Absorptive capacity, 11
Accountability, 402–403
Achievement motivation courses,
139–140
Achievement-nurturing
orientation, 52
Achievement-oriented leadership
style, 366
Acquisition drive, 140, 142
Action research approach,
456–458, 462
Action scripts, 209
Active listening, 286–287, 291
Adaptive cultures, 425–426,
437, 584
Adjourning stage, 246–247
Adjustment, 433
ADR (alternative dispute
resolution), 347–348
Advisory teams, 235
Affective commitment, 112, 113
Aggressive culture, 419
Agreeableness, 40, 41
Alarm reaction, 115, 140, 156
All-channels structure, 304
Alternative dispute resolution
(ADR), 347–348
Alternatives, 200, 203–209, 221
employee involvement and,
213–214
evaluating opportunities,
206–207
goals and, 203
information processing in,
204–206
intuition and, 208–209
problems with maximization, 206
role of emotions in, 207–208
See also Choice(s)
Ambiguity, 202, 212, 335
Analyzability, 408
Anchoring and adjustment
heuristic, 205
Anchors of knowledge, 23–25
Antecedents, 83
Applied performance practices,
164–187
empowerment practices, 182–183
financial reward practices ( See
Financial reward practices )
job design, 175–181
meaning of money and, 166–167
self-leadership practices, 183–187
Appreciative coaching, 148–149
Appreciative inquiry approach,
458–459, 462
Aptitudes, ability and, 35
Artifacts, 420–423, 437
aligning, in changing culture,
430–431
cultural values and, 424
organizational language, 422
physical structures and symbols,
422–423
ritual and ceremonies, 421–422
stories and legends, 420–421
Art training, 70
ASA (attraction-selection-attrition)
theory, 431–432, 437
Assertiveness, 310–311
Assimilation, 427–428
Associative play, 219–220
Assumptions, 69–70, 416, 419
Attention, 68–70, 208
Attitude object, 100
Attitudes, 122
cognitive components of, 100–101
effects of job specialization on,
176–177
influence of emotions on, 100,
101–102
job satisfaction, 108–112
organizational commitment,
112–113
toward money, 166–167
Attraction-selection-attrition (ASA)
theory, 431–432, 437
Attribution errors, 76, 540
Attribution theory, 75–76, 88
Audience characteristics, 344
Authentic leadership, 80, 362
Authority
deference to, 310
hierarchical, 259
upward appeal to, 311–312
“vocal authority,” 310–311
Autonomy
empowerment and, 183
job autonomy, 13, 178
of self-directed teams,
253–254, 255
self-leadership and, 187
Availability heuristic, 205
Avoiding style, 337, 338
Avoiding uncertainty, 52
B
Baby boomers, 21
Balance
in fulfillment of drives, 142
work-life balance, 22, 23,
119, 418
Balanced scorecard (BSC), 147
Bargaining-zone model, 343
Barriers to communication, 291
information overload and, 275,
282–283
kinds of, 271, 281–282
Barriers to entry, 250
“Bathroom effect,” 287–288
Beehive Web site, 275
Behavior(s), 16–19, 25, 33–56
communication preferences, 278
cross-cultural values and, 50–52
effect of emotions on, 102
ethics and ( See Ethics )
healthy, reinforcement of,
84, 85
MARS model of ( See MARS
model of individual behavior )
organizational ( See Organizational
behavior )
organizational citizenship, 17–18
parallel behavior, 277
personality in organizations,
38–43
reinforcement of, in diffusion of
change, 455
self-concept, 43–47
self-leadership behaviors, 186
self-serving, 316
of test subjects, 512
understanding, 36
values and, 47–50
work behaviors, 18–19, 109–111
Behavioral intentions, 100, 101
616
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Subject Index 617
Behavioral norms
absenteeism and, 19
cultural display rules,
103–104, 122
social norms, 134–135, 279
team norms, 249–250
Behavioral perspective of
leadership, 364–365
Behavior modeling, 85–86, 145,
374, 458
Behavior modification, 82–85, 88
ABC’s of, 83
contingencies of reinforcement,
83–84
in practice, 84–85
Beliefs, attitudes and, 100
Belongingness, 135, 136
Benefits conflict, 572
“Benevolents,” 154
Bias
confirmation bias, 69
correspondence bias, 540
in decision heuristics, 205–206
in judging, 47
perceptual, 68, 79, 513
problem identification biases,
201–202
in sampling, 509–510
self-serving bias, 76
See also Stereotyping
Bicultural audit, 427
“Big Five” personality dimensions,
39–41, 56, 362
“BlackBerry addiction,” 117
“Black Friday,” 535
Blog(s), 288
BlogCentral, 288
Bonding drive, 140, 142, 277, 290
Bonuses, 109, 171, 174, 232
Bootlegging, 235
Bounded rationality, 203
Brainstorming
in diverging sessions, 217
electronic, 259–260
nominal group technique, 260
in team decision making, 258–259
Broadbanding, 169
Brooks’ Law, 237–238
BSC (balanced scorecard), 147
“Buddy system,” 436
Buffering, 283, 341, 451
Bullying, 116
Burning-platform strategy, 451
Business knowledge, 362, 363
C
Calculus-based trust, 252
Cannes Lions International
Advertising Festival, 305
“CANOE,” 40
Categorical thinking, 70, 72
Categorization, 72
Causation
establishing in field surveys,
512–513
research methods and, 510–511
Cellular manufacturing model,
239, 240
Centrality, power and, 306
Centralization, 393, 408–409
Ceremonies, 422
Chain of command, 396
Challenging goals, 147
Change agents, 447, 457
in organizational change, 455, 456
transformational leaders as, 371
Changing organizational culture,
429–432
aligning artifacts in, 430–431
attraction-selection-attrition theory,
431–432, 437
person-organization value
congruence, 432
rewards and, 431
Charisma, 372
Charismatic leadership, 372–373
Charismatic visionaries, 377
Child care support, 119
Choice(s)
choosing effectively, 200, 209
implementation of, 200, 209–210
intuition and, 208–209
rational choice paradigm,
198–200, 203, 204, 221
role of emotions in, 207–208
too many alternatives and, 206, 207
See also Alternatives ; Decision
making
Circumplex models, 48–49, 99
Clarity, in self-concept, 43
Client-consultant relationships, 457
Client divisional structure, 398
Client feedback, 217
Client relationships, 181
Closed systems, 8
“Closing costs,” 212
Clustering illusion, 205–206
Coalition formation, 310, 311
“Codebooks,” 272
Codes of conduct, 55
Coercion, 452, 454
Coercive power, 303, 317
Cognition, 98, 100–101
Cognitive appraisal perspective, 114
Cognitive closure, need for, 70,
72, 202
Cognitive dissonance, 102
Cognitive-emotional attitude process,
101–102
Cognitive intelligence, 362, 363
Collective purpose of organizations,
4–5
Collectivism, 50–51, 339–340, 341
Columbia disaster, 201, 259
Comforting, 244
Commissions, 170
Commitment
of employee to decision, 214
escalation of, 210–212, 221
goal commitment, 147
influence tactics and,
314, 315
organizational, 112–113, 375
to strategic vision, 374
Communication, 268–291
barriers to (noise), 271, 275,
281–283, 291
computer-mediated, 273–276
in conflict management, 341
creativity and, 219
cross-cultural, 283–285
empathy in, 284, 285–286
face-to-face ( See Face-to-face
communication )
gender differences in, 285, 291
importance of, 270–271
improving, 285–289, 341
informal, 387, 388–389, 396
information technologies and
( See Information technologies )
interpersonal, 285–287
media richness and, 279
model of, 271–272
multicommunication, 279
in negotiation, 345
nonverbal ( See Nonverbal
communication )
open, equity theory and, 154
opportunity for, 335
organizational, 287–289
in problem identification, 203
problems with, conflict and,
335–336
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618 Subject Index
Communication —Cont.
