Discussion Forum on Chapter readings

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REQUIRED TEXT

Robbins, S. & Judge T. (2018). Essentials of Organizational Behavior.  Boston, MA:  Pearson. 

 

Chapter 13  Power and Politics

Chapter 14  Conflict and Negotiation

Organizational
Behavior

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Organizational
Behavior
15
Stephen P. Robbins
—San Diego State University
Timothy A. Judge
—University of Notre Dame

E D I T I O N
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Library of Congress Cataloging-in-Publication Data
Robbins, Stephen P.
Organizational behavior / Stephen P. Robbins, Timothy A. Judge. — 15th ed.
p. cm.
Includes indexes.
ISBN-13: 978-0-13-283487-2
ISBN-10: 0-13-283487-1
1. Organizational behavior. I. Judge, Tim. II. Title.
HD58.7.R62 2012
658.3—dc23
2011038674
10 9 8 7 6 5 4 3 2 1
ISBN 10: 0-13-283487-1
ISBN 13: 978-0-13-283487-2

3
2
1
Brief Contents
The Individual
2 Diversity in Organizations 39
3 Attitudes and Job Satisfaction 69
4 Emotions and Moods 97
5 Personality and Values 131
6 Perception and Individual Decision Making 165
7 Motivation Concepts 201
8 Motivation: From Concepts to Applications 239
The Group
9 Foundations of Group Behavior 271
10 Understanding Work Teams 307
11 Communication 335
12 Leadership 367
13 Power and Politics 411
14 Conflict and Negotiation 445
15 Foundations of Organization Structure 479
Preface xxii
v
Introduction
1 What Is Organizational Behavior? 3

vi B R I E F C O N T E N T S
Appendix A Research in Organizational Behavior 616
Comprehensive Cases 623
Indexes 637
Glindex 663
4 The Organization System
16 Organizational Culture 511
17 Human Resource Policies and Practices 543
18 Organizational Change and Stress Management 577

1
Contents
Preface xxii
vii
Introduction
1 What Is Organizational Behavior? 3
The Importance of Interpersonal Skills 4
What Managers Do 5
Management Functions 6 • Management Roles 6 • Management
Skills 8 • Effective versus Successful Managerial Activities 8 • A Review
of the Manager’s Job 9
Enter Organizational Behavior 10
Complementing Intuition with Systematic Study 11
Disciplines That Contribute to the OB Field 13
Psychology 14 • Social Psychology 14 • Sociology 14 • Anthropology 14
There Are Few Absolutes in OB 14
Challenges and Opportunities for OB 15
Responding to Economic Pressures 15 • Responding to Globalization 16
• Managing Workforce Diversity 18 • Improving Customer
Service 18 • Improving People Skills 19 • Stimulating Innovation
and Change 20 • Coping with “Temporariness” 20 • Working in
Networked Organizations 20 • Helping Employees Balance Work–Life
Conflicts 21 • Creating a Positive Work Environment 22 • Improving
Ethical Behavior 22
Coming Attractions: Developing an OB Model 23
An Overview 23 • Inputs 24 • Processes 25 • Outcomes 25
Summary and Implications for Managers 30
Self-Assessment Library How Much Do I Know About Organizational Behavior? 4
Myth or Science? “Most Acts of Workplace Bullying Are Men Attacking Women” 12
An Ethical Choice Can You Learn from Failure? 24
glOBalization! Does National Culture Affect Organizational Practices? 30
Point/Counterpoint Lost in Translation? 31
Questions for Review 32
Experiential Exercise Workforce Diversity 32
Ethical Dilemma Jekyll and Hyde 33
Case Incident 1 “Lessons for ‘Undercover’ Bosses” 34
Case Incident 2 Era of the Disposable Worker? 35
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viii C O N T E N T S
S A L
S A L
2 The Individual
2 Diversity in Organizations 39
Diversity 40
Demographic Characteristics of the U.S. Workforce 41 • Levels
of Diversity 42 • Discrimination 42
Biographical Characteristics 44
Age 44 • Sex 46 • Race and Ethnicity 48 • Disability 48 • Other
Biographical Characteristics: Tenure, Religion, Sexual Orientation,
and Gender Identity 50
Ability 52
Intellectual Abilities 52 • Physical Abilities 55 • The Role of Disabilities 56
Implementing Diversity Management Strategies 56
Attracting, Selecting, Developing, and Retaining Diverse
Employees 56 • Diversity in Groups 58 • Effective Diversity Programs 58
Summary and Implications for Managers 60
Self-Assessment Library What’s My Attitude Toward Older People? 40
Myth or Science? “Dual-Career Couples Divorce Less” 47
An Ethical Choice Religious Tattoos 51
glOBalization! Images of Diversity from Around the Globe 54
Point/Counterpoint Men Have More Mathematical Ability Than Women 61
Questions for Review 62
Experiential Exercise Feeling Excluded 62
Ethical Dilemma Board Quotas 62
Case Incident 1 The Flynn Effect 63
Case Incident 2 Increasing Age Diversity in the Workplace 64
3 Attitudes and Job Satisfaction 69
Attitudes 70
What Are the Main Components of Attitudes? 70 • Does Behavior Always
Follow from Attitudes? 71 • What Are the Major Job Attitudes? 73
Job Satisfaction 78
Measuring Job Satisfaction 79 • How Satisfied Are People in Their
Jobs? 80 • What Causes Job Satisfaction? 81 • The Impact of Satisfied
and Dissatisfied Employees on the Workplace 82
Summary and Implications for Managers 88
Self-Assessment Library How Satisfied Am I with My Job? 70

An Ethical Choice Do Employers Owe Workers More Satisfying Jobs? 74
glOBalization! Culture and Work–Life Balance 76
Self-Assessment Library Am I Engaged? 78
Myth or Science? “Favorable Job Attitudes Make Organizations More Profitable” 83
Point/Counterpoint Employer–Employee Loyalty Is an Outdated Concept 87
Questions for Review 88
Experiential Exercise What Factors Are Most Important to Your Job Satisfaction? 89
Ethical Dilemma Bounty Hunters 89
Case Incident 1 Long Hours, Hundreds of E-Mails, and No Sleep:
Does This Sound Like a Satisfying Job? 90
Case Incident 2 Crafting a Better Job 91
4 Emotions and Moods 97
What Are Emotions and Moods? 98
The Basic Emotions 100 • The Basic Moods: Positive and Negative Affect 100
• The Function of Emotions 102 • Sources of Emotions and Moods 103
Emotional Labor 108
Affective Events Theory 110
Emotional Intelligence 112
The Case for EI 113 • The Case Against EI 114 • Emotion Regulation 115
OB Applications of Emotions and Moods 115
Selection 116 • Decision Making 116 • Creativity 116 • Motivation 117
• Leadership 117 • Negotiation 117 • Customer Service 118 • Job
Attitudes 119 • Deviant Workplace Behaviors 119 • Safety and Injury
at Work 119 • How Managers Can Influence Moods 120
Summary and Implications for Managers 121
Self-Assessment Library How Are You Feeling Right Now? 98
Self-Assessment Library What’s My Affect Intensity? 104
Myth or Science? We Are Better Judges of When Others Are Happy Than When
They Are Sad 107
glOBalization! Should You Expect “Service with a Smile” All Around the World? 108
Self-Assessment Library What’s My Emotional Intelligence Score? 115
An Ethical Choice Schadenfreude 120
Point/Counterpoint Sometimes Blowing Your Top Is a Good Thing 122
Questions for Review 121
Experiential Exercise Who Can Catch a Liar? 123
Ethical Dilemma Happiness Coaches for Employees 123
Case Incident 1 Is It Okay to Cry at Work? 124
Case Incident 2 Can You Read Emotions from Faces? 124
5 Personality and Values 131
Personality 133
What Is Personality? 133 • The Myers-Briggs Type Indicator 135 • The Big
Five Personality Model 136 • Other Personality Traits Relevant to OB 139
C O N T E N T S ix
S A L
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x C O N T E N T S
Values 144
The Importance of Values 144 • Terminal versus Instrumental
Values 144 • Generational Values 145
Linking an Individual’s Personality and Values to the Workplace 148
Person–Job Fit 148 • Person–Organization Fit 150
International Values 150
Summary and Implications for Managers 154
Self-Assessment Library Am I a Narcissist? 132
Myth or Science? Personality Predicts the Performance of Entrepreneurs 142
glOBalization! The Right Personality for a Global Workplace 143
An Ethical Choice Should You Try to Change Someone’s Personality? 147
Point/Counterpoint Millennials Are More Narcissistic 155
Questions for Review 156
Experiential Exercise What Organizational Culture Do You Prefer? 156
Ethical Dilemma Freedom or Lack of Commitment? 156
Case Incident 1 Is There a Price for Being Too Nice? 157
Case Incident 2 Leadership from an Introvert’s Perspective 158
6 Perception and Individual Decision Making 165
What Is Perception? 166
Factors That Influence Perception 167
Person Perception: Making Judgments About Others 168
Attribution Theory 168 • Common Shortcuts in Judging
Others 170 • Specific Applications of Shortcuts in Organizations 173
The Link Between Perception and Individual Decision Making 174
Decision Making in Organizations 175
The Rational Model, Bounded Rationality, and Intuition 175 • Common
Biases and Errors in Decision Making 177
Influences on Decision Making: Individual Differences and Organizational
Constraints 184
Individual Differences 184 • Organizational Constraints 186
What About Ethics in Decision Making? 187
Three Ethical Decision Criteria 187 • Improving Creativity in Decision
Making 188
Summary and Implications for Managers 190
Self-Assessment Library What Are My Gender Role Perceptions? 166
glOBalization! Chinese Time, North American Time 171
Myth or Science? Creative Decision Making Is a Right-Brain Activity 181
Self-Assessment Library Am I A Deliberate Decision Maker? 183
An Ethical Choice Whose Ethical Standards to Follow? 185
Self-Assessment Library How Creative Am I? 190
Point/Counterpoint Checklists Lead to Better Decisions 191
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C O N T E N T S xi
Questions for Review 192
Experiential Exercise Biases in Decision Making 193
Ethical Dilemma Do Unethical Decisions Come from Bad Character? 193
Case Incident 1 Computerized Decision Making 194
Case Incident 2 Predictions That Didn’t Quite Pan Out 195
7 Motivation Concepts 201
Defining Motivation 202
Early Theories of Motivation 203
Hierarchy of Needs Theory 203 • Theory X and Theory Y 205 • Two-Factor
Theory 205 • McClelland’s Theory of Needs 207
Contemporary Theories of Motivation 208
Self-Determination Theory 208 • Job Engagement 211 • Goal-Setting
Theory 212 • Self-Efficacy Theory 215 • Reinforcement Theory 218 • Equity
Theory/Organizational Justice 219 • Expectancy Theory 224
Integrating Contemporary Theories of Motivation 226
Summary and Implications for Managers 228
Self-Assessment Library How Confident Am I in My Abilities to Succeed? 202
Myth or Science? “The Support of Others Improves Our Chances of Accomplishing
Our Goals” 204
An Ethical Choice Motivated to Behave Unethically 209
glOBalization! Autonomy Needs Around the Globe 210
Self-Assessment Library What Are My Course Performance Goals? 214
Point/Counterpoint Fear Is a Powerful Motivator 229
Questions for Review 230
Experiential Exercise Goal-Setting Task 230
Ethical Dilemma The Big Easy? 230
Case Incident 1 It’s Not Fair! 231
Case Incident 2 Bullying Bosses 231
8 Motivation: From Concepts to Applications 239
Motivating by Job Design: The Job Characteristics Model 240
The Job Characteristics Model 240 • How Can Jobs Be
Redesigned? 242 • Alternative Work Arrangements 245 • The Social and
Physical Context of Work 249
Employee Involvement 250
Examples of Employee Involvement Programs 251 • Linking Employee
Involvement Programs and Motivation Theories 252
Using Rewards to Motivate Employees 252
What to Pay: Establishing a Pay Structure 252 • How to Pay: Rewarding
Individual Employees Through Variable-Pay Programs 253 • Flexible
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xii C O N T E N T S
Benefits: Developing a Benefits Package 257 • Intrinsic Rewards: Employee
Recognition Programs 259
Summary and Implications for Managers 261
Self-Assessment Library What’s My Job’s Motivating Potential? 240
Myth or Science? “CEO Pay Can’t Be Measured” 243
An Ethical Choice Identifying Conflicts of Interest 258
glOBalization! Motivated by Individual Goals or Relational Goals? 260
Point/Counterpoint “If Money Doesn’t Make You Happy, You Aren’t Spending It Right” 262
Questions for Review 263
Experiential Exercise Assessing Employee Motivation and Satisfaction Using
the Job Characteristics Model 263
Ethical Dilemma Spitting Mad 264
Case Incident 1 Multitasking: A Good Use of Your Time? 264
Case Incident 2 Bonuses Can Backfire 265
3 The Group
9 Foundations of Group Behavior 271
Defining and Classifying Groups 272
Why Do People Form Groups? 272
Stages of Group Development 274
The Five-Stage Model 275 • An Alternative Model for Temporary Groups
with Deadlines 276
Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 277
Group Property 1: Roles 277 • Group Property 2: Norms 280 • Group
Property 3: Status 285 • Group Property 4: Size 286 • Group Property 5:
Cohesiveness 288 • Group Property 6: Diversity 288
Group Decision Making 290
Groups versus the Individual 290 • Groupthink and
Groupshift 292 • Group Decision-Making Techniques 295
Summary and Implications for Managers 296
Self-Assessment Library Do I Have a Negative Attitude Toward Working in Groups? 272
Self-Assessment Library Do I Trust Others? 280
glOBalization! Forming International Teams in a Virtual World 291
Myth or Science? “Asians Have Less Ingroup Bias Than Americans” 292
An Ethical Choice Should You Use Group Peer Pressure? 294
Point/Counterpoint Affinity Groups Fuel Business Success 298
Questions for Review 297
Experiential Exercise Wilderness Survival 299
Ethical Dilemma Is Social Loafing Shirking? 300
Case Incident 1 Negative Aspects of Collaboration? 300
Case Incident 2 Herd Behavior and the Housing Bubble (and Collapse) 301
S A L
S A L

C O N T E N T S xiii
10 Understanding Work Teams 307
Why Have Teams Become So Popular? 308
Differences Between Groups and Teams 309
Types of Teams 310
Problem-Solving Teams 310 • Self-Managed Work Teams 310
• Cross-Functional Teams 311 • Virtual Teams 312
Creating Effective Teams 312
Context: What Factors Determine Whether Teams Are Successful 313
• Team Composition 315 • Team Processes 319
Turning Individuals into Team Players 322
Selecting: Hiring Team Players 323 • Training: Creating Team
Players 324 • Rewarding: Providing Incentives to Be a Good Team
Player 324
Beware! Teams Aren’t Always the Answer 324
Summary and Implications for Managers 325
Self-Assessment Library How Good Am I at Building and Leading a Team? 308
glOBalization! Group Cohesiveness across Cultures 314
An Ethical Choice Using Global Virtual Teams as an Environmental Choice 315
Myth or Science? “Teams Work Best Under Angry Leaders” 320
Self-Assessment Library What Is My Team Efficacy? 322
Point/Counterpoint We Can Learn Much About Work Teams from Studying
Sports Teams 326
Questions for Review 327
Experiential Exercise Fixed versus Variable Flight Crews 327
Ethical Dilemma Unethical Teams 327
Case Incident 1 Why Don’t Teams Work Like They’re Supposed to? 328
Case Incident 2 Multicultural Multinational Teams at IBM 329
11 Communication 335
Functions of Communication 336
The Communication Process 338
Direction of Communication 338
Downward Communication 339 • Upward Communication 339
• Lateral Communication 339
Interpersonal Communication 340
Oral Communication 340 • Written Communication 341
• Nonverbal Communication 341
Organizational Communication 342
Formal Small-Group Networks 343 • The Grapevine 343
• Electronic Communications 345 • Managing Information 349
Choice of Communication Channel 350
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xiv C O N T E N T S
Persuasive Communications 351
Automatic and Controlled Processing 351 • Interest Level 352
• Prior Knowledge 352 • Personality 352 • Message Characteristics 352
Barriers to Effective Communication 353
Filtering 353 • Selective Perception 353 • Information
Overload 353 • Emotions 353 • Language 354 • Silence 354
• Communication Apprehension 355 • Lying 355
Global Implications 356
Cultural Barriers 356 • Cultural Context 357 • A Cultural Guide 358
Summary and Implications for Managers 360
Self-Assessment Library Am I a Gossip? 336
An Ethical Choice The Ethics of Gossip at Work 345
Myth or Science? “We Know What Makes Good Liars Good” 356
glOBalization! How Direct Should You Be? 358
Point/Counterpoint Social Networking Is Good Business 359
Self-Assessment Library How Good Are My Listening Skills? 360
Questions for Review 360
Experiential Exercise An Absence of Nonverbal Communication 361
Ethical Dilemma Pitfalls of E-Mail 361
Case Incident 1 Using Social Media to Your Advantage 362
Case Incident 2 Should Companies That Fire Shoot First? 362
12 Leadership 367
What Is Leadership? 368
Trait Theories 369
Behavioral Theories 370
Summary of Trait Theories and Behavioral Theories 372
Contingency Theories 372
The Fiedler Model 373 • Other Contingency Theories 375
Leader–Member Exchange (LMX) Theory 377
Charismatic Leadership and Transformational Leadership 379
Charismatic Leadership 379 • Transformational Leadership 382
Authentic Leadership: Ethics and Trust 386
What Is Authentic Leadership? 386 • Ethics and Leadership 386 • Servant
Leadership 387 • Trust and Leadership 387 • How Is Trust Developed? 389
• Trust as a Process 390 • What Are the Consequences of Trust? 390
Leading for the Future: Mentoring 391
Mentoring 391
Challenges to the Leadership Construct 393
Leadership as an Attribution 393 • Substitutes for and Neutralizers
of Leadership 394 • Online Leadership 395
Finding and Creating Effective Leaders 396
Selecting Leaders 396 • Training Leaders 396
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C O N T E N T S xv
Summary and Implications for Managers 397
Self-Assessment Library What’s My Leadership Style? 368
Self-Assessment Library What’s My LPC Score? 373
glOBalization! Cross-Cultural Leadership Styles 378
Self-Assessment Library How Charismatic Am I? 382
Self-Assessment Library Am I an Ethical Leader? 386
An Ethical Choice Do Leaders Have a Responsibility to Protect
Followers? 388
Myth or Science? “Power Helps Leaders Perform Better” 392
Point/Counterpoint Heroes Are Made, Not Born 398
Questions for Review 399
Experiential Exercise What Is a Leader? 399
Ethical Dilemma Undercover Leaders 399
Case Incident 1 Leadership Mettle Forged in Battle 400
Case Incident 2 Leadership Factories 400
13 Power and Politics 411
A Definition of Power 412
Contrasting Leadership and Power 413
Bases of Power 414
Formal Power 414 • Personal Power 415 • Which Bases of Power Are
Most Effective? 416 • Power and Perceived Justice 416
Dependence: The Key to Power 416
The General Dependence Postulate 416 • What Creates Dependence? 417
Power Tactics 418
Sexual Harassment: Unequal Power in the Workplace 421
Politics: Power in Action 424
Definition of Organizational Politics 424 • The Reality of Politics 424
Causes and Consequences of Political Behavior 426
Factors Contributing to Political Behavior 426 • How Do People Respond
to Organizational Politics? 429 • Impression Management 430
The Ethics of Behaving Politically 434
Summary and Implications for Managers 435
Self-Assessment Library Is My Workplace Political? 412
glOBalization! Power Distance and Innovation 420
An Ethical Choice Should All Sexual Behavior Be Prohibited at Work? 423
Myth or Science? “Corporate Political Activity Pays” 428
Self-Assessment Library How Good Am I at Playing Politics? 430
Point/Counterpoint Power Corrupts People 436
Questions for Review 437
Experiential Exercise Understanding Power Dynamics 437
Ethical Dilemma Corporate Spying 438
Case Incident 1 Delegate Power, or Keep It Close? 438
Case Incident 2 The Persuasion Imperative 439
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xvi C O N T E N T S
14 Conflict and Negotiation 445
A Definition of Conflict 446
Transitions in Conflict Thought 447
The Traditional View of Conflict 447 • The Interactionist View
of Conflict 447 • Resolution-Focused View of Conflict 449
The Conflict Process 449
Stage I: Potential Opposition or Incompatibility 450 • Stage II: Cognition
and Personalization 451 • Stage III: Intentions 452 • Stage IV:
Behavior 454 • Stage V: Outcomes 455
Negotiation 458
Bargaining Strategies 458 • The Negotiation Process 463
• Individual Differences in Negotiation Effectiveness 464 • Third-Party
Negotiations 467
Summary and Implications for Managers 469
Self-Assessment Library What’s My Preferred Conflict-Handling Style? 446
Myth or Science? “Communicating Well Is More Important in Cross-Cultural
Negotiations” 462
glOBalization! Anger and Conflict Across Cultures 467
Self-Assessment Library What’s My Negotiating Style? 467
An Ethical Choice Using Empathy to Negotiate More Ethically 468
Point/Counterpoint Player–Owner Disputes Are Unnecessary 471
Questions for Review 472
Experiential Exercise A Negotiation Role-Play 472
Ethical Dilemma The Lowball Applicant 473
Case Incident 1 Choosing Your Battles 473
Case Incident 2 Mediation: Master Solution to Employment Disputes? 474
15 Foundations of Organization Structure 479
What Is Organizational Structure? 480
Work Specialization 480 • Departmentalization 482 • Chain
of Command 483 • Span of Control 484 • Centralization and
Decentralization 485 • Formalization 486
Common Organizational Designs 486
The Simple Structure 486 • The Bureaucracy 487 • The Matrix Structure 488
New Design Options 490
The Virtual Organization 490 • The Boundaryless Organization 492
• The Leaner Organization: Downsizing 494
Why Do Structures Differ? 496
Organizational Strategy 496 • Organization Size 498 • Technology 498
• Environment 499
Organizational Designs and Employee Behavior 501
Summary and Implications for Managers 502
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C O N T E N T S xvii
4 The Organization System
16 Organizational Culture 511
What Is Organizational Culture? 512
A Definition of Organizational Culture 512 • Culture Is a Descriptive
Term 514 • Do Organizations Have Uniform Cultures? 514 • Strong versus
Weak Cultures 514 • Culture versus Formalization 515
What Do Cultures Do? 516
Culture’s Functions 516 • Culture Creates Climate 516 • Culture as a
Liability 517
Creating and Sustaining Culture 519
How a Culture Begins 519 • Keeping a Culture Alive 519 • Summary:
How Cultures Form 523
How Employees Learn Culture 523
Stories 523 • Rituals 524 • Material Symbols 524 • Language 524
Creating an Ethical Organizational Culture 525
Creating a Positive Organizational Culture 527
Spirituality and Organizational Culture 529
What Is Spirituality? 529 • Why Spirituality Now? 530 • Characteristics
of a Spiritual Organization 530 • Achieving a Spiritual
Organization 531 • Criticisms of Spirituality 531
Global Implications 532
Summary and Implications for Managers 533
Self-Assessment Library What’s the Right Organizational Culture for Me? 512
glOBalization! Face Culture, Dignity Culture, and Organizational Culture 515
Myth or Science? “Employees Treat Customers the Same Way the Organization
Treats Them” 518
An Ethical Choice Designing a Culture of Ethical Voice 526
S A L
Self-Assessment Library Do I Like Bureaucracy? 480
Self-Assessment Library How Willing Am I to Delegate? 486
glOBalization! The Global Organization 489
An Ethical Choice Downsizing with a Conscience 496
Myth or Science? “Employees Resent Outsourcing” 500
Point/Counterpoint The End of Management 503
Questions for Review 504
Experiential Exercise Dismantling a Bureaucracy 504
Ethical Dilemma Directing the Directors 505
Case Incident 1 Creative Deviance: Bucking the Hierarchy? 506
Case Incident 2 Siemens’ Simple Structure—Not 506
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xviii C O N T E N T S
Self-Assessment Library How Spiritual Am I? 531
Point/Counterpoint Organizations Should Strive to Create a Positive
Organizational Culture 534
Questions for Review 535
Experiential Exercise Rate Your Classroom Culture 535
Ethical Dilemma A Bankrupt Culture 536
Case Incident 1 Mergers Don’t Always Lead to Culture Clashes 536
Case Incident 2 Did Toyota’s Culture Cause Its Problems? 537
17 Human Resource Policies and Practices 543
Selection Practices 544
How the Selection Process Works 544 • Initial Selection 545 • Substantive
Selection 546 • Contingent Selection 549 • International Variations
in Selection Processes 550
Training and Development Programs 551
Types of Training 551 • Training Methods 553 • Evaluating
Effectiveness 554
Performance Evaluation 554
What Is Performance? 555 • Purposes of Performance
Evaluation 555 • What Do We Evaluate? 555 • Who Should Do the
Evaluating? 556 • Methods of Performance Evaluation 558 • Suggestions
for Improving Performance Evaluations 560 • Providing Performance
Feedback 562 • International Variations in Performance Appraisal 563
Managing Work–Life Conflicts in Organizations 563
Summary and Implications for Managers 566
Self-Assessment Library How Much Do I Know About Human Resource
Management (HRM)? 544
glOBalization! Performance Appraisal Around the World 558
An Ethical Choice Recruiting the Unemployed 561
Self-Assessment Library How Good Am I at Giving Performance Feedback? 563
Myth or Science? “Work Is Making Us Fat” 564
Point/Counterpoint Social Media Is a Great Source of New Hires 567
Questions for Review 568
Experiential Exercise Evaluating Performance and Providing Feedback 568
Ethical Dilemma Credit Checking 568
Case Incident 1 The End of the Performance Appraisal? 569
Case Incident 2 Job Candidates Without Strong SAT Scores Need Not Apply 570
18 Organizational Change and Stress Management 577
Forces for Change 578
Planned Change 580
Resistance to Change 580
Overcoming Resistance to Change 582 • The Politics of Change 584
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C O N T E N T S xix
Approaches to Managing Organizational Change 584
Lewin’s Three-Step Model 584 • Kotter’s Eight-Step Plan for Implementing
Change 586 • Action Research 587 • Organizational Development 587
Creating a Culture for Change 591
Stimulating a Culture of Innovation 591 • Creating a Learning
Organization 593
Work Stress and Its Management 595
What Is Stress? 595 • Potential Sources of Stress 597 • Individual
Differences 599 • Cultural Differences 600 • Consequences of Stress 601
• Managing Stress 602
Summary and Implications for Managers 606
Self-Assessment Library How Well Do I Respond to Turbulent Change? 578
Myth or Science? “Men Experience More Job Stress Than Women” 596
Self-Assessment Library How Stressful Is My Life? 600
An Ethical Choice Responsibly Managing Your Own Stress 601
glOBalization! Work–Family Stress in Different Cultures 604
Point/Counterpoint Responsible Managers Relieve Stress on Their Employees 607
Questions for Review 608
Experiential Exercise Power and the Changing Environment 608
Ethical Dilemma Changes at WPAC 609
Case Incident 1 Starbucks Returns to Its Roots 610
Case Incident 2 The Rise of Extreme Jobs 610
Appendix A Research in Organizational Behavior 616
Comprehensive Cases 623
Indexes 637
Glindex 663
S A L
SS AA L

About the Authors
xx
Stephen P. Robbins
Education
Ph.D. University of Arizona
Professional Experience
Academic Positions: Professor, San Diego State University, Southern Illinois
University at Edwardsville, University of Baltimore, Concordia University in
Montreal, and University of Nebraska at Omaha.
Research: Research interests have focused on conflict, power, and politics in
organizations, behavioral decision making, and the development of effective
interpersonal skills.
Books Published: World’s best-selling author of textbooks in both management
and organizational behavior. His books have sold more than 5 million copies
and have been translated into 20 languages; editions have been adapted for
Canada, Australia, South Africa, and India, such as these:
• Essentials of Organizational Behavior , 11th ed. (Prentice Hall, 2012)
• Management , 11th ed. with Mary Coulter (Prentice Hall, 2012)
• Fundamentals of Human Resource Management , 10th ed., with David DeCenzo
(Wiley, 2010)
• Prentice Hall’s Self-Assessment Library 3.4 (Prentice Hall, 2010)
• Fundamentals of Management , 8th ed., with David DeCenzo and Mary Coulter
(Prentice Hall, 2013)
• Supervision Today! 7th ed., with David DeCenzo and Robert Wolter (Prentice
Hall, 2013)
• Training in Interpersonal Skills: TIPS for Managing People at Work , 6th ed., with
Phillip Hunsaker (Prentice Hall, 2012)
• Managing Today! 2nd ed. (Prentice Hall, 2000)
• Organization Theory , 3rd ed. (Prentice Hall, 1990)
• The Truth About Managing People , 2nd ed. (Financial Times/Prentice Hall,
2008)
• Decide and Conquer: Make Winning Decisions and Take Control of Your Life
(Financial Times/Prentice Hall, 2004).
Other Interests
In his “other life,” Dr. Robbins actively participates in masters’ track compe-
tition. Since turning 50 in 1993, he has won 18 national championships and
12 world titles. He is the current world record holder at 100 meters (12.37 seconds)
and 200 meters (25.20 seconds) for men 65 and over.

Timothy A. Judge
Education
Ph.D., University of Illinois at Urbana-Champaign
Professional Experience
Academic Positions: Franklin D. Schurz Chair, Department of Management,
Mendoza College of Business, University of Notre Dame; Matherly-McKethan
Eminent Scholar in Management, Warrington College of Business Administra-
tion, University of Florida; Stanley M. Howe Professor in Leadership, Henry B.
Tippie College of Business, University of Iowa; Associate Professor (with tenure),
Department of Human Resource Studies, School of Industrial and Labor Rela-
tions, Cornell University; Lecturer, Charles University, Czech Republic, and Co-
menius University, Slovakia; Instructor, Industrial/Organizational Psychology,
Department of Psychology, University of Illinois at Urbana-Champaign.
Research: Dr. Judge’s primary research interests are in (1) personality, moods,
and emotions; (2) job attitudes; (3) leadership and influence behaviors; and
(4) careers (person–organization fit, career success). Dr. Judge has published
more than 140 articles on these and other major topics in journals such as Jour-
nal of Organizational Behavior, Personnel Psychology, Academy of Management Journal,
Journal of Applied Psychology, European Journal of Personality, and European Journal
of Work and Organizational Psychology .
Fellowship: Dr. Judge is a fellow of the American Psychological Association,
the Academy of Management, the Society for Industrial and Organizational
Psychology, and the American Psychological Society.
Awards: In 1995, Dr. Judge received the Ernest J. McCormick Award for
Distinguished Early Career Contributions from the Society for Industrial and
Organizational Psychology. In 2001, he received the Larry L. Cummings Award
for mid-career contributions from the Organizational Behavior Division of the
Academy of Management. In 2007, he received the Professional Practice Award
from the Institute of Industrial and Labor Relations, University of Illinois.
Books Published: H. G. Heneman III, T. A. Judge, and J. D. Kammeyer-Mueller,
Staffing Organizations, 7th ed. (Madison, WI: Mendota House/Irwin, 2011)
Other Interests
Although he cannot keep up (literally!) with Dr. Robbin’s accomplishments on
the track, Dr. Judge enjoys golf, cooking and baking, literature (he’s a particu-
lar fan of Thomas Hardy and is a member of the Thomas Hardy Society), and
keeping up with his three children, who range in age from 23 to 9.
A B O U T T H E A U T H O R S xxi

Preface
xxii
Welcome to the fifteenth edition of Organizational Behavior! Long considered
the standard for all organizational behavior textbooks, this edition continues
its tradition of making current, relevant research come alive for students. While
maintaining its hallmark features—clear writing style, cutting-edge content, and
engaging pedagogy—the fourteenth edition has been updated to reflect the most
recent research within the field of organizational behavior. This is one of the
most comprehensive and thorough revisions of Organizational Behavior we’ve un-
dertaken, and while we’ve preserved the core material, we’re confident that this
edition reflects the most important research and topical issues facing organiza-
tions, managers, and employees.
Key Changes to the Fifteenth Edition
• The most substantial updating ever. The following sections of each chapter
are new to the fifteenth edition:
• Opening Vignette
• Myth or Science?
• Ethical Choice
• Point/Counterpoint
• Case Incident
• In addition, the following material is substantially revised and updated:
• Case Incident (those not entirely new are revised and updated)
• OB Poll (more than half are new to this edition)
• Ethical Dilemma (more than half are new to this edition)
• Photos/captions (more than half are new to this edition)
• New feature: glOBalization!, which features organizational behavior in an
international context.
• Improved integration of global implications: With the explosion of interna-
tional research, global OB research is now woven into each chapter, rather
than in a stand-alone section at the end of the chapter.
• Revision to Summary and Implications for Managers section, with more
focus on practical ways to apply the material on the job.
• NEW videos—up-to-date videos showing management topics in action,
access to the complete management video library, as well as instructional
materials for integrating clips from popular movies into your class, are at
www.mymanagementlab.com .
Chapter-by-Chapter Changes
Chapter 1 : What Is Organizational Behavior?
• Entirely new Opening Vignette (The New Normal?)
• New feature: glOBalization!
• New Myth or Science? (“Most Acts of Workplace Bullying Are Men Attacking
Women”)
• New OB Model, with better integration with pedagogy (structure) of book

www.mymanagementlab.com

• New Point–Counterpoint (Lost in Translation?)
• New An Ethical Choice (Can You Learn from Failure?)
• New Case Incident (Lessons for ‘Undercover’ Bosses )
• New Case Incident (Era of the Disposable Worker?)
Chapter 2 : Diversity in Organizations
• Entirely new Opening Vignette (The Rise and Fall of Erin Callan)
• New feature: glOBalization!
• New Myth or Science? (“Dual-Career Couples Divorce Less”)
• Enhanced coverage of stereotyping and discrimination research
• Revised content regarding age discrimination and implications of an aging
workforce
• Updates to discussion of disability in the workplace
• Expanded coverage of sexual orientation discrimination
• New material and integration of diversity with international/cultural diversity
• New Point–Counterpoint (Men Have More Mathematical Ability Than Women)
• New An Ethical Choice (Religious Tattoos)
• New Case Incident (Increasing Age Diversity in the Workplace)
• Updated Case Incident (The Flynn Effect)
Chapter 3 : Attitudes and Job Satisfaction
• Entirely new Opening Vignette (What Does SAS Stand For?)
• New feature: glOBalization!
• New Myth or Science? (“Favorable Job Attitudes Make Organizations More
Profitable”)
• Review of recent studies on within-person variation in job attitudes
• New developments in organizational commitment
• Updated material on organizational citizenship behaviors
• New perspectives on attitudes and organizational performance
• New ethical dilemma
• New Point–Counterpoint (Employer–Employee Loyalty Is an Outdated
Concept)
• New An Ethical Choice (Do Employers Owe Workers More Satisfying Jobs?)
• New Case Incident (Crafting a Better Job)
• Updated Case Incident (Long Hours, Hundreds of E-Mails, and No Sleep:
Does This Sound Like a Satisfying Job?)
Chapter 4 : Emotions and Moods
• Entirely new Opening Vignette (Love at Work: Taboo No More?)
• New feature: glOBalization!
• New Myth or Science? (“We Are Better Judges of When Others Are Happy
Than When They Are Sad”)
• Revised introduction to the topic
• Review of research on moods and employee attachment
• New section on “moral emotions”
• Discussion of emotion regulation strategies and their consequences
• New research on gender and emotions
• Updated content on emotional displays at work
• New section on Emotional Intelligence, with substantially more coverage and a
new exhibit
• New Point–Counterpoint (Sometimes Blowing Your Top Is a Good Thing)
• New An Ethical Choice (Schadenfreude)
• New Case Incident (Is It Okay to Cry at Work?)
• Updated Case Incident (Can You Read Emotions from Faces?)
P R E F A C E xxiii

Chapter 5 : Personality and Values
• Entirely new Opening Vignette (Changing of the Guard in Japan: Is it the Econ-
omy, or the Values?)
• New feature: glOBalization!
• New Myth or Science? (“Personality Predicts the Performance of Entrepreneurs”)
• Introduces concepts related to dispositional self- and other-orientation
• New material regarding vocational choices
• New discussion of values and reactions to violations of employee values
• Major revision regarding Hofstede’s model of culture and its consequences
• Updated information on personality and expatriate success
• New Point–Counterpoint (Millennials Are More Narcissistic)
• New An Ethical Choice (Should You Try to Change Someone’s Personality?)
• New Case Incident (Leadership from an Introvert’s Perspective)
• Updated Case Incident (Is There a Price for Being Too Nice?)
Chapter 6 : Perception and Individual Decision Making
• Entirely new Opening Vignette (Do Machines Make Better Decisions?)
• New feature: glOBalization!
• New Myth or Science? (“Creative Decision Making Is a Right-Brain Activity”)
• Review of recent work on self-serving biases
• New information on stereotyping processes
• Discussion of latest trends in decision errors research
• Updated discussion of culture and perceptions
• New section on Financial Decision Making and how it informs to understand
recent and current crises
• New Experiential Exercise
• New Point–Counterpoint (Checklists Lead to Better Decisions)
• New An Ethical Choice (Whose Ethical Standards to Follow?)
• New Case Incident (Computerized Decision Making)
• Updated Case Incident (Predictions That Didn’t Quite Pan Out)
Chapter 7 : Motivation Concepts
• Entirely new Opening Vignette (The Motivations of the 99ers)
• New feature: glOBalization!
• New Myth or Science? (“The Support of Others Improves Our Chances of
Accomplishing Our Goals”)
• New material on psychological need theories
• Increased discussion of employee engagement
• Updates to the discussion on goal-setting theory
• New perspectives on equity and organizational justice
• New Point–Counterpoint (Fear Is a Powerful Motivator)
• New An Ethical Choice (Motivated to Behave Unethically)
• New Case Incident (It’s Not Fair!)
• Updated Case Incident (Bullying Bosses)
Chapter 8 : Motivation: From Concepts to Applications
• Entirely new Opening Vignette (Motivation Minus the Moolah)
• New feature: glOBalization!
• New Myth or Science? (“CEO Pay Can’t Be Measured”)
• Updated discussion of job characteristics
• New coverage of flextime, telecommuting, and related work practices
• Revised discussion of employee empowerment and its effects
• Discussion of innovations in gainsharing practices
xxiv P R E F A C E

P R E F A C E xxv
• New Point–Counterpoint (“If Money Doesn’t Make You Happy, You Aren’t
Spending It Right”)
• New Case Incident (Bonuses Can Backfire)
• Updated Case Incident (Multitasking: A Good Use of Your Time?)
Chapter 9 : Foundations of Group Behavior
• Entirely new Opening Vignette (To the Clickers Go the Spoils)
• New feature: glOBalization!
• New Myth or Science? (“Asians Have Less Ingroup Bias Than Americans”)
• New material on dysfunctional behavior in teams
• Discussion of minority influence on group decision making
• Introduces material on team mental models
• Updated information on group decision errors and groupthink
• New information on international variations in group behavior
• New Point–Counterpoint (Affinity Groups Fuel Business Success)
• New An Ethical Choice (Should You Use Group Peer Pressure?)
• New Case Incident (Negative Aspects of Collaboration?)
• Updated Case Incident (Herd Behavior and the Housing Bubble [and
Collapse])
Chapter 10 : Understanding Work Teams
• Entirely new Opening Vignette (Killing bin Laden)
• New feature: glOBalization!
• New Myth or Science? (“Teams Work Best Under Angry Leaders”)
• Updated discussion of strategies to improve team performance
• Review of research on team decision-making strategies
• New perspectives on creativity in teams
• New material on team proactivity
• Presents new literature on work teams in international contexts
• New Point–Counterpoint (We Can Learn Much about Work Teams from
Studying Sports Teams)
• New An Ethical Choice (Using Global Virtual Teams as an Environmental
Choice)
• New Case Incident (Why Don’t Teams Work Like They’re Supposed To?)
• Updated Case Incident (Multicultural Multinational Teams at IBM)
Chapter 11 : Communication
• Entirely new Opening Vignette (Goldman Rules)
• New feature: glOBalization!
• New Myth or Science? (“We Know What Makes Good Liars Good”)
• New section on Social Networking
• New section on Persuasive Communication strategies
• Discussion of how to frame messages for maximum impact
• Discussion of the effects of authority, expertise, and liking on communica-
tion effectiveness
• Updated discussion of body language in communication
• Introduces new ideas about the effects of electronic communications
• New Point–Counterpoint (Social Networking Is Good Business)
• New An Ethical Choice (The Ethics of Gossip at Work)
• New Case Incident (Using Social Media to Your Advantage)
• Updated Case Incident (Should Companies That Fire Shoot First?)

xxvi P R E FAC E
Chapter 12 : Leadership
• Entirely new Opening Vignette (Making Google’s Leaders)
• New feature: glOBalization!
• New Myth or Science? (“Power Helps Leaders Perform Better”)
• Expanded discussion of leader effects on employee attitudes
• New perspectives on culture and leadership
• New material regarding emotional intelligence and leadership
• Increased consideration of contemporary theories of leadership
• Consideration of “servant leadership”
• Discussion of how leaders can increase employee creativity
• New Point–Counterpoint (Heroes Are Made, Not Born)
• New An Ethical Choice (Do Leaders Have a Responsibility to Protect
Followers?)
• New Case Incident (Leadership Mettle Forged in Battle)
• Updated Case Incident (Leadership Factories)
Chapter 13 : Power and Politics
• Entirely new Opening Vignette (Appearances Can Be Deceiving)
• New feature: glOBalization!
• New Myth or Science? (“Corporate Political Activity Pays”)
• Coverage of latest research on influence tactics
• Revised discussion of sexual harassment
• Updated discussion of political behavior in organizations
• Revision to international issues in power and politics
• New Point–Counterpoint (Power Corrupts People)
• New An Ethical Choice (Should All Sexual Behavior Be Prohibited at Work?)
• New Case Incident (Delegate Power, or Keep it Close?)
• Updated Case Incident (The Persuasion Imperative)
Chapter 14 : Conflict and Negotiation
• Entirely new Opening Vignette (No Conflict at the Post Office. . . Is That
Good?)
• New feature: glOBalization!
• New Myth or Science? (“Communicating Well Is More Important in Cross-
Cultural Negotiations”)
• Updated material on gender and negotiation styles
• New material on individual differences in negotiation styles
• Discussion of emotions in negotiation
• New information on suspicion and deception in negotiation
• Updates to discussion on conflict and conflict management processes
• New Point–Counterpoint (Player–Owner Disputes Are Unnecessary)
• New An Ethical Choice (Using Empathy to Negotiate More Ethically)
• New Case Incident (Choosing Your Battles)
• Updated Case Incident (Mediation: Master Solution to Employment
Disputes?)
Chapter 15 : Foundations of Organization Structure
• Entirely new Opening Vignette (Dismantling a Bureaucracy)
• New feature: glOBalization!
• New Myth or Science? (“Employees Resent Outsourcing”)
• Latest research on boundaryless organizations and their functioning
• Discussion of technology’s influence on organizational structure