in reducing restraining forces,
452–453
of strategic vision, 373–374
by team members, 244
team structure and, 241
through “grapevine,” 289–290
verbal, 272–273, 290
virtual meetings, 268
workforce diversity and, 21
written, 281
Communication channels, 272–281
computer-mediated communication,
273–276
media richness and, 278–280
nonverbal communication,
276–277
persuasion and, 281
social acceptance and, 278,
290–291
Communication skills, 335
Communication systems, 239
Communities of practice, 235
Comparison other, 152, 153
Competencies, 13
ability and, 35
core competencies, 404
development of, in teams,
247–248
of effective leaders, 362–363
empowerment and, 182
Competency-based rewards,
168, 169
Competency perspective of
leadership, 361–364, 378
competencies of effective leaders,
361–363
limitations of, 363–364
Competitive advantage, 112
Complex environments, 406, 407
Complexity, in self-concept, 43
Complex work, 237, 240–241, 389
Compliance, 310–311, 314, 315
Composite cultures, 428
Compromising style, 337, 338, 340
Computer-mediated communication,
273–276
e-mail problems, 273–275
social networking, 275–276
Concessions, in negotiation, 345–346
Concurrent engineering, 388
Condorcet’s jury theorem, 214
“Conduit” metaphor, 271
Confirmation bias, 69
Conflict, 328, 349
ambiguous rules and, 335
conflict process model,
331–332, 349
constructive, 258, 329–331,
349, 447
increased in matrix structure, 402
perspectives of, 328–331
produced by antagonism, 450
relationship conflict, 329–331,
341, 349
structural sources of, 332–336
styles of handling ( See Conflict
management )
types of, 572
workforce diversity and, 21
Conflict episodes, 331–332
Conflict management, 336–340, 349
choosing best style, 337–339
cultural and gender differences in,
339–340
structural approaches to, 340–342
styles of, 336–337
through negotiation, 342–346
Conflict process model,
331–332, 349
Conflict resolution, 244, 346–348
Conformity, 258
Conscientiousness, 40, 41, 186, 362
Consensus, 75–76
Consequences
of behavior, 83, 86
of change, employee concerns
about, 447
of distress, physical, 115, 121
of influence tactics, 314, 315
of performance-based rewards,
174–175
of power, 309
of procedural injustice, 155, 156
of stress, controlling, 121
of team cohesion, 251
of workforce diversity, 21–22
Consequential principles of ethics, 53
Conservation, 48, 49
Consistency, 38, 43, 75–76, 431
Construct(s), 508
Constructive conflict, 258, 330, 331,
349, 447
Constructive thought patterns, 185
Contact hypothesis, 81, 341
Contingencies
of employee involvement, 214–215
of influence tactics, 314, 315
of organizational design ( See
Organizational design )
of path-goal leadership theory,
367–368
of reinforcement, 83–84
of self-fulfilling prophecy, 77–78
of self-leadership practices,
186–187
technological, 407–408
Contingencies of power,
305–309, 317
centrality, 306
discretion, 306
influence tactics, 314
social networking, 307–309
substitutability, 305–306
visibility, 307
Contingency anchor of OB, 23, 24
Contingency theories of leadership,
365–371, 378
Fiedler’s contingency model,
369–370, 378
leadership substitutes, 370–371
leader’s natural style and, 370
path-goal theory, 365–368
situational leadership theory, 369
Continuance commitment, 112
Continuous reinforcement, 84
Control
corporate culture as system
for, 424
information control, 298, 304, 310,
311, 448
of knowledge, 23–25
locus of control, 45, 390–393
of resources, 306
in scientific method, 509, 511–512
situational control, 369
span of control, 390–393, 408
task control, 117, 316
Converging sessions, 217
Cooperation by team members, 243
Coordination of work activities,
387–390
formal hierarchy, 389
informal communication, 387,
388–389
standardization, 389–390
by team members, 244
Coping strategies, 118, 304–305
Core affect, 99
Core competencies, 404
Corporate culture. See Organizational
culture
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Subject Index 619
Corporate Service Corps program
(IBM), 65–66
Corporate social responsibility
(CSR), 16, 65–66
Correspondence bias, 540
Countercultures, 419–420
Counterproductive work behaviors
(CWBs), 18
Countervailing power, 301
Creativity, 196, 215–221
in brainstorming, 259
characteristics of creative people,
216, 218
cross-pollination of, 220–221
culture of, 418, 421
example of, 217
organizational conditions and,
218–219
rejection of, mental models and,
201–202
role of incubation in, 215–216
supportive work environment
and, 218–221
See also Decision making
Credible feedback, 148
Critical investigation, 509
Cross-cultural communication,
283–285, 291
nonverbal cues in, 284–285
voice intonation, 283–284
Cross-cultural values, 48, 50–52, 56
achievement-nurturing
orientation, 52
conflict-handling styles, 339–340
emotional display rules,
103–104, 122
ideas about leadership, 375,
376–377, 378
individualism vs. collectivism,
50–51
organizational change and,
461, 463
power distance, 51–52, 302, 314
rewards and, 173
toward money, 167
uncertainty avoidance, 52
Cross-functional teams, 234, 340
Cross-pollination, 220–221
CSR (corporate social responsibility),
16, 65–66
Cultlike cultures, 423, 424, 425
Cultural content, 418–419, 436
Culturally consistent rewards, 431
“Culture carriers,” 431
Culture change, 437
Culture clashes, 427, 437
Culture of conflict, 331
Customer-driven change, 451
Customer satisfaction, 111, 112,
179, 451
CWBs (counterproductive work
behaviors), 18
Cynicism, in job burnout, 115–116
D
Dashboard feedback, 150
Data collection, 345, 508–509
Deadlines, 344
Decentralization
complex environments and,
406, 407
of organizational structure, 393
in team-based structure, 400
Decision commitment, 214
Decision heuristics, 205–206
Decision making, 196, 198, 221
alternatives evaluation
( See Alternatives )
communication and, 270
creativity integral to
( See Creativity )
emotion in decision evaluation,
207–208, 221
employee involvement in,
213–215, 366
evaluating outcomes of, 210–212
identifying problems and
opportunities in, 200–203
implementation of choice,
200, 209–210
optimal conflict levels and, 329
organizational strategy and, 408
programmed and nonpro-
grammed, 199–200
rational choice paradigm, 198–200
self-enhancement and, 44–45,
48, 49
in teams, 256–260, 261
Decision structure, 214
Decisive leadership, 202
Deculturation strategy, 428
Deductive process, 508–509
Deep acting, 105, 106
Deep-level diversity, 21, 245
Defense drive, 140, 142
Deference to authority, 310
Deficiency needs, 136
“Delayering,” 392–393
Delivering stage, 459
Deming Prize, 213
Departmentalization, 395–405, 409
divisional structure, 397–400
functional structure, 396–397
matrix structure, 401–403
network structure, 403–405
simple structure, 396
team-based structure, 400–401
Departmental teams, 235
Dependence, 300, 301
Dependent variables, 510–511, 512
Depersonalization, 115–116
Description, 286
Designing stage, 459
Desire for harmony, 257
Differentiation
conflict and, 333
differential rewards, 418
reducing, in conflict management,
340, 341
in social perception, 72
Diffusion of change, 455–456
Digital media, 305
Direct confrontation, 446
Direct costs, 448
Direction, in motivation, 34–35
Directive leadership style
path-goal theory and, 366–368
personality and, 370
supportive style compared, 508
Disclosure, 81
Discovery stage, 459
Discretion, power and, 306
Display rules, 103–104, 122
Distinctiveness, 75–76
Distress, 114
job burnout and, 115–116
physical consequences of,
115, 121
Distributive justice, 53, 151–152
Divergent thinking, 216
Diverging sessions, 217
Diverse environments, 406
Diversity. See Workforce diversity
Divisional structure, 397–400, 409
evaluation of, 399–400
globally integrated
enterprise, 399
kinds of, 397–399
Division of labor, 386–387
Dominant culture, 419
Dreaming stage, 459
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620 Subject Index
Drive(s)
defined, 134
in effective leaders, 362–363
influence on motivation, 141
Maslow’s needs list as, 136
needs contrasted, 134, 138
See also Four-drive theory ; Needs
Driving forces, 444, 450, 462
Dynamic environments, 406
E
EAPs (employee assistance
programs), 121
Early adopters, 305
EEOC (Equal Employment
Opportunity Commission), 116
Effectiveness
efficiency contrasted, 9
in problem identification, 202–203
of self-leadership practices, 186
strength of culture and, 424–426
undermined by power, 309
See also Organizational effective-
ness ; Team effectiveness
Efficiency, 9
Effort-to-performance (E-to-P)
expectancy, 143–145, 147
EI. See Emotional intelligence
Electronic brainstorming, 258–259
E-mail, 273–275
Emerging values, 420
Emoticons (smileys), 273
Emotion(s), 98–102, 122
attitudes and, 100–102
“catching,” 277
circumplex model of, 99
cultural display norms,
103–104, 122
decision evaluation process and,
207–208, 221
early preferences formed by,
200, 207
e-mail as poor communicator, 273
emotional attachment to
opportunities, 206–207
emotional dissonance, 104–105
escalation of commitment and, 211
as information, 208
managing in workplace, 103–105
moods contrasted, 98
produced by stories, 421
rational choice paradigm and, 200
relationship conflict and, 330
role in employee motivation, 135
stress as emotional experience, 114
types of, 99
Emotional contagion, 277
Emotional dissonance, 104–105
Emotional exhaustion, 115
Emotional intelligence (EI),
105–108, 122
dimensions of, 105–107
in effective leaders, 362, 363
improving, 107–108
relationship conflict and, 330
role in motivation, 142
Emotional labor, 103, 122
Emotional markers, 69, 207
Emotional stability, 40–41
“Emotion detection” software, 146
Empathy, 81, 82
in communication, 284,
285–286, 291
in emotional intelligence, 106
power and, 309
Employee(s)
baby boomers, 21
commitment to decisions, 214
diverse ( See Workforce diversity )
generation-X/-Y, 21, 169, 326, 328
job satisfaction of ( See Job
satisfaction )
liaison roles in coordination of
work, 388
psychological contract with, 435
resistance to change, 445–449
success of, self-leadership and,
183–184
trust in leader, 363, 374
voice of, 110, 155, 447
Employee assistance programs
(EAPs), 121
Employee dispute resolution,
347–348
Employee engagement, 132–133
Employee involvement, 13, 221
in decision making, 213–215
organizational commitment
and, 113
in reducing restraining forces,
452, 453–454
Employee motivation.