P R E F A C E xxvii
• Updated review of the relationship between organizational structure and
attitudes
• New An Ethical Choice (Downsizing with a Conscience)
• New Case Incident (Creative Deviance: Bucking the Hierarchy?)
• Updated Case Incident (Siemens’ Simple Structure—Not)
Chapter 16 : Organizational Culture
• Entirely new Opening Vignette (Ursula M. Burns and the Culture of Xerox)
• New feature: glOBalization!
• New Myth or Science? (“Employees Treat Customers the Same Way the
Organization Treats Them”)
• New review of basic issues in organizational culture and subcultures
• Enhanced discussion of ethical culture
• Review of culture and organizational performance
• Revised discussion of organizational socialization practices and outcomes
• New Point–Counterpoint (Organizations Should Strive to Create a Positive
Organizational Culture)
• New An Ethical Choice (Designing a Culture of Ethical Voice)
• New Case Incident (Did Toyota’s Culture Cause Its Problems?)
• Updated Case Incident (Mergers Don’t Always Lead to Culture Clashes)
Chapter 17 : Human Resource Policies and Practices
• Entirely new Opening Vignette (Testing NFL Quarterbacks)
• New feature: glOBalization!
• New Myth or Science? (“Work Is Making Us Fat”)
• Discussion of the implications of the Great Recession
• New material on legal issues
• Updated discussion of the effects of high performance work practice on
employee attitudes and behavior
• Expanded discussion of the effects of staffing decisions on employee
turnover
• New section on Job Performance and Workplace Civility
• New material related to performance appraisals and rater goals
• New Point–Counterpoint (Social Media Is a Great Source of New Hires)
• New An Ethical Choice (Recruiting the Unemployed)
• New Case Incident (The End of the Performance Appraisal?)
• Updated Case Incident (Job Candidates Without Strong SAT Scores Need
Not Apply)
Chapter 18 : Organizational Change and Stress Management
• Entirely new Opening Vignette (Sweet Changes at Cadbury?)
• New feature: glOBalization!
• New Myth or Science? (“Men Experience More Job Stress Than Women”)
• Updated review of research on individual readiness for organizational
change
• Discussion of maladaptive behavioral response to stress at work
• Updated discussion of coping strategies
• Implications of the stress-health relationship
• New Point–Counterpoint (Responsible Managers Relieve Stress on Their
Employees)
• New An Ethical Choice (Responsibly Managing Your Own Stress)
• New Case Incident (Starbucks Returns to Its Roots)
• Updated Case Incident (The Rise of Extreme Jobs)

xxviii P R E FAC E
Teaching and Learning Support
MyManagementLab ( www.mymanagementlab.com ) is an easy-to-use online
tool that personalizes course content and provides robust assessment and re-
porting to measure student and class performance. All the resources you need
for course success are in one place—flexible and easily adapted for your course
experience.
Instructor’s Resource Center
At www.pearsonhighered.com/irc , instructors can access a variety of print, digi-
tal, and presentation resources available with this text in downloadable format.
Registration is simple and gives you immediate access to new titles and new
editions. As a registered faculty member, you can download resource files and
receive immediate access and instructions for installing course management
content on your campus server.
If you need assistance, our dedicated technical support team is ready to
help with the media supplements that accompany this text. Visit 247pearsoned
.custhelp.com for answers to frequently asked questions and toll-free user
support phone numbers.
The following supplements are available to adopting instructors (for
detailed descriptions, please visit www.pearsonhighered.com/irc ):
• Instructor’s Manual—updated and revised to provide ideas and resources in
the classroom.
• Test Item File—Revised and updated to include questions that require stu-
dents to apply the knowledge that they’ve read about in the text through
Learning Objectives and Learning Outcomes. Questions are also tagged to
reflect the AACSB Learning Standards.
• TestGen Test Generating Software—Test management software that con-
tains all material from the Test Item File. This software is completely user-
friendly and allows instructors to view, edit, and add test questions with just
a few mouse clicks. All of our TestGens are converted for use in Blackboard
and WebCT and are available for download from www.pearsonhighered
.com/irc.
• PowerPoint Presentation—A ready-to-use PowerPoint slideshow designed
for classroom presentation. Use it as is, or edit content to fit your individual
classroom needs.
• Image Library—includes all the charts, tables, and graphs that are found in
the text.
Videos on DVD
Adopters can access the 48 videos on the 2013 Organizational Behavior Video
Library DVD. These videos have been produced to depict real-world OB issues
and give students a taste of the multi-faceted nature of OB in real companies.
Learning Management Systems
BlackBoard and WebCT Course Cartridges are available for download from
www.pearsonhighered.com/irc. These standard course cartridges contain the
Instructor’s Manual, TestGen, Instructor PowerPoints, and when available, Stu-
dent PowerPoints and Student Data Files.

www.mymanagementlab.com

www.pearsonhighered.com/irc

www.pearsonhighered.com/irc

www.pearsonhighered.com/irc

www.pearsonhighered.com/irc

www.pearsonhighered.com/irc

P R E F A C E xxix
CourseSmart eTextbooks Online
Developed for students looking to save money on required or recommended text-
books, CourseSmart eTextbooks online save students money compared with the
suggested list price of the print text. Students simply select their eText by title
or author and purchase immediate access to the content for the duration of the
course using any major credit card. With CourseSmart eText, students can search
for specific keywords or page numbers, make notes online, print reading assign-
ments that incorporate lecture notes, and bookmark important passages for later
review. For more information, or to purchase a CourseSmart eTextbook, visit
www.coursesmart.com .
Pearson’s Self-Assessment
Library (S.A.L.)
A hallmark of the Robbins series, S.A.L. is a unique learning tool that allows you
to assess your knowledge, beliefs, feelings, and actions in regard to a wide range of
personal skills, abilities, and interests. Self-assessments have been integrated into
each chapter, including a self-assessment at the beginning of each chapter. S.A.L.
helps students better understand their interpersonal and behavioral skills as they
relate to the theoretical concepts presented in each chapter.
Highlights
• 69 research-based self-assessments —All 69 instruments of our collection are
from sources such as Journal of Social Behavior and Personality, Harvard Business
Review, Organizational Behavior: Experiences and Cases, Journal of Experimental
Education, Journal of Applied Measurement, and more.
• Work–life and career focused —All self-assessments are focused to help indi-
viduals better manage their work lives or careers. Organized in four parts,
these instruments offer you one source from which to learn more about
yourself.
• Choice of formats —The Prentice Hall Self-Assessment Library is available in
CD-ROM, online, or print format.
• Save feature —Students can take the self-assessments an unlimited number
of times, and they can save and print their scores for class discussion.
• Scoring key —The key to the self-assessments has been edited by Steve
Robbins to allow students to quickly make sense of the results of their score.
• Instructor’s manual —An Instructor’s Manual guides instructors in interpret-
ing self-assessments and helps facilitate better classroom discussion.

www.coursesmart.com

Acknowledgments
Getting this book into your hands was a team effort. It took faculty reviewers
and a talented group of designers and production specialists, editorial per-
sonnel, and marketing and sales staff.
More than one hundred instructors reviewed parts or all of Organizational
Behavior, Fifteenth Edition. Their comments, compliments, and suggestions
have significantly improved the final product. The authors wish to thank John D.
Kammeyer-Mueller of the University of Florida for help with several key aspects
of this revision. The authors would also like to extend their sincerest thanks to
the following instructors:
xxx
Lee Boam , University of Utah
Andres Johnson , Santa Clara University
Edward Lisoski , Northeastern University
Douglas Mahony , Lehigh University
Douglas McCabe , Georgetown University
Bradley Norris , Baylor University
Jonelle Roth , Michigan State University
Philip Roth , Clemson University
Dale Rude , University of Houston
Holly Schroth , University of California at
Berkeley
Jody Tolan , University of Southern California
Debra Schneck , Indiana University
Marilyn Wesner , George Washington
University
Over the last editions this text has grown stronger with the contribution and
feedback of the following instructors:
David Abramis , California State University
Chris Adalikwu , Concordia College
Basil Adams , Notre Dame de Namur
University
Janet Adams , Kennesaw State University
Cheryl Adkins , Longwood College
Vicky Aitken , St. Louis Community College
David Albritton , Northern Arizona University
Bradley Alge , Purdue University
Lois Antonen , CSUS
Lucy Arendt , University of Wisconsin, Green Bay
Anke Arnaud , University of Central Florida
Mihran Aroian , University of Texas, Austin
Gary Ballinger , Purdue University
Deborah Balser , University of Missouri at
St. Louis
Christopher Barlow , DePaul University
Joy Benson , University of Wisconsin at
Green Bay
Lehman Benson III , University of Arizona
Jacqui Bergman , Appalachian State
University
Anne Berthelot , University of Texas at
El Paso
David Bess , Shidler College of Business at the
University of Hawaii
Bruce Bikle , California State University,
Sacramento
Richard Blackburn , University of North
Carolina–Chapel Hill
Weldon Blake , Bethune-Cookman College
Carl Blencke , University of Central Florida
Michael Bochenek , Elmhurst College
Alicia Boisnier , State University of New York
William H. Bommer , Cleveland State
University
Bryan Bonner , University of Utah
Jessica Bradley , Clemson University
Dr. Jerry Bream , Empire State College/
Niagara Frontier Center
Jim Breaugh , University of Missouri
Peggy Brewer , Eastern Kentucky University
Deborah Brown , North Carolina State
University
Reginald Bruce , University of Louisville
Jeff Bruns , Bacone College
Pamela Buckle , Adelphi University
Patricia Buhler , Goldey-Beacom College
Allen Bures , Radford University
Edith Busija , University of Richmond
Holly Buttner , University of North Carolina
at Greensboro
Michael Cafferky , Southern Adventist
University
Scott Campbell , Francis Marion University
Elena Capella , University of San Francisco

AC K N O W L E D G M E N T S xxxi
Don Capener , Monmouth University
Dan Caprar , University of Iowa
David Carmichael , Oklahoma City University
Carol Carnevale , SUNY Empire State College
Donald W. Caudill , Bluefield College
Suzanne Chan , Tulane University
Anthony Chelte , Midwestern State University
Bongsoon Cho , State University of
New York—Buffalo
Savannah Clay , Central Piedmont Community
College
David Connelly , Western Illinois State
University
Jeffrey Conte , San Diego State University
Jane Crabtree , Benedictine University
Suzanne Crampton , Grand Valley State
University
Douglas Crawford , Wilson College
Michael Cruz , San Jose State University
Robert Cyr , Northwestern University
Evelyn Dadzie , Clark Atlanta University
Joseph Daly , Appalachian State University
Denise Daniels , Seattle Pacific University
Marie Dasborough , Oklahoma State
University
Nancy Da Silva , San Jose State University
Christine Day , Eastern Michigan University
Emmeline de Pillis , University of Hawaii, Hilo
Kathy Lund Dean , Idaho State University
Roger Dean , Washington & Lee University
Robert DelCampo , University of New Mexico
Kristen Detienne , Brigham Young University
Doug Dierking , University of Texas at Austin
Cynthia Doil , Southern Illinois University
Jennifer Dose , Messiah College
Ceasar Douglas , Florida State University
David Duby , Liberty University
Ken Dunegan , Cleveland State University
Michael Dutch , Greensboro College
Kathleen Edwards , University of Texas at
Austin
Berrin Erdogan , Portland State University
Ellen Fagenson Eland , George Mason
University
Lenny Favara , Central Christian College
Claudia Ferrante , U.S. Air Force Academy
Andy Fitorre , Nyack College
Kathleen Fleming , Averett University
Erin Fluegge , University of Florida
Edward Fox , Wilkes University
Alison Fragale , University of North Carolina
at Chapel Hill
Lucy Franks , Bellevue University
Dean Frear , Wilkes University
Jann Freed , Central College
Crissie Frye , Eastern Michigan University
Diane Galbraith , Slippery Rock University
Carolyn Gardner , Radford University
Janice Gates , Western Illinois University
Ellen Kaye Gehrke , Alliant International
University
James Gelatt , University of Maryland
University College
Joe Gerard , University of Wisconsin at
Milwaukee
Matthew Giblin , Southern Illinois University
Donald Gibson , Fairfield University
Cindi Gilliland , The University of Arizona
Mary Giovannini , Truman State University
David Glew , University of North Carolina at
Wilmington
Leonard Glick , Northeastern University
Reginald Goodfellow , California State
University
Jeffrey Goldstein , Adelphi University
Jodi Goodman , University of Connecticut
Claude Graeff , Illinois State University
Richard Grover , University of Southern Maine
W. Lee Grubb III , East Carolina University
John Guarino , Averett University
Rebecca Guidice , University of Nevada
at Las Vegas
Andra Gumbus , Sacred Heart University
Linda Hackleman , Concordia University
Austin
Deniz Hackner , Tidewater Community
College
Michael Hadani , Long Island University
Jonathon Halbesleben , University of
Missouri-Columbia
Dan Hallock , University of North Alabama
Tracey Rockett Hanft , University of Texas
at Dallas
Edward Hampton , University of Central
Florida
Vernard Harrington , Radford University
Nell Hartley , Robert Morris University
Barbara Hassell , Indiana University, Kelley
School of Business
Erin Hayes , George Washington University
Tom Head , Roosevelt University
Douglas Heeter , Ferris State University
David Henderson , University of Illinois
at Chicago
Scott Henley , Oklahoma City University
Ted Herbert , Rollins College
Susan Herman , University of Alaska Fairbanks
James Hess , Ivy Tech Community College
Ronald Hester , Marymount University

Patricia Hewlin , Georgetown University
Chad Higgins , University of Washington
Kim Hinrichs , Minnesota State University
Mankato
Kathie Holland , University of Central Florida
Elaine Hollensbe , University of Cincinnati
Kristin Holmberg-Wright , University of
Wisconsin at Parkside
Brooks Holtom , Georgetown University
Lisa Houts , California State University
Fullerton
Abigail Hubbard , University of Houston
Paul Hudec , Milwaukee School of Engineering
Stephen Humphrey , Florida State University
Charlice Hurst , University of Florida
Warren Imada , Leeward Community College
Gazi Islam , Tulane University
Alan Jackson , Peru State College
Christine Jackson , Purdue University
Marsha Jackson , Bowie State University
Kathryn Jacobson , Arizona State University
Paul Jacques , Western Carolina University
David Jalajas , Long Island University
Elizabeth Jamison , Radford University
Stephen Jenner , California State University,
Dominguez Hills
John Jermier , University of South Florida
Jack Johnson , Consumnes River College
Michael Johnson , University of Washington
David Jones , South University
Ray Jones , University of Pittsburgh
Anthony Jost , University of Delaware
Louis Jourdan , Clayton College
Rusty Juban , Southeastern Illinois University
Carole L. Jurkiewicz , Louisiana State
University
John Kammeyer-Mueller , University
of Florida
Edward Kass , Saint Joseph’s University
Marsha Katz , Governors State College
James Katzenstein , California State University
John Keiser , SUNY College at Brockport
Mark Kendrick , Methodist University
Mary Kern , Baruch College
Robert Key , University of Phoenix
Sigrid Khorram , University of Texas at
El Paso
Hal Kingsley , Erie Community College
Jeffrey Kobles , California State University
San Marcos
Jack Kondrasuk , University of Portland
Leslie A. Korb , University of Nebraska at
Kearney
Glen Kreiner , University of Cincinnati
James Kroeger , Cleveland State University
Frederick Lane , Baruch College
Rebecca Lau , Virginia Polytechnic Institute
and State University
David Leuser , Plymouth State College
Julia Levashina , Indiana State University
Kokomo
Benyamin Lichtenstein , University of
Massachusetts at Boston
Robert Liden , University of Illinois at Chicago
Don Lifton , Ithaca College
Ginamarie Ligon , Villanova University
Beth Livingston , University of Florida
Barbara Low , Dominican University
Doyle Lucas , Anderson University
Alexandra Luong , University of Minnesota
Rick Maclin , Missouri Baptist University
Peter Madsen , Brigham Young University
Lou Marino , University of Alabama
Catherine Marsh , Northpark University
J. David Martin , Midwestern State University
Timothy A. Matherly , Florida State University
John Mattoon , State University of New York
Paul Maxwell , Saint Thomas University
Brenda McAleer , University of Maine at
Augusta
Christina McCale , Regis College
Don McCormick , California State University
Northridge
James McElroy , Iowa State University
Bonnie McNeely , Murray State University
Melony Mead , University of Phoenix
Steven Meisel , La Salle University
Nancy Meyer-Emerick , Cleveland State
University
Catherine Michael , St. Edwards University
Sandy Miles , Murray State University
Janice Miller , University of Wisconsin at
Milwaukee
Leann Mischel , Susquehanna University
Atul Mitra , University of Northern Iowa
Linda Morable , Richland College
Paula Morrow , Iowa State University
Mark Mortensen , Massachusetts Institute
of Technology
Lori Muse , Western Michigan University
Padmakumar Nair , University of Texas at
Dallas
Judy Nixon , University of Tennessee at
Chattanooga
Jeffrey Nystrom , University of Colorado at
Denver
Alison O’Brien , George Mason University
Heather Odle-Dusseau , Clemson University
Miguel Olivas-Lujan , Lujan Clarion University
xxxii A C K N O W L E D G M E N T S

AC K N O W L E D G M E N T S xxxiii
Kelly Ottman , University of Wisconsin at
Milwaukee
Cynthia Ozeki , California State University,
Dominguez Hills
Peg Padgett , Butler University
Jennifer Palthe , Western Michigan University
Dennis Passovoy , University of Texas at
Austin
Karen Paul , Florida International University
Laura Finnerty Paul , Skidmore College
Anette Pendergrass , Arkansas State
University at Mountain Home
Bryan Pesta , Cleveland State University
Jeff Peterson , University of Washington
Nanette Philibert , Missouri Southern
State University
Larry Phillips , Indiana University South Bend
William Pinchuk , Rutgers University at
Camden
Eric Popkoff , Brooklyn College
Paul Preston , University of Montevallo
Scott Quatro , Grand Canyon University
Aarti Ramaswami , Indiana University
Bloomington
Jere Ramsey , Cal Poly at San Luis Obispo
Amy Randel , San Diego State University
Anne Reilly , Loyola University Chicago
Clint Relyea , Arkansas State University
Herbert Ricardo , Indian River Community
College
David Ritchey , University of Texas at Dallas
Chris Roberts , University of Massachusetts
Amherst
Sherry Robinson , Pennsylvania State
University Hazleton
Christopher Ann Robinson-Easley ,
Governors State University
Joe Rode , Miami University
Bob Roller , LeTourneau University
Andrea Roofe , Florida International
University
Craig Russell , University of Oklahoma at
Norman
Manjula Salimath , University of North Texas
Mary Saunders , Georgia Gwinnett College
Andy Schaffer , North Georgia College and
State University
Elizabeth Scott , Elizabeth City University
Mark Seabright , Western Oregon University
Joseph Seltzer , LaSalle University
John Shaw , Mississippi State University
John Sherlock , Western Carolina University
Daniel Sherman , University of Alabama,
Huntsville
Heather Shields , Texas Tech University
Ted Shore , California State University at
Long Beach
Stuart Sidle , University of New Haven
Bret Simmons , University of Nevada Reno
Randy Sleeth , Virginia Commonwealth
University
William Smith , Emporia State University
Kenneth Solano , Northeastern University
Shane Spiller , Morehead State University
Lynda St. Clair , Bryant University
John B. Stark , California State University,
Bakersfield
Merwyn Strate , Purdue University
Joo-Seng Tan , Cornell University
Karen Thompson , Sonoma State University
Linda Tibbetts , Antioch University
McGregor
Ed Tomlinson , John Carroll University
Bob Trodella , Webster University
Tom Tudor , University of Arkansas at Little
Rock
William D. Tudor , Ohio State University
Daniel Turban , University of Missouri
Albert Turner , Webster University
Jim Turner , Morehead State University
Leslie Tworoger , Nova Southeastern
University
M. A. Viets , University of Vermont
Roger Volkema , American University
William Walker , University of Houston
Ian Walsh , Boston College
Charles F. Warren , Salem State College
Christa Washington , Saint Augustine’s
College
Jim Westerman , Appalachian State University
William J. White , Northwestern University
David Whitlock , Southwest Baptist University
Dan Wiljanen , Grand Valley State University
Dean Williamson , Brewton-Parker College
Hilda Williamson , Hampton University
Alice Wilson , Cedar Crest College
Barry Wisdom , Southeast Missouri State
University
Craig Wishart , Fayetteville State University
Laura Wolfe , Louisiana State University
Melody Wollan , Eastern Illinois University
Evan Wood , Taylor University Fort Wayne
Chun-Sheng Yu , University of Houston-
Victoria
Jun Zhao , Governors State University
Lori Ziegler , University of Texas at Dallas
Mary Ellen Zuckerman , State University
of New York at Geneseo
Gail Zwart , Riverside Community College

xxxiv A C K N O W L E D G M E N T S
We owe a debt of gratitude to all those at Pearson Education who have sup-
ported this text over the past 30 years and who have worked so hard on the de-
velopment of this latest edition. On the development and editorial side, we want
to thank Elisa Adams, Development Editor; Steve Deitmer, Director of Develop-
ment; Ashley Santora, Director of Editorial Services; Brian Mickelson, Acquisi-
tions Editor; and Sally Yagan, Editorial Director. On the design and production
side, Judy Leale, Senior Managing Editor, did an outstanding job, as did Becca
Groves, Production Project Manager, and Nancy Moudry, Photo Development
Editor. Last but not least, we would like to thank Nikki Ayana Jones, Senior
Marketing Manager; Patrice Lumumba Jones, Vice President Director of Market-
ing; and their sales staff, who have been selling this book over its many editions.
Thank you for the attention you’ve given to this book.

Organizational
Behavior

THE NEW NORMAL?
2
S
cott Nicholson sits alone in his parents’ house in suburban Boston. His
parents have long since left for work. He lifts his laptop from a small
table on which his mother used to have a vase with flowers. This day will
be like tomorrow, and tomorrow will be like today.
On his laptop, Scott searches corporate Web sites for job openings.
Today, he finds one, and he mails off a résumé and cover letter. It’s a rou-
tine he repeats nearly every day, applying to four to five jobs a week, week
after week.
Despite graduating from Colgate University with a 4.0 GPA, Scott has
been job-hunting for 5 months. His myriad applications have produced only
one offer: A $40,000-a-year job as an associate claims adjuster at Hanover
Insurance Group in Worcester. He turned the offer down. “The conversation
I’m going to have with my parents now that I’ve turned down this job is more
of a concern to me than turning down the job,” Scott said.
Why is Scott more concerned with his parents’ reaction than he is with
finding a job? To some degree, this is a reflection of the job offer (too low
a salary, too small a company, too limited a job description). However, it
also suggests a generational shift in thinking. While the job market for new
entrants is perhaps the most sluggish in memory, new college graduates
remain committed to following their dreams and holding out high hopes for
their careers.
Scott’s father, David Nicholson, 57, has an established managerial career,
with a household income of $175,000/year. Early in his career, David said,
he was less concerned with starting off with the right job than his son is
now. “You maneuvered and you did not worry what the maneuvering would
lead to,” David said. “You know it would lead to something good.” Scott’s
grandfather, William Nicholson, a retired stock broker, has even more trou-
ble understanding Scott’s travails. “I view what is happening to Scott with
dismay,” the grandfather said. Despite feeling pressure from his parents to
find a job (“I am beginning to realize that refusal is going to have repercus-
sions”), Scott remains undaunted: “I am absolutely certain that my job hunt
will eventually pay off.”
Scott is not alone. In the past 5 years, millions of U.S. workers have lost
their jobs, and millions of new entrants—many of them, like Scott, under 30—
have had trouble finding suitable work.
Sources: L. Uchitelle, “A New Generation, an Elusive American Dream” New York Times (July 7, 2010),
pp. A1, A11; B. Levin, “Sending Out an S.O.S.: Who Will Give This a Handout/Job?” Dealbreaker
(July 7, 2010), http://dealbreaker.com/tag/scott-nicholson/ .
LEARNING
OBJECTIVES
After studying this chapter,
you should be able to:
1 Demonstrate the
importance of interpersonal
skills in the workplace.
2 Describe the manager’s
functions, roles, and skills.
3 Define organizational
behavior ( OB ).
4 Show the value to OB of
systematic study.
5 Identify the major
behavioral science
disciplines that contribute
to OB.
6 Demonstrate why few
absolutes apply to OB.
7 Identify the challenges and
opportunities managers
have in applying OB
concepts.
8 Compare the three levels
of analysis in this book’s
OB model.
MyManagementLab
Access a host of interactive
learning aids to help strengthen
your understanding of the
chapter concepts at
www.mymanagementlab.com

www.mymanagementlab.com

http://dealbreaker.com/tag/scott-nicholson/

What Is
Organizational
Behavior? 1
The stellar universe is not so difficult
of comprehension as the real actions
of other people. —Marcel Proust
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4 CHAPTER 1 What Is Organizational Behavior?
T he details of this story might be disheartening to read, but they accurately reflect some of the problems faced by the contemporary workforce. The story also highlights several issues of interest to organizational behavior
researchers, including motivation, emotions, personality, and communication.
Through the course of this book, you’ll learn how all these elements can be
studied systematically.
You’ve probably made many observations about people’s behavior in your
life. In a way, you are already proficient at seeing some of the major themes in
organizational behavior. At the same time, you probably have not had the tools
to make these observations systematically. This is where organizational behavior
comes into play. And, as we’ll learn, it is much more than common sense, intu-
ition, and soothsaying.
To see how far common sense gets you, try the following from the Self-
Assessment Library.
S A L
SELF-ASSESSMENT LIBRARY
How Much Do I Know About Organizational Behavior?
In the Self-Assessment Library (available on CD and online), take assessment IV.G.1
(How Much Do I Know About OB?) and answer the following questions:
1. How did you score? Are you surprised by your score?
2. How much of effective management do you think is common sense? Did
your score on the test change your answer to this question?
1 Demonstrate the impor-
tance of interpersonal skills
in the workplace.
Until the late 1980s, business school curricula emphasized the technical aspects
of management, focusing on economics, accounting, finance, and quantitative
techniques. Course work in human behavior and people skills received rela-
tively less attention. Over the past three decades, however, business faculty have
come to realize the role that understanding human behavior plays in determin-
ing a manager’s effectiveness, and required courses on people skills have been
added to many curricula. As the director of leadership at MIT’s Sloan School of
Management put it, “M.B.A. students may get by on their technical and quan-
titative skills the first couple of years out of school. But soon, leadership and
communication skills come to the fore in distinguishing the managers whose
careers really take off.” 1
Developing managers’ interpersonal skills also helps organizations attract
and keep high-performing employees. Regardless of labor market conditions,
outstanding employees are always in short supply. 2 Companies known as good
places to work—such as Starbucks, Adobe Systems, Cisco, Whole Foods, Google,
American Express, Amgen, Pfizer, and Marriott—have a big advantage. A recent
survey of hundreds of workplaces, and more than 200,000 respondents, showed
the social relationships among co-workers and supervisors were strongly related
to overall job satisfaction. Positive social relationships also were associated with
lower stress at work and lower intentions to quit. 3 So having managers with good
interpersonal skills is likely to make the workplace more pleasant, which in turn
makes it easier to hire and keep qualified people. Creating a pleasant work-
place also appears to make good economic sense. Companies with reputations
The Importance of Interpersonal Skills

What Managers Do 5
as good places to work (such as Forbes’ “100 Best Companies to Work For in
America”) have been found to generate superior financial performance. 4
We have come to understand that in today’s competitive and demanding
workplace, managers can’t succeed on their technical skills alone. They also
have to have good people skills. This book has been written to help both man-
agers and potential managers develop those people skills.
Succeeding in management today
requires good interpersonal skills.
Communication and leadership
skills distinguish managers such as
John Chambers, who rise to the
top of their profession. Chambers
is CEO of Cisco Systems, the world’s
largest maker of networking equip-
ment. He is respected as a visionary
leader and innovator who has the
ability to drive an entrepreneurial
culture. As an effective communica-
tor, Chambers is described as warm-
hearted and straight talking. In this
photo Chambers speaks during a
launch ceremony of a green tech-
nology partnership Cisco formed
with a university in China.
Let’s begin by briefly defining the terms manager and organization —the place
where managers work. Then let’s look at the manager’s job; specifically, what
do managers do?
Managers get things done through other people. They make decisions,
allocate resources, and direct the activities of others to attain goals. Managers
do their work in an organization , which is a consciously coordinated social
unit, composed of two or more people, that functions on a relatively contin-
uous basis to achieve a common goal or set of goals. By this definition, man-
ufacturing and service firms are organizations, and so are schools, hospitals,
churches, military units, retail stores, police departments, and local, state,
and federal government agencies. The people who oversee the activities of
What Managers Do
2 Describe the manager’s
functions, roles, and skills.
manager An individual who achieves
goals through other people.
organization A consciously
coordinated social unit, composed of
two or more people, that functions on
a relatively continuous basis to achieve
a common goal or set of goals.
MyManagementLab
For an interactive application of this
topic, check out this chapter’s
simulation activity at
www.mymanagementlab.com .
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o
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s,
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c.

www.mymanagementlab.com

6 CHAPTER 1 What Is Organizational Behavior?
others and who are responsible for attaining goals in these organizations
are managers (sometimes called administrators, especially in not-for-profit
organizations).
Management Functions
In the early part of the twentieth century, French industrialist Henri Fayol wrote
that all managers perform five management functions: planning, organizing,
commanding, coordinating, and controlling. 5 Today, we have condensed these
to four: planning, organizing, leading, and controlling.
Because organizations exist to achieve goals, someone has to define those
goals and the means for achieving them; management is that someone. The
planning function encompasses defining an organization’s goals, establishing
an overall strategy for achieving those goals, and developing a comprehen-
sive set of plans to integrate and coordinate activities. Evidence indicates this
function increases the most as managers move from lower-level to mid-level
management. 6
Managers are also responsible for designing an organization’s structure. We
call this function organizing . It includes determining what tasks are to be done,
who is to do them, how the tasks are to be grouped, who reports to whom, and
where decisions are to be made.
Every organization contains people, and it is management’s job to direct and
coordinate those people. This is the leading function. When managers motivate
employees, direct their activities, select the most effective communication chan-
nels, or resolve conflicts among members, they’re engaging in leading.
To ensure things are going as they should, management must monitor the
organization’s performance and compare it with previously set goals. If there are
any significant deviations, it is management’s job to get the organization back on
track. This monitoring, comparing, and potential correcting is the controlling
function.
So, using the functional approach, the answer to the question “What do
managers do?” is that they plan, organize, lead, and control.
Management Roles
In the late 1960s, Henry Mintzberg, then a graduate student at MIT, under-
took a careful study of five executives to determine what they did on their
jobs. On the basis of his observations, Mintzberg concluded that managers per-
form ten different, highly interrelated roles—or sets of behaviors. 7 As shown in
Exhibit 1-1 , these ten roles are primarily (1) interpersonal, (2) informational,
or (3) decisional.
Interpersonal Roles All managers are required to perform duties that are
ceremonial and symbolic in nature. For instance, when the president of a
college hands out diplomas at commencement or a factory supervisor gives a
group of high school students a tour of the plant, he or she is acting in a fig-
urehead role. All managers also have a leadership role. This role includes hiring,
training, motivating, and disciplining employees. The third role within the
interpersonal grouping is the liaison role, or contacting others who provide
the manager with information. The sales manager who obtains information
from the quality-control manager in his or her own company has an internal
liaison relationship. When that sales manager has contacts with other sales
executives through a marketing trade association, he or she has an outside
liaison relationship.

What Managers Do 7
Informational Roles All managers, to some degree, collect information from
outside organizations and institutions, typically by scanning the news media
(including the Internet) and talking with other people to learn of changes in
the public’s tastes, what competitors may be planning, and the like. Mintzberg
called this the monitor role. Managers also act as a conduit to transmit infor-
mation to organizational members. This is the disseminator role. In addition,
managers perform a spokesperson role when they represent the organization to
outsiders.
Decisional Roles Mintzberg identified four roles that require making choices.
In the entrepreneur role, managers initiate and oversee new projects that will im-
prove their organization’s performance. As disturbance handlers, managers take
corrective action in response to unforeseen problems. As resource allocators,
planning A process that includes
defining goals, establishing strategy,
and developing plans to coordinate
activities.
organizing Determining what tasks
are to be done, who is to do them,
how the tasks are to be grouped, who
reports to whom, and where decisions
are to be made.
leading A function that includes
motivating employees, directing
others, selecting the most effective
communication channels, and
resolving conflicts.
controlling Monitoring activities to
ensure they are being accomplished as
planned and correcting any significant
deviations.
Role Description
Interpersonal
Figurehead Symbolic head; required to perform a number of routine duties
of a legal or social nature
Leader Responsible for the motivation and direction of employees
Liaison Maintains a network of outside contacts who provide favors
and information
Informational
Monitor Receives a wide variety of information; serves as nerve center
of internal and external information of the organization
Disseminator Transmits information received from outsiders or from other
employees to members of the organization
Spokesperson Transmits information to outsiders on organization’s plans,
policies, actions, and results; serves as expert on organization’s
industry
Decisional
Entrepreneur Searches organization and its environment for opportunities
and initiates projects to bring about change
Disturbance handler Responsible for corrective action when organization faces
important, unexpected disturbances
Resource allocator Makes or approves significant organizational decisions
Negotiator Responsible for representing the organization at major
negotiations
Minztberg’s Managerial Roles
Source: Adapted from The Nature of Managerial Work by H. Mintzberg. Copyright © 1973 by H. Mintzberg. MINTZBERG, HENRY,
THE NATURE OF MANAGERIAL WORK, 1st Edition, © 1980, pp. 92–93. Reprinted with permission of Pearson Education, Inc.,
Upper Saddle River, NJ.
Exhibit 1-1

8 CHAPTER 1 What Is Organizational Behavior?
managers are responsible for allocating human, physical, and monetary re-
sources. Finally, managers perform a negotiator role, in which they discuss issues
and bargain with other units to gain advantages for their own unit.
Management Skills
Still another way of considering what managers do is to look at the skills or
competencies they need to achieve their goals. Researchers have identified a
number of skills that differentiate effective from ineffective managers. 8
Technical Skills Technical skills encompass the ability to apply specialized
knowledge or expertise. When you think of the skills of professionals such as civil
engineers or oral surgeons, you typically focus on the technical skills they have
learned through extensive formal education. Of course, professionals don’t have
a monopoly on technical skills, and not all technical skills have to be learned
in schools or other formal training programs. All jobs require some specialized
expertise, and many people develop their technical skills on the job.
Human Skills The ability to understand, communicate with, motivate,
and support other people, both individually and in groups, defines hu-
man skills . Many people are technically proficient but poor listeners, un-
able to understand the needs of others, or weak at managing conflicts.
Because managers get things done through other people, they must have
good human skills.
Conceptual Skills Managers must have the mental ability to analyze and diag-
nose complex situations. These tasks require conceptual skills . Decision mak-
ing, for instance, requires managers to identify problems, develop alternative
solutions to correct those problems, evaluate those alternative solutions, and
select the best one. After they have selected a course of action, managers must
be able to organize a plan of action and then execute it. The ability to integrate
new ideas with existing processes and innovate on the job are also crucial con-
ceptual skills for today’s managers.
Effective versus Successful Managerial Activities
Fred Luthans and his associates looked at what managers do from a somewhat
different perspective. 9 They asked, “Do managers who move up the quickest in an
organization do the same activities and with the same emphasis as managers who
do the best job?” You might think the answer is yes, but that’s not always the case.
Luthans and his associates studied more than 450 managers. All engaged in
four managerial activities:
1. Traditional management. Decision making, planning, and controlling.
2. Communication. Exchanging routine information and processing
paperwork.
3. Human resource management. Motivating, disciplining, managing con-
flict, staffing, and training.
4. Networking. Socializing, politicking, and interacting with outsiders.
The “average” manager spent 32 percent of his or her time in traditional
management activities, 29 percent communicating, 20 percent in human
resource management activities, and 19 percent networking. However, the time
and effort different individual managers spent on those activities varied a great
deal. As shown in Exhibit 1-2 , among managers who were successful (defined
in terms of speed of promotion within their organization), networking made

What Managers Do 9
the largest relative contribution to success, and human resource manage-
ment activities made the least relative contribution. Among effective manag-
ers (defined in terms of quantity and quality of their performance and the
satisfaction and commitment of employees), communication made the largest
relative contribution and networking the least. More recent studies in Australia,
Israel, Italy, Japan, and the United States confirm the link between network-
ing and social relationships and success within an organization. 10 And the con-
nection between communication and effective managers is also clear. A study
of 410 U.S. managers indicates those who seek information from colleagues
and employees—even if it’s negative—and who explain their decisions are the
most effective. 11
This research offers important insights. Successful managers give almost
the opposite emphases to traditional management, communication, human
resource management, and networking as do effective managers. This find-
ing challenges the historical assumption that promotions are based on perfor-
mance, and it illustrates the importance of networking and political skills in
getting ahead in organizations.
A Review of the Manager’s Job
One common thread runs through the functions, roles, skills, activities, and
approaches to management: Each recognizes the paramount importance of
managing people, whether it is called “the leading function,” “interpersonal
roles,” “human skills,” or “human resource management, communication, and
networking activities.” It’s clear managers must develop their people skills to be
effective and successful.
technical skills The ability to apply
specialized knowledge or expertise.
human skills The ability to work
with, understand, and motivate other
people, both individually and in
groups.
conceptual skills The mental ability
to analyze and diagnose complex
situations.
Average
managers
Effective
managers
Successful
managers
19% 19%
48%
11%
11%
28%
13%
26%
44%
20%
29%
32%
Traditional management Communication
Human resource management Networking
Allocation of Activities by Time
Source: Based on F. Luthans, R. M. Hodgetts, and S. A. Rosenkrantz, Real Managers (Cambridge, MA: Ballinger, 1988).
Exhibit 1-2

10 CHAPTER 1 What Is Organizational Behavior?
We’ve made the case for the importance of people skills. But neither this book
nor the discipline on which it is based is called “people skills.” The term that is
widely used to describe the discipline is organizational behavior.
Organizational behavior (often abbreviated OB) is a field of study that
investigates the impact that individuals, groups, and structure have on behav-
ior within organizations, for the purpose of applying such knowledge toward
improving an organization’s effectiveness. That’s a mouthful, so let’s break
it down.
Organizational behavior is a field of study, meaning that it is a distinct area
of expertise with a common body of knowledge. What does it study? It studies
three determinants of behavior in organizations: individuals, groups, and struc-
ture. In addition, OB applies the knowledge gained about individuals, groups,
and the effect of structure on behavior in order to make organizations work
more effectively.
To sum up our definition, OB is the study of what people do in an orga-
nization and how their behavior affects the organization’s performance. And
because OB is concerned specifically with employment-related situations, you
should not be surprised that it emphasizes behavior as related to concerns
such as jobs, work, absenteeism, employment turnover, productivity, human
performance, and management.
Although debate exists about the relative importance of each, OB in-
cludes the core topics of motivation, leader behavior and power, interper-
sonal communication, group structure and processes, learning, attitude
development and perception, change processes, conflict, work design, and
work stress. 12
Enter Organizational Behavior
3 Define organizational
behavior (OB).
Online shoe retailer Zappos.com
understands how organizational
behavior affects an organization’s
performance. Zappos maintains
good employee relationships by
providing generous benefits, exten-
sive customer service training, and
a positive, fun-loving work environ-
ment. Employees are empowered
to make decisions that increase cus-
tomer satisfaction and are encour-
aged to create fun and a little
weirdness.” At Zappos, employee
loyalty, job satisfaction, and produc-
tivity are high, contributing to the
company’s growth. In this photo,
employees view a line of shoes in
one of the company’s quirky offices.
So
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Complementing Intuition with Systematic Study 11
organizational behavior (OB) A field
of study that investigates the impact
that individuals, groups, and structure
have on behavior within organizations,
for the purpose of applying such
knowledge toward improving an
organization’s effectiveness.
systematic study Looking at
relationships, attempting to attribute
causes and effects, and drawing
conclusions based on scientific
evidence.
evidence-based management
(EBM) The basing of managerial
decisions on the best available
scientific evidence.
intuition A gut feeling not necessarily
supported by research.
Each of us is a student of behavior. Whether you’ve explicitly thought about it
before, you’ve been “reading” people almost all your life, watching their actions
and trying to interpret what you see or predict what people might do under
different conditions. Unfortunately, the casual or common sense approach to
reading others can often lead to erroneous predictions. However, you can im-
prove your predictive ability by supplementing intuition with a more systematic
approach.
The systematic approach in this book will uncover important facts and
relationships and provide a base from which to make more accurate predictions
of behavior. Underlying this systematic approach is the belief that behavior is
not random. Rather, we can identify fundamental consistencies underlying the
behavior of all individuals and modify them to reflect individual differences.
These fundamental consistencies are very important. Why? Because they
allow predictability. Behavior is generally predictable, and the systematic study
of behavior is a means to making reasonably accurate predictions. When we
use the term systematic study , we mean looking at relationships, attempt-
ing to attribute causes and effects, and basing our conclusions on scientific
evidence—that is, on data gathered under controlled conditions and mea-
sured and interpreted in a reasonably rigorous manner. (See Appendix A for
a basic review of research methods used in studies of organizational behavior.)
Evidence-based management (EBM) complements systematic study by bas-
ing managerial decisions on the best available scientific evidence. For example,
we want doctors to make decisions about patient care based on the latest avail-
able evidence, and EBM argues that managers should do the same, becoming
more scientific in how they think about management problems. A manager
might pose a managerial question, search for the best available evidence, and
apply the relevant information to the question or case at hand. You might think
it difficult to argue against this (what manager would say decisions shouldn’t
be based on evidence?), but the vast majority of management decisions are still
made “on the fly,” with little or systematic study of available evidence. 13
Systematic study and EBM add to intuition , or those “gut feelings” about
what makes others (and ourselves) “tick.” Of course, the things you have come
to believe in an unsystematic way are not necessarily incorrect. Jack Welch (for-
mer CEO of GE) noted, “The trick, of course, is to know when to go with your
gut.” But if we make all decisions with intuition or gut instinct, we’re likely
working with incomplete information—like making an investment decision
with only half the data.
Relying on intuition is made worse because we tend to overestimate the
accuracy of what we think we know. In a recent survey, 86 percent of managers
thought their organization was treating their employees well, but only 55 percent
of the employees thought so. Surveys of human resource managers have also
Complementing Intuition with Systematic Study
4 Show the value to OB
of systematic study.