See Motivation
Employee recognition, 137
Employee stock ownership plans
(ESOPs), 171–172
Employment relationships, 2, 22–23
Empowerment, 182, 187, 309, 372
Empowerment practices, 164–165,
182–183
Enacted values, 417
Encounter stage, 434
“Entitleds,” 154
Entitlements, 53
Entry barriers, 250
Equal Employment Opportunity
Commission (EEOC), 116
Equality principle, 152
Equity principle, 152
Equity sensitivity, 154
Equity theory, 152–155
evaluation of, 154–155
individual differences, 152–154
inequity and motivation, 152–154
ERG theory, 138, 156
Escalation of commitment,
210–212, 221
ESOPs (employee stock ownership
plans), 171–172
Espoused-enacted value
congruence, 50
Espoused values, 416–417
Esteem needs, 135, 136
Ethical issues
impression management, 313
job satisfaction as, 112
in OB research, 511
in organizational change,
461–462, 463
Ethical sensitivity, 54
Ethics, 52–55
business ethics, 14, 426
of job satisfaction, 112
moral intensity and, 53
organizational culture and, 426
situational influences on, 54
stakeholder perspective and, 15–16
supporting ethical behavior, 54–55
three principles of, 53
unethical business practices, 14
utilitarianism, 53, 198
of workforce diversity, 21–22
E-to-P expectancy, 143–145, 147
Eustress, 114
Evaluation
in action research, 457
in active listening, 287
of alternatives ( See Alternatives )
outcomes evaluation, 210–212
self-evaluation, 45–46, 56, 537
Evaluation apprehension, 257, 259
Evaluative self-talk, 185
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Subject Index 621
Evidence-based management, 24
EVLN (exit-voice-loyalty-neglect)
model of job dissatisfaction,
109–110
Exchange as influence tactic, 310,
313–314
Executive compensation, 109
Exhaustion stage, 115
Exit, job satisfaction and, 109–110
Exit-voice-loyalty-neglect (EVLN)
model, 109–110
Expectancy theory, 143–145, 156
components of, 143–144
path-goal theory and, 365
in practice, 144–145
Experience, 100, 110
creativity undermined by, 218
directive leadership and, 367
openness to, 40, 41, 218
Experienced meaningfulness,
178–179
Experienced responsibility, 179
Experiential learning, 86, 88
Expert power, 303, 317
Explicit knowledge, 82
External attributions, 75–76
External challenge, 251
External environment(s)
alignment of culture with, 425
challenges to organizational
effectiveness, 19–23, 25
compatibility with demands of,
8–9
formalization and, 393
globalization, 20
mechanistic vs. organic structures
and, 395
organizational design and,
406, 409
situational factors in, 37
uncertainty in, 304–305
Extinction, 84
Extranets, 404
Extroversion, 40, 41, 186, 362
E-zines, 288
F
Facebook Web site, 275, 289, 305
Face saving, 341, 344, 449
“Face time,” 23
Face-to-face communication, 256
coordination of work and, 388
multicommunication, 279
persuasion and, 312
reduced by technology, 273
as rich media, 278, 280
False-consensus effect, 79
Family and Medical Leave Act, 119
Family relations, 23
“Fault lines” in teams, 245
Fear of unknown, 449, 453
Feedback, 81
from client, 217
in communication, 271
effective, characteristics of,
148–149
emotional contagion, 277
evaluating, 151
goal setting and ( See Goal setting )
as job characteristic, 178
multisource (360-degree), 149–151,
257, 303
nonsocial vs. social, 150–151
persuasion and, 281
sources of, 149–151
supportive, 145
Feelings, 41, 100
FFM (five-factor model) of
personality, 39–41, 56, 362
Fiedler’s contingency model of
leadership, 369–370, 378
Field experiments, 511
Field surveys, 512–513
Filtering, 282, 310
Financial performance, 375
Financial reward practices,
167–175, 187
competency-based rewards, 169
improving reward effectiveness,
172–175, 187
job design and, 175–181
job status-based rewards, 168–169
membership- and seniority-based
rewards, 167–168
performance-based rewards,
170–172
Financial success, role of OB in, 6
Five-category model, 335–336
Five-factor model (FFM), 39–41,
56, 362
Five-stage model of team
development, 246–247
“Flaming” e-mails, 274
Flat structures, 391–393
Flexible workforce, 168, 169, 180
Flexible work hours, 119
“Flypaper” approach, 434
Focus groups, 217
Force field analysis model,
444–449, 462
driving forces, 444
restraining forces, 444, 445–449
Forcing style, 337, 338, 339, 340
Forecasting, 304
Formal hierarchy, 259, 389,
392–393
Formalization, 393–394, 400, 409
Forming stage, 246
Fortune 500 companies, 55, 150
“Four-D” model of appreciative
inquiry, 459
Four-drive theory, 140–142, 156
evaluation of, 142
influence of drives on
motivation, 141
practical implications of, 142
“Four pillars,” 581
Functional structure, 396–397, 409
Fundamental attribution error,
76, 540
Future search, 460
G
Gainsharing plans, 170
GAS (general adaptation syndrome),
114–115
Gender differences
in communication, 285, 291
in handling conflict, 340
in ideas about leadership, 377–378
General adaptation syndrome (GAS),
114–115
Generation-X/-Y employees, 21, 169,
326, 328
Geographic divisional structure,
397, 398–399
Global issues
cross-cultural communication,
283–285, 291
emotional intelligence, 107
employee engagement, 133
guanxi, 314
intentional discrimination, 74
job satisfaction, 108
lean management, 10
motivation, 136, 137
organizational conflict, 334
seniority-based rewards, 167
social network analysis, 308
stress, 114
team formation, 243
work overload, 116–117
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622 Subject Index
Globalization, 20, 255–256
Globally integrated enterprises, 399
Global matrix structure,
401–403, 402
Global mindset, 68, 86
Goal(s)
incompatible, 333
relevant, 146–147
shared, 81
superordinate, 340
task goals, 242
Goal commitment, 147
Goal feedback, 147
Goal incompatibility, 333
Goal participation, 147
Goal setting, 156
balanced scorecard in, 147
evaluating, 151
feedback and ( See Feedback )
for negotiation, 345
personal, in self-leadership, 184
strategic vision, 373–374
“Golden handcuffs,” 168
Gourami Business Challenge, 243
Grapevine, 289–290, 291
Grounded theory, 509
Group(s)
focus groups, 217
formal ( See Team(s) )
informal ( See Informal groups )
in-group favoritism, 80
nominal group technique, 260
reference groups, 46–47
Group dynamics, 21
Groupthink, 257–258
Growth needs, 136, 180
Guanxi, 314
Guolaosi (death from overwork), 117
H
Halo effect, 78
“Hard” influence tactics, 310–312,
314, 315, 337
Health and well-being
communication and, 270–271
physical consequences of distress,
115, 121
reinforcement of healthy
behaviors, 84, 85
of team members, 238
wellness programs, 121
Heroic leadership model, 360
Hierarchical authority, 259
“Higher purpose,” 373
High-performance teams, 239
High-performance work practices
(HPWP), 12–13, 25, 172
High power distance cultures,
302, 314
Hiring and retention, 18
Homogenization, 72
Hostile environments, 406
Hostile work environment, 116
HPWP (high-performance work
practices), 12–13, 25, 172
“Huddles,” 289
Human capital, 12–13
Hygienes, 177
Hypotheses
constructs and, 508
contact hypothesis, 81, 341
testing, 508–509
I
IAT (Implicit Association Test),
80, 541
Identification-based trust, 252, 253
Illegal acts, 52–53, 174
Impact, empowerment and, 182
Implementation of decisions, 200,
209–210
Implicit Association Test (IAT),
80, 541
Implicit-favorite comparison,
204–205, 209
Implicit leadership theory,
375–376, 378
Impression management, 310,
313, 434
Incremental change, 457
Incubation, 215–216
Independent variables, 510–511, 512
Individual behavior. See Behavior(s)
Individual differences
equity sensitivity, 154
in equity theory, 152–154
job design and, 179–180
in needs, 134–135
in stress, 118
Individualistic cultures, 50–51, 340
Individual level of analysis, 24
Individual rewards, 170
Individual rights, 53
Inductive research, 508
Inequity
employee motivation and, 152–154
overreward/underreward,
152, 153
Influence tactics, 309–314, 317
assertiveness, 310–311
coalition formation, 310, 311
consequences and contingencies
of, 314, 315
exchange, 310, 313–314
“hard” tactics, 310–312, 314,
315, 337
information control, 310, 311
ingratiation and impression
management, 310, 312–313
organizational politics and, 315–316
persuasion, 310, 312
silent authority, 310
“soft” tactics, 310, 312–314, 315
upward appeal, 310, 311–312
See also Power
Informal communication, 387,
388–389, 396
Informal groups, 234–236, 260
nature of, 235–236
organizational outcomes and, 236
Informal roles, 248
Information
in creating urgency for
change, 451
emotions as, 208
encoding and decoding, 271–272
and power, 304–305, 317
as source of power, 304–305
Information control, 298, 310,
311, 448
Information-gathering, 345, 508–509
Information load, 283
Information overload, 275, 282–283
Information processing, 204–206
biased decision heuristics, 205–206
implicit-favorite comparison,
204–205, 209
satisficing and, 206, 209
Information processing capacity, 283
Information sharing, 337
Information technologies
communication and, 270, 289–290
differentiation and, 333
digital media, 305
electronic brainstorming, 259–260
employment relationships and,
22–23
multicommunication and, 279
virtual teams and, 255–256
See also Technology
Ingratiation, 310, 313
In-group favoritism, 80
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Subject Index 623
Initial-offer point, 343
Injustice, 155, 156
Innovation, culture of, 418, 419
Inoculation effect, 312
Inquisition, 346, 347
Insight, 216
Insincerity, 313
Integrated environments, 406
Integration strategy, 419, 428
Integrator roles, 388
Integrity, in leaders, 362, 363
Intellectual capital, 11–12
Intelligence
cognitive, in effective leaders,
362, 363
of creative people, 216
emotional ( See Emotional
intelligence )
Intensity, 35
Intentional discrimination, 73
Interdependence, 301
conflict and, 334–335
kinds of, 241–242, 335
reducing, in conflict management,
341, 342
span of control and, 391
Intergenerational conflict, 326, 333
Internal attributions, 75, 76
Internal dispute resolution, 347–348
Internal subsystems, 8, 9
Internet World Asia Industry
Awards, 313
Interpersonal communication,
285–287
active listening, 286–287
sender tasks in, 285–286
Interpersonal conflict-handling.