12 CHAPTER 1 What Is Organizational Behavior?
T
his statement is true in the broad
sense that most research in-
dicates men are more likely to
engage in workplace bullying, and
women are more likely to be targets of
bullying behavior.
However, the full picture of gender
and workplace bullying is more compli-
cated than that.
First, the gender differences are nar-
rowing. A recent study of workplace
bullying by the Workplace Bullying
Institute (WBI) suggested that 60 per-
cent of workplace bullies are men and
40 percent are women. That is still a sig-
nificant gender difference. But it is not
as large as was once the case. Some of
the narrowing in the gender of bullies
is due to the ascension of women up
their organizations’ ladders. Evidence
indicates that the vast majority of inci-
dents of workplace bullying are “top-
down”: the supervisor is intimidating
the subordinate. As more women are
becoming supervisors, this is changing,
to some degree, the gender balance of
workplace bullies.
A second complication is that when
women bully others at work, other
women are overwhelmingly their tar-
gets. The same WBI study of work-
place bullying revealed that 58 percent
of victims of bullying are women.
However, almost all of this gender dif-
ference in victims is due to who women
bullies target; in 80 percent of the cases,
it was other women. Male bullies are ac-
tually more likely to target their own sex,
though to a less dramatic degree than
female bullies do.
Finally, it does appear that women
are more adversely affected by bullying.
A recent study of 183 victims of bully-
ing found that the prevalence of trauma
was higher for women (49 percent)
than men (35 percent). The complexity
of these relationships shows us that
gaining a true understanding of orga-
nizational behavior phenomena often
means understanding that the causes
and consequences of work behavior are
complex.
Back to bullying, experts suggest
some ways to cope with workplace
bullies regardless of your sex.
1. Talk to your bully. “Perhaps your
boss is one of those people who
aren’t aware of how they come
across,” says Stanford’s Robert
Sutton, author of several books on
bullying in the workplace.
2. Get help. Keep a diary of the behav-
ior. Be specific and focus more on
actions than feelings. At some point,
it might be necessary to involve
others, such as human resources.
3. Ignore it. This is often easier said
than done, but sometimes the only
thing you can do is to try to ignore
the bully. “Try not to let it touch
your soul,” says Sutton.
4. Polish your résumé. Bullies some-
times go away, and sometimes
they listen. But if they aren’t going
to change and aren’t going away,
you may want to plan your exit
strategy. Take your time and don’t
panic. But not every workplace is
filled with bullies, and you’ll likely
be happier if you’re in one of those.
Source: L. Petrecca, “Bullying in Workplace
Is Common, Hard to Fix,” USA Today (De-
c ember 28, 2010), pp. 1B–2B; R. I. Sutton,
Good Boss, Bad Boss: How to Be the
Best … and Learn from the Worst (New
York: Business Plus, 2010); A. Rodríguez-
Muñoz, B. Moreno-Jiménez, A. Vergel, and
E. G. Hernández, “Post-Traumatic Symptoms
Among Victims of Workplace Bullying:
Exploring Gender Differences and Shattered
Assumptions,” Journal of Applied Social
Psychology 40, no. 10 (2010), pp. 2616–2635.
Myth or Science?
“Most Acts of Workplace Bullying
Are Men Attacking Women”
shown many managers hold “common sense” opinions regarding effective man-
agement that have been flatly refuted by empirical evidence.
We find a similar problem in chasing the business and popular media for
management wisdom. The business press tends to be dominated by fads. As a
writer for The New Yorker put it, “Every few years, new companies succeed, and
they are scrutinized for the underlying truths they might reveal. But often there
is no underlying truth; the companies just happened to be in the right place at
the right time.” 14 Although we try to avoid it, we might also fall into this trap.
It’s not that the business press stories are all wrong; it’s that without a systematic
approach, it’s hard to separate the wheat from the chaff.
We’re not advising that you throw your intuition, or all the business
press, out the window. Nor are we arguing that research is always right.

Disciplines That Contribute to the OB Field 13
Organizational behavior is an applied behavioral science built on contributions
from a number of behavioral disciplines, mainly psychology and social psychol-
ogy, sociology, and anthropology. Psychology’s contributions have been mainly
at the individual or micro level of analysis, while the other disciplines have con-
tributed to our understanding of macro concepts such as group processes and
organization. Exhibit 1-3 is an overview of the major contributions to the study of
organizational behavior.
Disciplines That Contribute to the OB Field
5 Identify the major behav-
ioral science disciplines that
contribute to OB.
Sociology
Social psychology
Anthropology
Psychology
Behavioral
science
OutputUnit of
analysis
Contribution
Learning
Motivation
Personality
Emotions
Perception
Training
Leadership effectiveness
Job satisfaction
Individual decision making
Performance appraisal
Attitude measurement
Employee selection
Work design
Work stress
Behavioral change
Attitude change
Communication
Group processes
Group decision making
Formal organization theory
Organizational technology
Organizational change
Organizational culture
Comparative values
Comparative attitudes
Cross-cultural analysis
Organizational culture
Organizational environment
Power
Communication
Power
Conflict
Intergroup behavior
Study of
organizational
behavior
Organization
system
Individual
Group
Toward an OB Discipline Exhibit 1-3
Researchers make mistakes, too. What we are advising is to use evidence
as much as possible to inform your intuition and experience. That is the
promise of OB.

14 CHAPTER 1 What Is Organizational Behavior?
Psychology
Psychology seeks to measure, explain, and sometimes change the behavior of
humans and other animals. Those who have contributed and continue to add
to the knowledge of OB are learning theorists, personality theorists, counseling
psychologists, and, most important, industrial and organizational psychologists.
Early industrial/organizational psychologists studied the problems of
fatigue, boredom, and other working conditions that could impede effi-
cient work performance. More recently, their contributions have expanded
to include learning, perception, personality, emotions, training, leadership
effectiveness, needs and motivational forces, job satisfaction, decision-making
processes, performance appraisals, attitude measurement, employee-selection
techniques, work design, and job stress.
Social Psychology
Social psychology , generally considered a branch of psychology, blends con-
cepts from both psychology and sociology to focus on peoples’ influence on
one another. One major study area is change —how to implement it and how to
reduce barriers to its acceptance. Social psychologists also contribute to mea-
suring, understanding, and changing attitudes; identifying communication pat-
terns; and building trust. Finally, they have made important contributions to
our study of group behavior, power, and conflict.
Sociology
While psychology focuses on the individual, sociology studies people in rela-
tion to their social environment or culture. Sociologists have contributed to OB
through their study of group behavior in organizations, particularly formal and
complex organizations. Perhaps most important, sociologists have studied or-
ganizational culture, formal organization theory and structure, organizational
technology, communications, power, and conflict.
Anthropology
Anthropology is the study of societies to learn about human beings and their
activities. Anthropologists’ work on cultures and environments has helped us
understand differences in fundamental values, attitudes, and behavior between
people in different countries and within different organizations. Much of our
current understanding of organizational culture, organizational environments,
and differences among national cultures is a result of the work of anthropolo-
gists or those using their methods.

Laws in the physical sciences—chemistry, astronomy, physics—are consistent and
apply in a wide range of situations. They allow scientists to generalize about the
pull of gravity or to be confident about sending astronauts into space to repair
satellites. But as a noted behavioral researcher observed, “God gave all the easy
problems to the physicists.” Human beings are complex, and few, if any, simple
and universal principles explain organizational behavior. Because we are not
alike, our ability to make simple, accurate, and sweeping generalizations is limited.
There Are Few Absolutes in OB
6 Demonstrate why few
absolutes apply to OB.

Challenges and Oppor tunities for OB 15
Two people often act very differently in the same situation, and the same person’s
behavior changes in different situations. Not everyone is motivated by money, and
people may behave differently at a religious service than they do at a party.
That doesn’t mean, of course, that we can’t offer reasonably accurate ex-
planations of human behavior or make valid predictions. It does mean that
OB concepts must reflect situational, or contingency, conditions. We can say x
leads to y, but only under conditions specified in z —the contingency variables .
The science of OB was developed by applying general concepts to a particular
situation, person, or group. For example, OB scholars would avoid stating that
everyone likes complex and challenging work (the general concept). Why?
Because not everyone wants a challenging job. Some people prefer routine
over varied, or simple over complex. A job attractive to one person may not be
to another; its appeal is contingent on the person who holds it.
As you proceed through this book, you’ll encounter a wealth of research-
based theories about how people behave in organizations. But don’t expect to
find a lot of straightforward cause-and-effect relationships. There aren’t many!
organizational behavior theories mirror the subject matter with which they
deal, and people are complex and complicated.
psychology The science that seeks
to measure, explain, and sometimes
change the behavior of humans and
other animals.
social psychology An area of
psychology that blends concepts
from psychology and sociology and
that focuses on the influence of people
on one another.
sociology The study of people in
relation to their social environment
or culture.
anthropology The study of societies
to learn about human beings and their
activities.
contingency variables Situational
factors: variables that moderate the
relationship between two or more
variables.
Understanding organizational behavior has never been more important for
managers. Take a quick look at the dramatic changes in organizations. The
typical employee is getting older; more women and people of color are in the
workplace; corporate downsizing and the heavy use of temporary workers are
severing the bonds of loyalty that tied many employees to their employers;
global competition requires employees to become more flexible and cope with
rapid change. The global recession has brought to the forefront the challenges
of working with and managing people during uncertain times.
In short, today’s challenges bring opportunities for managers to use OB con-
cepts. In this section, we review some of the most critical issues confronting manag-
ers for which OB offers solutions—or at least meaningful insights toward solutions.
Responding to Economic Pressures
When the U.S. economy plunged into a deep and prolonged recession in 2008,
virtually all other large economies around the world followed suit. Layoffs and
job losses were widespread, and those who survived the ax were often asked to
accept pay cuts.
During difficult economic times, effective management is often at a premium.
Anybody can run a company when business is booming, because the difference
Challenges and Opportunities for OB
7 Identify the challenges and
opportunities managers have
in applying OB concepts.

16 CHAPTER 1 What Is Organizational Behavior?
between good and bad management reflects the difference between making a lot
of money and making a lot more money. When times are bad, though, manag-
ers are on the front lines with employees who must be fired, who are asked to
make do with less, and who worry about their futures. The difference between
good and bad management can be the difference between profit and loss or, ulti-
mately, between survival and failure.
Consider Enterprise Rent-A-Car. The company prided itself on never hav-
ing laid off a U.S. employee in its 51-year history. Even in the 2001–2002 re-
cession after the 9/11 terrorist attacks, Enterprise kept hiring. In 2008–2009,
however, Enterprise was forced to lay off more than a thousand employees.
“These types of declines are unprecedented,” said Patrick Farrell, Enterprise’s
vice president of corporate responsibility. Gentex Corp, a Michigan-based auto
parts supplier, had never had a layoff in its 34-year history—until 2008–2009.
“We didn’t even have a layoff policy,” said Gentex’s vice president of human
resources. 15
Managing employees well when times are tough is just as hard as when times
are good—if not more so. But the OB approaches sometimes differ. In good
times, understanding how to reward, satisfy, and retain employees is at a premium.
In bad times, issues like stress, decision making, and coping come to the fore.
Responding to Globalization
Organizations are no longer constrained by national borders. Burger King
is owned by a British firm, and McDonald’s sells hamburgers in Moscow.
ExxonMobil, a so-called U.S. company, receives almost 75 percent of its revenues
from sales outside the United States. New employees at Finland-based phone
maker Nokia are increasingly being recruited from India, China, and other
developing countries—non-Finns now outnumber Finns at Nokia’s renowned
research center in Helsinki. And all major automobile makers now manufacture
cars outside their borders; Honda builds cars in Ohio, Ford in Brazil, Volkswagen
in Mexico, and both Mercedes and BMW in South Africa.
The world has become a global village. In the process, the manager’s job has
changed.
“Thinking about the job situation in America today, would you say that it is now a
good time or a bad time to find a quality job?”
100
90
80
70
60
50
40
30
20
10
0
Working in Good Times—and BadOB Poll
57 59 54
48
47
26
20
8 11
69
86 89 86
39 38 41
2004 2005 2006 2007 2008 2009 2010 2011
Bad
Good

Source: Gallup tracking polls of random samples of roughly 1,000 adults, aged 18 and older, living in the continental U.S., selected using
random-digit telephone sampling. See F. Newport, “Americans’ Views of Job Market Improve; Still Mostly Negative” (April 18, 2011),
www.gallup.com .

www.gallup.com

Challenges and Oppor tunities for OB 17
Increased Foreign Assignments If you’re a manager, you are increasingly
likely to find yourself in a foreign assignment—transferred to your employer’s
operating division or subsidiary in another country. Once there, you’ll have
to manage a workforce very different in needs, aspirations, and attitudes from
those you are used to back home.
Working with People from Different Cultures Even in your own country,
you’ll find yourself working with bosses, peers, and other employees born and
raised in different cultures. What motivates you may not motivate them. Or
your communication style may be straightforward and open, which others may
find uncomfortable and threatening. To work effectively with people from dif-
ferent cultures, you need to understand how their culture, geography, and re-
ligion have shaped them and how to adapt your management style to their
differences.
Managers at global companies such as McDonald’s, Disney, and Coca-Cola
have come to realize that economic values are not universally transferable.
Management practices need to be modified to reflect the values of the different
countries in which an organization operates.
Overseeing Movement of Jobs to Countries with Low-Cost Labor It’s increas-
ingly difficult for managers in advanced nations, where minimum wages are
typically $6 or more an hour, to compete against firms that rely on workers
from China and other developing nations where labor is available for 30 cents
an hour. It’s not by chance that many in the United States wear clothes made
in China, work on computers whose microchips came from Taiwan, and watch
movies filmed in Canada. In a global economy, jobs tend to flow where lower
costs give businesses a comparative advantage, though labor groups, politicians,
and local community leaders see the exporting of jobs as undermining the job
market at home. Managers face the difficult task of balancing the interests of
their organization with their responsibilities to the communities in which they
operate.
In the global economy, jobs tend
to shift from developed nations to
countries where lower labor costs
give firms a comparative advan-
tage. In this photo, an employee
wearing a sign on his head reading
“Capital Interests” joins co-workers
at a Nokia factory in Germany
to protest the company’s deci-
sion of terminating mobile phone
production at the plant, resulting
in the loss of 2,300 jobs. Nokia
announced plans to shift produc-
tion from Germany to Romania,
where labor costs are lower.
So
u
rc
e
: H
e
n
n
in
g
K
a
is
e
r/
G
e
tt
y
Im
a
g
e
s

18 CHAPTER 1 What Is Organizational Behavior?
Managing Workforce Diversity
One of the most important challenges for organizations is adapting to people
who are different. We describe this challenge as workforce diversity. Whereas glo-
balization focuses on differences among people from different countries, work-
force diversity addresses differences among people within given countries.
Workforce diversity acknowledges a workforce of women and men; many ra-
cial and ethnic groups; individuals with a variety of physical or psychological abili-
ties; and people who differ in age and sexual orientation. Managing this diversity
is a global concern. Most European countries have experienced dramatic growth
in immigration from the Middle East, Argentina and Venezuela host a significant
number of migrants from other South American countries, and nations from
India to Iraq to Indonesia find great cultural diversity within their borders.
The most significant change in the U.S. labor force during the last half of
the twentieth century was the rapid increase in the number of female workers.
In 1950, for instance, only 29.6 percent of the workforce was female. By 2008,
it was 46.5 percent. The first half of the twenty-first century will be notable for
changes in racial and ethnic composition and an aging baby boom genera-
tion. By 2050, Hispanics will grow from today’s 11 percent of the workforce
to 24 percent, blacks will increase from 12 to 14 percent, and Asians from
5 to 11 percent. Meanwhile, in the near term the labor force will be aging.
The 55-and-older age group, currently 13 percent of the labor force, will in-
crease to 20 percent by 2014.
Though we have more to say about workforce diversity in the next chapter,
suffice it to say here that it presents great opportunities and poses challenging
questions for managers and employees in all countries. How can we leverage
differences within groups for competitive advantage? Should we treat all employ-
ees alike? Should we recognize individual and cultural differences? How can we
foster cultural awareness in employees without lapsing into political correctness?
What are the legal requirements in each country? Does diversity even matter?
Improving Customer Service
American Express recently turned Joan Weinbel’s worst nightmare into a non-
event. It was 10:00 p.m. Joan was home in New Jersey, packing for a weeklong
trip, when she suddenly realized she had left her AmEx Gold card at a restau-
rant in New York City earlier in the evening. The restaurant was 30 miles away.
She had a flight to catch at 7:30 the next morning, and she wanted her card
for the trip. She called American Express. The phone was quickly answered
by a courteous and helpful AmEx customer service representative who told
Ms. Weinbel not to worry. He asked her a few questions and told her, “Help is
on the way.” To say Joan was flabbergasted when her doorbell rang at 11:45 p.m.
is an understatement—it was less than 2 hours after her call. At the door was a
courier with a new card. How the company was able to produce the card and
get it to her so quickly still puzzles Joan, but she said the experience made her
a customer for life.
Today, the majority of employees in developed countries work in service
jobs, including 80 percent in the United States. In Australia, 73 percent work
in service industries. In the United Kingdom, Germany, and Japan, the per-
centages are 69, 68, and 65, respectively. Service jobs include technical sup-
port representatives, fast-food counter workers, sales clerks, waiters and
waitresses, nurses, automobile repair technicians, consultants, credit represen-
tatives, financial planners, and flight attendants. The common characteristic
of these jobs is substantial interaction with an organization’s customers. And
because an organization can’t exist without customers—whether it is American

Challenges and Oppor tunities for OB 19
Express, L. L. Bean, a law firm, a museum, a school, or a government agency—
management needs to ensure employees do what it takes to please customers. 16
At Patagonia—a retail outfitter for climbers, mountain bikers, skiers and board-
ers, and other outdoor fanatics—customer service is the store manager’s most
important general responsibility: “Instill in your employees the meaning and
importance of customer service as outlined in the retail philosophy, ‘Our store
is a place where the word “no” does not exist’; empower staff to ‘use their
best judgment’ in all customer service matters.” 17 OB can help managers at
Patagonia achieve this goal and, more generally, can contribute to improving
an organization’s performance by showing managers how employee attitudes
and behavior are associated with customer satisfaction.
Many an organization has failed because its employees failed to please custom-
ers. Management needs to create a customer-responsive culture. OB can provide
considerable guidance in helping managers create such cultures—in which em-
ployees are friendly and courteous, accessible, knowledgeable, prompt in respond-
ing to customer needs, and willing to do what’s necessary to please the customer. 18
Improving People Skills
As you proceed through the chapters of this book, we’ll present relevant con-
cepts and theories that can help you explain and predict the behavior of peo-
ple at work. In addition, you’ll gain insights into specific people skills that you
workforce diversity The concept that
organizations are becoming more
heterogeneous in terms of gender,
age, race, ethnicity, sexual orientation,
and inclusion of other diverse groups.
The Ritz Carlton Hotel Company
is recognized worldwide as the
gold standard of the hospitality
industry. Its motto—“We are ladies
and gentlemen serving ladies and
gentlemen”—is exemplified by
the employee shown here serv-
ing a guest on the summer terrace
of the Ritz-Carlton Moscow. The
Ritz-Carlton’s customer-responsive
culture, which is articulated in
the company’s motto, credo, and
service values, is designed to build
strong relationships that create
guests for life.
So
u
rc
e
: I
T
A
R
–
T
A
SS
/
A
n
to
n
T
u
sh
in
/
N
e
w
sc
o
m

20 CHAPTER 1 What Is Organizational Behavior?
can use on the job. For instance, you’ll learn ways to design motivating jobs,
techniques for improving your listening skills, and how to create more effec-
tive teams.
Stimulating Innovation and Change
Whatever happened to Montgomery Ward, Woolworth, Smith Corona, TWA,
Bethlehem Steel, and WorldCom? All these giants went bust. Why have other
giants, such as General Motors, Sears, Boeing, and Lucent Technologies, im-
plemented huge cost-cutting programs and eliminated thousands of jobs? The
answer is to avoid going broke.
Today’s successful organizations must foster innovation and master the art
of change, or they’ll become candidates for extinction. Victory will go to the
organizations that maintain their flexibility, continually improve their quality,
and beat their competition to the marketplace with a constant stream of inno-
vative products and services. Domino’s single-handedly brought on the demise
of small pizza parlors whose managers thought they could continue doing what
they had been doing for years. Amazon.com is putting a lot of independent
bookstores out of business as it proves you can successfully sell books (and most
anything else) from a Web site. After years of lackluster performance, Boeing re-
alized it needed to change its business model. The result was its 787 Dreamliner
and a return to being the world’s largest airplane manufacturer.
An organization’s employees can be the impetus for innovation and change,
or they can be a major stumbling block. The challenge for managers is to stimu-
late their employees’ creativity and tolerance for change. The field of OB pro-
vides a wealth of ideas and techniques to aid in realizing these goals.
Coping with “Temporariness”
Globalization, expanded capacity, and advances in technology have required orga-
nizations to be fast and flexible if they are to survive. The result is that most manag-
ers and employees today work in a climate best characterized as “temporary.”
Workers must continually update their knowledge and skills to perform new
job requirements. Production employees at companies such as Caterpillar, Ford,
and Alcoa now need to operate computerized production equipment. That
was not part of their job descriptions 20 years ago. In the past, employees were
assigned to a specific work group, gaining a considerable amount of security
working with the same people day in and day out. That predictability has been
replaced by temporary work groups, with members from different departments,
and the increased use of employee rotation to fill constantly changing work as-
signments. Finally, organizations themselves are in a state of flux. They contin-
ually reorganize their various divisions, sell off poorly performing businesses,
downsize operations, subcontract noncritical services and operations to other
organizations, and replace permanent employees with temporary workers.
Today’s managers and employees must learn to cope with temporariness,
flexibility, spontaneity, and unpredictability. The study of OB can help you
better understand a work world of continual change, overcome resistance to
change, and create an organizational culture that thrives on change.
Working in Networked Organizations
Networked organizations allow people to communicate and work together
even though they may be thousands of miles apart. Independent contractors
can telecommute via computer to workplaces around the globe and change
employers as the demand for their services changes. Software programmers,
graphic designers, systems analysts, technical writers, photo researchers, book

Challenges and Oppor tunities for OB 21
and media editors, and medical transcribers are just a few examples of people
who can work from home or other nonoffice locations.
The manager’s job is different in a networked organization. Motivating and
leading people and making collaborative decisions online requires different
techniques than when individuals are physically present in a single location. As
more employees do their jobs by linking to others through networks, managers
must develop new skills. OB can provide valuable insights to help with honing
those skills.
Helping Employees Balance Work–Life Conflicts
The typical employee in the 1960s or 1970s showed up at a specified workplace
Monday through Friday and worked for clearly defined 8- or 9-hour chunks of
time. That’s no longer true for a large segment of today’s workforce. Employees
are increasingly complaining that the line between work and nonwork time
has become blurred, creating personal conflicts and stress. 19 At the same time,
today’s workplace presents opportunities for workers to create and structure
their own roles.
How do work–life conflicts come about? First, the creation of global orga-
nizations means the world never sleeps. At any time on any day, thousands of
General Electric employees are working somewhere. The need to consult with
colleagues or customers eight or ten time zones away means many employees of
global firms are “on call” 24 hours a day. Second, communication technology
allows many technical and professional employees to do their work at home,
in their cars, or on the beach in Tahiti—but it also means many feel like they
never really get away from the office. Third, organizations are asking employees
to put in longer hours. Over a recent 10-year period, the average U.S. workweek
increased from 43 to 47 hours; and the number of people working 50 or more
hours a week jumped from 24 to 37 percent. Finally, the rise of the dual-career
couple makes it difficult for married employees to find time to fulfill commit-
ments to home, spouse, children, parents, and friends. Millions of single-parent
households and employees with dependent parents have even more significant
challenges in balancing work and family responsibilities.
Dr. Orit Wimpfheimer performs her
job by linking to others through
networks. Shown here at her home
office near Jerusalem, Israel, she
is a radiologist who analyzes test
results from hospitals in the United
States over the Internet. Networked
organizations that use e-mail, the
Internet, and video-conferencing
allow Dr. Orit Wimpfheimer and
other telecommuters to commu-
nicate and work together even
though they are thousands of miles
apart. The manager’s job in a net-
worked organization requires dif-
ferent techniques from those used
when workers are physically pres-
ent in a single location.
So
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22 CHAPTER 1 What Is Organizational Behavior?
Employees increasingly recognize that work infringes on their personal
lives, and they’re not happy about it. Recent studies suggest employees want
jobs that give them flexibility in their work schedules so they can better manage
work–life conflicts. 20 In fact, balancing work and life demands now surpasses job
security as an employee priority. 21 The next generation of employees is likely to
show similar concerns. 22 Most college and university students say attaining a bal-
ance between personal life and work is a primary career goal; they want “a life”
as well as a job. Organizations that don’t help their people achieve work–life
balance will find it increasingly difficult to attract and retain the most capable
and motivated employees.
As you’ll see in later chapters, the field of OB offers a number of suggestions
to guide managers in designing workplaces and jobs that can help employees
deal with work–life conflicts.
Creating a Positive Work Environment
Although competitive pressures on most organizations are stronger than ever,
some organizations are trying to realize a competitive advantage by fostering a
positive work environment. Jeff Immelt and Jim McNerney, both disciples of
Jack Welch, have tried to maintain high-performance expectations (a charac-
teristic of GE’s culture) while fostering a positive work environment in their
organizations (GE and Boeing). “In this time of turmoil and cynicism about
business, you need to be passionate, positive leaders,” Mr. Immelt recently told
his top managers.
A real growth area in OB research is positive organizational scholarship
(also called positive organizational behavior ), which studies how organizations
develop human strengths, foster vitality and resilience, and unlock potential.
Researchers in this area say too much of OB research and management prac-
tice has been targeted toward identifying what’s wrong with organizations and
their employees. In response, they try to study what’s good about them. 23 Some
key independent variables in positive OB research are engagement, hope, opti-
mism, and resilience in the face of strain.
Positive organizational scholars have studied a concept called “reflected
best-self”—asking employees to think about when they were at their “personal
best” in order to understand how to exploit their strengths. The idea is that
we all have things at which we are unusually good, yet too often we focus
on addressing our limitations and too rarely think about how to exploit our
strengths. 24
Although positive organizational scholarship does not deny the value of the
negative (such as critical feedback), it does challenge researchers to look at OB
through a new lens and pushes organizations to exploit employees’ strengths
rather than dwell on their limitations.
Improving Ethical Behavior
In an organizational world characterized by cutbacks, expectations of increas-
ing productivity, and tough competition, it’s not surprising many employees
feel pressured to cut corners, break rules, and engage in other questionable
practices.
Increasingly they face ethical dilemmas and ethical choices , in which they are
required to identify right and wrong conduct. Should they “blow the whistle”
if they uncover illegal activities in their company? Do they follow orders with
which they don’t personally agree? Should they give an inflated performance
evaluation to an employee they like, knowing it could save that employee’s job?
Do they “play politics” to advance their career?

Coming Attractions: Developing an OB Model 23
What constitutes good ethical behavior has never been clearly defined, and,
in recent years, the line differentiating right from wrong has blurred. Employees
see people all around them engaging in unethical practices—elected officials
pad expense accounts or take bribes; corporate executives inflate profits so they
can cash in lucrative stock options; and university administrators look the other
way when winning coaches encourage scholarship athletes to take easy courses.
When caught, these people give excuses such as “Everyone does it” or “You
have to seize every advantage nowadays.” Determining the ethically correct way
to behave is especially difficult in a global economy because different cultures
have different perspectives on certain ethical issues. 25 Fair treatment of employ-
ees in an economic downturn varies considerably across cultures, for instance.
As we’ll see in Chapter 2 , perceptions of religious, ethnic, and gender diversity
differ across countries. Is it any wonder employees are expressing decreased
confidence in management and increasing uncertainty about what is appropri-
ate ethical behavior in their organizations? 26
Managers and their organizations are responding to the problem of unethi-
cal behavior in a number of ways. 27 They’re writing and distributing codes of
ethics to guide employees through ethical dilemmas. They’re offering seminars,
workshops, and other training programs to try to improve ethical behaviors.
They’re providing in-house advisors who can be contacted, in many cases anony-
mously, for assistance in dealing with ethical issues, and they’re creating protec-
tion mechanisms for employees who reveal internal unethical practices.
Today’s manager must create an ethically healthy climate for his or her em-
ployees, where they can do their work productively with minimal ambiguity about
what right and wrong behaviors are. Companies that promote a strong ethical
mission, encourage employees to behave with integrity, and provide strong ethi-
cal leadership can influence employee decisions to behave ethically. 28 In upcom-
ing chapters, we’ll discuss the actions managers can take to create an ethically
healthy climate and help employees sort through ethically ambiguous situations.
We’ll also present ethical-dilemma exercises at the end of each chapter that allow
you to think through ethical issues and assess how you would handle them.
positive organizational scholarship An
area of OB research that concerns how
organizations develop human strength,
foster vitality and resilience, and
unlock potential.
ethical dilemmas and ethical
choices Situations in which
individuals are required to define right
and wrong conduct.
model An abstraction of reality.
A simplified representation of some
real-world phenomenon.
We conclude this chapter by presenting a general model that defines the field
of OB, stakes out its parameters, and identifies inputs, processes, and outcomes.
The result will be “coming attractions” of the topics in the remainder of this book.
An Overview
A model is an abstraction of reality, a simplified representation of some real-
world phenomenon. Exhibit 1-4 presents the skeleton on which we will con-
struct our OB model. It proposes three types of variables (inputs, processes, and
Coming Attractions: Developing an OB Model
8 Compare the three levels
of analysis in this book’s
OB model.

24 CHAPTER 1 What Is Organizational Behavior?
M
istakes happen in business
all the time, but most people
have a powerful motivation
to try to cover up their errors as much
as possible. However, not recognizing
and learning from failures might be the
most dangerous failure of all because
it means the problem is likely to occur
again. This means that, even though
it might be hard to admit it, doing
the right thing often means admitting
when you’ve done the wrong thing.
Most people would say that we have
an ethical obligation to learn from
mistakes, but how can we do that?
In a recent special issue in Harvard
Business Review on failures, experts
argued that learning from mistakes
relies on several strategies, which
include:
1. Heed pressure. High pressure of-
ten provokes faulty thinking. BP
faced enormous pressure from
cost overruns—roughly $1 million
a day—in its deepwater oil explo-
rations. This led its managers to
miss warning signs that led to the
catastrophic explosion in the Gulf
of Mexico in 2010. Similar time
and cost pressures precipitated the
ill-fated Challenger and Columbia
space shuttle launches. In high-
pressure situations, ask yourself,
“If I had more time and resources,
would I make the same decision?”
2. Recognize that failure is not al-
ways bad. Most of us would agree
that we have learned more in life
from our mistakes than from our suc-
cesses. So, we need to realize that
while we don’t want to fail, it does
have a hidden gift if we’re willing to
receive—a chance to learn some-
thing important. Eli Lilly holds “failure
parties” to honor drug trials and ex-
periments that fail to achieve the de-
sired results. The rationale for these
parties is to recognize that when little
is ventured, little is lost, but little is
gained too. Procter & Gamble CEO
A. G. Lafley argues that very high
success rates show incremental
innovation—but what he wants are
game changers. He has celebrated
P&G’s 11 most expensive product
failures, focusing on what the com-
pany learned from each. So don’t be
afraid to admit mistakes—and ask
“What can I learn” from each.
3. Understand and address the root
cause. When Apple introduced the
iPhone 4 in 2010, many customers
complained about dropped calls.
Apple first responded by suggest-
ing the problem lay in the way cus-
tomers held the phones, suggested
they “avoid gripping [the phone] in
the lower left corner.” Steve Jobs
called the problem a “non-issue.”
Only later did Apple address the
root cause of the problem—and fix
it. When you make an error, try to
understand what caused it.
4. Reward owning up. If you make a
mistake, be willing to speak up and
admit it. Too often we dig ourselves
deeper into a hole by being de-
fensive about mistakes. That also
keeps us from learning from our
failures. If we all make mistakes,
what are we being so defensive
about?
Given the complexity of human behav-
ior, we’ll never avoid making mistakes
entirely. Indeed, a healthy appreciation
for how mistake-prone we are is one
of the points of this chapter (and of
Chapter 6 ). But we can do a better job
of admitting our mistakes and learning
from them when they occur.
Sources: A. C. Edmondson, “Strategies
for Learning from Failure,” Harvard Business
Review 89, no. 4 (2011), pp.  48–55;
R. G. Mcgrath, “Failing by Design,”
Harvard Business Review 89, no. 4 (2011),
pp.  76–83; C. H. Tinsley, R. L. Dillon, and
P. M. Madsen, “How to Avoid Catastrophe,”
Harvard Business Review 89, no. 4 (2011),
pp. 90–97.
An Ethical Choice
Can You Learn from Failure?
outcomes) at three levels of analysis (individual, group, and organizational).
The model proceeds from left to right, with inputs leading to processes and
processes leading to outcomes. Notice that the model also shows that outcomes
can influence inputs in the future.
Inputs
Inputs are the variables like personality, group structure, and organizational
culture that lead to processes. These variables set the stage for what will occur
in an organization later. Many are determined in advance of the employment
relationship. For example, individual diversity characteristics, personality, and
values are shaped by a combination of an individual’s genetic inheritance and
childhood environment. Group structure, roles, and team responsibilities are

Coming Attractions: Developing an OB Model 25
typically assigned immediately before or after a group is formed. Finally, organi-
zational structure and culture are usually the result of years of development and
change as the organization adapts to its environment and builds up customs
and norms.
Processes
If inputs are like the nouns in organizational behavior, processes are like verbs.
Processes are actions that individuals, groups, and organizations engage in as
a result of inputs and that lead to certain outcomes. At the individual level,
processes include emotions and moods, motivation, perception, and decision
making. At the group level, they include communication, leadership, power
and politics, and conflict and negotiation. Finally, at the organizational level,
processes include human resource management and change practices.
Outcomes
Outcomes are the key variables that you want to explain or predict, and that
are affected by some other variables. What are the primary outcomes in OB?
Scholars have emphasized individual-level outcomes like attitudes and satisfac-
tion, task performance, citizenship behavior, and withdrawal behavior. At the
group level, cohesion and functioning are the dependent variables. Finally, at
the organizational level we look at overall profitability and survival. Because
these outcomes will be covered in all the chapters, we’ll briefly discuss each
here so you can understand what the “goal” of OB will be.
Processes
Individual Level
• Emotions and moods
• Motivation
• Perception
• Decision making
Group Level
• Communication
• Leadership
• Power and politics
• Conflict and negotiation
Organizational Level
• Human resource
management
• Change practices
Outcomes
Individual Level
• Attitudes and stress
• Task performance
• Citizenship behavior
• Withdrawal behavior
Group Level
• Group cohesion
• Group functioning
Organizational Level
• Productivity
• Survival
Inputs
Individual Level
• Diversity
• Personality
• Values
Group Level
• Group structure
• Group roles
• Team responsibilities
Organizational Level
• Structure
• Culture
A Basic OB Model Exhibit 1-4
input Variables that lead to processes. processes Actions that individuals,
groups, and organizations engage in
as a result of inputs and that lead to
certain outcomes.
outcomes Key factors that are
affected by some other variables.

26 CHAPTER 1 What Is Organizational Behavior?
Attitudes and Stress Employee attitudes are the evaluations employees make,
ranging from positive to negative, about objects, people, or events. For exam-
ple, the statement, “I really think my job is great,” is a positive job attitude, and
“My job is boring and tedious” is a negative job attitude. Stress is an unpleasant
psychological process that occurs in response to environmental pressures.
Some people might think that influencing employee attitudes and stress is
purely soft stuff, and not the business of serious managers, but as we will show,
attitudes often have behavioral consequences that directly relate to organiza-
tional effectiveness. The belief that satisfied employees are more productive
than dissatisfied employees has been a basic tenet among managers for years,
though only now has research begun to support it. Ample evidence shows that
employees who are more satisfied and treated fairly are more willing to engage
in the above-and-beyond citizenship behavior so vital in the contemporary busi-
ness environment. A study of more than 2,500 business units also found that
those scoring in the top 25 percent on the employee opinion survey were, on
average, 4.6 percent above their sales budget for the year, while those scoring in
the bottom 25 percent were 0.8 percent below budget. In real numbers, this was
a difference of $104 million in sales per year between the two groups.
Task Performance The combination of effectiveness and efficiency at doing
your core job tasks is a reflection of your level of task performance . If we think
about the job of a factory worker, task performance could be measured by the
number and quality of products produced in an hour. The task performance of
a teacher would be the level of education that students obtain. The task perfor-
mance of a consultant might be measured by the timeliness and quality of the
presentations they offer to the client firm. All these types of performance relate
to the core duties and responsibilities of a job and are often directly related to
the functions listed on a formal job description.
Obviously task performance is the most important human output contribut-
ing to organizational effectiveness, so in every chapter we devote considerable
time to detailing how task performance is affected by the topic in question.
Task performance is one of the
primary individual-level outcomes
in organizational behavior. For
these women who install wiring in
car doors at the General Motors’
assembly plant in Lordstown, Ohio,
task performance is measured by
the number and quality of the work
they produce. Their level of task
performance is related to the duties
of their job and how effectively and
efficiently they perform them. Task
performance is the most important
human output contributing to orga-
nizational effectiveness.
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Coming Attractions: Developing an OB Model 27
Citizenship Behavior The discretionary behavior that is not part of an
employee’s formal job requirements, and that contributes to the psychologi-
cal and social environment of the workplace, is called citizenship behavior .
Successful organizations need employees who will do more than their usual job
duties—who will provide performance beyond expectations. In today’s dynamic
workplace, where tasks are increasingly performed by teams and flexibility is
critical, employees who engage in “good citizenship” behaviors help others
on their team, volunteer for extra work, avoid unnecessary conflicts, respect
the spirit as well as the letter of rules and regulations, and gracefully tolerate
occasional work-related impositions and nuisances.
Organizations want and need employees who will do things that aren’t in
any job description. Evidence indicates organizations that have such employees
outperform those that don’t. As a result, OB is concerned with citizenship be-
havior as an outcome variable.
Withdrawal Behavior We’ve already mentioned behavior that goes above and
beyond task requirements, but what about behavior that in some way is below
task requirements? Withdrawal behavior is the set of actions that employees take
to separate themselves from the organization. There are many forms of with-
drawal, ranging from showing up late or failing to attend meetings to absentee-
ism and turnover.
Employee withdrawal can have a very negative effect on an organization.
The cost of employee turnover alone has been estimated to run into the thou-
sands of dollars, even for entry-level positions. Absenteeism also costs organiza-
tions significant amounts of money and time every year. For instance, a recent
survey found the average direct cost to U.S. employers of unscheduled absences
is 8.7 percent of payroll. 29 In Sweden, an average of 10 percent of the country’s
workforce is on sick leave at any given time. 30
It’s obviously difficult for an organization to operate smoothly and attain its
objectives if employees fail to report to their jobs. The work flow is disrupted,
and  important decisions may be delayed. In organizations that rely heavily on
assembly-line production, absenteeism can be considerably more than a disrup-
tion; it can drastically reduce the quality of output or even shut down the facility.
Levels of absenteeism beyond the normal range have a direct impact on any orga-
nization’s effectiveness and efficiency. A high rate of turnover can also disrupt the
efficient running of an organization when knowledgeable and experienced per-
sonnel leave and replacements must be found to assume positions of responsibility.
All organizations, of course, have some turnover. The U.S. national turnover
rate averages about 3 percent per month, about a 36 percent turnover per year.
This average varies a lot by occupation, of course; the monthly turnover rate for
government jobs is less than 1 percent, versus 5 to 7 percent in the construc-
tion industry. 31 If the “right” people are leaving the organization—the marginal
and submarginal employees—turnover can actually be positive. It can create an
opportunity to replace an underperforming individual with someone who has
higher skills or motivation, open up increased opportunities for promotions,
task performance The combination of
effectiveness and efficiency at doing
your core job tasks.
citizenship behavior Discretionary
behavior that contributes to the
psychological and social environment
of the workplace.
withdrawal behavior The set of
actions employee take to separate
themselves from the organization.

28 CHAPTER 1 What Is Organizational Behavior?
and bring new and fresh ideas to the organization. 32 In today’s changing world
of work, reasonable levels of employee-initiated turnover improve organiza-
tional flexibility and employee independence, and they can lessen the need for
management-initiated layoffs.
So why do employees withdraw from work? As we will show later in the book,
reasons include negative job attitudes, emotions and moods, and negative inter-
actions with co-workers and supervisors.
Group Cohesion Although many outcomes in our model can be conceptual-
ized as individual level phenomena, some relate to how groups operate. Group
cohesion is the extent to which members of a group support and validate one
another at work. In other words, a cohesive group is one that sticks together.
When employees trust one another, seek common goals, and work together to
achieve these common ends, the group is cohesive; when employees are divided
among themselves in terms of what they want to achieve and have little loyalty to
one another, the group is not cohesive.
There is ample evidence showing that cohesive groups are more effective. 33
These results are found both for groups that are studied in highly controlled
laboratory settings and also for work teams observed in field settings. This fits
with our intuitive sense that people tend to work harder in groups that have
a common purpose. Companies attempt to increase cohesion in a variety of
ways ranging from brief icebreaker sessions to social events like picnics, parties,
and outdoor adventure-team retreats. Throughout the book we will try to assess
whether these specific efforts are likely to result in increases in group cohesive-
ness. We’ll also consider ways that picking the right people to be on the team in
the first place might be an effective way to enhance cohesion.
Group Functioning In the same way that positive job attitudes can be associ-
ated with higher levels of task performance, group cohesion should lead to posi-
tive group functioning. Group functioning refers to the quantity and quality of
a group’s work output. In the same way that the performance of a sports team
is more than the sum of individual players’ performance, group functioning in
work organizations is more than the sum of individual task performances.
What does it mean to say that a group is functioning effectively? In some
organizations, an effective group is one that stays focused on a core task and
achieves its ends as specified. Other organizations look for teams that are able
to work together collaboratively to provide excellent customer service. Still
others put more of a premium on group creativity and the flexibility to adapt to
changing situations. In each case, different types of activities will be required to
get the most from the team.
Productivity The highest level of analysis in organizational behavior is the or-
ganization as a whole. An organization is productive if it achieves its goals by
transforming inputs into outputs at the lowest cost. Thus productivity requires
both effectiveness and efficiency .
A hospital is effective when it successfully meets the needs of its clientele. It is effi-
cient when it can do so at a low cost. If a hospital manages to achieve higher output
from its present staff by reducing the average number of days a patient is confined
to bed or increasing the number of staff–patient contacts per day, we say the hos-
pital has gained productive efficiency. A business firm is effective when it attains
its sales or market share goals, but its productivity also depends on achieving those
goals efficiently. Popular measures of organizational efficiency include return on
investment, profit per dollar of sales, and output per hour of labor.
Service organizations must include customer needs and requirements in as-
sessing their effectiveness. Why? Because a clear chain of cause and effect runs

Coming Attractions: Developing an OB Model 29
from employee attitudes and behavior to customer attitudes and behavior to a
service organization’s productivity. Sears has carefully documented this chain. 34
The company’s management found that a 5 percent improvement in employee
attitudes leads to a 1.3 percent increase in customer satisfaction, which in turn
translates into a 0.5 percent improvement in revenue growth. By training em-
ployees to improve the employee–customer interaction, Sears was able to im-
prove customer satisfaction by 4 percent over a 12-month period, generating an
estimated $200 million in additional revenues.
Survival The final outcome we will consider is organizational survival , which
is simply evidence that the organization is able to exist and grow over the long
term. The survival of an organization depends not just on how productive the
organization is, but also on how well it fits with its environment. A company
that is very productively making goods and services of little value to the mar-
ket is unlikely to survive for long, so survival factors in things like perceiving
the market successfully, making good decisions about how and when to pursue
opportunities, and engaging in successful change management to adapt to new
business conditions.
Having reviewed the input, process, and outcome model, we’re going to
change the figure up a little bit by grouping topics together based on whether we
study them at the individual, group, or organizational level. As you can seen in
Exhibit 1-5 , we will deal with inputs, processes, and outcomes at all three levels of
group cohesion The extent to which
members of a group support and
validate one another while at work.
group functioning The quantity and
quality of a work group’s output.
productivity The combination of the
effectiveness and efficiency of an
organization.
effectiveness The degree to which
an organization meets the needs of its
clientele or customers.
efficiency The degree to which an
organization can achieve its ends at a
low cost.
organizational survival The degree to
which an organization is able to exist
and grow over the long term.
The Group
Inputs
• Group structures
(Ch. 9 & 10)
• Group roles (Ch. 9 & 10)
• Team responsibilities
(Ch. 9 & 10)
Processes
• Communication (Ch. 11)
• Leadership (Ch. 12)
• Power and polities (Ch. 13)
• Conflict and negotiation
(Ch. 14)
Outcomes
• Group collesion
(Ch. 9 & 10)
• Group functioning
(Ch. 9 & 10)
The Organization
Inputs
• Structure (Ch. 15)
• Culture (Ch. 16)
Processes
• Human resource
management (Ch. 17)
• Change practices
(Ch. 18)
Outcomes
• Profitability
(Ch. 16 & 17)
• Survival
(Ch. 16 & 17)
The Individual
Inputs
• Diversity in Organizations
(ch.2)
• Personality and Values
(ch. 5)
Processes
• Emotions and moods (ch. 4)
• Motivation (Ch. 7 and 8)
• Perception and decision
making (Ch. 6)
Outcomes
• Attitudes (ch. 3) & stress
(ch. 18)
• Task performance (all)
• Citizenship behavior (all)
• Withdrawal behavior (all)
The Plan of the Book Exhibit 1-5

30 CHAPTER 1 What Is Organizational Behavior?
analysis, but we group the chapters as shown here to correspond with the typical
ways that research has been done in these areas. It is easier to understand one
unified presentation about how personality leads to motivation which leads to
performance, than to jump around levels of analysis. Because each level builds
on the one that precedes it, after going through them in sequence you will have
a good idea of how the human side of organizations functions.
C
ompanies  that  operate  in  more
than one  country face a  challeng-
ing dilemma: how much should
they tailor organizational practices like
leadership style, rewards, and commu-
nication to each country’s culture? To
some extent, it is necessary to change
the way a company does business
because of differences in regulations,
institutions, and labor force character-
istics. For example, a U.S. company
that operates in Germany will have to
contend with laws requiring greater
worker participation in decision
making, and an Australian company
operating in China will have to match
the knowledge and skills found in
the Chinese workforce. Despite
certain limitations imposed by law
and situational factors, managers still
need to make many decisions about
adjusting their organizational culture to
match the culture of the countries in
which they operate.
There are no simple responses
to this dilemma. Some researchers
propose that managers need to make
a concerted effort to adapt their orga-
nizational culture to match the culture
of the countries in which they operate.
These authors note that within any
country, there is a great deal of simi-
larity in management practices that is
likely the result of culture or values.
If a country’s basic outlook is highly
individualistic, then organizational cul-
ture should also emphasize individual
contributions and efforts. Conversely,
if national culture values collectivism,
then organizational culture should
emphasize group contributions and
cohesiveness. From this perspective,
successful international management
is all about tailoring management prac-
tices and values to fit with the cultural
values of each country in which the
company operates.
On the other hand, some propose
that national culture should not, and
does not, make much difference in
shaping organizational culture. These
researchers note that even within a
single country, there can be a great
deal of variation in values and norms.
The development of practices to match
a culture is fraught with problems of
stereotyping and over-generalizing
about the degree to which everyone
in a given country shares the same
values. These authors also note that
in tailoring practices to each country, a
firm loses the potential value of having
a unifying organizational culture. From
this perspective, companies should try
as much as possible to create a strong
culture that operates across borders to
create a unified global workforce.
Sources: Based on B. Gerhart, “How
Much Does National Culture Constrain
Organizational Culture,” Management
and Organization Review 5, no. 2 (2009),
pp. 241–259; A. S. Tsui, S. S. Nifadkar,
and A. Y. Ou, “Cross-national, Cross-
cultural Organizational Behavior Research:
Advances, Gaps, and Recommendations,”
Journal of Management 33, no. 3 (2007),
pp. 426-478; G. Johns, “The Essential
Impact of Context on Organizational
Behavior,” Academy of Management
Review 31, no. 2 (2006), pp. 386–408.
glOBalization!
Does National Culture Affect Organizational Practices?
Managers need to develop their interpersonal, or people, skills to be effec-
tive in their jobs. Organizational behavior (OB) investigates the impact that
individuals, groups, and structure have on behavior within an organization,
and it applies that knowledge to make organizations work more effectively.
Specifically, OB focuses on how to improve productivity; reduce absenteeism,
Summary and Implications for Managers

Summar y and Implications for Managers 31
Lost in Translation?
POINT COUNTERPOINT
O
rganizations are always looking for leaders, and man-
agers and manager-wannabes are continually looking
for ways to hone their leadership skills. Publishers re-
spond to this demand by offering hundreds of titles that prom-
ise insights into managing people. Books like these can provide
people with the secrets to management that others know about.
Moreover, isn’t it better to learn about management from people
in the trenches, as opposed to the latest esoteric musings from
the “Ivory Tower”? Many of the most important insights we gain
from life aren’t necessarily the product of careful empirical re-
search studies.
It is true there are some bad books out there. But do they
outnumber the esoteric research studies published every year?
For example, a couple of recent management and organiza-
tional behavior studies were published in 2011 with the follow-
ing titles:
● Training for Fostering Knowledge Co-Construction from
Collaborative Inference-Drawing
● The Factor Structure and Cross-Test Convergence of the
Mayer–Salovey–Caruso Model of Emotional Intelligence
● Refining Value-Based Differentiation in Business Relationships:
A Study of the Higher Order Relationship Building Blocks that
Influence Behavioural Intentions
● A Dialogical Approach to the Creation of New Knowledge in
Organizations
We don’t mean to poke fun at these studies. Rather, our point is
that you can’t judge a book by its cover any more than you can a
research study by its title.
There is no one right way to learn the science and art of
managing people in organizations. The most enlightened man-
agers are those who gather insights from multiple sources: their
own experience, research findings, observations of others,
and, yes, business press books, too. If great management were
produced by carefully gleaning results from research studies,
academicians would make the best managers. How often do we
see that?
Research and academics have an important role to play in
understanding effective management. But it isn’t fair to con-
demn all business books by citing the worst (or, at least, the
worse-sounding ones).
W
alk into your nearest major bookstore. You’ll undoubt-
edly find a large selection of books devoted to manage-
ment and managing. Consider the following recent titles:
● Tough Cookies: What 100 Years of the Girl Scouts Can Teach
You (Wiley, 2011)
● From Wags to Riches: How Dogs Teach Us to Succeed in
Business & Life (BenBella Books, 2011)
● All I Know About Management I Learned from My Dog:
The Real Story of Angel, a Rescued Golden Retriever,
Who Inspired the New Four Golden Rules of Management
(Skyhorse Publishing, 2011)
● Mother Teresa, CEO: Unexpected Principles for Practical
Leadership (Berrett-Koehler Publishers, 2011)
● Polar Bear Pirates and Their Quest to Engage the
Sleepwalkers: Motivate Everyday People to Deliver
Extraordinary Results (Capstone, 2011)
● Winnie-the-Pooh on Management: In Which a Very
Important Bear and His Friends Are Introduced to a Very
Important Subject (Penguin, 2011)
● Chicken Lips, Wheeler-Dealer, and the Beady-Eyed M.B.A.:
An Entrepreneurs Wild Adventures on the New Silk Road
(Wiley, 2011)
● Bodybuilders in Tutus: and 35 Other Obscure Business-
Boosting Observations (Robinwood Press, 2011)
● I’ll Make You an Offer You Can’t Refuse: Insider Business
Tips from a Former Mob Boss (Thomas Nelson, 2011)
● The Art of War from SmarterComics: How to be Successful
in Any Competition (Writers of The Round Table Press, 2011)
Popular books on organizational behavior often have cute
titles and are fun to read, but they make the job of managing
people seem much simpler than it is. Most are based on the
author’s opinions rather than substantive research, and it is
doubtful that one person’s experience translates into effective
management practice for everyone. Why do we waste our time
on “fluff” when, with a little effort, we can access knowledge
produced from thousands of scientific studies on human behav-
ior in organizations?
Organizational behavior is a complex subject. Few, if any,
simple statements about human behavior are generalizable to
all people in all situations. Should you really try to apply lead-
ership insights you got from a book about Geronimo or Tony
Soprano to managing software engineers in the twenty-first
century?

32 CHAPTER 1 What Is Organizational Behavior?
1 What is the importance of interpersonal skills?
2 What do managers do in terms of functions, roles,
and skills?
3 What is organizational behavior (OB)?
4 Why is it important to complement intuition with
systematic study?
5 What are the major behavioral science disciplines that
contribute to OB?
6 Why are there few absolutes in OB?
7 What are the challenges and opportunities for
managers in using OB concepts?
8 What are the three levels of analysis in this book’s
OB model?
QUESTIONS FOR REVIEW
EXPERIENTIAL EXERCISE Workforce Diversity
Purpose
To learn about the different needs of a diverse workforce.
Time Required
Approximately 40 minutes.
Participants and Roles
Divide the class into six groups of approximately equal
size. Assign each group one of the following roles:
Nancy is 28 years old. The divorced mother of three
children ages 3, 5, and 7, she is the department head.
She earns $40,000 per year at her job and receives
another $3,600 per year in child support from her
ex-husband.
Ethel is a 72-year-old widow. She works 25 hours
per week at an hourly wage of $8.50 to supplement
her $8,000 annual pension and earns a total of
$19,000 per year.
John is a 34-year-old born in Trinidad who is now a
U.S. resident. He is married and the father of two
small children. John attends college at night and is
MyManagementLab
Now that you have finished this chapter, go back to www.mymanagementlab.com to continue
practicing and applying the concepts you’ve learned.
turnover, and deviant workplace behavior; and increase organizational citi-
zenship behavior and job satisfaction. Here are a few specific implications for
managers:
● Some generalizations provide valid insights into human behavior, but
many are erroneous. Organizational behavior uses systematic study to
improve predictions of behavior over intuition alone.
● Because people are different, we need to look at OB in a contingency frame-
work, using situational variables to explain cause-and-effect relationships.
● Organizational behavior offers specific insights to improve a manager’s
people skills.
● It helps managers to see the value of workforce diversity and practices
that may need to be changed in different countries.
● It can improve quality and employee productivity by showing managers
how to empower their people, design and implement change programs,
improve customer service, and help employees balance work–life conflicts.
● It can help managers cope in a world of temporariness and learn how to
stimulate innovation.
● Finally, OB can guide managers in creating an ethically healthy work
climate.

www.mymanagementlab.com

Ethical Dilemma 33
● Life insurance:
Plan A ($25,000 coverage) � $500
Plan B ($50,000 coverage) � $1,000
Plan C ($100,000 coverage) � $2,000
Plan D ($250,000 coverage) � $3,000
● Mental health plan � $500
● Prepaid legal assistance � $300
● Vacation � 2 percent of annual pay for each week, up
to 6 weeks a year
● Pension at retirement equal to approximately 50 per-
cent of final annual earnings � $1,500
● 4-day workweek during the 3 summer months
(available only to full-time employees) � 4 percent
of annual pay
● Day care services (after company contribution) �
$2,000 for all of an employee’s children, regardless
of number
● Company-provided transportation to and from
work � $750
● College tuition reimbursement � $1,000
● Language class tuition reimbursement � $500
The Task
1. Each group has 15 minutes to develop a flexible
benefits package that consumes 25 percent
(and no more!) of its character’s pay.
2. After completing step 1, each group appoints a
spokesperson who describes to the entire class the
benefits package the group has arrived at for its
character.
3. The entire class then discusses the results. How did
the needs, concerns, and problems of each partici-
pant influence the group’s decision? What do the
results suggest for trying to motivate a diverse
workforce?
within a year of earning his bachelor’s degree. His
salary is $27,000 per year. His wife is an attorney and
earns approximately $50,000 per year.
Lu is 26 years old and single with a master’s degree
in education. He is paralyzed and confined to a
wheelchair as a result of an auto accident. He earns
$32,000 per year.
Maria is a single, 22-year-old woman born and raised
in Mexico. She came to the United States only
3 months ago, and her English needs considerable
improvement. She earns $20,000 per year.
Mike is a 16-year-old high school sophomore who
works 15 hours per week after school and during
vacations. He earns $7.20 per hour, or approximately
$5,600 per year.
The members of each group are to assume the character
consistent with their assigned role.
Background
The six participants work for a company that has recently
installed a flexible benefits program. Instead of the tra-
ditional “one benefit package fits all,” the company is
allocating an additional 25 percent of each employee’s
annual pay to be used for discretionary benefits. Those
benefits and their annual cost are as follows:
● Supplementary health care for employee:
Plan A (no deductible and pays 90 percent) � $3,000
Plan B ($200 deductible and pays 80 percent) �
$2,000
Plan C ($1,000 deductible and pays 70 percent) � $500
● Supplementary health care for dependents (same
deductibles and percentages as above):
Plan A � $2,000
Plan B � $1,500
Plan C � $500
● Supplementary dental plan � $500
Source: Special thanks to Professor Penny Wright (San Diego State University) for her suggestions during
the development of this exercise.
ETHICAL DILEMMA Jekyll and Hyde
Let’s assume you have been offered a job by Jekyll
Corporation, a company in the consumer products indus-
try. The job is in your chosen career path.
Jekyll Corporation has offered you a position that
would begin 2 weeks after you graduate. The job respon-
sibilities are appealing to you, make good use of your
training, and are intrinsically interesting. The company
seems well positioned financially, and you have met the
individual who would be your supervisor, who assures you
that the future prospects for your position and career are
bright. Several other graduates of your program work at
Jekyll Corporation, and they speak quite positively of the
company and promise to socialize and network with you
once you start.
As a company, Jekyll Corporation promotes itself as a
fair-trade and sustainable organization. Fair trade is a trad-
ing partnership—based on dialogue, transparency, and
respect—that seeks greater equity in international trade.
It contributes to sustainable development by offering
better trading conditions to, and securing the rights of,

34 CHAPTER 1 What Is Organizational Behavior?
CASE INCIDENT 1 “Lessons for ‘Undercover’ Bosses”
Executive offices in major corporations are often far re-
moved from the day-to-day work that most employees per-
form. While top executives might enjoy the perquisites
found in the executive suite, and separation from workday
concerns can foster a broader perspective on the business,
the distance between management and workers can come
at a real cost: top managers often fail to understand the
ways most employees do their jobs every day. The dangers
of this distant approach are clear. Executives sometimes
make decisions without recognizing how difficult or im-
practical they are to implement. Executives can also lose
sight of the primary challenges their employees face.
The practice of “management by walking around”
(MBWA) works against the insularity of the executive
suite. To practice MBWA, managers reserve time to walk
through departments regularly, form networks of acquain-
tances in the organization, and get away from their desks
to talk to individual employees. The practice was exem-
plified by Bill Hewlett and Dave Packard, who used this
management style at HP to learn more about the chal-
lenges and opportunities their employees were encoun-
tering. Many other organizations followed suit and found
that this style of management had advantages over a typi-
cal desk-bound approach to management. A recent study
of successful Swedish organizations revealed that MBWA
was an approach common to several firms that received
national awards for being great places to work.
The popular television program Undercover Boss took
MBWA to the next level by having top executives from
companies like Chiquita Brands, DirectTV, Great Wolf
Resorts, and NASCAR work incognito among line em-
ployees. Executives reported that this process taught them
how difficult many of the jobs in their organizations were,
and just how much skill was required to perform even the
lowest-level tasks. They also said the experience taught
them a lot about the core business in their organizations
and sparked ideas for improvements.
Although MBWA has long had its advocates, it does
present certain problems. First, the time managers spend
directly observing the workforce is time they are not do-
ing their core job tasks like analysis, coordination, and
strategic planning. Second, management based on subjec-
tive impressions gathered by walking around runs counter
to a research and data-based approach to making mana-
gerial decisions. Third, it is also possible that executives
who wander about will be seen as intruders and overseers.
Implementing the MBWA style requires a great deal of
foresight to avoid these potential pitfalls.
local producers and businesses. Fair-trade organizations
are actively engaged in supporting producers and sustain-
able environmental farming practices, and fair-trade prac-
tices prohibit child or forced labor.
Yesterday, Gabriel Utterson—a human resources man-
ager at Jekyll Corporation—called you to discuss initial
terms of the offer, which seemed reasonable and standard
for the industry. However, one aspect was not mentioned,
your starting salary. Gabriel said Jekyll is an internally trans-
parent organization—there are no secrets. While the firm
very much wants to hire you, there are limits to what it can
afford to offer, and before it makes a formal offer, it was
reasonable to ask what you would expect. Gabriel wanted
you to think about this and call back tomorrow.
Before calling Gabriel, you thought long and hard
about what it would take to accept Jekyll Corporation’s
offer. You have a number in mind, which may or may not
be the same number you give Gabriel. What starting salary
would it take for you to accept Jekyll Corporation’s offer?
Questions
1. What starting salary will you give Gabriel? What sal-
ary represents the minimum offer you would accept?
If these two numbers are different, why? Does giving
Gabriel a different number than your “internal” num-
ber violate Jekyll Corporation’s transparent culture?
Why or why not?
2. Assume you’ve received another offer, this one from
Hyde Associates. Like the Jekyll job, this position is
on your chosen career path and in the consumer
products industry. Assume, however, that you’ve read
in the news that “Hyde Associates has been criticized for
unsustainable manufacturing practices that may be harm-
ful to the environment. It has further been criticized for un-
fair trade practices and for employing underage children.”
Would that change whether you’d be willing to take
the job? Why or why not?
3. These scenarios are based on studies of Corporate
Social Responsibility (CSR) practices that show con-
sumers generally charge a kind of rent to companies
that do not practice CSR. In other words, they gen-
erally expect a substantial discount in order to buy
a product from Hyde rather than from Jekyll. For
example, if Jekyll and Hyde sold coffee, people would
pay a premium of $1.40 to buy coffee from Jekyll and
demand a discount of $2.40 to buy Hyde coffee. Do
you think this preference translates into job choice
decisions? Why or why not?

Case Incident 2 35
Sources: Based on T. Peters and N. Austin, “Management by Walking About,” Economist (September 8,
2008), www.economist.com ; F. Aguirre, M. White, K. Schaefer, and S. Phelps, “Secrets of an Undercover
Boss,” Fortune (August 27, 2010), pp. 41–44; J. Larsson, I. Backstrom, and H. Wiklund, “Leadership
and Organizational Behavior: Similarities between Three Award-Winning Organizations,” International
Journal of Management Practice 3 (2009), pp. 327–345.
CASE INCIDENT 2 Era of the Disposable Worker?
The great global recession has claimed many victims. In
many countries, unemployment is at near-historic highs,
and even those who have managed to keep their jobs have
often been asked to accept reduced work hours or pay
cuts. Another consequence of the current business and
economic environment is an increase in the number of
individuals employed on a temporary or contingent basis.
The statistics on U.S. temporary workers are grim. Many,
like single mother Tammy Smith, have no health insur-
ance, no retirement benefits, no vacation, no severance,
and no access to unemployment insurance. Increases in
layoffs mean that many jobs formerly considered safe have
become “temporary” in the sense that they could disap-
pear at any time with little warning. Forecasts suggest that
the next 5 to 10 years will be similar, with small pay in-
creases, worse working conditions, and low levels of job se-
curity. As Peter Cappelli of the University of Pennsylvania’s
Wharton School notes, “Employers are trying to get rid of
all fixed costs. First they did it with employment benefits.
Now they’re doing it with the jobs themselves. Everything
is variable.”
We might suppose these corporate actions are largely
taking place in an era of diminishing profitability.
However, data from the financial sector is not consistent
with this explanation. Among Fortune 500 companies, 2009
saw the second-largest jump in corporate earnings in the
list’s 56-year history. Moreover, many of these gains do not
appear to be the result of increases in revenue. Rather,
they reflect dramatic decreases in labor costs. One equity
market researcher noted, “The largest part of the gain
came from lower payrolls rather than the sluggish rise in
sales . . .” Wages also rose only slightly during this period
of rapidly increasing corporate profitability.
Some observers suggest the very nature of corporate
profit monitoring is to blame for the discrepancy between
corporate profitability and outcomes for workers. Some
have noted that teachers whose evaluations are based on
standardized test scores tend to “teach to the test,” to the
detriment of other areas of learning. In the same way,
when a company is judged primarily by the single met-
ric of a stock price, executives naturally try their best to
increase this number, possibly to the detriment of other
concerns like employee well-being or corporate culture.
On the other hand, others defend corporate actions that
increase the degree to which they can treat labor flexibly,
noting that in an increasingly competitive global market-
place, it might be necessary to sacrifice some jobs to save
the organization as a whole.
The issues of how executives make decisions about
workforce allocation, how job security and corporate loy-
alty influence employee behavior, and how emotional
reactions come to surround these issues are all core com-
ponents of organizational behavior research.
Questions
1. To what extent can individual business decisions
(as opposed to economic forces) explain deteriora-
tion in working conditions for many workers?
2. Do business organizations have a responsibility to
ensure that employees have secure jobs with good
Questions
1. What are some of the things managers can learn by
walking around and having daily contact with line
employees that they might not be able to learn from
looking at data and reports?
2. As an employee, would you appreciate knowing your
supervisor regularly spent time with workers? How
would knowing top executives routinely interact
with line employees affect your attitudes toward the
organization?
3. What ways can executives and other organizational
leaders learn about day-to-day business operations
besides going “undercover?”
4. Are there any dangers in the use of a management
by walking around strategy? Could this strategy lead
employees to feel they are being spied on? What
actions on the part of managers might minimize
these concerns?

www.economist.com

36 CHAPTER 1 What Is Organizational Behavior?
4. What do you think the likely impact of the growth
of temporary employment relationships will be for
employee attitudes and behaviors? How would you
develop a measurement system to evaluate the impact
of corporate downsizing and temporary job assign-
ments on employees?
working conditions, or is their primary responsibility
to shareholders?
3. What alternative measures of organizational per-
formance, besides share prices, do you think might
change the focus of business leaders?
ENDNOTES
1. Cited in R. Alsop, “Playing Well with Others,” Wall Street
Journal (September 9, 2002).
2. See, for instance, C. Penttila, “Hiring Hardships,”
Entrepreneur (October 2002), pp. 34–35.
3. S. E. Humphrey, J. D. Nahrgang, and F. P. Morgeson,
“Integrating Motivational, Social, and Contextual Work
Design Features: A Meta-Analytic Summary and Theoretical
Extension of the Work Design Literature,” Journal of Applied
Psychology 92, no. 5 (2007), pp. 1332–1356.
4. I. S. Fulmer, B. Gerhart, and K. S. Scott, “Are the 100 Best
Better? An Empirical Investigation of the Relationship Between
Being a ‘Great Place to Work’ and Firm Performance,”
Personnel Psychology (Winter 2003), pp. 965–993.
5. H. Fayol, Industrial and General Administration (Paris: Dunod,
1916).
6. A. I. Kraut, P. R. Pedigo, D. D. McKenna, and M. D. Dunnette,
“The Role of the Manager: What’s Really Important in
Different Management Jobs,” Academy of Management
Executive 19, no. 4 (2005), pp. 122–129.
7. H. Mintzberg, The Nature of Managerial Work (Upper Saddle
River, NJ: Prentice Hall, 1973).
8. R. L. Katz, “Skills of an Effective Administrator,” Harvard
Business Review (September–October 1974), pp. 90–102;
D. Bartram, “The Great Eight Competencies: A Criterion-
Centric Approach to Validation,” Journal of Applied Psychology 90,
no. 6 (2005), pp. 1185–1203; and S. E. Scullen, M. K. Mount,
and T. A. Judge, “Evidence of the Construct Validity of Devel-
opmental Ratings of Managerial Performance,” Journal of
Applied Psychology 88, no. 1 (2003), pp. 50–66.
9. F. Luthans, “Successful vs. Effective Real Managers,”
Academy of Management Executive (May 1988), pp. 127–132;
and F. Luthans, R. M. Hodgetts, and S. A. Rosenkrantz,
Real Managers (Cambridge, MA: Ballinger, 1988). See also
F. Shipper and J. Davy, “A Model and Investigation of
Managerial Skills, Employees’ Attitudes, and Managerial
Performance,” Leadership Quarterly 13 (2002), pp. 95–120.
10. P. Wu, M. Foo, and D. B. Turban, “The Role of Personality
in Relationship Closeness, Developer Assistance, and Career
Success,” Journal of Vocational Behavior 73, no. 3 (2008),
pp.  440–448; and A. M. Konrad, R. Kashlak, I. Yoshioka,
R. Waryszak, and N. Toren, “What Do Managers Like to Do?
A Five-Country Study,” Group & Organization Management
(December 2001), pp. 401–433.
Sources: Based on P. Coy, M. Conlin, and M. Herbst, “The Disposable Worker,” Bloomberg Businessweek
(January 7, 2010), www.businessweek.com ; S. Tully, “Fortune 500: Profits Bounce Back,” Fortune (May 3,
2010), pp. 140–144; D. Ariely, “You Are What You Measure,” Harvard Business Review (June 2010), p. 38.
11. A. S. Tsui, S. J. Ashford, L. St. Clair, and K. R. Xin, “Dealing
with Discrepant Expectations: Response Strategies and
Managerial Effectiveness,” Academy of Management Journal
(December 1995), pp. 1515–1543.
12. See, for instance, C. Heath and S. B. Sitkin, “Big-B Versus
Big-O: What Is Organizational about Organizational
Behavior?” Journal of Organizational Behavior (February 2001),
pp. 43–58. For a review of what one eminent researcher be-
lieves should be included in organizational behavior, based
on survey data, see J. B. Miner, “The Rated Importance,
Scientific Validity, and Practical Usefulness of Organizational
Behavior Theories: A Quantitative Review,” Academy of
Management Learning & Education (September 2003),
pp. 250–268.
13. D. M. Rousseau and S. McCarthy, “Educating Managers from
an Evidence-Based Perspective,” Academy of Management
Learning & Education 6, no. 1 (2007), pp. 84–101; and
S. L. Rynes, T. L. Giluk, and K. G. Brown, “The Very Separate
Worlds of Academic and Practitioner Periodicals in Human
Resource Management: Implications for Evidence-Based
Management,” Academy of Management Journal 50, no. 5
(2007), pp. 987–1008.
14. J. Surowiecki, “The Fatal-Flaw Myth,” The New Yorker (July 31,
2006), p. 25.
15. C. Tuna, “No-Layoff Policies Crumble,” The Wall Street Journal
(December 29, 2008), p. B2.
16. See, for instance, S. D. Pugh, J. Dietz, J. W. Wiley, and
S. M. Brooks, “Driving Service Effectiveness through
Employee-Customer Linkages,” Academy of Management
Executive (November 2002), pp. 73–84; and H. Liao and
A. Chuang, “A Multilevel Investigation of Factors Influencing
Employee Service Performance and Customer Outcomes,”
Academy of Management Journal (February 2004), pp. 41–58.
17. See www.patagonia.com/jobs/retail_asst_mgr.shtml ; and
“Patagonia Sets the Pace for Green Business,” Grist Magazine
(October 22, 2004), www.grist.org .
18. See, for instance, M. Workman and W. Bommer, “Rede
Signing Computer Call Center Work: A Longitudinal Field
Experiment,” Journal of Organizational Behavior (May 2004),
pp. 317–337.
19. See, for instance, V. S. Major, K. J. Klein, and M. G. Ehrhart,
“Work Time, Work Interference with Family, and Psychological
Distress,” Journal of Applied Psychology (June 2002), pp. 427–436;
D. Brady, “Rethinking the Rat Race,” BusinessWeek (August 26,
2002), pp. 142–143; J. M. Brett and L. K. Stroh, “Working 61

www.businessweek.com

www.patagonia.com/jobs/retail_asst_mgr.shtml

www.grist.org

Endnotes 37
Plus Hours a Week: Why Do Managers Do It?” Journal of Applied
Psychology (February 2003), pp. 67–78.
20. See, for instance, The 2002 National Study of the Changing
Workforce (New York: Families and Work Institute, 2002); and
W. J. Casper and L. C. Buffardi, “Work-Life Benefits and Job
Pursuit Intentions: The Role of Anticipated Organizational
Support,” Journal of Vocational Behavior 65, no. 3 (2004),
pp. 391–410.
21. Cited in S. Armour, “Workers Put Family First Despite Slow
Economy, Jobless Fear” (citation number 21) is: S. Armour,
“Workers Put Family First Despite Slow Economy, Jobless
Fears,” USA Today, (June 6, 2002), p. 38.
22. S. Shellenbarger, “What Job Candidates Really Want to Know:
Will I Have a Life?” The Wall Street Journal (November  17,
1999), p. B1; and “U.S. Employers Polish Image to Woo a
Demanding New Generation,” Manpower Argus (February
2000), p. 2.
23. F. Luthans and C. M. Youssef, “Emerging Positive Organi-
zational Behavior,” Journal of Management (June 2007),
pp. 321–349; C. M. Youssef and F. Luthans, “Positive
Organizational Behavior in the Workplace: The Impact of
Hope, Optimism, and Resilience,” Journal of Management
33, no. 5 (2007), pp. 774–800; and J. E. Dutton and
S. Sonenshein, “Positive Organizational Scholarship,” in
C. Cooper and J. Barling (eds.), Encyclopedia of Positive
Psychology (Thousand Oaks, CA: Sage, 2007).
24. L. M. Roberts, G. Spreitzer, J. Dutton, R. Quinn,
E. Heaphy, and B. Barker, “How to Play to Your Strengths,”
Harvard Business Review (January 2005), pp. 1–6; and
L. M. Roberts, J. E. Dutton, G. M. Spreitzer, E. D. Heaphy,
and R. E. Quinn, “Composing the Reflected Best-Self
Portrait: Becoming Extraordinary in Work Organizations,”
Academy of Management Review 30, no. 4 (2005), pp. 712–736.
25. W. Bailey and A. Spicer, “When Does National Identity
Matter? Convergence and Divergence in International
Business Ethics,” Academy of Management Journal 50, no.  6
(2007), pp. 1462–1480; and A. B. Oumlil and J. L. Balloun,
“Ethical Decision-Making Differences between American
and Moroccan Managers,” Journal of Business Ethics 84, no. 4
(2009), pp. 457–478.
26. J. Merritt, “For MBAs, Soul-Searching 101,” BusinessWeek
(September 16, 2002), pp. 64–66; and S. Greenhouse, “The
Mood at Work: Anger and Anxiety,” The New York Times
(October 29, 2002), p. E1.
27. See, for instance, G. R. Weaver, L. K. Trevino, and P. L.
Cochran, “Corporate Ethics Practices in the Mid-1990’s: An
Empirical Study of the Fortune 1000,” Journal of Business Ethics
(February 1999), pp. 283–294; and C. De Mesa Graziano,
“Promoting Ethical Conduct: A Review of Corporate
Practices,” Strategic Investor Relations (Fall 2002), pp. 29–35.
28. D. M. Mayer, M. Kuenzi, R. Greenbaum, M. Bardes, and
R. Salvador, “How Low Does Ethical Leadership Flow?
Test of a Trickle-Down Model,” Organizational Behavior and
Human Decision Processes 108, no. 1 (2009), pp. 1–13; and
A. Ardichvili, J. A. Mitchell, and D. Jondle, “Characteristics
of Ethical Business Cultures,” Journal of Business Ethics 85,
no. 4 (2009), pp. 445–451.
29. “Unplanned Absence Costs Organizations 8.7 Percent
of Payroll, Mercer/Kronos Study” (June 28, 2010), www
.mercer.com/press-releases/1383785 .
30. W. Hoge, “Sweden’s Cradle-to-Grave Welfare Starts to Get
Ill,” International Herald Tribune (September 25, 2002), p. 8.
31. See www.bls.gov/data (May 11, 2005).
32. See, for example, M. C. Sturman and C. O. Trevor, “The
Implications of Linking the Dynamic Performance and
Turnover Literatures,” Journal of Applied Psychology (August
2001), pp. 684–696.
33. M. Casey-Campbell and M. L. Martens, “Sticking It All
Together: A Critical Assessment of the Group Cohesion-
Performance Literature,” International Journal of Management
Reviews 11, (2008), pp. 223–246.
34. A. J. Rucci, S. P. Kirn, and R. T. Quinn, “The Employee–
Customer–Profit Chain at Sears,” Harvard Business Review
(January–February 1998), pp. 83–97.

www.mercer.com/press-releases/1383785

www.mercer.com/press-releases/1383785

www.bls.gov/data

THE RISE AND FALL OF ERIN CALLAN
38
E
rin Callan was one of those rare individuals who seemed to master
everything she undertook. Due to her precocious intelligence and
athletic prowess (at 13 she was one of the top gymnasts in New York),
people called her Wonder Child. She graduated magna cum laude from Harvard,
earned her law degree from New York University, and went to work for one of
the most prestigious law firms in New York City. In 1995, she went into bank-
ing, eventually rising to be chief financial officer (CFO) of one of the largest and
most prestigious U.S. investment banks, Lehman Brothers. At 41—young for a
CFO of such a large organization—Callan seemed to have it all. She was the first
woman ever to serve on the 158-year-old company’s executive committee. One
newspaper labeled her “Rising Star Erin Callan, now one of the most powerful
women on Wall Street.”
Now Callan is jobless and living in virtual exile on Long Island.
What happened?
The story of Erin Callan’s fall has a lot to do with the meltdown in the
financial services industry. Lehman, after all, went bankrupt in 2008, and
most senior executives lost their jobs. Most of its managers and executives,
however, have found work elsewhere. Why not Callan? The answer depends
on which narrative you accept. Callan refuses to discuss the issue with the
media. To some, she brought about her own downfall with her outsized
ambition and desire for attention. To others, she is the victim of a gender
double standard that is alive and well on Wall Street and elsewhere.
From one point of view, Callan caused her own demise. She lacked back-
ground in accounting, treasury, or operations—unusual for a CFO. According
to Fortune, many at Lehman disapproved of her brash style and provocative
wardrobe. “I don’t subordinate my feminine side,” she says. “I’m very open
about it. I have no problem talking about my shopper or my outfit.” When
Callan was named CFO, one of Lehman’s female senior executives went to
the CEO to rescind the promotion. Later, in the early days of the financial
meltdown, investors thought Callan’s responses were unimpressive. A few
months later, she was removed. Currently, the Securities and Exchange
Commission (SEC) is investigating whether her “forward looking statements”
regarding Lehman’s finances constitute civil fraud.
Read this way, Callan’s is the typical story of a Wall Street executive
caught unprepared for a crisis his or her decisions helped create. Is the story
so simple, though? After all, nearly all Callan’s male counterparts at Lehman
are now employed, including ex-CEO Richard Fuld (now managing member
of Matrix Advisors and advisor with Legend Securities). Many have landed at
Barclays, the British Bank that bought Lehman in bankruptcy.
LEARNING
OBJECTIVES
After studying this chapter,
you should be able to:
1 Describe the two major
forms of workforce
diversity.
2 Recognize stereotypes
and understand how they
function in organizational
settings.
3 Identify the key
biographical characteristics
and describe how they
are relevant to OB.
4 Define intellectual ability
and demonstrate its
relevance to OB.
5 Contrast intellectual
and physical ability.
6 Describe how organizations
manage diversity
effectively.
MyManagementLab
Access a host of interactive
learning aids to help strengthen
your understanding of the
chapter concepts at
www.mymanagementlab.com.

www.mymanagementlab.com

Diversity
in Organizations 2
I think that God in creating Man somewhat
overestimated his ability.
— Oscar Wilde
39Ph
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40 CHAPTER 2 Diversity in Organizations
S A L
SELF-ASSESSMENT LIBRARY
Does Callan’s sex have a role in this? Does an interest in fashion serve to
stigmatize women more than men? Does an interest in the media (“She was a
media hound,” said one Lehman executive) cast women in a harsher light?
Even National Public Radio (NPR) seemed to emphasize Callan’s looks over
her intellect. “Blonde, beautiful and outspoken, the spotlight loved Erin Callan.
Fortune magazine called her one of four women to watch,” said NPR. “Callan
cut a striking figure in her crochet-style dress, gold dangling earrings and
high-heeled boots.” Fortune said, “She arrived like a flash—a bright, glamorous
figure.” Were such descriptions applied to the male CFOs of Goldman Sachs,
Morgan Stanley, Merrill Lynch, or Bear Stearns?
As for Callan, friends say she is at peace with herself and her situation. “I’m
living a different life,” she recently told a reporter.
Sources: P. Sellers, “The Fall of a Wall Street Highflier,” Fortune (March 22, 2010), pp. 140–148;
P. Sellers, “Erin Callan, Lehman’s Ex-CFO, Goes Public,” CNN Money (February 22, 2011), www
.cnnmoney.com/ ; J. Quinn, “Goldman Outshines Rival Bear Stearns,” The Telegraph (September 21,
2007), www.telegraph.co.uk/ ; and C. Gasparino, “Lehman Probe Begins to Square in on Former
CFO,” FOXBusiness (June 10, 2010), www.foxbusiness.com/ .
S ex is but one characteristic people bring with them when they join an organization. In this chapter, we look at how organizations work to maxi-mize the potential contributions of a diverse workforce. We also show how
demographic characteristics such as ethnicity and individual differences in the
form of ability affect employee performance and satisfaction.
But first check out the following Self-Assessment Library, where you can
assess your views on one of the characteristics we’ll discuss in this chapter: age.
What’s My Attitude Toward Older People?
In the Self-Assessment Library (available on CD or online), take assessment IV.C.1
(What’s My Attitude Toward Older People?) and answer the following questions:
1. Are you surprised by your results?
2. How do your results compare to those of others?
We aren’t all the same. This is obvious enough, but managers sometimes forget
that they need to recognize and capitalize on these differences to get the most
from their employees. Effective diversity management increases an organiza-
tion’s access to the widest possible pool of skills, abilities, and ideas. Managers
also need to recognize that differences among people can lead to miscommu-
nication, misunderstanding, and conflict. In this chapter, we’ll learn about how
1 Describe the two major
forms of workforce diversity.
Diversity

www.cnnmoney.com/

www.cnnmoney.com/

www.telegraph.co.uk/

www.foxbusiness.com/

Diversity 41
individual characteristics like age, gender, race, ethnicity, and abilities can influ-
ence employee performance. We’ll also see how managers can develop aware-
ness about these characteristics and manage a diverse workforce effectively.
Demographic Characteristics of the U.S. Workforce
In the past, OB textbooks noted that rapid change was about to occur as
the predominantly white, male managerial workforce gave way to a gender-
balanced, multiethnic workforce. Today, that change is no longer happening: it
has happened, and it is increasingly reflected in the makeup of managerial and
professional jobs. Compared to 1976, women today are much more likely to be
employed full-time, have more education, and earn wages comparable to those
of men. 1 In addition, over the past 50 years the earnings gap between Whites
and other racial and ethnic groups has decreased significantly; past differences
between Whites and Asians have disappeared or been reversed. 2 Workers over
the age of 55 are an increasingly large portion of the workforce as well. This
permanent shift toward a diverse workforce means organizations need to make
diversity management a central component of their policies and practices. At
the same time, however, differences in wages across genders and racial and eth-
nic groups persist, and executive positions in Fortune 500 corporations continue
to be held by white males in numbers far beyond their representation in the
workforce in general.
A survey by the Society for Human Resources Management shows some
major employer concerns and opportunities resulting from the demographic
makeup of the U.S. workforce. 3 The aging of the workforce was consistently
the most significant concern of HR managers. The loss of skills resulting from
the retirement of many baby boomers, increased medical costs due to an aging
workforce, and many employees’ needs to care for elderly relatives topped the
list of issues. Other issues include developing multilingual training materials
and providing work–life benefits for dual-career couples.
Progress Energy reflects the
demographic characteristics of the
U.S. workforce today. It is gender
balanced, multiethnic, and engaged
in learning about diversity issues
and putting them into practice.
Progress, which recently merged
with Duke Energy, encourages
employees to participate in various
network groups, diversity councils,
and training workshops, such as
the one shown here. The company
believes that recognizing and
embracing diversity maximize
employee potential, customer
satisfaction, and business success.
So
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42 CHAPTER 2 Diversity in Organizations
Levels of Diversity
Although much has been said about diversity in age, race, gender, ethnicity,
religion, and disability status, experts now recognize that these demographic
characteristics are just the tip of the iceberg. 4 Demographics mostly reflect surface-
level diversity , not thoughts and feelings, and can lead employees to perceive one
another through stereotypes and assumptions. However, evidence has shown that as
people get to know one another, they become less concerned about demographic
differences if they see themselves as sharing more important characteristics, such as
personality and values, that represent deep-level diversity . 5
To understand this difference between surface- and deep-level diversity,
consider a few examples. Luis and Carol are co-workers who seem to have little
in common at first glance. Luis is a young, recently hired male college graduate
with a business degree, raised in a Spanish-speaking neighborhood in Miami.
Carol is an older, long-tenured woman raised in rural Kansas, who achieved her
current level in the organization by starting as a high school graduate and work-
ing her way through the hierarchy. At first, these co-workers may experience
some differences in communication based on their surface-level differences in
education, ethnicity, regional background, and gender. However, as they get
to know one another, they may find they are both deeply committed to their
families, share a common way of thinking about important work problems, like
to work collaboratively, and are interested in international assignments in the
future. These deep-level similarities will overshadow the more superficial differ-
ences between them, and research suggests they will work well together.
On the other hand, Steve and Dave are two unmarried white male college
graduates from Oregon who recently started working together. Superficially,
they seem well matched. But Steve is highly introverted, prefers to avoid risks,
solicits the opinions of others before making decisions, and likes the office
quiet, while Dave is extroverted, risk-seeking, and assertive and likes a busy,
active, and energetic work environment. Their surface-level similarity will not
necessarily lead to positive interactions because they have such fundamental,
deep-level differences. It will be a challenge for them to collaborate regularly at
work, and they’ll have to make some compromises to get things done together.
Throughout this book, we will encounter differences between deep- and
surface-level diversity in various contexts. Individual differences in personality
and culture shape preferences for rewards, communication styles, reactions to
leaders, negotiation styles, and many other aspects of behavior in organizations.
Discrimination
Although diversity does present many opportunities for organizations, effective
diversity management also means working to eliminate unfair discrimination .
To discriminate is to note a difference between things, which in itself isn’t
necessarily bad. Noticing one employee is more qualified is necessary for making
hiring decisions; noticing another is taking on leadership responsibilities
exceptionally well is necessary for making promotion decisions. Usually when we
talk about discrimination, though, we mean allowing our behavior to be influ-
enced by stereotypes about groups of people. Rather than looking at individual
characteristics, unfair discrimination assumes everyone in a group is the same.
This discrimination is often very harmful to organizations and employees.
Exhibit 2-1 provides definitions and examples of some forms of discrimina-
tion in organizations. Although many of these actions are prohibited by law,
and therefore aren’t part of almost any organization’s official policies, thou-
sands of cases of employment discrimination are documented every year, and
many more go unreported. As discrimination has increasingly come under both
2 Recognize stereotypes
and understand how they
function in organizational
settings.