See Conflict management
Interpretation, 70–71
Interpretivism, 507–508
Interventions, 457
Intrinsic motivation, 216, 218, 219
Introversion, 40
Intuition, 41, 208–209, 221
J
Jargon, 282
Job(s), 175
characteristics of, 177–179
person-job matching, 36, 387
realistic job preview, 435
Job autonomy, 13, 178
Job burnout, 115–116, 117
Job characteristics model, 177, 178
Job demands, 117
Job design, 175–181, 187
motivational strategies, 180–181
work efficiency and, 175–177
work motivation and, 177–181
Job enlargement, 180, 181
Job enrichment, 181
Job evaluation, 168–169
Job feedback, 178
Job resources, 117, 183, 219
Job rotation, 180
Job satisfaction, 108–112, 113, 122
customer satisfaction and, 111–112
ethics of, 112
performance and, 110–111
of self-directed teams, 254
work behavior and, 109–111
Job sharing, 119
Job specialization, 175
division of labor and, 386–387
effects on attitudes, 176–177
increasing expense of, 387
Job status-based rewards, 168–169
Johari Window, 80–81
Judging, 41–42, 47
Judgments, 100
Jungian personality theory, 41–42
Justice
distributive, 53, 151–152
organizational, 113, 151–156
organizational commitment
and, 113
procedural, 151, 155–156
resistance and, 447
K
Karoshi (death from overwork),
117, 503
Key performance indicators
(KPIs), 146
Knowledge
business knowledge of leaders,
362, 363
competitive advantage and, 10–11
control of, 23–25
expert power and, 303
explicit, 82
“silos of knowledge,” 270
source of decision knowledge, 214
tacit, 82, 86, 208–209
Knowledge acquisition, 11, 87
Knowledge-based trust, 252
Knowledge management, 10–12
Knowledge of results, 179
Knowledge sharing, 11, 87
Knowledge storage, 11
Knowledge use, 11, 88
KPIs (key performance
indicators), 146
L
Laboratory experiments, 511–512
Labor unions, 306
Language
differences in, 282, 283
organizational culture and, 422
See also Communication
Large-group interventions,
460–461, 462
Leader(s)
effective, competencies of, 361–363
employee trust in, 363, 374
espoused values and, 417
natural style of, 370
organizational culture shaped by,
429–430
personal characteristics of, 361
relationships of, 364
transactional, 371–372, 378
transformational, 371, 372
Leaderful organization, 360
Leader-member relations, 369
Leadership, 358–378
authentic leadership concept,
80, 362
behavioral perspective of, 364–365
capacity to alter team norms, 249
competency perspective of,
361–364
contingency perspective of,
365–371
cross-cultural and gender issues,
376–378
decisive, 202
directive or supportive, 366–368,
370, 508
implicit perspective of, 375–376
nature of, 360–361
path-goal theory, 365–368
people-oriented, 364–365,
366, 370
self-leadership ( See Self-leadership
practices )
situational leadership theory,
369, 378
transactional, 371–372, 378
transformational perspective of,
371–375, 378, 430
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624 Subject Index
Leadership motivation, 362, 363
Leadership potential, 364
Leadership prototypes, 375
Leadership styles, 369
Leadership substitutes, 172,
370–371
Leadership teams, 235
Lean management, 9, 10
Lean manufacturing principles, 253
Lean media, 278, 279
Learned capabilities, 35
Learned needs theory, 138–140, 156
Learning
ability to learn emotional
intelligence, 107–108
behavior modification, 82–85
experiential learning, 86, 88
goal setting and, 151
of needs, 139–140
organizational, 82–88, 270
organizational socialization
as, 433
parallel structures, 461, 462–463
in reducing restraining forces,
452, 453
social learning theory, 85–86, 88
through observation, 85–86
unlearning, 12
See also Perception
Learning drive, 140, 142
Learning opportunities, 86, 87
Learning orientation
creativity supported by, 219
empowerment and, 183
of organizational culture, 86, 217,
360, 418
Legitimate power, 302
Lewin’s model. See Force field
analysis model
Liability of newness, 395
Liaison roles, 388
Life-cycle theory of leadership, 369
LinkedIn Web site, 275
Location, negotiation and, 344
Locus of control, 45, 367–368
Logical analysis, 198, 207
Loyalty, 110
M
Machiavellian values, 316, 317
Management by walking around
(MBWA), 289
Managerial functions, 392
Market forces, 405
MARS model of individual behavior,
34–38, 56, 101, 535
ability, 35–36
diffusion of change and, 455
employee engagement and, 132
employee motivation, 34–35
role perceptions, 36
self-efficacy and, 45
situational factors, 37–38
Martingale strategy, 559
Maslow’s needs hierarchy theory,
135–138, 156
Matrix structure, 401–403, 409
Maximization, 198, 206
MBTI (Myers-Briggs Type Indicator),
41–42, 56, 208
MBWA (management by walking
around), 289
MCEI (Merging Cultures Evaluation
Index), 427
Meaning, 178–179, 182, 183, 277
Meaningful interaction, 81–82, 181
Mechanistic structures, 394–395, 409
Media choice, 278
Media richness, 291
of face-to-face communication,
278, 280
hierarchy of, 278, 279
in negotiations, 344
problems with e-mail, 274–275
Media richness theory, 279–280
Mediation, 347, 348
Meditation, 121
Membership-based rewards,
167–168
Memory, 205
Mental imagery, 185
Mental models, 201–202
creativity undermined by, 218
in departmentalization, 396
in perceptual process, 71
shared, in communication, 272
Mergers, 333, 335, 427–429
Merging Cultures Evaluation Index
(MCEI), 427
Metaphors, 271, 374
Mimicry, 277
Mistakes, 86, 87
Models. See specific models
Money, 166–167, 187
Moods, 98
Moral intensity, 53, 54
Morphological analysis, 220
Motivation, 130–156
achievement motivation courses,
139–140
direction in, 34–35
drives and ( See Drive(s) )
employee engagement and,
132–133
empowerment practices and,
164–165
equity theory and, 152–155
expectancy theory, 143–145
feedback and ( See Feedback )
goal setting and ( See Goal setting )
in high-cohesion teams, 251
intrinsic, of creative people, 216,
218, 219
leadership motivation, 362, 363
in MARS model, 34–35
needs and ( See Needs )
organizational justice and,
151–156
resistance as, 447
work attendance and, 18–19
See also Work motivation
Motivator(s), 177
Motivator-hygiene theory, 177
Muda (waste), 9
Multicommunication, 279
Multiculturalism, 52
Multidisciplinary anchor of OB,
23–24
Multiple levels of analysis, in OB,
23, 24–25
Multiskilling, 180
Multisource (360-degree) feedback,
149–151, 257, 303
Munificent environments, 406
Mutual understanding, 80–81
Myers-Briggs Type Indicator (MBTI),
41–42, 56, 208
MySpace Web site, 275
“Mythical man-month,” 237–238
N
nAch (need for achievement), 139
nAff (need for affiliation),
139, 218
Natural environment, 512–513
Natural grouping, 181
Naturalistic decision making, 559
Natural rewards, 185–186
Nature, 39
Nature vs. nurture debate, 39
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Subject Index 625
Need(s)
drives contrasted, 134, 138
esteem needs, 135, 136
growth needs, 136, 180
individual differences in, 134–135
physiological, 135, 136
safety needs, 135, 136
self-concept and, 134
See also Drive(s)
Need for achievement (nAch), 139
Need for affiliation (nAff), 139, 218
Need for power (nPow), 139
Need principle, 152
Needs theories
ERG theory, 138
four-drive theory, 140–142, 156
learned needs theory, 138–140
Maslow’s needs hierarchy theory,
135–138, 156
problems with, 138
Negative feedback, 149
Negative reinforcement, 83–84
Negative self-talk, 185
Neglect, 110
Negotiation, 342–346, 349
bargaining-zone model of, 343
in exchange, 314
negotiator skills, 345–346
in reducing restraining forces,
452, 454
situational influences on, 343–344
Negotiator skills
communication, 345
concessions, 345–346
information gathering, 345
preparation and goal setting, 345
Network structure, 403–405, 409
Neuroticism, 40, 41
Newsletters, 288
Noise (barriers to communication),
271, 275, 281–283, 291
Nominal group technique, 260
Nonconformity, 218
Nonprogrammed decisions, 199–200
Nonsocial sources of feedback,
150–151
Nonverbal communication, 273,
276–277, 290
emotional contagion and, 277
persuasion and, 281
resistance shown in, 445–447
Nonverbal cues, 284–285
Norming stage, 246
Norm of reciprocity, 313–314
Norms
behavioral ( See Behavioral norms )
cultural display norms, 103–104, 122
media choice and, 278
organizational, 277
social norms, 134–135, 279
team norms ( See Team norms )
nPow (need for power), 139
Nurture, 39
O
OB. See Organizational behavior
Obeya, 239–240
Observational learning, 85–86
Observational research, 513
OCBs (organizational citizenship
behaviors), 17–18
Omitting, 283
Openness to change, 48, 49, 425–426
Openness to experience, 40, 41, 218
Open-space technology, 460
Open-systems perspective, 7–9,
14, 425
Operant conditioning. See Behavior
modification
Opportunities, 199
effectiveness in identifying,
202–203
evaluating, 206–207
for learning, mistakes as, 86, 87
Opportunity to communicate, 335
Optimal-conflict perspective, 329
Organic structures, 394–395, 408, 409
Organization(s)
described, 4–5
personality in, 38–43
sources of power in, 301–305
stereotyping in, 72–73
Organizational behavior (OB), 3–25
anchors of knowledge, 23–25
contemporary challenges in, 19–23
as field of study, 4–6
history of, 5
individual behavior and, 16–19
organizational effectiveness, 7–16
positive behavior, 77–78, 138, 458
rational choice paradigm and, 204
self-concept and, 47
See also Behavior(s)
Organizational change, 442–463
action research approach to,
456–458, 462
appreciative inquiry approach to,
458–459
change agents, 455
cross-cultural issues, 461
diffusion of, 455–456
ethical issues, 461–462, 463
force field analysis of, 444–449
large-group interventions,
460–461
organizational politics and, 316
parallel learning structures, 461
strategic visions in, 455
unfreezing, changing, and
refreezing, 449–454
Organizational citizenship behaviors
(OCBs), 17–18
Organizational commitment,
112–113, 375
Organizational comprehension, 113
Organizational culture, 2, 414–437
attraction-selection-attrition theory,
431–432
business ethics and, 426
changing and strengthening,
429–432
content of, 418–419, 436
due-diligence audits of, 426, 427
elements of, 416–420
importance of, 423–426
learning orientation as part of, 86,
217, 360, 418
merging cultures, 426–429
rewards consistent with, 431
role of artifacts in, 420–423, 424,
430–431
shared ethical values, 55
socialization to, 432–436, 437
strength of, effectiveness and,
424–426
subcultures, 419–420
Organizational design, 405–408
external environment and,
406, 409
organizational size and, 407
organizational strategy, 408
technology and, 407–408
Organizational diagnosis, 457
Organizational effectiveness, 7–16, 25
external environment as challenge
to, 19–23, 25
HPWP perspective, 12–13
open-systems perspective, 7–9
organizational learning perspective,
10–12
stakeholder perspective, 13–16
workforce diversity and, 20–22
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626 Subject Index
Organizational efficiency, 9, 254,
371–372
Organizational goals, 203
Organizational hierarchy
communication throughout,
287–289
formal, 259, 389, 392–393
hierarchical authority, 259
Organizational justice, 113, 151–156
distributive justice, 151–152
equity theory, 152–155
procedural justice, 151, 155–156
Organizational learning, 82–88
aspects of, 87–88
behavior modification, 82–85
communication and, 270
social learning theory, 85–86
Organizational learning perspective,
10–12
Organizational level of analysis,
24–25
Organizational memory, 12
Organizational norms, 277
Organizational outcomes, 236
Organizational politics, 315–316,
317, 571
Organizational processes
culture, 414–437
organizational change, 442–463
structure, 384–409
Organizational purpose of
teams, 234, 235, 238
Organizational rewards, 170–172
Organizational size, 389, 407
Organizational socialization,
432–436, 437
ASA theory and, 431–432
improving process, 435–436
as learning process, 433
stages of, 433–435
Organizational strategy, 408
Organizational structure, 384–409
centralization and
decentralization, 393
contingencies of organizational
design, 405–408
coordinating work activities,
387–390
departmentalization, 395–405
division of labor, 386–387
elements of, 390–393
formalization, 393–394
mechanistic vs. organic, 394–395
team effectiveness and, 239
Organizational systems, 449
Organizational values, 47–48
Organization-community value
congruence, 50
Orientation, 432–433
Outcome/input ratio, 152, 153
Outcomes evaluation, 210–212
Outcome valences, 143–145
Outputs, 390
Overconfidence, 258
Overloaded zone, 279
Overreward inequity, 152, 153
Oversimplified zone, 279
P
Parallel learning structures, 461,
462–463
Participative leadership style,
366–368
Participative management. See
Employee involvement
Past experience, 110
Path-goal leadership theory,
365–368
contingencies of, 367–368
leadership styles, 366–367
servant leadership, 365
Pay-performance linkage, 172
Peer pressure, 303
People-oriented leadership, 364–365,
366, 370
Perception(s), 66–82, 88
attribution theory, 75–76
changing stress perceptions, 121
conflict based upon, 328, 329,
331–332
in equity theory, 153
formation of preferences, 200, 207
global mindset, 68
improving perceptions, 79–82
improving self-awareness, 79–81
legitimate power and, 302
meaningful interaction and, 81–82
of organizational politics, 315
perceptual biases, 68, 79, 513
perceptual errors, 78–79
perceptual process, 41, 42, 45,
68–71
power and, 309
self-fulfilling prophecy, 76–78
social identity and stereotyping,
71–74
See also Learning
Perceptual biases, 68,
79, 513
Perceptual blinders, 212
Perceptual blindness, 69–70
Perceptual defense, 201
Perceptual errors, 78–79, 88
Perceptual grouping, 70
Perceptual process, 41, 42, 45,
68–71
mental models, 71
model of, 69
perceptual organization and
interpretation, 70–71
selective attention, 68–70
Performance
bonuses and, 171
job satisfaction and, 110–111
key indicators of, 146
personality and, 43
rewards leading to, 169, 173
role of OB in, 6
social loafing, 238
task performance, 17
team cohesion and, 251
See also Applied performance
practices
Performance-based rewards
evaluation of, 172
improving reward effectiveness,
172–175, 187
individual rewards, 170
as leadership substitute, 172
organizational rewards,
170–172
relevance of, 173
team rewards, 170, 173, 187
unintended consequences of,
174–175
value of, 173
Performance measurement
continuous, self-leadership
and, 187
goal setting and, 151
in increasing P-to-O
expectancies, 145
Performance-oriented culture,
418, 419
Performance-to-outcomes (P-to-O)
expectancy, 143–145, 172
Performing stage, 246
Persistence, in motivation, 35
Personal “brand,” 313
Personal goal setting, 184
Personal identity, 46
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Subject Index 627
Personality, 56
definition of, 536
determinants of, 39
of effective leaders, 362
effect of emotions on, 102
five-factor model of, 39–41,
56, 362
influence on leadership style, 370
inherited characteristics, 375
Jungian theory and MBTI, 41–42
in organizations, 38–43
testing, problems with, 42–43
“Personality clashes,” 330
Personality testing, 38
caveats, 42–43
MBTI, 41–42
Personality traits, 38–39
EI associated with, 107
five-factor model of, 39–41
Personalized power, 139, 363
Personal leave, 119
Personal values, 47, 167
Person-job matching, 36, 387
Person-organization value
congruence, 49, 432
Persuasion, 281, 310, 312
Physical setting, 344, 422–423
Physiological needs, 135, 136
Piece rate, 170
Pilot projects, 455–456
Politeness, 273–274
Pooled interdependence, 241, 335
Position power, 369
Positive organizational behavior,
77–78, 138, 458
Positive reinforcement, 83, 84
in increasing E-to-P
expectancies, 145
self-reinforcement, 86, 186
Positive self-talk, 185
Positivism, 507
Postdecisional justification, 210, 221
Power, 300, 317
consequences of, 309
contingencies of, 305–309,
314, 317
improper uses of, 298
information and, 304–305, 342
meaning of, 300–301
sources of, in organizations
( See Sources of power )
willingness to delegate, 360
See also Influence
Power distance, 51–52, 302, 314
Practical intelligence, 362, 363
“Prediction markets,” 196, 214
Preemployment socialization,
433–434
Prejudice, 73
Preparation, 215, 345
Pressure to conform, 257
Prevention, uncertainty and, 304
Primacy effect, 78, 205
The Prince (Machiavelli), 316
Priorities, 36
Privacy, protection of, 461, 511
Problem identification, 199,
200–203
decisive leadership and, 202
effectiveness in, 202–203
employee involvement
and, 213
mental models in, 201–202
perceptual defense and, 201
solution-focused problems, 202
stakeholder framing and, 201
Problem solving, 336–337,
338, 340
Problem-solving style, 337, 342
Procedural justice, 151, 155–156
Processes, standardized, 389
Process losses, 237
Process of change, 447
Product development, 388
Production blocking, 257
Production teams, 2, 235
Productivity, 9, 254, 371–372
Product/service divisional structure,
397–398, 399
Professions, 306
Proficiency in communication, 280
Profitability, 133
Profit-sharing plans, 172
Programmed decisions, 199
Project GLOBE, 20
Project teams, 235
Project Ulysses, 65
Prospect theory, 211
Prototypes, 201–202
Psychological contract, 435
Psychological harassment, 116
P-to-O expectancy, 143–145, 172
Punishment, 83, 84, 542
Q
Quantity vs. quality dilemma, 36
Quantum change, 457
Quid pro quo sexual harassment, 116
R
Random sample selection, 509–510
“Rapport talk,” 285
Rational choice paradigm, 198–200,
203, 204, 221
Readiness, 369
Realistic job preview (RJP), 435
“Reality distortion field,” 312
Reality shock, 434
Receivers, 271
Recency effect, 78–79
Reciprocal interdependence, 241
Reduced personal accomplishment,
115–116
Redundancy, 272
Reference groups, 46–47
Referent power, 303–304, 307, 317
Refreezing, 444, 445, 457
Reinforcement schedules, 84
Reinforcement theory. See Behavior
modification
Relationship(s)
in action research, 457
client relationships, 181
of effective leaders, 364
employment relationships, 2,
22–23
Relationship capital, 12
Relationship conflict, 330, 341, 349
Relationship management, 106
Relevant goals, 146–147