Diversity 43
surface-level diversity Differences
in easily perceived characteristics,
such as gender, race, ethnicity, age,
or disability, that do not necessarily
reflect the ways people think or
feel but that may activate certain
stereotypes.
deep-level diversity Differences
in values, personality, and work
preferences that become progressively
more important for determining
similarity as people get to know one
another better.
discrimination Noting of a difference
between things; often we refer to
unfair discrimination, which means
making judgments about individuals
based on stereotypes regarding their
demographic group.
Type of Discrimination Defi nition Examples from Organizations
Discriminatory policies Actions taken by representatives of the Older workers may be targeted for layoffs
or practices organization that deny equal opportunity because they are highly paid and have lucrative
to perform or unequal rewards for benefi ts.
performance
Sexual harassment Unwanted sexual advances and other Salespeople at one company went on company-paid
verbal or physical conduct of a sexual visits to strip clubs, brought strippers into the offi ce to
nature that create a hostile or offensive celebrate promotions, and fostered pervasive sexual
work environment rumors.
Intimidation Overt threats or bullying directed at African-American employees at some companies have
members of specifi c groups of employees found nooses hanging over their work stations.
Mockery and insults Jokes or negative stereotypes; sometimes Arab-Americans have been asked at work whether
the result of jokes taken too far they were carrying bombs or were members of
terrorist organizations.
Exclusion Exclusion of certain people from job Many women in fi nance claim they are assigned to
opportunities, social events, discussions, marginal job roles or are given light workloads that
or informal mentoring; can occur don’t lead to promotion.
unintentionally
Incivility Disrespectful treatment, including Female lawyers note that male attorneys frequently
behaving in an aggressive manner, cut them off or do not adequately address their
interrupting the person, or ignoring comments.
his or her opinions
Forms of Discrimination
Sources: J. Levitz and P. Shishkin, “More Workers Cite Age Bias after Layoffs,” The Wall Street Journal (March 11, 2009), pp. D1–D2; W. M. Bulkeley, “A Data-Storage Titan Confronts Bias Claims,”
The Wall Street Journal (September 12, 2007), pp. A1, A16; D. Walker, “Incident with Noose Stirs Old Memories,” McClatchy-Tribune Business News (June 29, 2008); D. Solis, “Racial Horror Stories
Keep EEOC Busy,” Knight-Ridder Tribune Business News, July 30, 2005, p. 1; H. Ibish and A. Stewart, Report on Hate Crimes and Discrimination Against Arab Americans: The Post-September 11
Backlash, September 11, 2001—October 11, 2001 (Washington, DC: American-Arab Anti-Discrimination Committee, 2003); A. Raghavan, “Wall Street’s Disappearing Women,” Forbes (March 16, 2009),
pp. 72–78; and L. M. Cortina, “Unseen Injustice: Incivility as Modern Discrimination in Organizations,” Academy of Management Review 33, no. 1 (2008), pp. 55–75.
Exhibit 2-1
legal scrutiny and social disapproval, most overt forms have faded, which may
have resulted in an increase in more covert forms like incivility or exclusion. 6
As you can see, discrimination can occur in many ways, and its effects can be
just as varied depending on the organizational context and the personal biases
of its members. Some forms, like exclusion or incivility, are especially hard to
root out because they are impossible to observe and may occur simply because
the actor isn’t aware of the effects of his or her actions. Whether intentional
or not, discrimination can lead to serious negative consequences for employ-
ers, including reduced productivity and citizenship behavior, negative conflicts,
and increased turnover. Unfair discrimination also leaves qualified job candi-
dates out of initial hiring and promotions. Even if an employment discrimina-
tion lawsuit is never filed, a strong business case can be made for aggressively
working to eliminate unfair discrimination.
Diversity is a broad term, and the phrase workplace diversity can refer to any
characteristic that makes people different from one another. The following
section covers some important surface-level characteristics that differentiate
members of the workforce.

44 CHAPTER 2 Diversity in Organizations
Biographical characteristics such as age, gender, race, disability, and length of
service are some of the most obvious ways employees differ. As discussed in
Chapter 1 , this textbook is essentially concerned with finding and analyzing
the variables that affect employee productivity, absence, turnover, deviance,
citizenship, and satisfaction (refer back to Exhibit 1-4 ). Many organizational
concepts—motivation, say, or power and politics or organizational culture—are
hard to assess. Let’s begin, then, by looking at factors that are easily definable
and readily available—data that can be obtained, for the most part, from an
employee’s human resources (HR) file. Variations in these surface-level char-
acteristics may be the basis for discrimination against classes of employees, so
it is worth knowing how closely related they actually are to important work out-
comes. Many are not as important as people believe, and far more variation
occurs within groups sharing biographical characteristics than between them.
Age
The relationship between age and job performance is likely to be an issue
of increasing importance during the next decade for at least three reasons.
First, belief is widespread that job performance declines with increasing age.
Regardless of whether this is true, a lot of people believe it and act on it. Second,
as noted in Chapter 1 , the workforce is aging. Many employers recognize that
older workers represent a huge potential pool of high-quality applicants.
Companies such as Borders and the Vanguard Group have sought to increase
their attractiveness to older workers by providing targeted training that meets
their needs, and by offering flexible work schedules and part-time work to draw
in those who are semi-retired. 7 The third reason is U.S. legislation that, for all
intents and purposes, outlaws mandatory retirement. Most U.S. workers today
no longer have to retire at age 70.
Biographical Characteristics
3 Identify the key biographical
characteristics and describe
how they are relevant to OB.
Older employees are an integral
part of the workforce at Publix
Supermarkets, where one in five
employees is over the age of 50.
The company values the work ethic
and maturity of its senior associates
like the man shown here preparing
salmon pinwheels for customers
to sample. Publix is known for its
employment of senior citizens and
actively recruits older workers as
part of its corporate philosophy
of providing a diverse work place.
The company believes that older
workers have a strong work ethic,
many skills, and job knowledge
that they can share with younger
co-workers.
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Biographical Characteristics 45
What is the perception of older workers? Employers hold mixed feelings. 8
They see a number of positive qualities older workers bring to their jobs, such
as experience, judgment, a strong work ethic, and commitment to quality.
But older workers are also perceived as lacking flexibility and resisting new
technology. And when organizations are actively seeking individuals who are
adaptable and open to change, the negatives associated with age clearly hinder
the initial hiring of older workers and increase the likelihood they will be let go
during cutbacks.
Now let’s take a look at the evidence. What effect does age actually have
on turnover, absenteeism, productivity, and satisfaction? The older you get,
the less likely you are to quit your job. That conclusion is based on studies of
the age–turnover relationship. 9 Of course, this shouldn’t be too surprising. As
workers get older, they have fewer alternative job opportunities as their skills
have become more specialized to certain types of work. Their long tenure also
tends to provide them with higher wage rates, longer paid vacations, and more
attractive pension benefits.
It’s tempting to assume that age is also inversely related to absenteeism. After
all, if older workers are less likely to quit, won’t they also demonstrate higher
stability by coming to work more regularly? Not necessarily. Most studies do show
an inverse relationship, but close examination finds it is partially a function of
whether the absence is avoidable or unavoidable. 10 In general, older employees
have lower rates of avoidable absence than do younger employees. However,
they have equal rates of unavoidable absence, such as sickness absences.
How does age affect productivity? Many believe productivity declines with
age. It is often assumed that skills like speed, agility, strength, and coordination
decay over time and that prolonged job boredom and lack of intellectual
stimulation contribute to reduced productivity. The evidence, however,
contradicts those assumptions. During a 3-year period, a large hardware chain
staffed one of its stores solely with employees over age 50 and compared its
results with those of five stores with younger employees. The store staffed by
the over-50 employees was significantly more productive (in terms of sales
generated against labor costs) than two of the stores and held its own against
the other three. 11 Other reviews of the research find that age and job task
performance are unrelated and that older workers are more likely to engage in
citizenship behavior. 12
Our final concern is the relationship between age and job satisfaction, where
the evidence is mixed. A review of more than 800 studies found that older work-
ers tend to be more satisfied with their work, report better relationships with
co-workers, and are more committed to their employing organizations. 13 Other
studies, however, have found a U-shaped relationship. 14 Several explanations
could clear up these results, the most plausible being that these studies are
intermixing professional and nonprofessional employees. When we separate
the two types, satisfaction tends to continually increase among professionals as
they age, whereas it falls among nonprofessionals during middle age and then
rises again in the later years.
biographical characteristics Personal
characteristics—such as age, gender,
race, and length of tenure—that
are objective and easily obtained
from personnel records. These
characteristics are representative
of surface-level diversity.

46 CHAPTER 2 Diversity in Organizations
What are the effects of discrimination against individuals on the basis of
age? One large-scale study of more than 8,000 employees in 128 companies
found that an organizational climate favoring age discrimination was associated
with lower levels of commitment to the company. This lower commitment was,
in turn, related to lower levels of organizational performance. 15 Such results
suggest that combating age discrimination may be associated with higher levels
of organizational performance.
Sex
Few issues initiate more debates, misconceptions, and unsupported opinions
than whether women perform as well on jobs as men do.
The best place to begin to consider this is with the recognition that few,
if any, important differences between men and women affect job perfor-
mance. There are no consistent male–female differences in problem-solving
ability, analytical skills, competitive drive, motivation, sociability, or learn-
ing ability. 16 Psychological studies have found women are more agreeable
and willing to conform to authority, whereas men are more aggressive and
more likely to have expectations of success, but those differences are minor.
Given the significantly increased female participation in the workforce over
the past 40 years and the rethinking of what constitutes male and female
roles, we can assume no significant difference in job productivity between
men and women. 17
Unfortunately, sex roles still affect our perceptions. For example, women
who succeed in traditionally male domains are perceived as less likable, more
hostile, and less desirable as supervisors. 18 Interestingly, research also suggests
that women believe sex-based discrimination is more prevalent than do male
employees, and these beliefs are especially pronounced among women who
work with a large proportion of men. 19
One issue that does seem to differ between men and women, especially
when the employee has preschool-age children, is preference for work sched-
ules. 20 Working mothers are more likely to prefer part-time work, flexible
work schedules, and telecommuting in order to accommodate their fam-
ily responsibilities. Women also prefer jobs that encourage work–life bal-
ance, which has the effect of limiting their options for career advancement.
An interview study showed many of the work–life issues found in U.S. busi-
ness contexts are also common in France, despite government subsidies for
child care. 21
What about absence and turnover rates? Are women less stable employees
than men? First, evidence from a study of nearly 500,000 professional employ-
ees indicates significant differences, with women more likely to turn over than
men. 22 Women also have higher rates of absenteeism than men do. 23 The most
logical explanation is that the research was conducted in North America, and
North American culture has historically placed home and family responsibili-
ties on women. When a child is ill or someone needs to stay home to wait for
a plumber, the woman has traditionally taken time from work. However, this
research is also undoubtedly time-bound. 24 The role of women has definitely
changed over the past generation. Men are increasingly sharing responsibility
for child care, and an increasing number report feeling a conflict between their
home responsibilities and their work lives. 25 One interesting finding is that
regardless of sex, parents were rated lower in job commitment, achievement
striving, and dependability than individuals without children, but mothers were
rated especially low in competence. 26
Again, it is worth asking what the implications of sex discrimination are for
individuals. Research has shown that workers who experience sexual harassment

Biographical Characteristics 47
have higher levels of psychological stress, and these feelings in turn are related
to lower levels of organizational commitment and job satisfaction, and higher
intentions to turn over. 27 As with age discrimination, the evidence suggests that
combating sex discrimination may be associated with better performance for the
organization as a whole.
Sexual Harassment Claims by MenOB Poll
Utah
21.7
32.2 33.3
27.3
16.6
26.6
9.5
24.0
18.7
23.0
Sexual Harassment Claims Filed by Men in Selected States
35
30
25
20
15
10
5
0
West Virginia Michigan Wyoming Wisconsin
2007 2009

Sources: Equal Employment Opportunity Commission; D. Mattioli, “More Men Make Harassment Claims,” The Wall Street Journal (March 23, 2010), p. D4.
T
his statement is mostly false.
A recent large-scale study of
married couples in the United
States, the United Kingdom, and
Germany found that in all three countries
whether a wife worked outside the
home, and what she earned if she did,
had no effect on divorce rates. The
authors of this study conclude: “In no
country did a wife’s employment or
relative earnings significantly increase
the risk of dissolution.” Thus, it appears
that social critics on both the left
(dual-career couples have healthier,
happier marriages) and the right (a
traditional male working, wife at home
family structure is best) are wrong. Still,
this is a complex issue, and research on
it continues.
What about whether the husband
works outside the home? Historically,
this was quite unusual, but it is
becoming increasingly common—
wives are now the primary breadwinner
in 22 percent of U.S. couples, up from
7 percent in 1970. There is some evi-
dence that men are less healthy and
marriages are more likely to fail when
men do not work outside the home, or
when they become unemployed while
their wives continue to work. As one
researcher noted, many married men
ask themselves, “What is my value
here if I’m not bringing in money?” One
Canadian working mother, the primary
breadwinner in her family, says, “There
is a part of me that wonders if I can
trust, if it’s safe for me to take my foot
off the gas, to hold back and relax, not
be thinking and working all the time.”
Sources: L. P. P. Cooke, “Wives’ Part-time
Employment and Marital Stability in Great
Britain, West Germany and the United
States,” Sociology 44, no. 6 (2010),
pp. 1091–1108; T. Parker-Pope, “She Works.
They’re Happy.” The New York Times
(January 24, 2010), pp. ST1, ST10; and
S. Proudfoot, “More Women Bringing Home
the Bacon, More Men Cooking It,” National
Post (October 7, 2010), www.canada.com/ .
Myth or Science?
“Dual-Career Couples Divorce Less”

www.canada.com/

48 CHAPTER 2 Diversity in Organizations
Race and Ethnicity
Race is a controversial issue. In many cases, even bringing up the topic of race
and ethnicity is enough to create an uncomfortable silence. Indeed, evidence
suggests that some people find interacting with other racial groups uncomfort-
able unless there are clear behavioral scripts to guide their behavior. 28
Most people in the United States identify themselves according to racial group.
The U.S. Bureau of the Census classifies individuals according to seven broad
racial categories: American Indian and Alaska Native, Asian, Black or African
American, Native Hawaiian and Other Pacific Islander, Some Other Race, White,
and Two or More Races. An ethnicity distinction is also made between native
English speakers and Hispanics: Hispanics can be of any race. We define race in
this book as the biological heritage people use to identify themselves; ethnicity is
the additional set of cultural characteristics that often overlaps with race. This
definition allows each individual to define his or her race and ethnicity.
Race and ethnicity have been studied as they relate to employment out-
comes such as hiring decisions, performance evaluations, pay, and workplace
discrimination. Most research has concentrated on the differences in outcomes
and attitudes between Whites and African Americans, with little study of issues
relevant to Asian, Native American, and Hispanic populations. Doing justice to
all this research isn’t possible here, so let’s summarize a few points.
First, in employment settings, individuals tend to slightly favor colleagues
of their own race in performance evaluations, promotion decisions, and pay
raises, although such differences are not found consistently, especially when
highly structured methods of decision making are employed. 29 Second, substan-
tial racial differences exist in attitudes toward affirmative action, with African
Americans approving of such programs to a greater degree than Whites. 30
This difference may reflect the fact that African Americans and Hispanics per-
ceive discrimination to be more prevalent in the workplace. 31 Third, African
Americans generally fare worse than Whites in employment decisions. They
receive lower ratings in employment interviews, receive lower job performance
ratings, are paid less, and are promoted less frequently. 32 Yet there are no
statistically significant differences between African Americans and Whites in
observed absence rates, applied social skills at work, or accident rates. African
Americans and Hispanics also have higher turnover rates than Whites.
Employers’ major concern about using mental-ability tests for selection,
promotion, training, and similar employment decisions is that they may have a
negative impact on racial and ethnic groups. 33 However, evidence suggests that
“despite group differences in mean test performance, there is little convincing
evidence that well-constructed tests are more predictive of educational, train-
ing, or occupational performance for members of the majority group than for
members of minority groups.” 34 Observed differences in IQ test scores by racial
or ethnic group are smaller in more recent samples. 35 The issue of racial differ-
ences in general mental-ability tests continues to be hotly debated. 36
Does racial and ethnic discrimination lead to negative workplace outcomes?
As noted earlier, most research shows that members of racial and ethnic
minorities report higher levels of discrimination in the workplace. 37 Some
research suggests that having a positive climate for diversity overall can lead to
increased sales. 38
Disability
With the passage of the Americans with Disabilities Act (ADA) in 1990, the
representation of individuals with disabilities in the U.S. workforce rapidly
increased. 39 According to the ADA, employers are required to make reasonable

Biographical Characteristics 49
accommodations so their workplaces will be accessible to individuals with physi-
cal or mental disabilities.
Making inferences about the relationship between disability and employ-
ment outcomes is difficult because the term disability is so broad. The U.S.
Equal Employment Opportunity Commission classifies a person as disabled
who has any physical or mental impairment that substantially limits one or
more major life activities. Examples include missing limbs, seizure disorder,
Down Syndrome, deafness, schizophrenia, alcoholism, diabetes, and chronic
back pain. These conditions share almost no common features, so there’s no
generalization about how each condition is related to employment. Some jobs
obviously cannot be accommodated to some disabilities—the law and common
sense recognize that a blind person could not be a bus driver, a person with
severe cerebral palsy could not be a surgeon, and a person with profound
mobility constraints probably could not be a police patrol officer. However,
the increasing presence of computer technology and other adaptive devices is
shattering many traditional barriers to employment.
One of the most controversial aspects of the ADA is the provision that
requires employers to make reasonable accommodations for people with
psychiatric disabilities. 40 Most people have very strong biases against those with
mental illnesses, who are therefore reluctant to disclose this information to
employers. Many who do, report negative consequences.
The impact of disabilities on employment outcomes has been explored from
a variety of perspectives. On the one hand, a review of the evidence suggests
workers with disabilities receive higher performance evaluations. However,
this same review found that despite their higher performance, individuals with
disabilities tend to encounter lower performance expectations and are less
likely to be hired. 41 These negative effects are much stronger for individuals
with mental disabilities, and there is some evidence to suggest mental disabilities
may impair performance more than physical disabilities: Individuals with such
common mental health issues as depression and anxiety are significantly more
likely to be absent from work. 42
Microsoft views employees with
disabilities as valuable assets
because they help ensure that the
company’s products and services
meet all customer needs. At
the Microsoft Accessibility Lab,
employees can experience assistive
technologies and ergonomic
hardware designs that enable
them to be more productive. Kelly
Ford, who has been blind since
birth, is shown here in the lab
testing accessibility features of
the Windows operating system.
Ford also manages a team that is
working on improving Web page
browsing for all users, not just for
people with disabilities.
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50 CHAPTER 2 Diversity in Organizations
Several studies have examined participants who received résumés that were
identical, except that some mentioned a disability. The résumés that mentioned
mental illness or a physical disability were associated with much lower ratings
for perceived employability, especially in jobs requiring a great deal of personal
contact with the public. 43 Employability ratings for individuals with mental
illnesses were especially low. Similarly, when given randomly manipulated
academic portfolios, students preferred not to work with individuals who
had a learning disability even though there were no effects of disability on
performance ratings or expectations. 44
Contrast these selection-oriented results with studies showing that the
accomplishments of those with disabilities are often rated as more impressive
than the same accomplishments in people without disabilities. Participants
watched three individuals completing a carpentry task, one of whom was
described as having recently been hospitalized for a debilitating mental illness. 45
The raters consistently gave that person higher performance ratings. In this
case, it may be that disabled individuals were being treated as an outgroup in
need of special help. Similarly, when disability status is randomly manipulated
among hypothetical candidates, disabled individuals are rated as having
superior personal qualities like dependability and potency. 46
Other Biographical Characteristics: Tenure, Religion,
Sexual Orientation, and Gender Identity
The last set of biographical characteristics we’ll look at includes tenure, reli-
gion, sexual orientation, and gender identity.
Tenure Except for gender and racial differences, few issues are more subject to
misconceptions and speculations than the impact of seniority on job performance.
Extensive reviews have been conducted of the seniority–productivity
relationship. 47 If we define seniority as time on a particular job, the most recent
evidence demonstrates a positive relationship between seniority and job
productivity. So tenure, expressed as work experience, appears to be a good
predictor of employee productivity.
The research relating tenure to absence is quite straightforward. Studies
consistently show seniority to be negatively related to absenteeism. 48 In fact,
in terms of both frequency of absence and total days lost at work, tenure is the
single most important explanatory variable. 49
Tenure is also a potent variable in explaining turnover. The longer a person
is in a job, the less likely he or she is to quit. 50 Moreover, consistent with research
suggesting past behavior is the best predictor of future behavior, evidence
indicates tenure at an employee’s previous job is a powerful predictor of that
employee’s future turnover. 51
Evidence indicates tenure and job satisfaction are positively related. 52 In
fact, when age and tenure are treated separately, tenure appears a more consis-
tent and stable predictor of job satisfaction than age.
Religion Not only do religious and nonreligious people question each other’s
belief systems; often people of different religious faiths conflict. As the war in
Iraq and the past conflict in Northern Ireland demonstrate, violent differences
can erupt among sects of the same religion. U.S. federal law prohibits employ-
ers from discriminating against employees based on their religion, with very few
exceptions. However, that doesn’t mean religion is a nonissue in OB.
Perhaps the greatest religious diversity issue in the United States today
revolves around Islam. There are nearly 2 million Muslims in the United States,

Biographical Characteristics 51
and across the world Islam is one of the most popular religions. There are a
wide variety of perspectives on Islam. As one Islamic scholar has noted, “There
is no such thing as a single American Muslim community, much as there is no
single Christian community. Muslims vary hugely by ethnicity, faith, tradition,
education, income, and degree of religious observance.” 53 For the most part,
U.S. Muslims have attitudes similar to those of other U.S. citizens (though the
differences tend to be greater for younger U.S. Muslims). Still, there are both
perceived and real differences. Nearly four in ten U.S. adults admit they harbor
negative feelings or prejudices toward U.S. Muslims, and 52 percent believe
U.S. Muslims are not respectful of women. Some take these general biases a
step further. Motaz Elshafi, a 28-year-old software engineer for Cisco Systems,
born and raised in New Jersey, received an e-mail from a co-worker addressed
“Dear Terrorist.” Research has shown that job applicants in Muslim-identified
religious attire who applied for hypothetical retail jobs in the United States had
shorter, more interpersonally negative interviews than applicants who did not
wear Muslim-identified attire. 54
Faith can be an employment issue when religious beliefs prohibit or encour-
age certain behaviors. Based on their religious beliefs, some pharmacists refuse
to hand out RU-486, the “morning after” abortion pill. Many Christians do not
believe they should work on Sundays, and many conservative Jews believe they
should not work on Saturdays. Religious individuals may also believe they have
an obligation to express their beliefs in the workplace, and those who do not
share those beliefs may object. Perhaps as a result of different perceptions of
religion’s role in the workplace, religious discrimination claims have been a
growing source of discrimination claims in the United States.
Sexual Orientation and Gender Identity Employers differ widely in their treat-
ment of sexual orientation. Federal law does not prohibit discrimination against
C
o n s i d e r i n g t h e f o l l o w i n g
situation . . .
Edward practices the Kemetic religion,
based on ancient Egyptian faith, and
affiliates himself with a tribe number-
ing fewer than ten members. He states
that he believes in various deities and
follows the faith’s concept of Ma’at, a
guiding principle regarding truth and
order that represents physical and
moral balance in the universe. During
a religious ceremony he received small
tattoos encircling his wrist, written in
the Coptic language, which express
his servitude to Ra, the Egyptian god
of the sun. When his employer asks
him to cover the tattoos, he explains
that it is a sin to cover them intention-
ally because doing so would signify a
rejection of Ra.
If you were Edward’s employer, how
would you respond to his request? If
several valued customers objected to
Edward’s tattoos, would it affect your
response?
It may surprise you to learn that
the Equal Employment Opportunity
Commission (EEOC), the chief regula-
tory agency that enforces laws against
workplace discrimination, holds that
Edward’s employer may not ask him to
cover his tattoos. The seeming strange-
ness of Edward’s religious views is
not legally relevant. The EEOC notes,
“These can be religious beliefs and prac-
tices even if no one else or few other
people subscribe to them.” If Edward’s
tattoos did not emanate from sincere
religious beliefs, however, the employer
could ask him to cover them.
The upshot: Diversity, ethics, and
legal compliance are not always the
same thing. Sometimes what is legal
is not what you might do, and some-
times what you might do is not legal.
Source: N. C. Earp, “Unique Belief Can
Be Religious,” EEOC Compliance Manual
(downloaded April 27, 2011), www.eeoc
.gov/policy/docs/religion.html .
An Ethical Choice
Religious Tattoos

www.eeoc.gov/policy/docs/religion.html

www.eeoc.gov/policy/docs/religion.html

52 CHAPTER 2 Diversity in Organizations
employees based on sexual orientation, though many states and municipalities
do. In general, observers note that even in the absence of federal legislation
requiring nondiscrimination, many organizations have implemented policies
and procedures protecting employees on the basis of sexual orientation. 55
Raytheon, builder of Tomahawk cruise missiles and other defense systems,
offers domestic-partner benefits, supports a wide array of gay rights groups, and
wants to be an employer of choice for gays. The firm believes these policies give it
an advantage in the ever-competitive market for engineers and scientists. Raytheon
is not alone. More than half the Fortune 500 companies offer domestic-partner
benefits for gay couples, including American Express, IBM, Intel, Morgan Stanley,
Motorola, and Walmart. Some companies oppose domestic-partner benefits or
nondiscrimination clauses for gay employees. Among these are Alltel, ADM,
ExxonMobil, H. J. Heinz, Nissan, Nestlé, and Rubbermaid. 56 Despite some gains,
many lesbian, gay, and bisexual employees keep their gender identity from their
co-workers for fear of being discriminated against. 57
As for gender identity, companies are increasingly putting in place policies
to govern how their organization treats employees who change genders (often
called transgender employees ). In 2001, only eight companies in the Fortune 500 had
policies on gender identity. By 2006, that number had swelled to 124. IBM is one
of them. Brad Salavich, a diversity manager for IBM, says, “We believe that having
strong transgender and gender identification policies is a natural extension of
IBM’s corporate culture.” Dealing with transgender employees requires some
special considerations, such as for bathrooms, employee names, and so on. 58
We’ve so far covered surface characteristics unlikely, on their own, to directly
relate to job performance. Now we turn to deep-level abilities that are closely
related to job performance. Contrary to what we were taught in grade school,
we weren’t all created equal in our abilities. Most people are to the left or the
right of the median on some normally distributed ability curve. For example,
regardless of how motivated you are, it’s unlikely you can act as well as Scarlett
Johansson, play basketball as well as LeBron James, write as well as J. K. Rowling,
or play the guitar as well as Pat Metheny. Of course, just because we aren’t all
equal in abilities does not imply that some individuals are inherently inferior.
Everyone has strengths and weaknesses that make him or her relatively supe-
rior or inferior to others in performing certain tasks or activities. From man-
agement’s standpoint, the issue is not whether people differ in terms of their
abilities. They clearly do. The issue is using the knowledge that people differ to
increase the likelihood an employee will perform his or her job well.
What does ability mean? As we use the term, ability is an individual’s current
capacity to perform the various tasks in a job. Overall abilities are essentially
made up of two sets of factors: intellectual and physical.
Intellectual Abilities
Intellectual abilities are abilities needed to perform mental activities— thinking,
reasoning, and problem solving. Most societies place a high value on intelligence,
and for good reason. Smart people generally earn more money and attain
higher levels of education. They are also more likely to emerge as leaders of
4 Define intellectual ability
and demonstrate its
relevance to OB.
Ability

Ability 53
groups. Intelligence quotient (IQ) tests, for example, are designed to ascertain
a person’s general intellectual abilities. So, too, are popular college admission
tests, such as the SAT and ACT and graduate admission tests in business
(GMAT), law (LSAT), and medicine (MCAT). Testing firms don’t claim their
tests assess intelligence, but experts know they do. 59 The seven most frequently
cited dimensions making up intellectual abilities are number aptitude, verbal
comprehension, perceptual speed, inductive reasoning, deductive reasoning,
spatial visualization, and memory. 60 Exhibit 2-2 describes these dimensions.
Intelligence dimensions are positively related, so if you score high on verbal
comprehension, for example, you’re more likely to also score high on spatial
visualization. The correlations aren’t perfect, meaning people do have specific
abilities that predict important work-related outcomes when considered
individually. 61 However, they are high enough that researchers also recognize a
general factor of intelligence, general mental ability (GMA) . Evidence strongly
supports the idea that the structures and measures of intellectual abilities
generalize across cultures. Thus, someone in Venezuela or Sudan does not
have a different set of mental abilities than a U.S. or Czech worker. There is
some evidence that IQ scores vary to some degree across cultures, but those
differences are much smaller when we take into account educational and
economic differences. 62
Jobs differ in the demands they place on intellectual abilities. The more
complex a job in terms of information-processing demands, the more general
intelligence and verbal abilities will be necessary to perform successfully. 63
ability An individual’s capacity to
perform the various tasks in a job.
intellectual abilities The capacity
to do mental activities—thinking,
reasoning, and problem solving.
general mental ability (GMA) An
overall factor of intelligence, as
suggested by the positive correlations
among specific intellectual ability
dimensions.
Dimension Description Job Example
Number aptitude Ability to do speedy and accurate Accountant: Computing the sales tax on a set of items
arithmetic
Verbal comprehension Ability to understand what is read Plant manager: Following corporate policies on hiring
or heard and the relationship of
words to each other
Perceptual speed Ability to identify visual similarities Fire investigator: Identifying clues to support a charge of arson
and differences quickly and
accurately
Inductive reasoning Ability to identify a logical sequence Market researcher: Forecasting demand for a product in the
in a problem and then solve the next time period
problem
Deductive reasoning Ability to use logic and assess the Supervisor: Choosing between two different suggestions
implications of an argument offered by employees
Spatial visualization Ability to imagine how an object Interior decorator: Redecorating an office
would look if its position in space
were changed
Memory Ability to retain and recall past Salesperson: Remembering the names of customers
experiences
Dimensions of Intellectual Ability Exhibit 2-2

54 CHAPTER 2 Diversity in Organizations
Where employee behavior is highly routine and there are few or no opportu-
nities to exercise discretion, a high IQ is not as important to performing well.
However, that does not mean people with high IQs cannot have an impact on
traditionally less complex jobs.
It might surprise you that the most widely used intelligence test in hiring
decisions takes only 12 minutes to complete. It’s the Wonderlic Cognitive
Ability Test. There are different forms, and each has 50 questions. Here are a
few examples:
● When rope is selling at $0.10 a foot, how many feet can you buy for $0.60?
● Assume the first two statements are true. Is the final one:
1. True.
2. False.
3. Not certain.
a. The boy plays baseball.
b. All baseball players wear hats.
c. The boy wears a hat.
The Wonderlic measures both speed (almost nobody has time to answer
every question) and power (questions get harder as you go along), so the
A
s e c o n o m i c g l o b a l i z a t i o n
continues to expand, the very
idea of diversity management
must expand to include a diversity
of cultures and situations. Attitudes
toward diversity programs range
greatly across countries, with the
idea of what constitutes a “diverse”
workforce differing by culture and
the demography of the country. The
role of women in the workplace also
varies, with some countries valuing
sexual equality more than others.
Other categories of diversity, like
sexual orientation, are not recognized
in some countries but are important
elements of the diversity picture in
others. A consideration of three inter-
national examples helps illustrate how
diverse diversity programs can be.
In Singapore, diversity has become
part of the national agenda. On “Racial
Harmony Day,” street carnivals are
held to celebrate the nation’s unique
status as a crossroads of Chinese,
Malay, Indian, and other cultures.
Besides applauding these distinct
national identities, the country’s lead-
ers have also prioritized these celebra-
tions as a moment to emphasize the
shared identity of being Singaporean.
Brazil is a similarly diverse country; the
major demographic groups addressed
by Brazilian diversity policies include
African descendant, European descen-
dant, and Asian descendant, as well as
disability status. Research suggests
that diversity programs are relatively
new to Brazil compared to Europe and
North America, but companies are
coming to see diversity management
as a major component of their human
resources systems. In India, diversity
management often means addressing
differences in social class and caste
that do not arise in other countries,
with affirmative action programs man-
dating the number of individuals from
lower castes who must be included in
management positions for some types
of organizations.
Multinational organizations will have
to carefully consider how to create
diversity strategies given the variety
of perspectives on diversity across
countries. Many countries require
specific targets and quotas for achiev-
ing affirmative action goals, whereas
the legal framework in the United
States specifically forbids their use.
Some countries have strong prohibi-
tions on sexual harassment, whereas
in other countries behavior unaccept-
able in U.S. workplaces is common.
Effectively managing diversity in
multinational organizations is clearly a
challenge of the global marketplace.
Sources: Based on D. P. S. Goh, “State
Carnivals and the Subvention of Multi-
culturalism in Singapore,” The British
Journal of Sociology 62 (2011), pp. 111–133;
C. J. C. Jabbour, F. S. Gordono,
J. H. C. de Olivera, J. C. Martinez, and
R. A. G. Battistelle, “Diversity Management:
Challenges, Benefits, and the Role of
Human Resource Management in Brazilian
Organizations,” Equality, Diversity, and
Inclusion: An International Journal 30 (2011),
pp. 58–74; and F. L. Cooke and D. S. Saini,
“Diversity Management in India: A Study of
Organizations in Different Ownership Forms
and Industrial Sectors,” Human Resource
Management 49 (2010), pp. 477–500.
glOBalization!
Images of Diversity from Around the Globe

Ability 55
average score is pretty low—about 21/50. And because it is able to provide valid
information cheaply (for $5 to $10/applicant), more companies are using the
Wonderlic in hiring decisions. The Factory Card & Party Outlet, with 182 stores
nationwide, uses it. So do Subway, Peoples Flowers, Security Alarm, Workforce
Employment Solutions, and many others. Most of these companies don’t give up
other hiring tools, such as application forms or interviews. Rather, they add the
Wonderlic for its ability to provide valid data on applicants’ intelligence levels.
Interestingly, while intelligence is a big help in performing a job well, it
doesn’t make people happier or more satisfied with their jobs. The correlation
between intelligence and job satisfaction is about zero. Why? Research suggests
that although intelligent people perform better and tend to have more interest-
ing jobs, they are also more critical when evaluating their job conditions. Thus,
smart people have it better, but they also expect more. 64
Physical Abilities
Though the changing nature of work suggests intellectual abilities are in-
creasingly important for many jobs, physical abilities have been and will
remain valuable. Research on hundreds of jobs has identified nine basic
abilities needed in the performance of physical tasks. 65 These are described
in Exhibit 2-3 . Individuals differ in the extent to which they have each of
these abilities. Not surprisingly, there is also little relationship among them:
a high score on one is no assurance of a high score on others. High employee
performance is likely to be achieved when management has ascertained the
extent to which a job requires each of the nine abilities and then ensures that
employees in that job have those abilities.
5 Contrast intellectual and
physical ability.

Nine Basic Physical Abilities Exhibit 2-3
Strength Factors
1. Dynamic strength Ability to exert muscular force repeatedly or continuously
over time
2. Trunk strength Ability to exert muscular strength using the trunk
(particularly abdominal) muscles
3. Static strength Ability to exert force against external objects
4. Explosive strength Ability to expend a maximum of energy in one or a series of
explosive acts
Flexibility Factors
5. Extent flexibility Ability to move the trunk and back muscles as far as possible
6. Dynamic flexibility Ability to make rapid, repeated flexing movements
Other Factors
7. Body coordination Ability to coordinate the simultaneous actions of different
parts of the body
8. Balance Ability to maintain equilibrium despite forces pulling off
balance
9. Stamina Ability to continue maximum effort requiring prolonged
effort over time
physical abilities The capacity to do
tasks that demand stamina, dexterity,
strength, and similar characteristics.

56 CHAPTER 2 Diversity in Organizations
The Role of Disabilities
The importance of ability at work obviously creates problems when we attempt
to formulate workplace policies that recognize diversity in terms of disability
status. As we have noted, recognizing that individuals have different abilities
that can be taken into account when making hiring decisions is not problematic.
However, it is discriminatory to make blanket assumptions about people on the
basis of a disability. It is also possible to make accommodations for disabilities.
Having discussed a variety of ways in which people differ, we now look at how
a manager can and should manage these differences. Diversity management
makes everyone more aware of and sensitive to the needs and differences of
others. This definition highlights the fact that diversity programs include and
are meant for everyone. Diversity is much more likely to be successful when we
see it as everyone’s business than if we believe it helps only certain groups of
employees.
Attracting, Selecting, Developing,
and Retaining Diverse Employees
One method of enhancing workforce diversity is to target recruiting messages to
specific demographic groups underrepresented in the workforce. This means
placing advertisements in publications geared toward specific demographic
groups; recruiting at colleges, universities, and other institutions with significant
numbers of underrepresented minorities; and forming partnerships with
associations like the Society for Women Engineers or the Graduate Minority
Business Association. These efforts can be successful, and research has shown
that women and minorities do have greater interest in employers that make
special efforts to highlight a commitment to diversity in their recruiting
materials. Advertisements depicting groups of diverse employees are seen as
more attractive to women and racioethnic minorities, which is probably why
most organizations depict workforce diversity prominently in their recruiting
materials. Diversity advertisements that fail to show women and minorities
in positions of organizational leadership send a negative message about the
diversity climate at an organization. 66
The selection process is one of the most important places to apply diversity
efforts. Managers who hire need to value fairness and objectivity in selecting
employees and focus on the productive potential of new recruits. Fortunately,
ensuring that hiring is bias-free does appear to work. Where managers use
a well-defined protocol for assessing applicant talent and the organization
clearly prioritizes nondiscrimination policies, qualifications become far more
important in determining who gets hired than demographic characteristics. 67
Organizations that do not discourage discriminatory behavior are more likely
to see problems.
Similarity in personality appears to affect career advancement. Those whose
personality traits are similar to those of their co-workers are more likely to be
promoted than those whose personalities are different. 68 There’s an important
qualifier to these results: in collectivistic cultures, similarity to supervisors is
more important for predicting advancement, whereas in individualistic cultures,
MyManagementLab
For an interactive application of this
topic, check out this chapter’s
simulation activity at
www.mymanagementlab.com.
Implementing Diversity Management Strategies

www.mymanagementlab.com

Implementing Diversity Management Strategies 57
similarity to peers is more important. Once again, deep-level diversity factors
appear to be more important in shaping people’s reactions to one another than
surface-level characteristics.
Evidence from a study of more than 6,000 workers in a major retail organi-
zation indicated that in stores with a less supportive diversity climate, African
Americans or Hispanics made significantly fewer sales than White employees,
but when the diversity climate was positive, Hispanics and Whites sold about the
same amount and African Americans made more sales than Whites. 69 Whites
sold about the same amount whether there was a positive diversity climate or
not, but African Americans and Hispanics sold far more when there was. There
are obvious bottom-line implications of this research: stores that fostered a
positive diversity climate were able to capitalize on their diverse workforce and
make more money.
Some data suggest individuals who are demographically different from their
co-workers are more likely to feel low commitment and to turn over: women are
more likely to turn over from predominantly male work groups and men from
predominantly female work groups; non-Whites are more likely to turn over
from predominantly White work groups and Whites from predominantly non-
White work groups. 70 However, this behavior is more prominent among new
hires. After people become better acquainted with one another, demographic
differences are less consistently related to turnover. One very large-scale study
showed a positive diversity climate was related to higher organizational commit-
ment and lower turnover intentions among African-American, Hispanic, and
White managers. 71 In other words, all workers appeared to prefer an organiza-
tion that values diversity.
In Japan, Nissan Motor Company
is helping female employees
develop their careers at the
firm’s manufacturing plants and
car dealerships. Nissan provides
women, such as the assembly-line
worker shown here, with training
programs to develop skills and the
one-on-one counseling services of
career advisors. Nissan also posts
career interviews on its corporate
intranet with women who have
made significant contributions
to the company and serve as role
models for other female employees.
For Nissan, developing the talents
of women is a strategic imperative
for its business success.
diversity management The process
and programs by which managers
make everyone more aware of and
sensitive to the needs and differences
of others.
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58 CHAPTER 2 Diversity in Organizations
Diversity in Groups
Most contemporary workplaces require extensive work in group settings. When
people work in groups, they need to establish a common way of looking at
and accomplishing the major tasks, and they need to communicate with one
another often. If they feel little sense of membership and cohesion in their
groups, all these group attributes are likely to suffer.
Does diversity help or hurt group performance? The answer is “yes.” In
some cases, diversity in traits can hurt team performance, whereas in others it
can facilitate it. 72 Whether diverse or homogeneous teams are more effective
depends on the characteristic of interest. Demographic diversity (in gender,
race, and ethnicity) does not appear to either help or hurt team performance
in general. On the other hand, teams of individuals who are highly intelligent,
conscientious, and interested in working in team settings are more effective.
Thus diversity on these variables is likely to be a bad thing—it makes little sense
to try to form teams that mix in members who are lower in intelligence, consci-
entiousness, and uninterested in teamwork. In other cases, differences can be a
strength. Groups of individuals with different types of expertise and education
are more effective than homogeneous groups. Similarly, a group made entirely
of assertive people who want to be in charge, or a group whose members all
prefer to follow the lead of others, will be less effective than a group that mixes
leaders and followers.
Regardless of the composition of the group, differences can be leveraged
to achieve superior performance. The most important way is to emphasize the
higher-level similarities among members. 73 In other words, groups of diverse
individuals will be much more effective if leaders can show how members have
a common interest in the group’s success. Evidence also shows transformational
leaders (who emphasize higher-order goals and values in their leadership style)
are more effective in managing diverse teams. 74
Effective Diversity Programs
Organizations use a variety of efforts to capitalize on diversity, including the
recruiting and selection policies we have already discussed, as well as training
and development practices. Effective, comprehensive workforce programs
encouraging diversity have three distinct components. First, they teach
managers about the legal framework for equal employment opportunity
and encourage fair treatment of all people regardless of their demographic
characteristics. Second, they teach managers how a diverse workforce will be
better able to serve a diverse market of customers and clients. Third, they foster
personal development practices that bring out the skills and abilities of all
workers, acknowledging how differences in perspective can be a valuable way to
improve performance for everyone. 75
Much concern about diversity has to do with fair treatment. 76 Most negative
reactions to employment discrimination are based on the idea that discrimina-
tory treatment is unfair. Regardless of race or gender, people are generally in
favor of diversity-oriented programs, including affirmative action, if they believe
the policies ensure everyone a fair opportunity to show their skills and abilities.
A major study of the consequences of diversity programs came to what might
seem a surprising conclusion. 77 Organizations that provided diversity train-
ing were not consistently more likely to have women and minorities in upper
management positions than organizations that did not. On closer examination
though, these results are not surprising. Experts have long known that one-shot
training sessions without strategies to encourage effective diversity manage-
ment back on the job are not likely to be very effective. Some diversity programs
6 Describe how organizations
manage diversity effectively.

Implementing Diversity Management Strategies 59
are truly effective in improving representation in management. They include
strategies to measure the representation of women and minorities in managerial
positions, and they hold managers accountable for achieving more demograph-
ically diverse management teams. Researchers also suggest that diversity expe-
riences are more likely to lead to positive adaptation for all parties if (1) the
diversity experience undermines stereotypical attitudes, (2) if the perceiver is
motivated and able to consider a new perspective on others, (3) if the perceiver
engages in stereotype suppression and generative thought in response to the
diversity experience, and (4) if the positive experience of stereotype undermin-
ing is repeated frequently. 78 Diversity programs based on these principles are
likely to be more effective than traditional classroom learning.
Organizational leaders should examine their workforce to determine
whether target groups have been underutilized. If groups of employees are
not proportionally represented in top management, managers should look
for any hidden barriers to advancement. They can often improve recruiting
practices, make selection systems more transparent, and provide training for
those employees who have not had adequate exposure to certain material
in the past. The organization should also clearly communicate its policies to
employees so they can understand how and why certain practices are followed.
Communications should focus as much as possible on qualifications and job
performance; emphasizing certain groups as needing more assistance could
well backfire. A case study of the multinational Finnish company TRANSCO
found it was possible to develop a consistent global philosophy for diversity
management. However, differences in legal and cultural factors across nations
forced TRANSCO to develop unique policies to match the cultural and legal
frameworks of each country in which it operated. 79
To ensure the top-level management team represents the diversity of its work-
force and client base, Safeway implemented the Retail Leadership Development
(RLD) Program, a formal career development program. This program is open
to all employees, so it is inclusive, but women and underrepresented racial or
ethnic groups are particularly encouraged to participate. Interested individu-
als take a series of examinations to determine whether they have management
potential. Those who perform well on the tests are provided with work in roles
that expose them to managerial opportunities. The program’s comprehensive
nature is underscored by its additional support activities: All managers attend
NASCAR, an American sport with
a worldwide following, promotes
diversity within its organization
and throughout the motorsports
industry. Through its Drive to
Diversity program, NASCAR ensures
that everyone is given a fair
opportunity to show and develop
his or her skills and abilities. The
program seeks to develop minority
and female drivers and crew
members as shown in this photo.
Drivers participate in a scouting
combine and earn the chance
to compete with an established
NASCAR team for a full season. And
after completing their training,
crew member trainees can compete
with a racing team.
So
u
rc
e
: C
h
u
ck
B
u
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o
n
/A
P
I
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a
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60 CHAPTER 2 Diversity in Organizations
workshops that help them bring diversity concerns front and center in their
staff meetings. They are also charged with providing promising RLD partici-
pants with additional training and development opportunities to ensure they
have the skills needed for advancement. The program incorporates the type
of accountability we have said is crucial to the success of diversity efforts; per-
formance bonuses are provided to managers who meet concrete diversity
goals. This program has shown real success: the number of White women store
managers has increased by 31 percent since its inception, and the number of
women-of-color store managers has increased by 92 percent. 80
MyManagementLab
Now that you have finished this chapter, go back to www.mymanagementlab.com to continue
practicing and applying the concepts you’ve learned.
This chapter looked at diversity from many perspectives. We paid particular
attention to three variables—biographical characteristics, ability, and diversity
programs. Let’s summarize what we found and consider its importance for a
manager trying to understand organizational behavior.
● We can readily observe biographical characteristics, but that doesn’t
mean we should explicitly use them in management decisions. Most
research shows fairly minimal effects of biographical characteristics on
job performance. We also need to be aware of implicit biases we or other
managers may have.
● An effective selection process will improve the fit between employees
and job requirements. A job analysis will provide information about jobs
currently being done and the abilities individuals need to perform the
jobs adequately. Applicants can then be tested, interviewed, and evaluated
on the degree to which they possess the necessary abilities.
● Promotion and transfer decisions affecting individuals already in the orga-
nization’s employ should reflect candidates’ abilities. As with new employ-
ees, care should be taken to assess critical abilities incumbents will need
in the job and match those with the organization’s human resources.
● To accommodate employees with disabilities, managers can improve the
fit by fine-tuning the job to better match an incumbent’s abilities. Often,
modifications with no significant impact on the job’s basic activities, such
as changing equipment or reorganizing tasks within a group, can better
adapt work to the specific talents of a given employee.
● Diversity management must be an ongoing commitment that crosses all
levels of the organization. Group management, recruiting, hiring, reten-
tion, and development practices can all be designed to leverage diversity
for the organization’s competitive advantage.
● Policies to improve the climate for diversity can be effective, so long as
they are designed to acknowledge all employees’ perspectives. One-shot
diversity training sessions are less likely to be effective than comprehen-
sive programs that address the climate for diversity at multiple levels.
Summary and Implications for Managers

www.mymanagementlab.com

Summar y and Implications for Managers 61
Men Have More Mathematical Ability Than Women
POINT COUNTERPOINT
W
omen make up about half the new entrants in the
professions of law, medicine, and dentistry. They are
the vast majority of veterinarians. Yet they remain
woefully underrepresented in science, mathematics, and tech-
nology positions. For example, only about one in five of recent
entrants into engineering graduate programs are women, and
in natural sciences and computer science departments at the
top universities, fewer than one in ten tenured professors are
women. If women are at such a disadvantage in terms of math
and science abilities, why are they better represented in some
occupations than others? Differing motivations produced by
teacher and parent expectations are the answer. If we think
women aren’t natural engineers, then we learn to steer girls
away from such career choices.
It is true there are gender differences in math test scores,
but those differences are not large. And often ignored is a
widely documented phenomenon: among the very young,
girls outperform boys on math (as well as on other) tests. By
adolescence, this advantage reverses and boys outperform
girls. If socialization and school experiences do not explain this
result, what does?
Moreover, we know that a large part of the reason fewer
women enter science, technology, engineering, and mathe-
matical (STEM) positions is not ability but motivation. Research
indicates that women perceive careers in STEM fields to be
less interpersonally fulfilling, and this explains their gravitation
toward other fields. If we are concerned about sex differences
in participation in these fields, we need to be concerned with
the motivational effects of these perceptions, not with any
presumed differences in male and female abilities.
H
arvard’s Larry Summers was forced to resign from
his job as president of the university for claiming that
women have different abilities than men, but there is
some truth to the claim. Evidence reliability indicates significant
gender differences in mathematical test scores.
To be sure, there are many, many women whose mathemati-
cal and scientific prowess far surpasses that of many men. The
distributions overlap to a considerable degree.
It is also true that most research shows that overall intel-
ligence doesn’t differ between genders: women are as smart
as men. But the fact of the matter is, the way in which men and
women are smart is, on average, different. Women tend to have
significantly higher scores on verbal ability measures and men
tend to have significantly higher scores on measures of math-
ematical ability.
Many sociologists and educational psychologists argue
that these differences are explained by socialization: boys are
socialized toward and rewarded for mathematical prowess,
whereas girls are pointed toward and expected to excel in writ-
ing and reading.
These socialization arguments, however, ignore some cold,
hard truths that have been uncovered in the latest research. We
know from neural imaging research that men’s and women’s
brains differ. Men tend to show higher activation in the area
of the brain responsible for mathematical and for spatial
operations. Women, in contrast, tend to have better bilateral
communication (the right and left sides of their brain communi-
cate better), which is vital to reading comprehension and writ-
ten and oral expression. Do we really think a child’s third-grade
teacher caused these differences?
No reasonable person suggests that boys and girls should
be steered into different occupations based on these findings.
Men and women should pursue the occupations that suit their
abilities and that they will find rewarding. But should our pursuit
of egalitarianism blind us to scientific findings that suggest the
obvious: men and women are not exactly alike?
Sources: Based on A. B. Diekman, E. R. Brown, A. M. Johnston, and E. K. Clark, “Seeking Congruity between Goals and Roles:
A New Look at Why Women Opt Out of Science, Technology, Engineering, and Mathematics Careers,” Psychological Science
21, no. 8 (2010), pp. 1051–1057; S. J. Ceci and W. Williams, “Sex Differences in Math-Intensive Fields,” Current Directions
in Psychological Science 19, no. 5 (2010), pp. 275–279; and J. Tierney, “Legislation Won’t Close Gender Gap in Sciences,”
The New York Times (June 14, 2010), pp. 1–4.

62 CHAPTER 2 Diversity in Organizations
1 What are the two major forms of workforce diversity?
2 What are stereotypes and how do they function in
organizational settings?
3 What are the key biographical characteristics and how
are they relevant to OB?
4 What is intellectual ability and how is it relevant to OB?
5 How can you contrast intellectual and physical ability?
6 How do organizations manage diversity effectively?
QUESTIONS FOR REVIEW
EXPERIENTIAL EXERCISE Feeling Excluded
This six-step exercise takes approximately 20 minutes.
Individual Work (Steps 1 and 2)
1. All participants are asked to recall a time when they have
felt uncomfortable or targeted because of their demo-
graphic status. Ideally, situations at work should be used,
but if no work situations come to mind, any situation
will work. Encourage students to use any demographic
characteristic they think is most appropriate, so they can
write about feeling excluded on the basis of race, ethnic-
ity, gender, age, disability status, religion, or any other
characteristic. They should briefly describe the situation,
what precipitated the event, how they felt at the time,
how they reacted, and how they believe the other party
could have made the situation better.
2. The instructor asks the students to then think about a
time when they might have either deliberately or acci-
dentally done something that made someone else feel
excluded or targeted because of their demographic
status. Once again, they should briefly describe the
situation, what precipitated the event, how they felt at
the time, how the other person reacted, and how they
could have made the situation better.
Small Groups (Steps 3 and 4)
3. Once everyone has written their descriptions, divide
the class into small groups of not more than four
people. If at all possible, try to compose groups that
are somewhat demographically diverse, to avoid
intergroup conflicts in the class review discussion.
Students should be encouraged to discuss their
situations and consider how their experiences were
similar or different.
4. After reading through everyone’s reactions, each
group should develop a short list of principles for
how they personally can avoid excluding or targeting
people in the future. Encourage them to be as
specific as possible, and also ask each group to find
solutions that work for everyone. Solutions should
focus on both avoiding these situations in the first
place and resolving them when they do occur.
Class Review (Steps 5 and 6)
5. Members of each group are invited to provide a very
brief summary of the major principles of how they’ve
felt excluded or targeted, and then to describe their
groups’ collective decisions regarding how these
situations can be minimized in the future.
6. The instructor should lead a discussion on how
companies might be able to develop comprehensive
policies that will encourage people to be sensitive in
their interactions with one another.
ETHICAL DILEMMA Board Quotas
That women are underrepresented on boards of directors
is an understatement. In the United States, only 15 percent
of board members among the Fortune 500 are women.
Among the 100 largest companies in Great Britain, women
hold approximately 12 percent of board seats, a represen-
tation that has changed little over the past 5 years. In the
European Union (EU) more generally, only 9.7 percent of
the directors of the 300 largest companies are women. In
China and India, the figure is roughly half that.
In response to such underrepresentation, many EU
countries—including France, Spain, and Norway—have
instituted compulsory quotas for female representation on
boards. Great Britain has guidelines and recommendations.
A 2011 official British government report recommended
that women make up at least 25 percent of the boards of
the largest British companies. Under the recommended
guidelines, companies would be required to announce
their board composition goals to their shareholders and
state clearly how they plan on meeting them. France passed
a law in 2011 that requires large companies to fill at least
40 percent of board seats with female members within the
next six years. Spain has a similar quota in place.

Case Incident 1 63
Questions
1. Given that women participate in the labor force
in roughly the same proportion as men, why do
you think women occupy so few seats on boards
of  directors?
2. Do you agree with the quotas established in many EU
countries? Why or why not?
3. Beyond legal remedies, what do you think can be
done to increase women’s representations on boards
of directors?
4. One recent study found no link between female repre-
sentation on boards of directors and these companies’
corporate sustainability or environmental policies. The
study’s author expressed surprise at the findings. Do
the findings surprise you? Why or why not?
Sources: J. Werdigier, “In Britain, a Push for More Women on Boards of Large Companies,” The New York
Times (February 25, 2011), p. B3; and J. Galbreath, “Are There Gender-Related Influences on Corporate
Sustainability? A Study of Women on Boards of Directors,” Journal of Management & Organization 17,
no. 1 (2011), pp. 17–38.
CASE INCIDENT 1 The Flynn Effect
Given that a substantial amount of intellectual ability is
inherited, it might surprise you to learn that intelligence test
scores are rising. In fact, scores have risen so dramatically
that today’s great-grandparents seem mentally deficient by
comparison. First, let’s review the evidence for rising test
scores. Then we’ll review explanations for the results.
On an IQ scale where 100 is the average, scores have
been rising about 3 points per decade, meaning if your
grandparent scored 100, the average score for your
generation would be around 115. That’s a pretty big
difference—about a standard deviation, meaning someone
from your grandparent’s generation whose score was at the
84th percentile would be only average (50th percentile) by
today’s norms.
James Flynn is a New Zealand researcher credited
with first documenting the rising scores. He reported the
results in 1984, when he found that almost everyone who
took a well-validated IQ test in the 1970s did better than
those who took one in the 1940s. The results appear to
hold up across cultures. Test scores are rising not only in
the United States but in most other countries in which the
effect has been tested, too.
What explains the Flynn effect? Researchers are not
entirely sure, but some of the explanations offered are these:
1. Education. Students today are better educated than
their ancestors, and education leads to higher test scores.
2. Smaller families. In 1900, the average couple had
four children; today the number is fewer than two. We
know firstborns tend to have higher IQs than other
children, probably because they receive more atten-
tion than their later-born siblings.
3. Test-taking savvy. Today’s children have been tested
so often that they are test-savvy: they know how to take
tests and how to do well on them.
4. Genes. Although smart couples tend to have fewer,
not more, children (which might lead us to expect
intelligence in the population to drop over time), it’s
possible that due to better education, tracking, and
testing, those who do have the right genes are better
able to exploit those advantages. Some genetics
researchers also have argued that if genes for intel-
ligence carried by both parents are dominant, they
win out, meaning the child’s IQ will be as high as or
higher than those of the parents.
Despite the strong heritability of IQ, researchers con-
tinue to pursue mechanisms that might raise IQ scores.
Factors like brain exercises (even video games) and reg-
ular physical exercise seem to at least temporarily boost
brain power. Other recent research in neuroscience has
had difficulty pinpointing physical mechanisms that can
lead to a boost in IQ, although researchers propose that a
focus on brain chemicals like dopamine may lead, in time,
to drugs that can boost IQ chemically.
Questions
1. Do you believe people are really getting smarter? Why
or why not?
2. Which of the factors explaining the Flynn effect do
you accept?
3. If the Flynn effect is true, does this undermine the
theory that IQ is mostly inherited? Why or why not?
Sources: Based on S. Begley, “Sex, Race, and IQ: Off Limits?” Newsweek (April 20, 2009), www.newsweek
.com ; M. A. Mingroni, “Resolving the IQ Paradox: Heterosis as a Cause of the Flynn Effect and Other
Trends,” Psychological Review (July 2007), pp. 806–829; and S. Begley, “Can You Build a Better Brain?”
Newsweek (January 10, 2011), www.newsweek.com .

www.newsweek.com

www.newsweek.com

www.newsweek.com

64 CHAPTER 2 Diversity in Organizations
CASE INCIDENT 2 Increasing Age Diversity in the Workplace
Over the past century, the average age of the workforce
has continually increased as medical science continues
to enhance longevity and vitality. The fastest-growing
segment of the workforce is individuals over the age of 55.
Recent medical research is exploring techniques that
could extend human life to 100 years or more. In addition,
the combination of laws prohibiting age discrimination
and elimination of defined-benefit pension plans means
that many individuals continue to work well past the tradi-
tional age of retirement.
Unfortunately, older workers face a variety of
discriminatory attitudes in the workplace. Researchers
scanned more than 100 publications on age discrimination
to determine what types of age stereotypes were most
prevalent across studies. They found that stereotypes
suggested job performance declined with age, counter to
empirical evidence presented earlier in this chapter that
relationships between age and core task performance are
essentially nil. Stereotypes also suggest that older workers
are less adaptable, less flexible, and incapable of learning
new concepts. Research, on the other hand, suggests they
are capable of learning and adapting to new situations
when these are framed appropriately.
Organizations can take steps to limit age discrimination
and ensure that employees are treated fairly regardless of
age. Many of the techniques to limit age discrimination
come down to fundamentally sound management practices
relevant for all employees: set clear expectations for
performance, deal with problems directly, communicate
with workers frequently, and follow clear policies and
procedures consistently. In particular, management
professionals note that clarity and consistency can help
ensure all employees are treated equally regardless of age.
Questions
1. What changes in employment relationships are likely
to occur as the population ages?
2. Do you think increasing age diversity will create new
challenges for managers? What types of challenges do
you expect will be most profound?
3. How can organizations cope with differences related
to age discrimination in the workplace?
4. What types of policies might lead to charges of age
discrimination, and how can they be changed to
eliminate these problems?
Sources: Based on D. Stipp, “The Anti-Aging Revolution,” Fortune (June 14, 2010), pp. 124–130;
R. A. Posthuma and M. A. Campion, “Age Stereotypes in the Workplace: Common Stereotypes, Moderators,
and Future Research Directions,” Journal of Management 35 (2009), pp. 158–188; and H. Perlowski, “With
an Aging Workforce, a Rising Risk of Discrimination Claims,” Workforce Management Online (July 2008),
www.workforce.com .
ENDNOTES
1. M. DiNatale and S. Boraas, “The Labor Force Experience of
Women from Generation X,” Monthly Labor Review (March
2002), pp. 1–15.
2. See, for example, F. Welch, “Catching Up: Wages of Black
Men,” The American Economic Review 93, no. 2 (2003),
pp. 320–325; A. Sakamoto, H. Wu, and J. M. Tzeng,
“The Declining Significance of Race Among American
Men During the Latter Half of the Twentieth Century,”
Demography 37 (January 2000), pp. 41–51; and A Sakomoto,
K. A. Goyette, and C. Kim, “Socioeconomic Attainments
of Asian Americans,” Annual Review of Sociology 35, (2009),
pp. 255–276.
3. J. Schram, SHRM Workplace Forecast (Alexandria, VA: Society
for Human Resource Management, 2006).
4. D. A. Harrison, K. H. Price, J. H. Gavin, and A. T. Florey,
“Time, Teams, and Task Performance: Changing Effects of
Surface- and Deep-Level Diversity on Group Functioning,”
Academy of Management Journal 45, no. 5 (2002), pp. 1029–1045;
and A.  H. Eagly and J. L. Chin, “Are Memberships in
Race, Ethnicity, and Gender Categories Merely Surface
Characteristics?” American Psychologist 65 (2010), pp. 934–935.
5. P. Chattopadhyay, M. Tluchowska, and E. George,
“Identifying the Ingroup: A Closer Look at the Influence
of Demographic Dissimilarity on Employee Social Identity,”
Academy of Management Review 29, no. 2 (2004), pp. 180–202;
and P. Chattopadhyay, “Beyond Direct and Symmetrical
Effects: The Influence of Demographic Dissimilarity on
Organizational Citizenship Behavior,” Academy of Management
Journal 42, no. 3 (1999), pp. 273–287.
6. L. M. Cortina, “Unseen Injustice: Incivility as Modern
Discrimination in Organizations,” Academy of Management
Review 33, no. 1 (2008), pp. 55–75.
7. R. J. Grossman, “Keep Pace with Older Workers,” HR
Magazine (May 2008), pp. 39–46.
8. K. A. Wrenn and T. J. Maurer, “Beliefs About Older Workers’
Learning and Development Behavior in Relation to Beliefs
About Malleability of Skills, Age-Related Decline, and
Control,” Journal of Applied Social Psychology 34, no. 2 (2004),
pp. 223–242; and R. A. Posthuma and M. A. Campion,
“Age Stereotypes in the Workplace: Common Stereotypes,

www.workforce.com

Endnotes 65
M.  Wooden, “Do Explanations of Absenteeism Differ for
Men and Women?” Human Relations (November 1995),
pp. 1309–1329.
24. See, for instance, M. Tait, M. Y. Padgett, and T. T. Baldwin,
“Job and Life Satisfaction: A Reevaluation of the Strength
of the Relationship and Gender Effects as a Function of
the Date of the Study,” Journal of Applied Psychology (June
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(September 6, 1999), pp. 202–208.
25. S. Halrynjo, “Men’s Work-Life Conflict: Career, Care and
Self-Realization: Patterns of Privileges and Dilemmas,”
Gender, Work & Organization 16, no. 1 (2009), pp. 98–125;
and S. Jayson, “Gender Roles See a ‘Conflict’ Shift,” USA
Today (March 26, 2009), p. 1A.
26. M. E. Heilman and T. G. Okimoto, “Motherhood: A Potential
Source of Bias in Employment Decisions,” Journal of Applied
Psychology 93, no. 1 (2008), pp. 189–198.
27. J. L. Raver and L. H. Nishii, “Once, Twice, or Three Times
as Harmful? Ethnic Harassment, Gender Harassment, and
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28. D. R. Avery, J. A. Richeson, M R. Hebl, and N. Ambady, “It
Does Not Have to Be Uncomfortable: The Role of Behavioral
Scripts in Black-White Interracial Interactions,” Journal of
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29. J. M. McCarthy, C. H. Van Iddekinge, and M. A. Campion,
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“Exploring the Influence of Decision Makers’ Race and
Gender on Actual Promotions to Top Management,”
Personnel Psychology 55, no. 2 (2002), pp. 397–428.
30. D. A. Kravitz, D. M. Mayer, L. M. Leslie, and D. Lev-Arey,
“Understanding Attitudes Toward Affirmative Action
Programs in Employment: Summary and Meta-Analysis of
35 Years of Research,” Journal of Applied Psychology 91 (2006),
pp. 1013–1036.
31. D. R. Avery, P F. McKay, and D. C. Wilson “What Are the
Odds? How Demographic Similarity Affects the Prevalence
of Perceived Employment Discrimination,” Journal of Applied
Psychology 93 (2008), pp. 235–249.
32. J. M. Sacco, C. R. Scheu, A. M. Ryan, and N. Schmitt, “An
Investigation of Race and Sex Similarity Effects in Interviews:
A Multilevel Approach to Relational Demography,” Journal
of Applied Psychology 88, no. 5 (2003), pp. 852–865; and
P. F. McKay and M. A. McDaniel, “A Reexamination of Black-
White Mean Differences in Work Performance: More Data,
More Moderators,” Journal of Applied Psychology 91, no.  3
(2006), pp. 538–554.
33. P. Bobko, P. L. Roth, and D. Potosky, “Derivation and
Implications of a Meta-Analytic Matrix Incorporating Cog-
nitive Ability, Alternative Predictors, and Job Performance,”
Personnel Psychology (Autumn 1999), pp. 561–589.
34. M. J. Ree, T. R. Carretta, and J. R. Steindl, “Cognitive
Ability,” in N. Anderson, D. S. Ones, H. K. Sinangil, and
C. Viswesvaran (eds.), Handbook of Industrial, Work, and
Organizational Psychology , vol. 1 (London: Sage Publications,
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35. W. T. Dickens and J. R. Flynn, “Black Americans Reduce the
Racial IQ Gap: Evidence from Standardization Samples,”
Moderators, and Future Research Directions,” Journal of
Management 35 (2009), pp. 158–188.
9. T. W. H. Ng and D. C. Feldman, “Re-examining the
Relationship Between Age and Voluntary Turnover,” Journal
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10. T. W. H. Ng and D. C. Feldman, “The Relationship of Age
to Ten Dimensions of Job Performance,” Journal of Applied
Psychology 93 (2008), pp. 392–423.
11. Cited in K. Labich, “The New Unemployed,” Fortune
(March 8, 1993), p. 43.
12. See Ng and Feldman, “The Relationship of Age to Ten
Dimensions of Job Performance.”
13. T. W. H. Ng and D. C. Feldman, “The Relationship of Age
with Job Attitudes: A Meta-Analysis,” Personnel Psychology 63
(2010), pp. 677–718.
14. K. M. Kacmar and G. R. Ferris, “Theoretical and
Methodological Considerations in the Age–Job Satisfaction
Relationship,” Journal of Applied Psychology (April 1989),
pp. 201–207; and W. A. Hochwarter, G. R. Ferris, P. L. Perrewe,
L. A. Witt, and C. Kiewitz, “A Note on the Nonlinearity of the
Age–Job Satisfaction Relationship,” Journal of Applied Social
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15. F. Kunze, S. A. Boehm, and H. Bruch, “Age Diversity, Age
Discrimination Climate and Performance Consequences—A
Cross Organizational Study,” Journal of Organizational
Behavior 32 (2011), pp. 264–290.
16. See E. M. Weiss, G. Kemmler, E. A. Deisenhammer,
W.  W. Fleischhacker, and M. Delazer, “Sex Differences in
Cognitive Functions,” Personality and Individual Differences
(September 2003), pp. 863–875; and A. F. Jorm, K. J. Anstey,
H. Christensen, and B. Rodgers, “Gender Differences in
Cognitive Abilities: The Mediating Role of Health State and
Health Habits,” Intelligence (January 2004), pp. 7–23.
17. See M. M. Black and E. W. Holden, “The Impact of Gender
on Productivity and Satisfaction Among Medical School
Psychologists,” Journal of Clinical Psychology in Medical Settings
(March 1998), pp. 117–131.
18. M. E. Heilman and T. G. Okimoto, “Why Are Women Penalized
for Success at Male Tasks? The Implied Communality Deficit,”
Journal of Applied Psychology 92, no. 1 (2007), pp. 81–92.
19. D. R. Avery, P F. McKay, and D. C. Wilson “What are the
Odds? How Demographic Similarity Affects the Prevalence
of Perceived Employment Discrimination,” Journal of Applied
Psychology 93 (2008), pp. 235–249.
20. C. Kirchmeyer, “The Different Effects of Family on Objective
Career Success Across Gender: A Test of Alternative
Explanations,” Journal of Vocational Behavior 68, no. 2 (2006),
pp. 323–346; and C. Guillaume and S. Pochic, “What Would
You Sacrifice? Access to Top Management and the Work-
Life Balance,” Gender, Work & Organization 16, no. 1 (2009),
pp. 14–36.
21. Guillaume and Pochic, “What Would You Sacrifice? Access
to Top Management and the Work-Life Balance.”
22. P. W. Hom, L. Roberson, and A. D. Ellis, “Challenging
Conventional Wisdom About Who Quits: Revelations from
Corporate America,” Journal of Applied Psychology 93, no. 1
(2008), pp. 1–34.
23. See, for instance, K. D. Scott and E. L. McClellan, “Gender
Differences in Absenteeism,” Public Personnel Management
(Summer 1990), pp. 229–253; and A. VandenHeuvel and

66 CHAPTER 2 Diversity in Organizations
47. T. W. H. Ng and D. C. Feldman, “Organizational Tenure
and Job Performance,” Journal of Management 36, (2010),
pp. 1220–1250.
48. I. R. Gellatly, “Individual and Group Determinants of
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Status Work Environment,” Academy of Management Journal
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50. R. W. Griffeth, P. W. Hom, and S. Gaertner, “A Meta-analysis
of Antecedents and Correlates of Employee Turnover:
Update, Moderator Tests, and Research Implications for the
Next Millennium,” Journal of Management 26, no. 3 (2000),
pp. 463–488.
51. M. R. Barrick and R. D. Zimmerman, “Hiring for Retention
and Performance,” Human Resource Management 48 (2009),
pp. 183–206.
52. W. van Breukelen, R. van der Vlist, and H. Steensma,
“Voluntary Employee Turnover: Combining Variables from
the ‘Traditional’ Turnover Literature with the Theory of
Planned Behavior,” Journal of Organizational Behavior 25,
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53. M. Elias, “USA’s Muslims Under a Cloud,” USA Today
(August 10, 2006), pp. 1D, 2D; and R. R. Hastings, “Muslims
Seek Acknowledgement of Mainstream Americans,” HRWeek
(May 11, 2007), p. 1.
54. E. B. King and A. S. Ahmad, “An Experimental Field
Study of Interpersonal Discrimination Toward Muslim Job
Applicants,” Personnel Psychology 63 (2010), pp. 881–906.
55. See, for example, E. B. King and J. M. Cortina, “The Social
and Economic Imperative of Lesbian, Gay, Bisexual, and
Transgendered Supportive Organizational Policies,”
Industrial and Organizational Psychology: Perspectives on Science
and Practice 3 (2010), pp. 69–78.
56. HRC Corporate Equality Index, 2011, www.hrc.org/documents/
HRC-CEI-2011-Final ; and R. R. Hastings, “Necessity
Breeds Inclusion: Reconsidering ‘Don’t Ask, Don’t Tell,’”
HRWeek (January 2007), pp. 1–2.
57. B. R. Ragins, “Disclosure Disconnects: Antecedents and
Consequences of Disclosing Invisible Stigmas Across Life
Domains,” Academy of Management Review 33 (2008), pp. 194–215.
58. B. Leonard, “Transgender Issues Test Diversity Limits,”
HRMagazine (June 2007), pp. 32–34.
59. L. S. Gottfredson, “The Challenge and Promise of Cognitive
Career Assessment,” Journal of Career Assessment 11, no. 2
(2003), pp. 115–135.
60. M. D. Dunnette, “Aptitudes, Abilities, and Skills,” in
M. D. Dunnette (ed.), Handbook of Industrial and Organizational
Psychology (Chicago: Rand McNally, 1976), pp. 478–483.
61. J. W. B. Lang, M. Kersting, U. R. Hülscheger, and J. Lang,
“General Mental Ability, Narrower Cognitive Abilities, and
Job Performance: The Perspective of the Nested-Factors
Model of Cognitive Abilities” Personnel Psychology 63 (2010),
pp. 595–640.
62. N. Barber, “Educational and Ecological Correlates of IQ: A
Cross-National Investigation,” Intelligence (May–June 2005),
pp. 273–284.
63. J. F. Salgado, N. Anderson, S. Moscoso, C. Bertua, F. de Fruyt,
and J. P. Rolland, “A Meta-analytic Study of General Mental
Psychological Science 17 (2006), pp. 913–920; and C. Murray,
“The Magnitude and Components of Change in the Black-
White IQ Difference from 1920 to 1991: A Birth Cohort
Analysis of the Woodcock-Johnson Standardizations,”
Intelligence 35, no. 44 (2007), pp. 305–318.
36. See J. P. Rushton and A. R. Jenson, “Thirty Years of Research
on Race Differences in Cognitive Ability,” Psychology, Public
Policy, and the Law 11, no. 2 (2005), pp. 235–295; and
R. E. Nisbett, “Heredity, Environment, and Race Differences in
IQ: A Commentary on Rushton and Jensen (2005),” Psychology,
Public Policy, and the Law 11, no. 2 (2005), pp. 302–310.
37. Avery, McKay, and Wilson, “What Are the Odds? How
Demographic Similarity Affects the Prevalence of Perceived
Employment Discrimination”; and Raver and Nishii, “Once,
Twice, or Three Times as Harmful? Ethnic Harassment, Gender
Harassment, and Generalized Workplace Harassment.”
38. P. F. McKay, D. R. Avery, and M. A. Morris, “Mean Racial-
Ethnic Differences in Employee Sales Performance: The
Moderating Role of Diversity Climate,” Personnel Psychology
61, no. 2 (2008), pp. 349–374.
39. Americans with Disabilities Act, 42 U.S.C. § 12101, et seq.
(1990).
40. S. G. Goldberg, M. B. Killeen, and B. O’Day, “The Disclosure
Conundrum: How People with Psychiatric Disabilities
Navigate Employment,” Psychology, Public Policy, and Law 11,
no. 3 (2005), pp. 463–500; M. L. Ellison, Z. Russinova,
K. L. MacDonald-Wilson, and A. Lyass, “Patterns and
Correlates of Workplace Disclosure Among Professionals
and Managers with Psychiatric Conditions,” Journal of
Vocational Rehabilitation 18, no. 1 (2003), pp. 3–13.
41. L. R. Ren, R. L. Paetzold, and A. Colella, “A Meta-Analysis of
Experimental Studies on the Effects of Disability on Human
Resource Judgments,” Human Resource Management Review
18, no. 3 (2008), pp. 191–203.
42. S. Almond and A. Healey, “Mental Health and Absence
from Work: New Evidence from the UK Quarterly Labour
Force Survey,” Work, Employment, and Society 17, no. 4 (2003),
pp. 731–742.
43. E. Louvet, “Social Judgment Toward Job Applicants
with Disabilities: Perception of Personal Qualities and
Competences,” Rehabilitation Psychology 52, no. 3 (2007),
pp. 297–303; and W. D. Gouvier, S. Sytsma-Jordan, and
S. Mayville, “Patterns of Discrimination in Hiring Job
Applicants with Disabilities: The Role of Disability Type, Job
Complexity, and Public Contact,” Rehabilitation Psychology 48,
no. 3 (2003), pp. 175–181.
44. A. Colella, A. S. DeNisi, and A. Varma, “The Impact of
Ratee’s Disability on Performance Judgments and Choice
as Partner: The Role of Disability-Job Fit Stereotypes and
Interdependence of Rewards,” Journal of Applied Psychology
83, no. 1 (1998), pp. 102–111.
45. J. M. Czajka and A. S. DeNisi, “Effects of Emotional Disability
and Clear Performance Standards on Performance Ratings,”
Academy of Management Journal 31, no. 2 (1988), pp. 394–404.
46. B. S. Bell and K. J. Klein, “Effect of Disability, Gender,
and Job Level on Ratings of Job Applicants,” Rehabilitation
Psychology 46, no. 3 (2001), pp. 229–246; and Louvet,
“Social Judgment Toward Job Applicants with Disabilities:
Perception of Personal Qualities and Competences.”

www.hrc.org/documents/HRC-CEI-2011-Final

www.hrc.org/documents/HRC-CEI-2011-Final

Endnotes 67
72. S. T. Bell, “Deep-Level Composition Variables as Predictors
of Team Performance: A Meta–Analysis,” Journal of Applied
Psychology 92, no. 3 (2007), pp. 595–615; S. K. Horwitz and
I. B. Horwitz, “The Effects of Team Diversity on Team
Outcomes: A Meta-Analytic Review of Team Demography,”
Journal of Management 33, no. 6 (2007), pp. 987–1015;
G. L. Stewart, “A Meta-Analytic Review of Relationships
Between Team Design Features and Team Performance,”
Journal of Management 32, no. 1 (2006), pp. 29–54; and
A. Joshi and H. Roh, “The Role of Context in Work Team
Diversity Research: A Meta-Analytic Review,” Academy of
Management Journal 52, no. 3 (2009), pp. 599–627.
73. A. C. Homan, J. R. Hollenbeck, S. E. Humphrey, D. Van
Knippenberg, D. R. Ilgen, and G. A. Van Kleef, “Facing
Differences with an Open Mind: Openness to Experience,
Salience of Intragroup Differences, and Performance of
Diverse Work Groups,” Academy of Management Journal 51,
no. 6 (2008), pp. 1204–1222.
74. E. Kearney and D. Gebert, “Managing Diversity and Enhancing
Team Outcomes: The Promise of Transformational
Leadership,” Journal of Applied Psychology 94, no. 1 (2009),
pp. 77–89.
75. C. L. Holladay and M. A. Quiñones, “The Influence of
Training Focus and Trainer Characteristics on Diversity
Training Effectiveness,” Academy of Management Learning and
Education 7, no. 3 (2008), pp. 343–354; and R. Anand and
M. Winters, “A Retrospective View of Corporate Diversity
Training from 1964 to the Present,” Academy of Management
Learning and Education 7, no. 3 (2008), pp. 356–372.
76. Q. M. Roberson and C. K. Stevens, “Making Sense of Diversity
in the Workplace: Organizational Justice and Language
Abstraction in Employees’ Accounts of Diversity-Related
Incidents,” Journal of Applied Psychology 91 (2006), pp. 379–391;
and D. A. Harrison, D. A. Kravitz, D. M. Mayer, L. M. Leslie,
and D. Lev-Arey, “Understanding Attitudes Toward Affirmative
Action Programs in Employment: Summary and Meta-Analysis
of 35 Years of Research,” Journal of Applied Psychology 91 (2006),
pp. 1013–1036.
77. A. Kalev, F. Dobbin, and E. Kelly, “Best Practices or Best
Guesses? Assessing the Efficacy of Corporate Affirmative
Action and Diversity Policies,” American Sociological Review 71,
no. 4 (2006), pp. 589–617.
78. R. J. Crisp and R. N. Turner, “Cognitive Adaptation to the
Experience of Social and Cultural Diversity,” Psychological
Bulletin 137 (2011), pp. 242–266.
79. A. Sippola and A. Smale, “The Global Integration of Diversity
Management: A Longitudinal Case Study,” International
Journal of Human Resource Management 18, no. 11 (2007),
pp. 1895–1916.
80. A. Pomeroy, “Cultivating Female Leaders,” HR Magazine
(February 2007), pp. 44–50.
Ability Validity for Different Occupations in the European
Community,” Journal of Applied Psychology (December 2003),
pp. 1068–1081; and F. L. Schmidt and J. E. Hunter, “Select
on Intelligence,” in E. A. Locke (ed.), Handbook of Principles
of Organizational Behavior (Malden, MA: Blackwell, 2004).
64. Y. Ganzach, “Intelligence and Job Satisfaction,” Academy
of Management Journal 41, no. 5 (1998), pp. 526–539;
and  Y. Ganzach, “Intelligence, Education, and Facets of
Job  Satisfaction,” Work and Occupations 30, no. 1 (2003),
pp. 97–122.
65. E. A. Fleishman, “Evaluating Physical Abilities Required by
Jobs,” Personnel Administrator (June 1979), pp. 82–92.
66. D. R. Avery, “Reactions to Diversity in Recruitment
Advertising: Are the Differences Black and White?”
Journal of Applied Psychology 88, no. 4 (2003), pp. 672–679;
P. F. McKay and D. R. Avery, “What Has Race Got to Do with
It? Unraveling the Role of Racioethnicity in Job Seekers’
Reactions to Site Visits,” Personnel Psychology 59, no. 2 (2006),
pp. 395–429; and D. R. Avery and P. F. McKay, “Target
Practice: An Organizational Impression Management
Approach to Attracting Minority and Female Job Applicants,”
Personnel Psychology 59, no. 1 (2006), pp. 157–187.
67. M. R. Buckley, K. A. Jackson, M. C. Bolino, J. G. Veres, and
H.  S. Field, “The Influence of Relational Demography on
Panel Interview Ratings: A Field Experiment,” Personnel
Psychology 60 (2007), pp. 627–646; J. M. Sacco, C. R. Scheu,
A. M. Ryan, and N. Schmitt, “An Investigation of Race and
Sex Similarity Effects in Interviews: A Multilevel Approach
to Relational Demography,” Journal of Applied Psychology 88
(2003), pp. 852–865; and J. C. Ziegert and P. J. Hanges,
“Employment Discrimination: The Role of Implicit Attitudes,
Motivation, and a Climate for Racial Bias,” Journal of Applied
Psychology 90 (2005), pp. 553–562.
68. J. Schaubroeck and S. S. K. Lam, “How Similarity to Peers
and Supervisor Influences Organizational Advancement
in Different Cultures,” Academy of Management Journal 45
(2002), pp. 1120–1136.
69. P. F. McKay, D. R. Avery, and M. A. Morris, “Mean Racial-
Ethnic Differences in Employee Sales Performance: The
Moderating Role of Diversity Climate,” Personnel Psychology
61, no. 2 (2008), pp. 349–374.
70. A. S. Tsui, T. D. Egan, and C. A. O’Reilly, “Being Different:
Relational Demography and Organizational Attachment,”
Administrative Science Quarterly 37 (1992), pp. 547–579; and
J. M. Sacco and N. Schmitt, “A Dynamic Multilevel Model of
Demographic Diversity and Misfit Effects,” Journal of Applied
Psychology 90 (2005), pp. 203–231.
71. P. F. McKay, D. R. Avery, S. Tonidandel, M. A. Morris,
M. Hernandez, and M. R. Hebl, “Racial Differences in
Employee Retention: Are Diversity Climate Perceptions the
Key?” Personnel Psychology 60, no. 1 (2007), pp. 35–62.