Repetition, 286
“Report talk,” 285
Representativeness heuristic,
205–206
Representative sampling, 509–510
Research design, 511–513
field surveys, 512–513
laboratory experiments, 511–512
observational research, 513
Research methods, 507–513
action research approach,
456–458, 462
causation issue, 510–511
design strategies ( See Research
design )
ethical issues, 511
sampling, 509–510
scientific research by teams, 236
systematic research in OB,
23, 24
theory building and, 507–509
Resilience, 118
Resistance point, 343
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628 Subject Index
Resistance stage, 115
Resistance to change, 462
by employees, 445–449
minimizing, 460
reducing through training, 453
restraining forces and, 447–449
subtle resistance, 445–447
Resistance to influence tactics, 314, 315
Resources
increasing, in conflict
management, 341
job resources, 117, 183, 219
organizational politics and, 316
power over, 305–306
scarce, conflict and, 335
scarcity of, 335, 406
Respect, 273–274, 284, 419
Responding, 287
Responsibility, 255
Restraining forces, 445–449
reasons for resistance, 447–449
as resource for change, 447
strategies for reducing, 451–454
Results-only work environment
(ROWE), 120, 449, 455, 504
Retaliation, 156
Retirement plans, 171
Return on quality (ROQ)
measures, 442
Reward(s)
competency-based, 168, 169
culturally consistent, 431
differential, 418
effectiveness of, 172–175, 187
individual, 170
job satisfaction and, 111
job status-based, 168–169
linking to performance, 169, 173
membership-based, 167–168
natural, as self-leadership strategy,
185–186
organizational, 170–172
outcome valences and, 145
overreward/underreward inequity,
152, 153
performance-based, 170–175, 187
seniority-based, 167
team effectiveness and, 239
“Reward inflation,” 85
Reward power, 302–303, 317
Reward systems, 14–15, 174–175
Rich media, 279
Risk of conflict, 214–215
Risk tolerance, 217
Rituals, 421–422
RJP (realistic job preview), 435
Role(s)
employees in liaison roles, 388
informal, 248
role management, 435
separation of, in decision
making, 212
team roles, 248
Role management, 435
Role perceptions, 36
“Romance of leadership” effect, 376
ROQ (return on quality)
measures, 442
Routine, 449
ROWE (results-only work
environment), 120, 449, 455, 504
“Rubber band” effect, 449
Rules and procedures, 335,
341–342, 394
Rumor, 289, 290
S
Sabbaticals, 120
Safety needs, 135, 136
Sampling, 509–510
Sarbanes-Oxley Act of 2002, 53
Satisficing, 206, 209, 221
Scenario planning, 209
Scientific management, 176
Scientific method, 509
SDTs. See Self-directed teams
Search conferences, 460
Second Life Web site, 268
Selective attention, 68–70
Self-actualization, 135, 136, 138
Self-awareness, 79–81, 106
Self-concept, 32, 43–47, 56
cognitive dissonance and, 102
of effective leaders, 362
in EVLN model, 110
informal groups and, 235
money and, 168
needs and, 134
organizational behavior and, 47
personal and social identity, 46–47
in personality stability, 39
self-enhancement, 44–45
self-evaluation, 45–46
self-serving bias and, 76
self-verification, 45
social self, 46–47
stereotyping and, 72–73
team trust and, 252
Self-determination, 182–183
Self-directed teams (SDTs), 232, 235,
253–255, 261
distinctive features of, 253–254
span of control and, 390
success factors for, 254–255
team-based structure, 400–401
Self-direction, 218
Self-efficacy, 45, 149
Self-enhancement, 44–45, 48, 49
Self-esteem, 45
of creative people, 218
nonsocial sources of feedback
and, 151
organizational change and, 462
Self-evaluation, 45–46, 56, 537
Self-fulfilling prophecy, 76–78, 88
achievement-oriented leadership
and, 366
contingencies of, 77–78
training in awareness of, 79
Self-justification, 210–212
Self-leadership practices, 183–187
contingencies of, 186–187
effectiveness of, 186
employee success and, 183–184
leadership substitutes, 370
strategies, 184–186
Self-management, 106
Self-monitoring, 186
Self-reinforcement, 86, 186
Self-report scales, 42–43
Self-serving behavior, 316
Self-serving bias, 76
Self-talk, 185
Self-transcendence, 48, 49
Self-verification, 45
Sender(s)
barriers to communication and,
281–282
in conduit model, 271
encoding-decoding process
and, 272
in interpersonal communication,
285–286
Seniority-based rewards, 167–168
Sense-making process, 424
Sensing, 41, 286
Separation of roles, 212
Separation strategy, 428–429
Sequential interdependence, 241
Servant leadership, 365
Service profit chain model, 111
Service teams, 235
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Subject Index 629
Sexual harassment, 116
Shared assumptions, 416, 419
Shared goals, 81
Shared leadership, 360–361
Shared mental models, 272
Shared values, 14, 47
ethical values, 55
organizational commitment
and, 113
in organizational culture, 416
reward systems and, 14–15
“Shock events,” 109–110
Silence as communication, 284
Silent authority, 310
“Silos of knowledge,” 270
Similarity-attraction effect, 250
Similar-to-me effect, 79
Simple environments, 406
Simple structure, 396
Situational control, 369
Situational factors
in ethics, 54
in MARS model, 37–38
in negotiations, 343–344
in path-goal leadership theory,
367–368
Situational leadership theory (SLT),
369, 378
Situation favorableness, 369
Skill(s)
for diffusion of change, 456
directive leadership and, 367
standardized, 390
Skill-based pay plans, 169
Skill variety, 177, 179, 180
Skunkworks teams, 234, 235
SLT (situational leadership theory),
369, 378
“SMART” goals, 146
“Smart manufacturing,” 253
Social acceptance, 278, 290–291
Social awareness, 106
Social capital, 236, 307
Social distractions, 280
“Social glue,” 424
Social identity, 46, 72–74, 311, 333
Social identity theory, 71–72, 88, 235
reference group in, 46–47
social perception and, 72
Social interaction
importance of EI to, 106–107
in rich communication
channels, 280
Web 2.0 and, 275
Socialization
development of value system
by, 47
organizational socialization,
432–436, 437
self-concept and, 134
Socialization agents, 436
Socialized power, 139, 363
Social learning theory, 85–86, 88
Social loafing, 238
Social network analysis tools,
307–308
Social networking, 2, 236
communication, 275–276
exchange in, 314
power and, 307–309, 317
Web sites for, 236, 238, 275
Social network media, 305
Social norms, 134–135, 279
Social perception, 72
Social presence, 273, 281
Social self, 46–47
Social sources of feedback, 149,
150–151
Social structures, 461
Social support, 121
“Soft” influence tactics, 310,
312–314, 315
Solution-focused problems, 202
Source of decision knowledge, 214
Sources of feedback. See Feedback
Sources of power, 301–305, 317
coercive power, 303, 317
expert power, 303
information as, 304–305, 342
legitimate power, 302
referent power, 303–304, 307
reward power, 302–303
Span of control, 390–393, 408
“delayering,” 392–393
tall vs. flat structures, 391–393
Specific goals, 146
Stability, culture of, 419
Stabilization of change, 457
Stable environments, 406
Stakeholder(s), 13, 14
Stakeholder framing, 201
Stakeholder perspective, 13–16
Standardization of work, 389–390
Start-up companies, 395
Statistical measurement, 510, 511
Stereotyping, 72–74
bias reduced by e-mail, 73
lack of communication and, 335
in organizations, 72–73
power and, 309
problems with, 73, 74
representativeness heuristic
and, 205
See also Bias
Stimulation values, 218
Stock options, 172
Stop-loss levels, 212
Stories, 374, 420–421, 430–431
Storming stage, 246
Strategic vision, 373–374, 455
Strength-based coaching, 148–149
Stress, 114–121, 122
causes of ( See Stressors )
“delayering” and, 392
distress, 114, 115–116, 121
emotional dissonance and, 105
eustress, 114
general adaptation syndrome,
114–115
HPWPs and, 13
individual differences in, 118
managing ( See Stress management )
work-life balance and, 23
Stress index, 119
Stress management, 118–121
changing perceptions, 121
controlling consequences, 121
in reducing restraining forces,
452, 454
removing stressor, 118–119
social support, 121
withdrawing, 119–121
Stressors, 116–117
and incivility, 116
low task control, 117
removing, 118–119
work overload, 116–117
Stretch goals, 147
Strong cultures, 437
effectiveness and, 424–426
suppression of dissent, 425
weak cultures compared, 423–424
Structural approaches to conflict
management, 340–342, 349
clarifying rules and procedures,
341–342
emphasizing superordinate
goals, 340
improving communication, 341
increasing resources, 341
reducing differentiation, 340, 341
reducing interdependence, 341
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630 Subject Index
Structural capital, 12
Structural sources of conflict,
332–336
ambiguous rules, 335
communication problems,
335–336
differentiation, 333
incompatible goals, 333
interdependence, 334–335
scarce resources, 335
Subcultures, 419–420, 425,
436–437
Subjective expected utility, 199
Substitutability, 305–306
Subtle resistance, 445–447
Success, 250, 256
Summarizing, 283
Superordinate goals, 340
Support, 113
Supportive leadership style,