WHAT DOES SAS STAND FOR?
68
M
ost of you probably are not familiar with SAS Institute, Inc. Is it
a think-tank? An educational program to teach children man-
ners? No, SAS (originally Statistical Analysis System) is a Cary,
North Carolina–based software company, and one that happens to be the
best place to work in the United States in 2011 (as it was in 2010), according
to Fortune magazine.
Founded by North Carolina State University graduate student Anthony J.
Barr, SAS quickly established itself as one of the largest developers of statis-
tical software (where its main rival was and continues to be Chicago-based
SPSS, now a division of IBM). Part of the secret of SAS’s growth and success is
that it has branched off into other software markets, such as business plan-
ning and support, quality improvement, data storage, and others. Today, the
firm employs more than 11,000 people.
However, another distinguishing characteristic of SAS is its highly
employee-friendly culture. As a result of being given “the Royal Treatment”
(in the words of 60 Minutes ), SAS employees turn over at a rate under
4 percent, roughly a tenth that of their firm’s competitors.
So what is this royal treatment? SAS provides a host of benefits employ-
ees love, including:
● Free onsite health care.
● Subsidized onsite child care.
● Summer camp for kids.
● “M&M Wednesdays,” when employees are given free candy.
● Soda fountains and snacks in every break room.
● A beauty salon.
● A 66,000-ft 2 recreation and fitness center.
● Car cleaning.
To be sure, these benefits are one reason SAS is a desirable place to
work. However, the firm’s commitment to its employees goes beyond nice
perks. Even in the economic downturn, SAS has refused to lay off employ-
ees and has even expanded its benefits. “In a tough economy, SAS did
not waiver from our commitment to our employees and the innovative
culture that keeps them challenged and provides work–life balance,” said
Jenn Mann, Vice President of Human Resources at SAS. “SAS’s contin-
ued success proves our core belief: Happy, healthy employees are more
productive.”
Says one SAS employee: “People stay at SAS in large part because they
are happy, but to dig a little deeper, I would argue that people don’t leave
LEARNING
OBJECTIVES
After studying this chapter,
you should be able to:
1 Contrast the three
components of an attitude.
2 Summarize the relationship
between attitudes and
behavior.
3 Compare and contrast the
major job attitudes.
4 Define job satisfaction
and show how we can
measure it.
5 Summarize the main causes
of job satisfaction.
6 Identify four employee
responses to dissatisfaction.
MyManagementLab
Access a host of interactive
learning aids to help strengthen
your understanding of the
chapter concepts at
www.mymanagementlab.com

www.mymanagementlab.com

Attitudes and
Job Satisfaction 3
69
Attitude isn’t everything, but it’s close.
— New York Times headline, August 6, 2006
Ph
ot
o:
S
A
S
re
cr
ea
tio
na
l c
en
te
r.
S
ou
rc
e:
C
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rly
K
ur
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Re
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x
Pi
ct
ur
es
69

70 CHAPTER 3 Attitudes and Job Satisfac tion
S A L
SELF-ASSESSMENT LIBRARY
SAS because they feel regarded—seen, attended to and cared for. I have stayed
for that reason, and love what I do for that reason.”
Sources: “100 Best Companies to Work For 2011,” Fortune (January 7, 2011), http://money
.cnn.com/ ; D. Bracken, “SAS Again Tops Fortune List of Best Places to Work,” Charlotte Observer
(January 20, 2011), www.charlotteobserver.com/ ; and S. Rezvani, “What Makes a ‘Best
Workplace?’ ” Washington Post (January 21, 2011), http://views.washingtonpost.com/ .
T hough most will not go as far as SAS to promote employee satisfaction, many organizations are very concerned with the attitudes of their employ-ees. In this chapter, we look at attitudes, their link to behavior, and how
employees’ satisfaction or dissatisfaction with their jobs affects the workplace.
What are your attitudes toward your job? Use the following Self-Assessment
Library to determine your level of satisfaction with your current or past jobs.
How Satisfied Am I with My Job?
In the Self-Assessment Library (available on CD or online), take assessment I.B.3
(How Satisfied Am I with My Job?) and then answer the following questions. If
you currently do not have a job, answer the questions for your most recent job.
1. How does your job satisfaction compare to that of others in your class who
have taken the assessment?
2. Why do you think your satisfaction is higher or lower than average?
Attitudes are evaluative statements—either favorable or unfavorable—about
objects, people, or events. They reflect how we feel about something. When I
say “I like my job,” I am expressing my attitude about work.
Attitudes are complex. If you ask people about their attitude toward religion,
Lady Gaga, or the organization they work for, you may get a simple response, but
the reasons underlying it are probably complicated. In order to fully understand
attitudes, we must consider their fundamental properties or components.
What Are the Main Components of Attitudes?
Typically, researchers have assumed that attitudes have three components: cog-
nition, affect, and behavior. 1 Let’s look at each.
The statement “My pay is low” is the cognitive component of an attitude—
a description of or belief in the way things are. It sets the stage for the more
critical part of an attitude—its affective component . Affect is the emotional or
feeling segment of an attitude and is reflected in the statement “I am angry over
how little I’m paid.” Finally, affect can lead to behavioral outcomes. The behav-
ioral component of an attitude describes an intention to behave in a certain way
toward someone or something—to continue the example, “I’m going to look
for another job that pays better.”
Viewing attitudes as having three components—cognition, affect, and
behavior—is helpful in understanding their complexity and the potential
1 Contrast the three
components of an attitude.
Attitudes

www.charlotteobserver.com/

http://money.cnn.com/

http://money.cnn.com/

http://views.washingtonpost.com/

Attitudes 71
relationship between attitudes and behavior. Keep in mind that these compo-
nents are closely related, and cognition and affect in particular are inseparable
in many ways. For example, imagine you realized that someone has just treated
you unfairly. Aren’t you likely to have feelings about that, occurring virtually in-
stantaneously with the realization? Thus, cognition and affect are intertwined.
Exhibit 3-1 illustrates how the three components of an attitude are related.
In this example, an employee didn’t get a promotion he thought he deserved;
a co-worker got it instead. The employee’s attitude toward his supervisor is illus-
trated as follows: the employee thought he deserved the promotion (cognition),
he strongly dislikes his supervisor (affect), and he is looking for another job
(behavior). As we’ve noted, although we often think cognition causes affect, which
then causes behavior, in reality these components are often difficult to separate.
In organizations, attitudes are important for their behavioral component. If
workers believe, for example, that supervisors, auditors, bosses, and time-and-
motion engineers are all in conspiracy to make employees work harder for the
same or less money, it makes sense to try to understand how these attitudes
formed, how they relate to actual job behavior, and how they might be changed.
Does Behavior Always Follow from Attitudes?
Early research on attitudes assumed they were causally related to behavior—
that is, the attitudes people hold determine what they do. Common sense, too,
suggests a relationship. Isn’t it logical that people watch television programs
they like, or that employees try to avoid assignments they find distasteful?
Negative
attitude
toward
supervisor
Cognitive = evaluation
My supervisor gave a promotion
to a coworker who deserved it
less than me. My supervisor is unfair.
Affective = feeling
I dislike my supervisor!
C
o
g
n
it
io
n
,
a
ff
e
ct
,
a
n
d
b
e
h
a
v
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a
re
c
lo
se
ly
r
e
la
te
d
.
Behavioral = action
I’m looking for other work; I’ve
complained about my supervisor
to anyone who would listen.
The Components of an Attitude Exhibit 3-1
attitudes Evaluative statements or
judgments concerning objects, people,
or events. affective component The emotional or
feeling segment of an attitude.
behavioral component An intention
to behave in a certain way toward
someone or something.
cognitive component The opinion or
belief segment of an attitude.
2 Summarize the relationship
between attitudes and
behavior.

72 CHAPTER 3 Attitudes and Job Satisfac tion
However, in the late 1960s, a review of the research challenged this assumed
effect of attitudes on behavior. 2 One researcher—Leon Festinger—argued
that attitudes follow behavior. Did you ever notice how people change what
they say so it doesn’t contradict what they do? Perhaps a friend of yours has
consistently argued that the quality of U.S. cars isn’t up to that of imports and
that he’d never own anything but a Japanese or German car. But his dad gives
him a late-model Ford Mustang, and suddenly he says U.S. cars aren’t so bad.
Festinger proposed that cases of attitude following behavior illustrate the ef-
fects of cognitive dissonance , 3 any incompatibility an individual might perceive
between two or more attitudes or between behavior and attitudes. Festinger
argued that any form of inconsistency is uncomfortable and that individuals
will therefore attempt to reduce it. They will seek a stable state, which is a mini-
mum of dissonance.
Research has generally concluded that people do seek consistency among
their attitudes and between their attitudes and their behavior. 4 They either
alter the attitudes or the behavior, or they develop a rationalization for the
discrepancy. Tobacco executives provide an example. 5 How, you might won-
der, do these people cope with the continuing revelations about the health
dangers of smoking? They can deny any clear causation between smoking and
cancer. They can brainwash themselves by continually articulating the benefits
of tobacco. They can acknowledge the negative consequences of smoking but
rationalize that people are going to smoke and that tobacco companies merely
promote freedom of choice. They can accept the evidence and make cigarettes
less dangerous or reduce their availability to more vulnerable groups, such as
teenagers. Or they can quit their job because the dissonance is too great.
No individual, of course, can completely avoid dissonance. You know cheat-
ing on your income tax is wrong, but you fudge the numbers a bit every year
and hope you’re not audited. Or you tell your children to floss their teeth, but
you don’t do it yourself. Festinger proposed that the desire to reduce disso-
nance depends on moderating factors, including the importance of the elements
creating it and the degree of influence we believe we have over them. Individuals
Marriott International strives for
consistency between employee
attitudes and behavior through its
motto “Spirit to Serve.” CEO and
chairman J. W. Marriott, Jr., models
the behavior of service by visiting
hotel employees throughout the
year. “I want our associates to know
that there really is a guy named
Marriott who cares about them,” he
says. The company honors employ-
ees with job excellence awards
for behavior that exemplifies an
attitude of service to customers
and co-workers.
So
u
rc
e
:
B
il
l
G
re
e
n
b
la
t/
U
P
I/
N
e
w
sc
o
m

Attitudes 73
will be more motivated to reduce dissonance when the attitudes or behavior are
important or when they believe the dissonance is due to something they can
control. A third factor is the rewards of dissonance; high rewards accompanying
high dissonance tend to reduce the tension inherent in the dissonance.
While Festinger argued that attitudes follow behavior, other researchers
asked whether there was any relationship at all. More recent research shows that
attitudes predict future behavior and confirmed Festinger’s idea that “moderat-
ing variables” can strengthen the link. 6
Moderating Variables The most powerful moderators of the attitudes rela-
tionship are the importance of the attitude, its correspondence to behavior, its acces-
sibility, the presence of social pressures, and whether a person has direct experience
with the attitude. 7
Important attitudes reflect our fundamental values, self-interest, or iden-
tification with individuals or groups we value. These attitudes tend to show a
strong relationship to our behavior.
Specific attitudes tend to predict specific behaviors, whereas general at-
titudes tend to best predict general behaviors. For instance, asking someone
about her intention to stay with an organization for the next 6 months is likely
to better predict turnover for that person than asking her how satisfied she is
with her job overall. On the other hand, overall job satisfaction would better
predict a general behavior, such as whether the individual was engaged in her
work or motivated to contribute to her organization. 8
Attitudes that our memories can easily access are more likely to predict our
behavior. Interestingly, you’re more likely to remember attitudes you frequently
express. So the more you talk about your attitude on a subject, the more likely
you are to remember it, and the more likely it is to shape your behavior.
Discrepancies between attitudes and behavior tend to occur when social
pressures to behave in certain ways hold exceptional power, as in most orga-
nizations. This may explain why an employee who holds strong anti-union at-
titudes attends pro-union organizing meetings, or why tobacco executives, who
are not smokers themselves and who tend to believe the research linking smok-
ing and cancer, don’t actively discourage others from smoking.
Finally, the attitude–behavior relationship is likely to be much stronger if
an attitude refers to something with which we have direct personal experience.
Asking college students with no significant work experience how they would
respond to working for an authoritarian supervisor is far less likely to predict
actual behavior than asking that same question of employees who have actually
worked for such an individual.
What Are the Major Job Attitudes?
We each have thousands of attitudes, but OB focuses our attention on a very
limited number of work-related attitudes. These tap positive or negative evalu-
ations that employees hold about aspects of their work environment. Most of
the research in OB has looked at three attitudes: job satisfaction, job involve-
ment, and organizational commitment. 9 A few other important attitudes are
perceived organizational support and employee engagement; we’ll also briefly
discuss these.
cognitive dissonance Any
incompatibility between two or more
attitudes or between behavior and
attitudes.
3 Compare and contrast the
major job attitudes.

74 CHAPTER 3 Attitudes and Job Satisfac tion
Job Satisfaction When people speak of employee attitudes, they usually mean
job satisfaction , which describes a positive feeling about a job, resulting from
an evaluation of its characteristics. A person with a high level of job satisfaction
holds positive feelings about his or her job, while a person with a low level holds
negative feelings. Because OB researchers give job satisfaction high importance,
we’ll review this attitude in detail later in the chapter.
Job Involvement Related to job satisfaction is job involvement , 10 which mea-
sures the degree to which people identify psychologically with their job and con-
sider their perceived performance level important to self-worth. 11 Employees with
a high level of job involvement strongly identify with and really care about the kind
of work they do. Another closely related concept is psychological empowerment ,
employees’ beliefs in the degree to which they influence their work environment,
their competence, the meaningfulness of their job, and their perceived auton-
omy. 12 One study of nursing managers in Singapore found that good leaders
empower their employees by involving them in decisions, making them feel their
work is important, and giving them discretion to “do their own thing.” 13
High levels of both job involvement and psychological empowerment are
positively related to organizational citizenship and job performance. 14 High job
involvement is also related to reduced absences and lower resignation rates. 15
Organizational Commitment In organizational commitment , an employee
identifies with a particular organization and its goals and wishes to remain a
R
esearch by the Conference Board
suggests that job satisfaction for
U.S. employees is at a 23-year
low. This appears to be occurring in the
midst of a dramatic growth in informa-
tion technology that was supposed to
make work easier for employees. What
is going on here? Are employers failing
to consider an ethical responsibility to
employees by providing a satisfying,
fulfilling experience at work?
When Professor James Heskett
of Harvard posted information about
these low job satisfaction rates on
his blog, respondents provided a vari-
ety of different explanations for why
U.S. workers are less satisfied than
they were in the past. They included
economic pressures, instability in
the business environment, and in-
creased competition to get the best
jobs. Others believe businesses have
become so focused on stock prices
and profitability that the personal re-
lationship that used to exist between
employers and employees has been
lost. Still others proposed that in a
poor economic environment, employ-
ees who wanted to switch to a new
job aren’t always able to find alterna-
tives, leaving them “hostages” to a
dissatisfying work situation.
Whatever the explanation, there
is cause for concern. Survey data
from Towers Watson’s global work-
force study of 20,000 employees in
22  markets around the world found
that employees are especially con-
cerned about job security and feel
they are entirely responsible for ensur-
ing their long-term career prospects
work out. In the current economic
environment, it seems that in employ-
ers’ minds, employee well-being and
security have taken a back seat to cop-
ing with workplace realities.
What can managers do to ensure
they are making ethical decisions
about protecting the quality of the
workplace in their organizations? As
we have shown, managers can enact
a variety of concrete steps—including
improving working conditions and pro-
viding a positive social environment—
that will make work more enjoyable for
employees. Employers may also want
to think about whether their efforts to
achieve efficiency and productivity are
creating a work environment that is
not very satisfying for employees.
Sources: Based on J. Heskett, “Why Are
Fewer and Fewer U.S. Employees Satisfied
with Their Jobs?” Harvard Business School
Working Knowledge (April 2, 2010), hbswk
.hbs.edu; and Towers Watson, 2010 Global
Workforce Study (New York: Author, 2010).
An Ethical Choice
Do Employers Owe Workers More Satisfying Jobs?

Attitudes 75
member. Most research has focused on emotional attachment to an organiza-
tion and belief in its values as the “gold standard” for employee commitment. 16
A positive relationship appears to exist between organizational commit-
ment and job productivity, but it is a modest one. 17 A review of 27 studies sug-
gested the relationship between commitment and performance is strongest for
new employees and considerably weaker for more experienced employees. 18
Interestingly, research indicates that employees who feel their employers fail
to keep promises to them feel less committed, and these reductions in commit-
ment, in turn, lead to lower levels of creative performance. 19 And, as with job in-
volvement, the research evidence demonstrates negative relationships between
organizational commitment and both absenteeism and turnover. 20
Theoretical models propose that employees who are committed will be less
likely to engage in work withdrawal even if they are dissatisfied, because they
have a sense of organizational loyalty. On the other hand, employees who are
not committed, who feel less loyal to the organization, will tend to show lower
levels of attendance at work across the board. Research confirms this theoreti-
cal proposition. 21 It does appear that even if employees are not currently happy
with their work, they are willing to make sacrifices for the organization if they
are committed enough.
At Veterinary Cancer Group in
Tustin, California, employees
are committed to their company
because they identify with their
organization and its goals and
want to remain part of the small
business. The client care special-
ists shown in this photo and their
co-workers share the cancer clinic’s
goal of improving the quality of
life for patients and giving sup-
port to the families of patients.
Veterinarian Mona Rosenberg, who
founded the practice, has created
a positive work environment at the
clinic by hiring kind and compas-
sionate people and by valuing the
work of each employee, resulting in
the favorable employee attitude of
organizational commitment.
job involvement The degree to which
a person identifies with a job, actively
participates in it, and considers
performance important to self-worth.
psychological empowerment
Employees’ belief in the degree
to which they affect their work
environment, their competence, the
meaningfulness of their job, and their
perceived autonomy in their work.
organizational commitment The
degree to which an employee
identifies with a particular organization
and its goals and wishes to maintain
membership in the organization.
job satisfaction A positive feeling
about one’s job resulting from an
evaluation of its characteristics.
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76 CHAPTER 3 Attitudes and Job Satisfac tion
Perceived Organizational Support Perceived organizational support (POS) is
the degree to which employees believe the organization values their contribution
and cares about their well-being (for example, an employee believes his organiza-
tion would accommodate him if he had a child care problem or would forgive an
honest mistake on his part). Research shows that people perceive their organiza-
tion as supportive when rewards are deemed fair, when employees have a voice
in decisions, and when they see their supervisors as supportive. 22 Employees with
strong POS perceptions have been found more likely to have higher levels of or-
ganizational citizenship behaviors, lower levels of tardiness, and better customer
T
he increased time pressures
of the always-connected work-
place are eroding the boundary
between work life and personal life,
and many individuals in postindustrial
economies struggle to balance the
two. Is this striving for work–life bal-
ance unique to the North American
and European context, or is it a global
phenomenon?
One possible reason for variations
in work–life balance across countries is
differences in the structure and func-
tioning of the family. Some research
suggests that countries with stronger
differences in expectations for men
and women have different levels and
types of work–life conflict. Other re-
search suggests that work–life balance
will be different in an individualistic
country like the United States than in
a country that is more collectivist in its
orientation. In individualist countries,
employers might expect more sacri-
fice from their employees in terms of
their family lives, whereas collectiv-
ist nations where family has a higher
priority will have fewer work–life bal-
ance issues. Conversely, collectivists’
higher value on family may mean they
feel more conflicted if there are com-
peting demands from the workplace
and home.
There are other reasons to suspect
that research based on the U.S. con-
text will not generalize to other coun-
tries. Data from a study by Harvard and
McGill University researchers found
that work–life balance policies like paid
maternity leave, paternity leave, and
paid time off in the United States are
far less generous than in other wealthy
nations. The study’s lead author, Jody
Heymann, notes, “More countries are
providing the workplace protections
that millions of Americans can only
dream of.” The research interest in
work–life balance may at least partially
be a reflection of an unusually strong
conflict between work and family life
in the United States.
At the same time, many of the
same issues that contribute to work–
life imbalance are present in other
countries. Globally, the rise of the
dual-earner couple has meant that
both partners now have family respon-
sibilities that must be met. Always-
connected technology that blurs the
line between personal and work time
have become standard for managers in
every part of the world. The institution
of “siesta,” or a midday break, used
to be much more common in Hispanic
cultures than it is today as the global-
ized workplace puts greater demands
on workers. Concerns about overwork
have also become very prevalent in
the rapidly growing economic sphere
of East Asia. The Japanese even have
a term, karoshi, referring to death from
overwork.
Research to date does suggest
that work–life concerns are present
in other cultures. For example, most
studies find that feelings of conflict
between work and personal life are re-
lated to lower levels of satisfaction and
higher levels of psychological strain.
The magnitude of these relationships
varies across countries, but it appears
that concerns about work interfering
with family are present around the
world. There is also evidence that
translated U.S. surveys about work–
life conflicts are equally good mea-
sures of work–life conflicts in Europe
and East Asia.
Even with the growth of interna-
tional research, most studies to date
have been designed and conducted
entirely within the United States, and
many others have been conducted in
cultures with marked similarities to the
United States, like Canada and Great
Britain. As the number of international
studies continues to increase, we will
develop a better understanding of how
different cultures relate to work–life
challenges.
Sources: Based on G. N. Powell, A. M.
Francesco, and Y. Ling, “Toward Culture-
Sensitive Theories of the Work–Family
Interface,” Journal of Organizational
Behavior 30 (2009), pp. 597–616; “Survey:
U.S. Workplace Not Family-Oriented.”
MSNBC.com , (May 22, 2007), www
.msnbc.msn.com/id/16907584/ ; and J. Lu,
O. Siu, P. E. Spector, and K. Shi, “Antecedents
and Outcomes of a Fourfold Taxonomy of
Work-Family Balance in Chinese Employed
Parents,” Journal of Occupational Health
Psychology 14 (2009), pp. 182–192.
glOBalization!
Culture and Work–Life Balance

www.msnbc.msn.com/id/16907584/

www.msnbc.msn.com/id/16907584/

Attitudes 77
service. 23 Though little cross-cultural research has been done, one study found
POS predicted only the job performance and citizenship behaviors of untradi-
tional or low power-distance Chinese employees—in short, those more likely to
think of work as an exchange rather than a moral obligation. 24
Employee Engagement A new concept is employee engagement , an individual’s
involvement with, satisfaction with, and enthusiasm for, the work she does. We
might ask employees whether they have access to resources and the opportunities
to learn new skills, whether they feel their work is important and meaningful, and
whether their interactions with co-workers and supervisors are rewarding. 25 Highly
engaged employees have a passion for their work and feel a deep connection
to their company; disengaged employees have essentially checked out—putting
time but not energy or attention into their work. A study of nearly 8,000 business
units in 36 companies found that those whose employees had high-average levels
of engagement had higher levels of customer satisfaction, were more produc-
tive, brought in higher profits, and had lower levels of turnover and accidents
than at other companies. 26 Molson Coors found engaged employees were five
times less likely to have safety incidents, and when one did occur it was much
less serious and less costly for the engaged employee than for a disengaged one
($63 per incident versus $392). Engagement becomes a real concern for most
organizations because surveys indicate that few employees— between 17 percent
and 29 percent—are highly engaged by their work. Caterpillar set out to increase
employee engagement and recorded a resulting 80 percent drop in grievances
and a 34 percent increase in highly satisfied customers. 27
Employee engagement is high at
Genentech, a biotechnology firm
where employees share a serious
commitment to science and patients
and are passionate about the work
they do. Genentech employees
discover, develop, manufacture,
and commercialize medicines that
treat patients with serious or life-
threatening medical conditions.
Feeling that their contributions are
important and meaningful, employ-
ees cite the chance to make a dif-
ference in the lives of patients as
the number one reason they enjoy
working at Genentech.
employee engagement An individual’s
involvement with, satisfaction with,
and enthusiasm for the work he or
she does.
perceived organizational support
(POS) The degree to which
employees believe an organization
values their contribution and cares
about their well-being.
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78 CHAPTER 3 Attitudes and Job Satisfac tion
S A L
SELF-ASSESSMENT LIBRARY
Such promising findings have earned employee engagement a following in
many business organizations and management consulting firms. However, the
concept is relatively new and still generates active debate about its usefulness.
One review of the literature concluded, “The meaning of employee engage-
ment is ambiguous among both academic researchers and among practitioners
who use it in conversations with clients.” Another reviewer called engagement
“an umbrella term for whatever one wants it to be.” 28 More recent research has
set out to clarify the dimensions of employee engagement. This work has dem-
onstrated that engagement is distinct from job satisfaction and job involvement
and incrementally predicts job behaviors after we take these traditional job at-
titudes into account.
Am I Engaged?
In the Self-Assessment Library (available on CD or online), take assessment
IV.B.1 (Am I Engaged?). (Note: If you do not currently have a job, answer the
questions for your most recent job.)
Are These Job Attitudes Really All That Distinct? You might wonder whether
these job attitudes are really distinct. If people feel deeply engaged by their
job (high job involvement), isn’t it probable they like it too (high job sat-
isfaction)? Won’t people who think their organization is supportive (high
perceived organizational support) also feel committed to it (strong organiza-
tional commitment)?
Evidence suggests these attitudes are highly related, perhaps to a troubling
degree. For example, the correlation between perceived organizational sup-
port and affective commitment is very strong. 29 That means the variables may be
redundant—if you know someone’s affective commitment, you know her perceived
organizational support. Why is redundancy troubling? Because it is inefficient and
confusing. Why have two steering wheels on a car when you need only one? Why
have two concepts—going by different labels—when you need only one?
Although we OB researchers like proposing new attitudes, often we haven’t
been good at showing how they compare and contrast with each other. There is
some distinctiveness among them, but they overlap greatly, for various reasons in-
cluding the employee’s personality. Some people are predisposed to be positive or
negative about almost everything. If someone tells you she loves her company, it
may not mean a lot if she is positive about everything else in her life. Or the overlap
may mean some organizations are just all-around better places to work than others.
Then if you as a manager know someone’s level of job satisfaction, you know most
of what you need to know about how that person sees the organization.
We have already discussed job satisfaction briefly. Now let’s dissect the concept
more carefully. How do we measure job satisfaction? What causes an employee
to have a high level of job satisfaction? How do dissatisfied and satisfied employ-
ees affect an organization?
4 Define job satisfaction and
show how we can measure it.
Job Satisfaction

Job Satisfaction 79
Measuring Job Satisfaction
Our definition of job satisfaction—a positive feeling about a job resulting
from an evaluation of its characteristics—is clearly broad. 30 Yet that breadth
is appropriate. A job is more than just shuffling papers, writing program-
ming code, waiting on customers, or driving a truck. Jobs require interact-
ing with co-workers and bosses, following organizational rules and policies,
meeting performance standards, living with less than ideal working condi-
tions, and the like. 31 An employee’s assessment of his satisfaction with the
job is thus a complex summation of many discrete elements. How, then, do
we measure it?
Two approaches are popular. The single global rating is a response to
one question, such as “All things considered, how satisfied are you with
your job?” Respondents circle a number between 1 and 5 on a scale from
“highly satisfied” to “highly dissatisfied.” The second method, the summa-
tion of job facets, is more sophisticated. It identifies key elements in a job
such as the nature of the work, supervision, present pay, promotion oppor-
tunities, and relationships with co-workers. 32 Respondents rate these on a
standardized scale, and researchers add the ratings to create an overall job
satisfaction score.
Is one of these approaches superior? Intuitively, summing up responses to
a number of job factors seems likely to achieve a more accurate evaluation of
job satisfaction. Research, however, doesn’t support the intuition. 33 This is one
of those rare instances in which simplicity seems to work as well as complex-
ity, making one method essentially as valid as the other. The best explanation
is that the concept of job satisfaction is so broad a single question captures
its essence. The summation of job facets may also leave out some important
data. Both methods are helpful. The single global rating method isn’t very
time consuming, thus freeing time for other tasks, and the summation of job
facets helps managers zero in on problems and deal with them faster and more
accurately.
What Are the Main Causes of Job Dissatisfaction?OB Poll
0 20 4010 30 50453525155
On-the-job stress
Pay
Promotion
Work
Security
Supervisor
Coworkers
32%
% Dissatisfied with Aspect of Job
26%
21%
15%
14%
9%
3%
Source: L. Saad, “On-the-Job Stress Is U.S. Workers’ Biggest Complaint,” Gallup Poll (August 30, 2010), www.gallup.com/ .

www.gallup.com/

80 CHAPTER 3 Attitudes and Job Satisfac tion
0
20
10
40
30
60
50
80
70
100
90
Work Itself Pay
P
e
rc
e
n
ta
g
e
Promotion Supervision Coworkers Overall
Average Job Satisfaction Levels by Facet Exhibit 3-2
How Satisfied Are People in Their Jobs?
Are most people satisfied with their jobs? The answer seems to be a qualified
“yes” in the United States and most other developed countries. Independent
studies conducted among U.S. workers over the past 30 years generally indicate
more workers are satisfied with their jobs than not. But a caution is in order.
Recent data show a dramatic drop-off in average job satisfaction levels during
the economic contraction that started in late 2007, so much so that only about
half of workers report being satisfied with their jobs now. 34
Research also shows satisfaction levels vary a lot, depending on which
facet of job satisfaction you’re talking about. As shown in Exhibit 3-2 , peo-
ple have typically been more satisfied with their jobs overall, with the work
itself, and with their supervisors and co-workers than they have been with
their pay and with promotion opportunities. It’s not really clear why peo-
ple dislike their pay and promotion possibilities more than other aspects of
their jobs. 35
Although job satisfaction appears relevant across cultures, that doesn’t
mean there are no cultural differences in job satisfaction. Evidence suggests
employees in Western cultures have higher levels of job satisfaction than those
in Eastern cultures. 36 Exhibit 3-3 provides the results of a global study of job
satisfaction levels of workers in 15 countries. (This study included 23 countries,
but for presentation purposes we report the results for only the largest.) As
the exhibit shows, the highest levels appear in the United States and western
Europe. Do employees in Western cultures have better jobs? Or are they sim-
ply more positive (and less self critical)? Although both factors are probably
at play, evidence suggests that individuals in Eastern cultures find negative
emotions less aversive more than do individuals in Western cultures, who tend
to emphasize positive emotions and individual happiness. 37 That may be why
employees in Western cultures such as the United States and Scandinavia are
more likely to have higher levels of satisfaction.

Job Satisfaction 81
De
nm
ar
k
De
nm
ar
k
Sw
itz
er
lan
d
Sw
itz
er
lan
d
US
A
US
A
N
or
wa
y
N
or
wa
y
Sw
ed
en
Sw
ed
en
Ge
rm
an
y
Ge
rm
an
y
Po
lan
d
Po
lan
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Ca
na
da
Ca
na
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ly
Ita
ly
Fra
nc
e
Fra
nc
e
Cz
ec
h
Re
p
Cz
ec
h
Re
p
Ru
ssi
a
Ru
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a
Hu
ng
ar
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Hu
ng
ar
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Ja
pa
n
Ja
pa
nkk dd AA yy nn yy dd KK aa lyly ee pp aa yy nn
4.20
4.40
4.60
4.80
5.00
5.20
5.40
5.60
5.80
5.68
5.43
5.32
5.20 5.20
5.12 5.08 5.08 5.06 5.06 5.06 5.06
4.84 4.77 4.74
Average Levels of Job Satisfaction by Country
Note: Scores represent average job-satisfaction levels in each country as rated on a 1 � very dissatisfied to 10 � very satisfied scale.
Source: M. Benz and B. S. Frey, “The Value of Autonomy: Evidence from the Self-Employed in 23 Countries,” working paper 173,
Institute for Empirical Research in Economics, University of Zurich, November 2003 ( ssrn.com/abstract�475140 ).
Exhibit 3-3
5 Summarize the main causes
of job satisfaction.
What Causes Job Satisfaction?
Think about the best job you’ve ever had. What made it so? Chances are you liked
the work you did and the people with whom you worked. Interesting jobs that
provide training, variety, independence, and control satisfy most employees. 38
There is also a strong correspondence between how well people enjoy the social
context of their workplace and how satisfied they are overall. Interdependence,
feedback, social support, and interaction with co-workers outside the workplace
are strongly related to job satisfaction even after accounting for characteristics
of the work itself. 39
You’ve probably noticed that pay comes up often when people discuss job
satisfaction. For people who are poor or who live in poor countries, pay does
correlate with job satisfaction and overall happiness. But once an individual
reaches a level of comfortable living (in the United States, that occurs at
about $40,000 a year, depending on the region and family size), the relation-
ship between pay and job satisfaction virtually disappears. People who earn
$80,000 are, on average, no happier with their jobs than those who earn closer
to $40,000. Take a look at Exhibit 3-4 . It shows the relationship between the
average pay for a job and the average level of job satisfaction. As you can see,
there isn’t much of a relationship there. Handsomely compensated jobs have
average satisfaction levels no higher than those that pay much less. One re-
searcher even found no significant difference when he compared the overall
well-being of the richest people on the Forbes 400 list with that of Maasai herd-
ers in East Africa. 40
Money does motivate people, as we will discover in Chapter 6 . But what mo-
tivates us is not necessarily the same as what makes us happy. A recent poll by
UCLA and the American Council on Education found that entering college
freshmen rated becoming “very well off financially” first on a list of 19  goals,
ahead of choices such as helping others, raising a family, or becoming proficient
in an academic pursuit. Maybe your goal isn’t to be happy. But if it is, money’s
probably not going to do much to get you there. 41

82 CHAPTER 3 Attitudes and Job Satisfac tion
Job satisfaction is not just about job conditions. Personality also plays a role.
Research has shown that people who have positive core self-evaluations —who
believe in their inner worth and basic competence—are more satisfied with their
jobs than those with negative core self-evaluations. Not only do they see their
work as more fulfilling and challenging, they are more likely to gravitate toward
challenging jobs in the first place. Those with negative core self- evaluations set
less ambitious goals and are more likely to give up when confronting difficulties.
Thus, they’re more likely to be stuck in boring, repetitive jobs than those with
positive core self-evaluations. 42
The Impact of Satisfied and Dissatisfied
Employees on the Workplace
What happens when employees like their jobs, and when they dislike their jobs?
One theoretical model—the exit–voice–loyalty–neglect framework—is helpful
in understanding the consequences of dissatisfaction. Exhibit 3-5 illustrates the
framework’s four responses, which differ along two dimensions: constructive/
destructive and active/passive. The responses are as follows: 43
● Exit. The exit response directs behavior toward leaving the organiza-
tion, including looking for a new position as well as resigning.
● Voice. The voice response includes actively and constructively attempt-
ing to improve conditions, including suggesting improvements, discussing
problems with superiors, and undertaking some forms of union activity.
● Loyalty. The loyalty response means passively but optimistically waiting
for conditions to improve, including speaking up for the organization in
the face of external criticism and trusting the organization and its man-
agement to “do the right thing.”
● Neglect. The neglect response passively allows conditions to worsen and
includes chronic absenteeism or lateness, reduced effort, and increased
error rate.
40%
50%
60%
70%
80%
90%
$15,000 $30,000 $45,000 $60,000 $75,000 $90,000
P
e
rc
e
n
ta
g
e
o
f
P
a
y
S
a
ti
sf
a
ct
io
n
Pay in US$—2002
Relationship Between Average Pay in Job
and Job Satisfaction of Employees in That Job
Source: T. A. Judge, R. F. Piccolo, N. P. Podsakoff, J. C. Shaw, and B. L. Rich, “Can Happiness Be ‘Earned’? The Relationship
Between Pay and Job Satisfaction,” working paper, University of Florida, 2005.
Exhibit 3-4
6 Identify four employee
responses to dissatisfaction.