366–368, 508
Surface acting, 105
Surface-level diversity, 21
Surveys of job satisfaction, 108
“Sweatbox” sessions, 2
Symbols, 307, 374
Systematic process, scientific method
as, 509
Systematic research, in OB, 23, 24
Systemic discrimination, 73
T
Tacit knowledge, 82, 86, 208–209
Tall structures, 391–393
Target point, 343
Task(s), 36, 285–286
Task characteristics, 240–242
Task control, 117, 316
Task force teams, 235
Task goals, 242
Task identity, 177, 179
Task interdependence, 241–242
Task-oriented leadership, 364–365,
366, 370
Task performance, 17
Task significance, 177–178, 179
Task structure, 368, 369
Team(s), 260
advantages of, 236–237
advisory, 235
cross-functional, 234, 340
disadvantages of, 237–238
“fault lines” in, 245
high-performance, 239
organizational purpose of, 234,
235, 238
scientific research by, 236
skunkworks teams, 234, 235
social loafing in, 238
suited to complex work, 237,
240–241
workspace design for, 287–288
See also specific kinds of teams
Team-based structure, 400–401, 409
Team-building activities,
248–249, 504
Team cohesion, 261
consequences of, 251
influences on, 250–251
optimal conflict levels and, 329,
330–331
Team competence development,
247–248
Team composition, 242–245
development of norms and, 249
effective members, 242–244
Team decision making, 256–260, 261
constraints on, 256–258
structures for improvement of,
258–260
Team design
composition, 242–245
elements in, 240–245
size, 242
task characteristics, 240–242
Team development, 2, 245–249, 260
accelerating by team building,
248–249
global issues, 243
identity development, 247
process losses in, 237
roles, 248
stages in, 245–248
Team dynamics, 232–261
advantages and disadvantages,
236–238
decision making, 256–260
elements in team design, 240–245
incongruent, as source of
resistance, 449
leadership style and, 368
model of effectiveness, 238–240
processes, 245–253
self-directed teams ( See Self-
directed teams )
teams and informal groups,
234–236
virtual teams, 255–256
Team effectiveness, 238–240, 260
characteristics of members,
242–244
environment and, 239–240
model of, 238–239
Team level of analysis, 24
Team members
effective, characteristics of,
242–244
influence on team cohesion, 250
success of virtual teams and, 256
well-being of, 238
Team norms, 260
development of, 249
dysfunctional, changing, 249–250
improving decision making, 258
social acceptance and, 277
supportive, conflict and, 331
Team-oriented culture, 410
Team processes, 245–253
cohesion, 250–251
communication, 268–291
conflict and negotiation,
326–349
development ( See Team
development )
leadership, 358–378
norms, 249–250
power and influence, 298–317
team dynamics, 232–261
trust, 251–253
Team rewards
alteration of team norms, 250
performance-based, 170, 173, 187
team effectiveness and, 239
Team roles, 248
Team size, 242, 250, 258, 260
Team trust, 251–253
dynamics of, 252–253
foundations of, 252
Technological contingencies,
407–408
Technology
“emotion detection” software, 146
face-to-face communication
and, 273
network structures and, 405, 409
open-space technology, 460
organizational design and,
407–408
work overload and, 116–117
See also Information technologies
Telecommuting (telework), 22, 119
Templates, in intuition, 208–209
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Subject Index 631
“Tend and befriend” response to
stress, 121
Test subjects
behavior of, 512
ethical issues, 511
participant observation, 513
sampling issues, 509–510
Thailand Quality Class award, 213
Theory(ies), 507
Theory building, 507–509
grounded theory, 509
positivism vs. interpretivism,
507–508
scientific method used in, 509
theory testing in, 507, 508–509
Thinking, 41
“Thin slice” studies of perception, 71
Third-party conflict resolution,
346–348, 349
alternative dispute resolution,
347–348
choice of method, 347
Third-variable effect, 511
Thought patterns, 185
360-Degree feedback, 149–151,
257, 303
Time constraints, 257
Timeliness of feedback, 148
Time management, 283
Time passage, 344
Time pressure, 344
Timing, in communication, 286
Tolerance for ambiguity, 202
Top management, 288–289
“Town hall meetings,” 289
Training and development
achievement motivation courses,
139–140
art training, 70
ethics training, 55
to minimize stereotyping, 73
in reducing resistance, 453
Transactional leadership,
371–372, 378
Transformational leadership,
371–375, 378
charismatic leadership compared,
372–373
corporate culture and, 430
evaluation of, 374–375
strategic vision, 373–374
transactional leadership compared,
371–372
Transformation processes, 9
Trendspotting, 305
Triple-bottom-line philosophy, 16
Trust
of employee in leader, 363, 374
empowerment and, 183
in negotiation, 342
organizational commitment
and, 113
organizational socialization
and, 435
power and, 301
in teams, 251–253
Twin studies of personality, 39
U
Uncertainty avoidance, 52
Underreward inequity, 152, 153
Unethical business practices, 14
Unfreezing, changing, and refreezing,
444–445, 449–454, 462
creating urgency for change,
450–451
reducing restraining forces,
451–454
refreezing, 454
Unintentional discrimination, 73
Unlearning, 12
Upward appeal, 310, 311–312
Urgency for change, 450–451
Utilitarianism, 53, 198
V
Vacations, 120
Valence, 144
Value congruence, 49–50
Value expression, 155
Values, 14–16, 32, 47, 56, 416
across cultures ( See Cross-cultural
values )
circular model of, 48–49
core values, corporate culture
and, 423
emerging, subcultures and, 420
enacted, 417
espoused, 416–417
individual behavior and, 47–50
influence tactics and, 314
integrity, 362, 363
Machiavellian, 316, 317
personal values, 47, 167
person-organization value
congruence, 432
shared, 14–15, 47, 55, 113, 416
types of, 48–49
value congruence, 49–50
in workplace, 47–50
Value system, 47, 56
Variability, 407–408
Variable ratio reinforcement
schedule, 84, 85
Verbal communication, 272–273, 290
Verification, 216
Virtual meetings, 268
Virtual teams, 235, 261
differentiation in, 333
in globally integrated
enterprises, 399
information technologies and,
255–256
success factors for, 256
Virtual work, 22
Visibility, 307
Visualization, 185
“Vocal authority,” 310–311
Voice
job satisfaction and, 110
in procedural justice, 155
resistance as, 447
Voice intonation, 283–284
“Voice of the Customer”
initiative, 179
Volunteering, 65–66, 81
W
Weak cultures, 424, 437
Web-based communication, 288
Web sites, 236, 268, 275, 288
Wellness programs, 121
Wheel formation, 304
Wiki(s), 275–276
Wikipedia, 275
Willingness, 369
Win-lose orientation
in conflict management,
337, 342
in negotiations, 343, 344
Win-win orientation, 336–337
Withdrawal from stressors,
119–121
Women, 121, 308–309
Workaholics, 118
Work attendance, 18–19
Work behavior, 109–111
Work break, 186
Work efficiency, 175–177
job specialization and,
176–177, 387
scientific management, 176
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632 Subject Index
Work environment
hostile, 116
results-only (ROWE), 120, 449,
455, 504
self-leadership and, 187
supportive of creativity, 218–221
workspace arrangement, 220
Workforce diversity
consequences of, 21–22
employment relationships and,
22–23
organizational effectiveness and,
20–22
subcultures and, 425
surface- vs. deep-level, 21, 245
in team composition, 245
physical layout of, 239–240
values in, 47–50
Work quality, 177
Workspace design, organizational
communication and,
287–288, 291
Work stresses. See Stress
Written communication, 281
Y
Yielding style, 337, 338–339
Z
“Zero e-mail days,” 274, 275
“Zone of indifference,” 302
Workforce flexibility, 168, 169, 180
Work-life balance, 22, 23, 119, 418
Workload
death from overwork, 117, 503
“delayering” and, 392
overload, 116–117
Work motivation
core job characteristics, 177–178
critical psychological states,
178–179
individual differences in,
179–180
job design and, 177–181
Workplace
individual behavior in, 49
managing emotions in, 103–105
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633
url index
A
adweek.com/aw/national/
article_display.jsp?vnu_content_
id=1003628468 , 570
americahurrah.com/Oakley/Entry.
htm , 584
B
berlin.de/fifawm2006/stadt/
imagekampagne/index.php , 544
beyond-the-book.com/leadership/
leadership_030707.html , 552
blueshirtnation.com , 276
C
cnt.gouv.qc.ca , 548
D
daringfireball.net/2006/05/
more_aperture_dirt , 562
E
eeoc.gov/stats/harass.html , 548
eWeek.com , 567
expeditions.com/Theater17.
asp?Media=175 , 586
F
fastcompany.com/magazine/10/
brandyou.html , 571
folklore.org , 571
H
handelsbanken.co.uk , 556
I
ihaveanidea.org , 561, 584
J
jnj.com/connect/about-jnj/
management-approach/ , 582
M
mmhe.com/mcshane5e , 30, 65, 94,
129, 163, 195, 230, 267, 297,
325, 357, 413, 441, 467
N
nucor.com/indexinner.aspx?finpage=
aboutus , 580
O
oakley.com , 584
P
pg.com/jobs/corporate_structure/
four_pillars.jhtml , 581
plato.stanford.edu/entries/
kant-judgment , 557
plato.stanford.edu/entries/
stoicism , 557
propagandagames.go.com , 547
S
search.ebscohost.com/login.
aspx?direct=true&db=f5h&AN
=27728242&site=ehost-live , 583
serviceuntitled.com/interview-
david-bryce-part-3-of-
3/2006/10/13/ , 561
spiegel.de/international/
0,1518,390118,00.html , 544
spiegel.de/international/business/
0,1518,533852,00.html , 579
ssrn.com/paper=1086462 , 558
U
usps.com/redress/ , 575
W
watsonwyatt.com/asia-pacific/
research/workasia/workmy_
keyfindings.asp , 551
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Cover�������������������������������
Title Page����������������������������������������������
Copyright�������������������������������������������
About The Authors�������������������������������������������������������������������
Dedication����������������������������������������������
Brief Contents����������������������������������������������������������
Contents����������������������������������������
Preface�������������������������������������
Part One Introduction�������������������������������������������������������������������������������
Chapter 1 – Introduction To The Field Of Organizational Behavior����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
The Field Of Organizational Behavior����������������������������������������������������������������������������������������������������������������������������
Perspectives Of Organizational Effectiveness����������������������������������������������������������������������������������������������������������������������������������������������������
Types Of Individual Behavior����������������������������������������������������������������������������������������������������
Contemporary Challenges For Organizations�������������������������������������������������������������������������������������������������������������������������������������������
Anchors Of Organizational Behavior Knowledge����������������������������������������������������������������������������������������������������������������������������������������������������
Part Two Individual Behavior And Processes����������������������������������������������������������������������������������������������������������������������������������������������
Chapter 2 – Individual Behavior, Personality, And Values����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Mars Model Of Individual Behavior And Performance�������������������������������������������������������������������������������������������������������������������������������������������������������������������
Personality In Organizations����������������������������������������������������������������������������������������������������
Self-concept: The “i” In Organizational Behavior����������������������������������������������������������������������������������������������������������������������������������������������������������������
Values In The Workplace�������������������������������������������������������������������������������������
Values Across Cultures����������������������������������������������������������������������������������
Ethical Values And Behavior�������������������������������������������������������������������������������������������������
Chapter 3 – Perception And Learning In Organizations����������������������������������������������������������������������������������������������������������������������������������������������������������������������������
The Perceptual Process����������������������������������������������������������������������������������
Social Identity And Stereotyping����������������������������������������������������������������������������������������������������������������
Attribution Theory����������������������������������������������������������������������
Self-fulfilling Prophecy����������������������������������������������������������������������������������������
Other Perceptual Errors�������������������������������������������������������������������������������������
Improving Perceptions�������������������������������������������������������������������������������
Learning In Organizations�������������������������������������������������������������������������������������������
From Individual To Organizational Learning����������������������������������������������������������������������������������������������������������������������������������������������
Chapter 4 – Workplace Emotions, Attitudes, And Stress�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Emotions In The Workplace�������������������������������������������������������������������������������������������
Managing Emotions At Work�������������������������������������������������������������������������������������������
Emotional Intelligence����������������������������������������������������������������������������������
Job Satisfaction����������������������������������������������������������������
Organizational Commitment�������������������������������������������������������������������������������������������
Work-related Stress And Its Management����������������������������������������������������������������������������������������������������������������������������������
Chapter 5 – Foundations Of Employee Motivation����������������������������������������������������������������������������������������������������������������������������������������������������������
Employee Engagement�������������������������������������������������������������������������
Employee Drives And Needs�������������������������������������������������������������������������������������������
Expectancy Theory Of Motivation�������������������������������������������������������������������������������������������������������������
Goal Setting And Feedback�������������������������������������������������������������������������������������������
Organizational Justice����������������������������������������������������������������������������������
Chapter 6 – Applied Performance Practices�������������������������������������������������������������������������������������������������������������������������������������������
The Meaning Of Money In The Workplace�������������������������������������������������������������������������������������������������������������������������������
Financial Reward Practices����������������������������������������������������������������������������������������������
Job Design Practices����������������������������������������������������������������������������
Empowerment Practices�������������������������������������������������������������������������������
Self-leadership Practices�������������������������������������������������������������������������������������������
Chapter 7 – Decision Making And Creativity����������������������������������������������������������������������������������������������������������������������������������������������
Rational Choice Paradigm Of Decision Making�������������������������������������������������������������������������������������������������������������������������������������������������
Identifying Problems And Opportunities����������������������������������������������������������������������������������������������������������������������������������
Evaluating And Choosing Alternatives����������������������������������������������������������������������������������������������������������������������������
Implementing Decisions����������������������������������������������������������������������������������
Evaluating Decision Outcomes����������������������������������������������������������������������������������������������������
Employee Involvement In Decision Making�������������������������������������������������������������������������������������������������������������������������������������
Creativity����������������������������������������������
Part Three Team Processes�������������������������������������������������������������������������������������������
Chapter 8 – Team Dynamics�������������������������������������������������������������������������������������������
Teams And Informal Groups�������������������������������������������������������������������������������������������
Advantages And Disadvantages Of Teams�������������������������������������������������������������������������������������������������������������������������������
A Model Of Team Effectiveness�������������������������������������������������������������������������������������������������������
Team Design Elements����������������������������������������������������������������������������
Team Processes����������������������������������������������������������
Self-directed Teams�������������������������������������������������������������������������
Virtual Teams�������������������������������������������������������
Team Decision Making����������������������������������������������������������������������������
Chapter 9 – Communicating In Teams And Organizations����������������������������������������������������������������������������������������������������������������������������������������������������������������������������
The Importance Of Communication�������������������������������������������������������������������������������������������������������������
A Model Of Communication����������������������������������������������������������������������������������������
Communication Channels����������������������������������������������������������������������������������
Choosing The Best Communication Channel�������������������������������������������������������������������������������������������������������������������������������������
Communication Barriers (noise)����������������������������������������������������������������������������������������������������������
Cross-cultural And Cross-gender Communication�������������������������������������������������������������������������������������������������������������������������������������������������������
Improving Interpersonal Communication�������������������������������������������������������������������������������������������������������������������������������
Improving Communication Throughout The Hierarchy����������������������������������������������������������������������������������������������������������������������������������������������������������������
Communicating Through The Grapevine�������������������������������������������������������������������������������������������������������������������������
Chapter 10 – Power And Influence In The Workplace�������������������������������������������������������������������������������������������������������������������������������������������������������������������
The Meaning Of Power����������������������������������������������������������������������������
Sources Of Power In Organizations�������������������������������������������������������������������������������������������������������������������
Contingencies Of Power����������������������������������������������������������������������������������
Influencing Others����������������������������������������������������������������������
Influence Tactics And Organizational Politics�������������������������������������������������������������������������������������������������������������������������������������������������������
Chapter 11 – Conflict And Negotiation In The Workplace����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Is Conflict Good Or Bad?����������������������������������������������������������������������������������������
Conflict Process Model����������������������������������������������������������������������������������
Structural Sources Of Conflict In Organizations�������������������������������������������������������������������������������������������������������������������������������������������������������������
Interpersonal Conflict-handling Styles����������������������������������������������������������������������������������������������������������������������������������
Structural Approaches To Conflict Management����������������������������������������������������������������������������������������������������������������������������������������������������
Resolving Conflict Through Negotiation����������������������������������������������������������������������������������������������������������������������������������
Third-party Conflict Resolution�������������������������������������������������������������������������������������������������������������
Chapter 12 – Leadership In Organizational Settings����������������������������������������������������������������������������������������������������������������������������������������������������������������������
What Is Leadership?�������������������������������������������������������������������������
Competency Perspective Of Leadership����������������������������������������������������������������������������������������������������������������������������
Behavioral Perspective Of Leadership����������������������������������������������������������������������������������������������������������������������������
Contingency Perspective Of Leadership�������������������������������������������������������������������������������������������������������������������������������
Transformational Perspective Of Leadership����������������������������������������������������������������������������������������������������������������������������������������������
Implicit Leadership Perspective�������������������������������������������������������������������������������������������������������������
Cross-cultural And Gender Issues In Leadership����������������������������������������������������������������������������������������������������������������������������������������������������������
Part Four Organizational Processes����������������������������������������������������������������������������������������������������������������������
Chapter 13 – Organizational Structure�������������������������������������������������������������������������������������������������������������������������������
Division Of Labor And Coordination����������������������������������������������������������������������������������������������������������������������
Elements Of Organizational Structure����������������������������������������������������������������������������������������������������������������������������
Forms Of Departmentalization����������������������������������������������������������������������������������������������������
Contingencies Of Organizational Design����������������������������������������������������������������������������������������������������������������������������������
Chapter 14 – Organizational Culture�������������������������������������������������������������������������������������������������������������������������
Elements Of Organizational Culture����������������������������������������������������������������������������������������������������������������������
Deciphering Organizational Culture Through Artifacts����������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Is Organizational Culture Important?����������������������������������������������������������������������������������������������������������������������������
Merging Organizational Cultures�������������������������������������������������������������������������������������������������������������
Changing And Strengthening Organizational Culture�������������������������������������������������������������������������������������������������������������������������������������������������������������������
Organizational Socialization����������������������������������������������������������������������������������������������������
Chapter 15 – Organizational Change����������������������������������������������������������������������������������������������������������������������
Lewin’s Force Field Analysis Model����������������������������������������������������������������������������������������������������������������������
Unfreezing, Changing, And Refreezing����������������������������������������������������������������������������������������������������������������������������
Change Agents, Strategic Visions, And Diffusing Change����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Four Approaches To Organizational Change����������������������������������������������������������������������������������������������������������������������������������������
Cross-cultural And Ethical Issues In Organizational Change����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Organizational Behavior: The Journey Continues����������������������������������������������������������������������������������������������������������������������������������������������������������
Additional Cases����������������������������������������������������������������
Case 1: A Mir Kiss?�������������������������������������������������������������������������
Case 2: Arctic Mining Consultants�������������������������������������������������������������������������������������������������������������������
Case 3: Big Screen’s Big Failure����������������������������������������������������������������������������������������������������������������
Case 4: Bridging The Two Worlds—the Organizational Dilemma����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Case 5: Fran Hayden Joins Dairy Engineering�������������������������������������������������������������������������������������������������������������������������������������������������
Case 6: From Lippert-johanson Incorporated To Fenway Waste Management�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Case 7: Glengarry Regional Medical Center�������������������������������������������������������������������������������������������������������������������������������������������
Case 8: High Noon At Alpha Mills����������������������������������������������������������������������������������������������������������������
Case 9: Keeping Suzanne Chalmers����������������������������������������������������������������������������������������������������������������
Case 10: Northwest Canadian Forest Products Limited�������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Case 11: Perfect Pizzeria�������������������������������������������������������������������������������������������
Case 12: Simmons Laboratories�������������������������������������������������������������������������������������������������������
Case 13: Treetop Forest Products����������������������������������������������������������������������������������������������������������������
Video Cases�������������������������������������������������
Video Cases For Part One����������������������������������������������������������������������������������������
Video Cases For Part Two����������������������������������������������������������������������������������������
Video Cases For Part Three����������������������������������������������������������������������������������������������
Video Case For Part Four����������������������������������������������������������������������������������������
Appendix A����������������������������������������������
Appendix B����������������������������������������������
Glossary����������������������������������������
References����������������������������������������������
Photo Credits�������������������������������������������������������
Name Index����������������������������������������������
Subject Index�������������������������������������������������������
Url Index�������������������������������������������
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