Job Satisfaction 83
Active
Constructive Destructive
Passive
VOICE EXIT
LOYALTY NEGLECT
Responses to Dissatisfaction Exhibit 3-5
T
his statement appears to be true.
A recent study of 2,178 busi-
ness units suggested that job
attitudes measured at one point in
time predicted organizational financial
performance roughly six months later.
In the study, job attitudes were mea-
sured through employees’ responses
to 12 questions (such as, “At work, my
opinions seem to count”) and financial
performance was measured in terms
of revenue and profit margin.
Why does employee job satisfac-
tion appear to pay off? The authors of
this study uncovered two explanations:
satisfied employees are less likely to
quit, and they engender stronger cus-
tomer loyalty. Low turnover and high
customer loyalty both helped make
organizations more profitable.
This study also found some evidence
for what might be called a virtuous
cycle: having satisfied employees tends
to improve subsequent financial perfor-
mance, which tends to improve later
employee satisfaction even further.
No organization can be all things
to all employees, but this study does
suggest that attention to improving
employee attitudes is well rewarded.
The authors of this study conclude,
“Improving employee work perceptions
can improve business competitiveness
while positively impacting the well-
being of employees.”
Sources: Based on Anonymous, “Happy
Employees May Be the Key to Success for
Organizations,” Science Daily (August 4,
2010), www.sciencedaily.com ; J. K. Harter
and F. L. Schmidt, “What Really Drives
Financial Success?” Gallup Management
Journal (September 2, 2010), http://gmj
.gallup.com/content/142733/really-drives-
financial-success.aspx .
Myth or Science?
“Favorable Job Attitudes Make Organizations
More Profitable”
exit Dissatisfaction expressed
through behavior directed toward
leaving the organization.
loyalty Dissatisfaction expressed by
passively waiting for conditions to
improve.
neglect Dissatisfaction expressed
through allowing conditions to worsen.
voice Dissatisfaction expressed
through active and constructive
attempts to improve conditions.
core self-evaluations Bottom-line
conclusions individuals have about
their capabilities, competence, and
worth as a person.

www.sciencedaily.com

http://gmj.gallup.com/content/142733/really-drivesfinancial-success.aspx

http://gmj.gallup.com/content/142733/really-drivesfinancial-success.aspx

http://gmj.gallup.com/content/142733/really-drivesfinancial-success.aspx

84 CHAPTER 3 Attitudes and Job Satisfac tion
Exit and neglect behaviors encompass our performance variables—
productivity, absenteeism, and turnover. But this model expands employee
response to include voice and loyalty—constructive behaviors that allow individ-
uals to tolerate unpleasant situations or revive satisfactory working conditions.
It helps us understand situations, such as we sometimes find among unionized
workers, for whom low job satisfaction is coupled with low turnover. 44 Union
members often express dissatisfaction through the grievance procedure or for-
mal contract negotiations. These voice mechanisms allow them to continue in
their jobs while convincing themselves they are acting to improve the situation.
As helpful as this framework is, it’s quite general. We now discuss more spe-
cific outcomes of job satisfaction and dissatisfaction in the workplace.
Job Satisfaction and Job Performance As several studies have concluded, happy
workers are more likely to be productive workers. Some researchers used to be-
lieve the relationship between job satisfaction and job performance was a myth.
But a review of 300 studies suggested the correlation is pretty strong. 45 As we
move from the individual to the organizational level, we also find support for the
satisfaction–performance relationship. 46 When we gather satisfaction and pro-
ductivity data for the organization as a whole, we find organizations with more
satisfied employees tend to be more effective than organizations with fewer.
Job Satisfaction and OCB It seems logical to assume job satisfaction should
be a major determinant of an employee’s organizational citizenship behavior
(OCB). 47 Satisfied employees would seem more likely to talk positively about the
organization, help others, and go beyond the normal expectations in their job,
perhaps because they want to reciprocate their positive experiences. Consistent
with this thinking, evidence suggests job satisfaction is moderately correlated
with OCBs; people who are more satisfied with their jobs are more likely to
engage in OCBs. 48 Why? Fairness perceptions help explain the relationship. 49
Those who feel their co-workers support them are more likely to engage in
helpful behaviors, whereas those who have antagonistic relationships with co-
workers are less likely to do so. 50 Individuals with certain personality traits are
Customers of CSN Stores appreci-
ate the excellent service provided
by the online retailer’s customer
representatives shown here at
the company’s offices in Boston.
Service firms like CSN understand
that satisfied employees increase
customer satisfaction and loyalty.
CSN believes that customers deserve
exceptional service and is dedicated
to hiring people who are friendly
and willing to help others. The
company helps shape a positive on-
the-job attitude by giving employ-
ees product knowledge training
and teaching them how to assess
customer needs and how to guide
buyers in making well-informed
decisions.
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Job Satisfaction 85
also more satisfied with their work, which in turn leads them to engage in more
OCBs. 51 Finally, research shows that when people are in a good mood, they are
more likely to engage in OCBs. 52
Job Satisfaction and Customer Satisfaction As we noted in Chapter 1 , employ-
ees in service jobs often interact with customers. Because service organization
managers should be concerned with pleasing those customers, it is reasonable
to ask, Is employee satisfaction related to positive customer outcomes? For front-
line employees who have regular customer contact, the answer is “yes.” Satisfied
employees increase customer satisfaction and loyalty. 53
A number of companies are acting on this evidence. The first core value
of online retailer Zappos, “Deliver WOW through service,” seems fairly obvi-
ous, but the way in which Zappos does it is not. Employees are encouraged to
“create fun and a little weirdness” and are given unusual discretion in mak-
ing customers satisfied; they are encouraged to use their imaginations, includ-
ing sending flowers to disgruntled customers, and Zappos even offers a $2,000
bribe to quit the company after training (to weed out the half-hearted). 54 Other
organizations seem to work the other end of the spectrum. Two independent
reports—one on the Transportation Security Administration (TSA) and the
other on airline passenger complaints—argue that low employee morale was
a major factor undermining passenger satisfaction. At US Airways, employees
have posted comments on blogs such as “Our planes (sic) smell filthy” and,
from another, “How can I take pride in this product?” 55
Job Satisfaction and Absenteeism We find a consistent negative relationship
between satisfaction and absenteeism, but it is moderate to weak. 56 While it
certainly makes sense that dissatisfied employees are more likely to miss work,
other factors affect the relationship. Organizations that provide liberal sick leave
benefits are encouraging all their employees—including those who are highly
satisfied—to take days off. You can find work satisfying yet still want to enjoy a
3-day weekend if those days come free with no penalties. When numerous alter-
native jobs are available, dissatisfied employees have high absence rates, but when
there are few they have the same (low) rate of absence as satisfied employees. 57
Job Satisfaction and Turnover The relationship between job satisfaction
and turnover is stronger than between satisfaction and absenteeism. 58 The
satisfaction–turnover relationship also is affected by alternative job prospects. If
an employee is presented with an unsolicited job offer, job dissatisfaction is less
predictive of turnover because the employee is more likely leaving in response
to “pull” (the lure of the other job) than “push” (the unattractiveness of the cur-
rent job). Similarly, job dissatisfaction is more likely to translate into turnover
when employment opportunities are plentiful because employees perceive it is
easy to move. Finally, when employees have high “human capital” (high educa-
tion, high ability), job dissatisfaction is more likely to translate into turnover
because they have, or perceive, many available alternatives. 59
Job Satisfaction and Workplace Deviance Job dissatisfaction and antagonis-
tic relationships with co-workers predict a variety of behaviors organizations
find undesirable, including unionization attempts, substance abuse, stealing
at work,  undue socializing, and tardiness. Researchers argue these behaviors
are indicators of a broader syndrome called deviant behavior in the workplace (or
counterproductive behavior or employee withdrawal ). 60 If employees don’t like their
work environment, they’ll respond somehow, though it is not always easy to
forecast exactly how . One worker might quit. Another might use work time to

86 CHAPTER 3 Attitudes and Job Satisfac tion
surf the Internet or take work supplies home for personal use. In short, workers
who don’t like their jobs “get even” in various ways—and because those ways
can be quite creative, controlling only one behavior, such as with an absence
control policy, leaves the root cause untouched. To effectively control the unde-
sirable consequences of job dissatisfaction, employers should attack the source
of the problem—the dissatisfaction—rather than try to control the different
responses.
Managers Often “Don’t Get It” Given the evidence we’ve just reviewed, it
should come as no surprise that job satisfaction can affect the bottom line. One
study by a management consulting firm separated large organizations into high
morale (more than 70 percent of employees expressed overall job satisfaction)
and medium or low morale (fewer than 70 percent). The stock prices of com-
panies in the high-morale group grew 19.4 percent, compared with 10 percent
for the medium- or low-morale group. Despite these results, many managers are
unconcerned about employee job satisfaction. Still others overestimate how sat-
isfied employees are with their jobs, so they don’t think there’s a problem when
there is. In one study of 262 large employers, 86 percent of senior managers be-
lieved their organization treated its employees well, but only 55 percent of em-
ployees agreed. Another study found 55 percent of managers thought morale
was good in their organization, compared to only 38 percent of employees. 61
Regular surveys can reduce gaps between what managers think employees
feel and what they really feel. Jonathan McDaniel, manager of a KFC restaurant
in Houston, surveys his employees every 3 months. Some results led him to
make changes, such as giving employees greater say about which workdays they
have off. However, McDaniel believes the process itself is valuable. “They really
love giving their opinions,” he says. “That’s the most important part of it—that
they have a voice and that they’re heard.” Surveys are no panacea, but if job
attitudes are as important as we believe, organizations need to find out where
they can be improved. 62
When employees do not like
their work environment, they will
respond in some way. An attempt
to form a union is one specific
behavior that may stem from job
dissatisfaction. At several different
Wal-Mart locations throughout the
United States, dissatisfied employ-
ees have tried, unsuccessfully,
to organize a union as a way to
receive better pay and more afford-
able health insurance. Joined by
supporters, the employees shown
here from a Wal-Mart warehouse
and distribution center in California
are protesting low wages and no
health care or other benefits.
So
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rc
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R
o
b
yn
B
e
ck
/G
e
tt
y
Im
a
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e
s

Job Satisfaction 87
Employer–Employee Loyalty Is an Outdated Concept
POINT COUNTERPOINT
T
here are employers and employees who show little regard
for each other. That each side can be uncaring or cavalier
is hardly a revelation. No doubt such cynical attitudes are
as old as the employment relationship itself.
But is that the norm? And is it desirable? The answer to both
these questions is “no.”
Says management guru Tom Peters, “Bottom line: loyalty
matters. A lot. Yesterday. Today. Tomorrow.” University of
Michigan’s Dave Ulrich says, “Leaders who encourage loyalty
want employees who are not only committed to and engaged in
their work but who also find meaning from it.”
It is true that the employer–employee relationship has
changed. For example, (largely) gone are the days when em-
ployers provide guaranteed payout pensions to which employ-
ees contribute nothing. But is that such a bad thing? There is a
big difference between asking employees to contribute to their
pension plans and abandoning plans altogether (or firing with-
out cause).
Moreover, it’s not that loyalty is dead, but rather that em-
ployers are loyal to a different kind of employee. Gone are the
days when an employer would refuse to fire a long-tenured but
incompetent employee. But is that the kind of loyalty most em-
ployees expect today anyway? Companies are loyal to employ-
ees who do their jobs well, and that too is as it should be.
In short, employees still expect certain standards of decency
and loyalty from their employers, and employers want engaged,
committed employees in return. That is a good thing—and not
so different from yesterday. Says workplace psychologist Binna
Kandola, “Workplaces may have changed but loyalty is not
dead—the bonds between people are too strong.”
T
he word loyalty is so outdated it is practically laughable.
Long gone are the days when an employer would keep
an employee for life, as are the days when an employee
would work for a single company for his or her entire career.
Workplace guru Linda Gratton says, “Loyalty is dead—killed
off through shortening contracts, outsourcing, automation and
multiple careers. Faced with what could be 50 years of work,
who honestly wants to spend that much time with one com-
pany? Serial monogamy is the order of the day.”
Right or wrong, the commitment on each side of the equa-
tion is weak. Take the example of Renault. The company ended
the 31-year career of employee Michel Balthazard (and two
others) on charges of espionage. The problem? The charges
were proved false. When the falseness of the charges became
public, Renault halfheartedly offered the employees their jobs
back and a lame apology: “Renault thanks them for the quality
of their work at the group and wishes them every success in
the future.”
As for employee’s loyalty to their employers, that too is
worth little nowadays. One manager with Deloitte says the cur-
rent employee attitude is, “I’m leaving, I had a great experience,
and I’m taking that with me.”
Employers tend to cut commitments to an employee, and re-
duce his or her benefits, the minute they perceive they can do
so. Employees tend to jump at the best available job offer as
soon as they see it.
The sooner we see the employment experience for what it is
(mostly transactional, mostly short to medium term), the better
off we’ll be. The workplace is no place for fantasies.
Sources: P. Korkki, “The Shifting Definition of Worker Loyalty,” The New York Times (April 24, 2011), p. BU8; “Is Workplace
Loyalty an Outmoded Concept?” Financial Times (March 8, 2011), www.ft.com/ ; and O. Gough and S. Arkani, “The Impact of the
Shifting Pensions Landscape on the Psychological Contract,” Personnel Review 40, no. 2 (2011), pp. 173–184.

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88 CHAPTER 3 Attitudes and Job Satisfac tion
MyManagementLab
Now that you have finished this chapter, go back to www.mymanagementlab.com to continue
practicing and applying the concepts you’ve learned.
Managers should be interested in their employees’ attitudes because attitudes
give warnings of potential problems and influence behavior. Creating a satisfied
workforce is hardly a guarantee of successful organizational performance, but
evidence strongly suggests that whatever managers can do to improve employee
attitudes will likely result in heightened organizational effectiveness. Some take-
away lessons from the study of attitudes include the following:
● Satisfied and committed employees have lower rates of turnover, absen-
teeism, and withdrawal behaviors. They also perform better on the job.
Given that managers want to keep resignations and absences down—
especially among their most productive employees—they’ll want to do
things that generate positive job attitudes.
● Managers will also want to measure job attitudes effectively so they can tell
how employees are reacting to their work. As one review put it, “A sound
measurement of overall job attitude is one of the most useful pieces of
information an organization can have about its employees.” 63
● The most important thing managers can do to raise employee satisfaction
is focus on the intrinsic parts of the job, such as making the work chal-
lenging and interesting.
● Although paying employees poorly will likely not attract high-quality
employees to the organization or keep high performers, managers
should realize that high pay alone is unlikely to create a satisfying work
environment.
Summary and Implications for Managers
1 What are the main components of attitudes? Are these
components related or unrelated?
2 Does behavior always follow from attitudes? Why or
why not? Discuss the factors that affect whether behavior
follows from attitudes.
3 What are the major job attitudes? In what ways are
these attitudes alike? What is unique about each?
4 How do we measure job satisfaction?
5 What causes job satisfaction? For most people, is pay or
the work itself more important?
6 What outcomes does job satisfaction influence? What
implications does this have for management?
QUESTIONS FOR REVIEW

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Ethical Dilemma 89
EXPERIENTIAL EXERCISE What Factors Are Most Important
to Your Job Satisfaction?
Most of us probably want a job we think will satisfy us.
But because no job is perfect, we often have to trade off
job attributes. One job may pay well but provide limited
opportunities for advancement or skill development.
Another may offer work we enjoy but have poor benefits.
The following is a list of 21 job factors or attributes:
● Autonomy and independence.
● Benefits.
● Career advancement opportunities.
● Career development opportunities.
● Compensation/pay.
● Communication between employees and
management.
● Contribution of work to organization’s business goals.
● Feeling safe in the work environment.
● Flexibility to balance life and work issues.
● Job security.
● Job-specific training.
● Management recognition of employee job
performance.
● Meaningfulness of job.
● Networking.
● Opportunities to use skills/abilities.
● Organization’s commitment to professional
development.
● Overall corporate culture.
● Relationship with co-workers.
● Relationship with immediate supervisor.
● The work itself.
● The variety of work.
On a sheet of paper, rank-order these job factors from
top to bottom so number 1 is the job factor you think is
most important to your job satisfaction, number 2 is the
second most important factor to your job satisfaction, and
so on.
Next, gather in teams of three or four people and try
the following:
1. Appoint a spokesperson who will take notes and re-
port the answers to the following questions, on behalf
of your group, back to the class.
2. Averaging across all members in your group, gener-
ate a list of the top five job factors.
3. Did most people in your group seem to value the
same job factors? Why or why not?
4. Your instructor will provide you the results of a study
of a random sample of 600 employees conducted
by the Society for Human Resource Management
(SHRM). How do your group’s rankings compare
with the SHRM results?
5. The chapter says pay doesn’t correlate all that well
with job satisfaction, but in the SHRM survey, people
say it is relatively important. Can your group suggest a
reason for the apparent discrepancy?
6. Now examine your own list again. Does your list
agree with the group list? Does your list agree with
the SHRM study?
ETHICAL DILEMMA Bounty Hunters
His SUV carefully obscured behind a row of trees, Rick
Raymond, private investigator, was on another case. This
case was not to catch the unfaithful spouse or petty crimi-
nal in action. Instead, Raymond was tracking an employee,
at the request of an employer, to determine whether an
Orlando repairman was sick as he claimed today and as he
had claimed to be several times recently.
As we have seen, absenteeism is a huge problem for or-
ganizations that has left them desperate for solutions. One
solution is to investigate. In the typical routine, when an
employee calls in sick, the employer asks for the reason. If
the reason is illness, and illness has been the reason for an
abnormal number of times in the past, the employer hires
a P.I. to follow the employee and photograph or videotape
his or her activity outside the house. Private investigators
also are used to ascertain whether individuals filing injury
claims (and drawing worker’s compensation benefits) are
in fact injured.
It may surprise you to learn that a recent court deci-
sion indicated hiring a private investigator to follow an
employee is legal. In this particular case, Diana Vail was
fired by Raybestos Products, an automotive parts manufac-
turer in Crawfordsville, Indiana, after an off-duty police of-
ficer hired by Raybestos produced evidence that she was

90 CHAPTER 3 Attitudes and Job Satisfac tion
abusing her sick-leave benefits. The U.S. Court of Appeals
ruled that such investigations were legal.
Despite their legality, such investigations are controver-
sial. Oracle and Hewlett-Packard have reportedly used pri-
vate investigators to follow managers or uncover the source
of leaks. Both actions spawned negative media coverage.
There is no doubt, though, that some employees do
abuse their sick-leave benefits. In an earlier case, Raymond
investigated an employee who called in sick with the
flu for 3 days. Raymond discovered that she actually vis-
ited Orlando theme parks on each of those days. When
Raymond showed her three time-stamped pictures of her-
self on rides, the employee’s first response was, “That’s
not me!” In another case, Raymond caught a worker
constructing an elaborate scheme to call in sick and go
on a cruise. “When he was shown the video surveillance
I’d done, he actually said to his boss, ‘I can’t believe you’d
be so sneaky.’ ” Raymond said. “The hypocrisy is amazing.”
Questions
1. If you had reason to believe someone was lying
about an absence from work, do you think it would
be appropriate to investigate?
2. If excessive absenteeism is a real problem in an or-
ganization, are there alternatives to surveillance? If
so, what are they, and do they have any limitations of
their own?
Sources: E. Spitznagel, “The Sick-Day Bounty Hunters,” Businessweek (December 6, 2010), pp. 93–95;
D. Levine, “Oracle Enlists Private Eyes to Find HP CEO,” Reuters (November 9, 2010), http://in.reuters
.com/ ; and K. Gullo, “HP’s Apotheker, Like Carmen Sandiego, Focus at Trial,” Businessweek
(November 10, 2010), www.businessweek.com/ .
CASE INCIDENT 1 Long Hours, Hundreds of E-Mails, and No Sleep:
Does This Sound Like a Satisfying Job?
In the 1970s, futurists were predicting that increases in
technology would dramatically shorten the workweek for
most people. But in the wired work world of today, where
employees can reach “the office” from wherever they are,
many managers are finding it extremely difficult to get
away from their jobs. In fact, one employment firm es-
timated that 30 percent of professionals take less than
their allotted vacation time, and 42 percent said they
have to cancel vacation plans regularly. Consider a few
examples:
● Gian Paolo Lombardo might work for a firm that man-
ufactures luggage for luxury travel, but he’s had pre-
cious little time for vacationing himself. During his last
“faux-cation” 3 years ago, he spent most of the time in
his hotel room in the resort town of Carmel, California,
with his BlackBerry, while his wife Ellen chatted with
other guests, hoping he’d finally finish with work. Ellen
notes that no meal or movie goes by without her hus-
band being hunched over his smartphone. She says,
“I think he needs to go into rehab.” He agrees.
● Irene Tse heads the government bond-trading divi-
sion at Goldman Sachs. For 10 years, she has seen the
stock market go from all-time highs to recession levels.
Such fluctuations can mean millions of dollars in either
profits or losses. “There are days when you can make a
lot, and other days where you lose so much you’re just
stunned by what you’ve done,” says Tse. She says she
hasn’t slept through the night in years and often wakes
up several times to check the global market status. Her
average workweek? Eighty hours. “I’ve done this for
10 years, and I can count on the fingers of one hand
the number of days in my career when I didn’t want to
come to work. Every day I wake up and I can’t wait to
get here.”
● Tony Kurz is a managing director at Capital Alliance
Partners, and he raises funds for real estate invest-
ments. However, these are not your average proper-
ties. Kurz often flies to exotic locations such as Costa
Rica and Hawaii to woo prospective clients. He travels
more than 300,000 miles per year, often sleeping on
planes and coping with jet lag. Kurz is not the only one
he knows with such a hectic work schedule. His girl-
friend, Avery Baker, logs around 400,000 miles a year
as the senior vice president of marketing for Tommy
Hilfiger. “It’s not easy to maintain a relationship like
this,” says Kurz. But do Kurz and Baker like their jobs?
You bet.
● David Clark is the vice president of global marketing
for MTV. His job often consists of traveling around
the globe to promote the channel as well as to keep
up with the global music scene. If he is not traveling
(Clark typically logs 200,000 miles a year), a typical
day consists of waking at 6:30 a.m. and immediately
responding to numerous messages that have accumu-
lated over the course of the night. He then goes to

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Case Incident 2 91
his office, where throughout the day he responds to
another 500 or so messages from clients around the
world. If he’s lucky, he gets to spend an hour a day
with his son, but then it’s back to work until he finally
goes to bed around midnight. Says Clark, “There are
plenty of people who would love to have this job.
They’re knocking on the door all the time. So that’s
motivating.”
Many individuals would balk at the prospect of a
60-hour or more workweek with constant traveling and
little time for anything else. Some individuals are exhila-
rated by it. But the demands of such jobs are clearly not
for everyone. Many quit, with turnover levels at 55 percent
for consultants and 30 percent for investment bankers, ac-
cording to Vault.com . However, clearly such jobs, while
time-consuming and often stressful, can be satisfying to
some individuals.
Questions
1. Do you think only certain individuals are attracted to
these types of jobs, or is it the characteristics of the
jobs themselves that are satisfying?
2. What characteristics of these jobs might contribute to
increased levels of job satisfaction?
3. Given that the four individuals we just read about
tend to be satisfied with their jobs, how might this sat-
isfaction relate to their job performance, citizenship
behavior, and turnover?
4. Recall David Clark’s statement that “There are plenty
of people who would love to have this job. They’re
knocking on the door all the time.” How might
Clark’s perceptions that he has a job many others
desire contribute to his job satisfaction?
Sources: Based on L. Golden, “A Brief History of Long Work Time and the Contemporary Sources of
Overwork,” Journal of Business Ethics 84, (2009), pp. 217–227; L. Tischler, “Extreme Jobs (And the People
Who Love Them),” Fast Company, April 2005, pp. 55–60, www.glo-jobs.com/article.php?article_no�87 ;
M. Conlin, “Do Us a Favor, Take a Vacation,” Bloomberg Businessweek, May 21, 2007, www.businessweek.com .
CASE INCIDENT 2 Crafting a Better Job
Consider for a moment a midlevel manager at a multi-
national foods company, Fatima, who would seem to be
at the top of her career. She’s consistently making her
required benchmarks and goals, she has built successful
relationships with colleagues, and senior management
have identified her as “high potential.” But she isn’t
happy with her work. She’d be much more interested in
understanding how her organization can use social me-
dia in marketing efforts. Ideally, she’d like to quit and
find something that better suits her passions, but in the
current economic environment this may not be an op-
tion. So she has decided to proactively reconfigure her
current job.
Fatima is part of a movement toward job “crafting,”
which is the process of deliberately reorganizing your job
so that it better fits your motives, strengths, and passions.
The core of job crafting is creating diagrams of day-to-day
activities with a coach. Then you and the coach collabora-
tively identify which tasks fit with your personal passions,
and which tend to drain motivation and satisfaction. Next
the client and coach work together to imagine ways to em-
phasize preferred activities and de-emphasize those that
are less interesting. Many people engaged in job crafting
find that upon deeper consideration, they have more con-
trol over their work than they thought.
So how did Fatima craft her job? She first noticed that
she was spending too much of her time monitoring her
team’s performance and answering team questions, and
not enough time working on the creative projects that
inspire her. She then considered how to modify her rela-
tionship with the team so that these activities incorporated
her passion for social media strategies, with team activities
more centered around developing new marketing. She
also identified members of her team who might be able to
help her implement these new strategies and directed her
interactions with these individuals toward her new goals.
As a result, not only has her engagement in her work in-
creased, but she has also developed new ideas that are be-
ing recognized and advanced within the organization. In
sum, she has found that by actively and creatively examin-
ing her work, she has been able to craft her current job
into one that is truly satisfying.
Questions
1. Why do you think many people are in jobs that are
not satisfying? Do organizations help people craft sat-
isfying and motivating jobs, and if not, why not?
2. Think about how you might reorient yourself to your
own job. Are the principles of job crafting described
above relevant to your work? Why or why not?

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92 CHAPTER 3 Attitudes and Job Satisfac tion
ENDNOTES
1. S. J. Breckler, “Empirical Validation of Affect, Behavior, and
Cognition as Distinct Components of Attitude,” Journal of
Personality and Social Psychology (May 1984), pp. 1191–1205.
2. A. W. Wicker, “Attitude Versus Action: The Relationship of
Verbal and Overt Behavioral Responses to Attitude Objects,”
Journal of Social Issues (Autumn 1969), pp. 41–78.
3. L. Festinger, A Theory of Cognitive Dissonance (Stanford, CA:
Stanford University Press, 1957).
4. See, for instance, L. R. Fabrigar, R. E. Petty, S. M. Smith, and
S. L. Crites, “Understanding Knowledge Effects on Attitude-
Behavior Consistency: The Role of Relevance, Complexity,
and Amount of Knowledge,” Journal of Personality and
Social Psychology 90, no. 4 (2006), pp. 556–577; and D. J.
Schleicher, J. D. Watt, and G. J. Greguras, “Reexamining the
Job Satisfaction-Performance Relationship: The Complexity
of Attitudes,” Journal of Applied Psychology 89, no. 1 (2004),
pp. 165–177.
5. See, for instance, J. Nocera, “If It’s Good for Philip Morris,
Can It Also Be Good for Public Health?” The New York Times
(June 18, 2006).
6. See L. R. Glasman and D. Albarracín, “Forming Attitudes That
Predict Future Behavior: A Meta-Analysis of the Attitude–
Behavior Relation,” Psychological Bulletin (September 2006),
pp. 778–822; I. Ajzen, “Nature and Operation of Attitudes,”
in S. T. Fiske, D. L. Schacter, and C. Zahn-Waxler (eds.),
Annual Review of Psychology, vol. 52 (Palo Alto, CA: Annual
Reviews, Inc., 2001), pp. 27–58; and M. Riketta, “The Causal
Relation Between Job Attitudes and Performance: A Meta-
Analysis of Panel Studies,” Journal of Applied Psychology, 93,
no. 2 (2008), pp. 472–481.
7. Ibid.
8. D. A. Harrison, D. A. Newman, and P. L. Roth, “How
Important Are Job Attitudes? Meta-Analytic Comparisons
o f I n t e g r a t i v e B e h a v i o r a l O u t c o m e s a n d T i m e
Sequences,” Academy of Management Journal 49, no. 2
(2006), pp. 305–325.
9. D. P. Moynihan and S. K. Pandey, “Finding Workable
Levers Over Work Motivation: Comparing Job Satisfaction,
Job Involvement, and Organizational Commitment,”
Administration & Society 39, no. 7 (2007), pp. 803–832.
10. See, for example, J. M. Diefendorff, D. J. Brown, and
A. M. Kamin, “Examining the Roles of Job Involvement and
Work Centrality in Predicting Organizational Citizenship
Behaviors and Job Performance,” Journal of Organizational
Behavior (February 2002), pp. 93–108.
11. Based on G. J. Blau and K. R. Boal, “Conceptualizing How
Job Involvement and Organizational Commitment Affect
Turnover and Absenteeism,” Academy of Management Review
(April 1987), p. 290.
12. G. Chen and R. J. Klimoski, “The Impact of Expectations
on Newcomer Performance in Teams as Mediated by Work
Characteristics, Social Exchanges, and Empowerment,”
Academy of Management Journal 46, no. 5 (2003), pp. 591–607;
A. Ergeneli, G. Saglam, and S. Metin, “Psychological
Empowerment and Its Relationship to Trust in Immediate
Managers,” Journal of Business Research (January 2007),
pp. 41–49; and S. E. Seibert, S. R. Silver, and W. A.
Randolph, “Taking Empowerment to the Next Level: A
Multiple-Level Model of Empowerment, Performance,
and Satisfaction,” Academy of Management Journal 47, no. 3
(2004), pp. 332–349.
13. B. J. Avolio, W. Zhu, W. Koh, and P. Bhatia, “Transformational
Leadership and Organizational Commitment: Mediating
Role of Psychological Empowerment and Moderating Role
of Structural Distance,” Journal of Organizational Behavior 25,
no. 8 (2004), pp. 951–968.
14. J. M. Diefendorff, D. J. Brown, A. M. Kamin, and R. G.
Lord, “Examining the Roles of Job Involvement and
Work Centrality in Predicting Organizational Citizenship
Behaviors and Job Performance,” Journal of Organizational
Behavior (February 2002), pp. 93–108.
15. M. R. Barrick, M. K. Mount, and J. P. Strauss, “Antecedents
of Involuntary Turnover Due to a Reduction in Force,”
Personnel Psychology 47, no. 3 (1994), pp. 515–535.
16. O. N. Solinger, W. van Olffen, and R. A. Roe, “Beyond the
Three-Component Model of Organizational Commitment,”
Journal of Applied Psychology 93 (2008), pp. 70–83.
17. B. J. Hoffman, C. A. Blair, J. P. Meriac, and D. J. Woehr,
“Expanding the Criterion Domain? A Quantitative Review
of the OCB Literature,” Journal of Applied Psychology 92, no. 2
(2007), pp. 555–566.
18. T. A. Wright and D. G. Bonett, “The Moderating Effects of
Employee Tenure on the Relation Between Organizational
Commitment and Job Performance: A Meta-Analysis,” Journal
of Applied Psychology (December 2002), pp. 1183–1190.
19. T. W. H. Ng, D. C. Feldman, and S. S. K. Lam, “Psychological
Contract Breaches, Organizational Commitment, and
Innovation-Related Behaviors: A Latent Growth Modeling
Sources: Based on A. Wrzesniewski, J. M. Berg, and J. E. Dutton, “Turn the Job You Have into the Job You Want,”
Harvard Business Review (June 2010), pp. 114–117; A. Wrzesniewski and J. E. Dutton, “Crafting a Job: Revisioning
Employees as Active Crafters of Their Work,” Academy of Management Review 26 (2010), pp. 179–201; and
J. Caplan, “Hate Your Job? Here’s How to Reshape It,” Time (December 4, 2009), www.time.com .
3. Some contend that job crafting sounds good in
principle but is not necessarily available to everyone.
What types of jobs are probably not amenable to job
crafting activities?
4. Are there any potential drawbacks to the job
crafting approach? How can these concerns be
minimized?

www.time.com

Endnotes 93
Approach,” Journal of Applied Psychology 95 (2010),
pp. 744–751.
20. See, for instance, K. Bentein, C. Vandenberghe,
R. Vandenberg, and F. Stinglhamber, “The Role of Change
in the Relationship between Commitment and Turnover:
A Latent Growth Modeling Approach,” Journal of Applied
Psychology 90 (2005), pp. 468–482; and J. D. Kammeyer-
Mueller, C. R. Wanberg, T. M. Glomb, and D. Ahlburg,
“The Role of Temporal Shifts in Turnover Processes:
It’s About Time.” Journal of Applied Psychology 90 (2005),
pp. 644–658.
21. J. P. Hausknecht, N. J. Hiller, and R. J. Vance, “Work-Unit
Absenteeism: Effects of Satisfaction, Commitment, Labor
Market Conditions, and Time,” Academy of Management
Journal 51 (2008), pp. 1223–1245.
22. L. Rhoades, R. Eisenberger, and S. Armeli, “Affective
Commitment to the Organization: The Contribution
of Perceived Organizational Support,” Journal of Applied
Psychology 86, no. 5 (2001), pp. 825–836.
23. C. Vandenberghe, K. Bentein, R. Michon, J. Chebat,
M. Tremblay, and J. Fils, “An Examination of the Role
of Perceived Support and Employee Commitment in
Employee–Customer Encounters,” Journal of Applied
Psychology 92, no. 4 (2007), pp. 1177–1187; and
P.  Eder and R. Eisenberger, “Perceived Organizational
Support: Reducing the Negative Influence of Coworker
Withdrawal Behavior,” Journal of Management 34, no. 1
(2008), pp. 55–68.
24. J. Farh, R. D. Hackett, and J. Liang, “Individual-Level Cultural
Values as Moderators of Perceived Organizational Support—
Employee Outcome Relationships in China: Comparing the
Effects of Power Distance and Traditionality,” Academy of
Management Journal 50, no. 3 (2007), pp. 715–729.
25. B. L. Rich, J. A. Lepine, and E. R. Crawford, “Job
Engagement: Antecedents and Effects on Job Performance,”
Academy of Management Journal 53 (2010), pp. 617–635.
26. J. K. Harter, F. L. Schmidt, and T. L. Hayes, “Business-
Unit-Level Relationship Between Employee Satisfaction,
Employee Engagement, and Business Outcomes: A Meta-
Analysis,” Journal of Applied Psychology 87, no. 2 (2002),
pp. 268–279.
27. N. R. Lockwood, Leveraging Employee Engagement for
Competitive Advantage (Alexandria, VA: Society for Human
Resource Management, 2007); and R. J. Vance, Employee
Engagement and Commitment (Alexandria, VA: Society for
Human Resource Management, 2006).
28. W. H. Macey and B. Schneider, “The Meaning of
Employee Engagement,” Industrial and Organizational
Psychology 1 (2008), pp. 3–30; A. Saks, “The Meaning and
Bleeding of Employee Engagement: How Muddy Is The
Water?” Industrial and Organizational Psychology 1 (2008),
pp. 40–43.
29. L. Rhoades and R. Eisenberger, “Perceived Organizational
Support: A Review of the Literature,” Journal of Applied
Psychology 87, no. 4 (2002), pp. 698–714; and R. L. Payne and
D. Morrison, “The Differential Effects of Negative Affectivity
on Measures of Well-Being Versus Job Satisfaction and
Organizational Commitment,” Anxiety, Stress & Coping: An
International Journal 15, no. 3 (2002), pp. 231–244.
30. For problems with the concept of job satisfaction, see
R. Hodson, “Workplace Behaviors,” Work and Occupations
(August 1991), pp. 271–290; and H. M. Weiss and
R. Cropanzano, “Affective Events Theory: A Theoretical
Discussion of the Structure, Causes and Consequences
of Affective Experiences at Work,” in B. M. Staw and L. L.
Cummings (eds.), Research in Organizational Behavior, vol. 18
(Greenwich, CT: JAI Press, 1996), pp. 1–3.
31. The Wyatt Company’s 1989 national WorkAmerica study
identified 12 dimensions of satisfaction: Work organiza-
tion, working conditions, communications, job performance
and performance review, co-workers, supervision, company
management, pay, benefits, career development and train-
ing, job content and satisfaction, and company image and
change.
32. See E. Spector, Job Satisfaction: Application, Assessment, Causes,
and Consequences (Thousand Oaks, CA: Sage, 1997), p. 3.
33. J. Wanous, A. E. Reichers, and M. J. Hudy, “Overall Job
Satisfaction: How Good Are Single-Item Measures?” Journal
of Applied Psychology (April 1997), pp. 247–252.
34. A. F. Chelte, J. Wright, and C. Tausky, “Did Job Satisfaction
Really Drop During the 1970s?” Monthly Labor Review
(November 1982), pp. 33–36; “Job Satisfaction High in
America, Says Conference Board Study,” Monthly Labor
Review (February 1985), p. 52; K. Bowman, “Attitudes About
Work, Chores, and Leisure in America,” AEI Opinion Studies
(August 25, 2003); and J. Pepitone, “U.S. Job Satisfaction
Hits 22-Year Low,” CNNMoney.com (January 5, 2010).
35. W. K. Balzer, J. A. Kihm, P. C. Smith, J. L. Irwin, P. D.
Bachiochi, C. Robie, E. F. Sinar, and L. F. Parra, Users’
Manual for the Job Descriptive Index (JDI; 1997 Revision) and
the Job in General Scales (Bowling Green, OH: Bowling Green
State University, 1997).
36. M. J. Gelfand, M. Erez, and Z. Aycan, “Cross-Cultural
Organizational Behavior,” Annual Review of Psychology 58
(2007), pp. 479–514; and A. S. Tsui, S. S. Nifadkar, and A. Y.
Ou, “Cross-National, Cross-Cultural Organizational Behavior
Research: Advances, Gaps, and Recommendations,” Journal
of Management (June 2007), pp. 426–478.
37. M. Benz and B. S. Frey, “The Value of Autonomy: Evidence
from the Self-Employed in 23 Countries,” working paper 173,
Institute for Empirical Research in Economics, University of
Zurich, November 2003 ( ssrn.com/abstract�475140 ); and
P. Warr, Work, Happiness, and Unhappiness (Mahwah, NJ:
Laurence Erlbaum, 2007).
38. J. Barling, E. K. Kelloway, and R. D. Iverson, “High-Quality
Work, Job Satisfaction, and Occupational Injuries,” Journal
of Applied Psychology 88, no. 2 (2003), pp. 276–283; and
F. W. Bond and D. Bunce, “The Role of Acceptance and
Job Control in Mental Health, Job Satisfaction, and Work
Performance,” Journal of Applied Psychology 88, no. 6 (2003),
pp. 1057–1067.
39. S. E. Humphrey, J. D. Nahrgang, and F. P. Morgeson,
“Integrating Motivational, Social, and Contextual Work
Design Features: A Meta-Analytic Summary and Theoretical
Extension of the Work Design Literature,” Journal of Applied
Psychology 92, no. 5 (2007), pp. 1332–1356; and D. S.
Chiaburu and D. A. Harrison, “Do Peers Make the Place?
Conceptual Synthesis and Meta-Analysis of Coworker Effect

94 CHAPTER 3 Attitudes and Job Satisfac tion
on Perceptions, Attitudes, OCBs, and Performance,” Journal
of Applied Psychology 93, no. 5 (2008), pp. 1082–1103.
40. E. Diener, E. Sandvik, L. Seidlitz, and M. Diener, “The
Relationship Between Income and Subjective Well-Being:
Relative or Absolute?” Social Indicators Research 28 (1993),
pp. 195–223.
41. E. Diener and M. E. P. Seligman, “Beyond Money: Toward
an Economy of Well-Being,” Psychological Science in the Public
Interest 5, no. 1 (2004), pp. 1–31; and A. Grant, “Money �
Happiness? That’s Rich: Here’s the Science Behind the
Axiom,” The (South Mississippi) Sun Herald (January 8, 2005).
42. T. A. Judge and C. Hurst, “The Benefits and Possible Costs
of Positive Core Self-Evaluations: A Review and Agenda
for Future Research,” in D. Nelson and C. L. Cooper
(eds.), Positive Organizational Behavior (London, UK: Sage
Publications, 2007), pp. 159–174.
43. See D. Farrell, “Exit, Voice, Loyalty, and Neglect as
Responses to Job Dissatisfaction: A Multidimensional
Scaling Study,” Academy of Management Journal (December
1983), pp. 596–606; C. E. Rusbult, D. Farrell, G. Rogers,
and A. G. Mainous III, “Impact of Exchange Variables on
Exit, Voice, Loyalty, and Neglect: An Integrative Model
of Responses to Declining Job Satisfaction,” Academy of
Management Journal (September 1988), pp. 599–627; M. J.
Withey and W. H. Cooper, “Predicting Exit, Voice, Loyalty,
and Neglect,” Administrative Science Quarterly (December
1989), pp. 521–539; J. Zhou and J. M. George, “When
Job Dissatisfaction Leads to Creativity: Encouraging the
Expression of Voice,” Academy of Management Journal
(August 2001), pp. 682–696; J. B. Olson-Buchanan and
W. R. Boswell, “The Role of Employee Loyalty and Formality
in Voicing Discontent,” Journal of Applied Psychology
(December 2002), pp. 1167–1174; and A. Davis-Blake, J. P.
Broschak, and E. George, “Happy Together? How Using
Nonstandard Workers Affects Exit, Voice, and Loyalty
Among Standard Employees,” Academy of Management
Journal 46, no. 4 (2003), pp. 475–485.
44. R. B. Freeman, “Job Satisfaction as an Economic Variable,”
American Economic Review (January 1978), pp. 135–141.
45. T. A. Judge, C. J. Thoresen, J. E. Bono, and G. K. Patton,
“The Job Satisfaction–Job Performance Relationship: A
Qualitative and Quantitative Review,” Psychological Bulletin
(May 2001), pp. 376–407.
46. C. Ostroff, “The Relationship Between Satisfaction, Attitudes,
and Performance: An Organizational Level Analysis,”
Journal of Applied Psychology (December 1992), pp. 963–974;
A. M. Ryan, M. J. Schmit, and R. Johnson, “Attitudes and
Effectiveness: Examining Relations at an Organizational
Level,” Personnel Psychology (Winter 1996), pp. 853–882;
and J. K. Harter, F. L. Schmidt, and T. L. Hayes, “Business-
Unit Level Relationship Between Employee Satisfaction,
Employee Engagement, and Business Outcomes: A
Meta-Analysis,” Journal of Applied Psychology (April 2002),
pp. 268–279.
47. See P. Podsakoff, S. B. MacKenzie, J. B. Paine, and D. G.
Bachrach, “Organizational Citizenship Behaviors: A Critical
Review of the Theoretical and Empirical Literature and
Suggestions for Future Research,” Journal of Management 26,
no. 3 (2000), pp. 513–563.
48. B. J. Hoffman, C. A. Blair, J. P. Maeriac, and D. J. Woehr,
“Expanding the Criterion Domain? A Quantitative Review
of the OCB Literature,” Journal of Applied Psychology 92, no. 2
(2007), pp. 555–566.
49. S. L. Blader and T. R. Tyler, “Testing and Extending the
Group Engagement Model: Linkages Between Social
Identity, Procedural Justice, Economic Outcomes, and
Extrarole Behavior,” Journal of Applied Psychology 94, no. 2
(2009), pp. 445–464.
50. D. S. Chiaburu and D. A. Harrison, “Do Peers Make the
Place? Conceptual Synthesis and Meta-Analysis of Coworker
Effect on Perceptions, Attitudes, OCBs, and Performance,”
Journal of Applied Psychology 93, no. 5 (2008), pp. 1082–1103.
51. R. Ilies, I. S. Fulmer, M. Spitzmuller, and M. D. Johnson,
“Personality and Citizenship Behavior: The Mediating Role
of Job Satisfaction,” Journal of Applied Psychology 94 (2009),
pp. 945–959.
52. R. Ilies, B. A. Scott, and T. A. Judge, “The Interactive Effects
of Personal Traits and Experienced States on Intraindividual
Patterns of Citizenship Behavior,” Academy of Management
Journal 49 (2006), pp. 561–575.
53. See, for instance, D. J. Koys, “The Effects of Employee
Satisfaction, Organizational Citizenship Behavior, and
Turnover on Organizational Effectiveness: A Unit-Level,
Longitudinal Study,” Personnel Psychology (Spring 2001),
pp. 101–114; and C. Vandenberghe, K. Bentein, R. Michon,
J. Chebat, M. Tremblay, and J. Fils, “An Examination
of the Role of Perceived Support and Employee
Commitment in Employee-Customer Encounters,” Journal
of Applied Psychology 92, no. 4 (2007), pp. 1177–1187; and
M. Schulte, C. Ostroff, S. Shmulyian, and A. Kinicki,
“Organizational Climate Configurations: Relationships to
Collective Attitudes, Customer Satisfaction, and Financial
Performance,” Journal of Applied Psychology 94 (2009),
pp. 618–634.
54. J. M. O’Brien, “Zappos Knows How to Kick It,” Fortune
(February 2, 2009), pp. 55–60.
55. T. Frank, “Report: Low Morale May Hurt Airport Security,”
USA Today (June 25, 2008), p. 3A; and J. Bailey, “Fliers Fed
Up? The Employees Feel the Same,” The New York Times
(December 22, 2007), pp. A1, A18.
56. E. A. Locke, “The Nature and Causes of Job Satisfaction,”
in M. D. Dunnette (ed.), Handbook of Industrial and
Organizational Psychology (Chicago: Rand McNally, 1976),
p. 1331; K. D. Scott and G. S. Taylor, “An Examination
of Conflicting Findings on the Relationship Between Job
Satisfaction and Absenteeism: A Meta-Analysis,” Academy
of Management Journal (September 1985), pp. 599–612; and
R. Steel and J. R. Rentsch, “Influence of Cumulation Strategies
on the Long-Range Prediction of Absenteeism,” Academy of
Management Journal (December 1995), pp. 1616–1634.
57. J. P. Hausknecht, N. J. Hiller, and R. J. Vance, “Work-Unit
Absenteeism: Effects of Satisfaction, Commitment, Labor
Market Conditions, and Time,” Academy of Management
Journal 51, no. 6 (2008), pp. 1123–1245.
58. W. Hom and R. W. Griffeth, Employee Turnover (Cincinnati,
OH: South-Western Publishing, 1995); R. W. Griffeth, P. W.
Hom, and S. Gaertner, “A Meta-Analysis of Antecedents
and Correlates of Employee Turnover: Update, Moderator

Endnotes 95
Tests, and Research Implications for the Next Millennium,”
Journal of Management 26, no. 3 (2000), p. 479.
59. T. H. Lee, B. Gerhart, I. Weller, and C. O. Trevor,
“Understanding Voluntary Turnover: Path-Specific Job
Satisfaction Effects and the Importance of Unsolicited Job
Offers,” Academy of Management Journal 51, no. 4 (2008),
pp. 651–671.
60. P. E. Spector, S. Fox, L. M. Penney, K. Bruursema, A. Goh,
and S. Kessler, “The Dimensionality of Counterproductivity:
Are All Counterproductive Behaviors Created Equal?”
Journal of Vocational Behavior 68, no. 3 (2006), pp. 446–460;
and D. S. Chiaburu and D. A. Harrison, “Do Peers Make the
Place? Conceptual Synthesis and Meta-Analysis of Coworker
Effect on Perceptions, Attitudes, OCBs, and Performance,”
Journal of Applied Psychology 93, no. 5 (2008), pp. 1082–1103.
61. K. Holland, “Inside the Minds of Your Employees,” The
New York Times (January 28, 2007), p. B1; “Study Sees Link
Between Morale and Stock Price,” Workforce Management
(February 27, 2006), p. 15; and “The Workplace as a Solar
System,” The New York Times (October 28, 2006), p. B5.
62. E. White, “How Surveying Workers Can Pay Off,” The Wall
Street Journal (June 18, 2007), p. B3.
63. Harrison, D. A., Newman, D. A., & Roth, P. L., How impor-
tant are job attitudes?: Meta-analytic comparisons for inte-
grative behavioral outcomes and time sequences. Academy of
Management Journal, no. 49 (2006), pp. 320–321.

LOVE AT WORK: TABOO NO MORE?
96
A
t one time, workplace romances were a taboo topic. When they
were discussed by organizations, it was often by means of a memo
outlining the policy against such liaisons among co-workers.
Though the motivations behind such policies were not evil—mostly,
it was a desire to avoid sexual harassment lawsuits emanating from one
employee’s amorous pursuit of another—they also overlooked a real prob-
lem: a large percentage of couples first met in the workplace, and for many
reasons, work is a great place to meet a future mate.
In one 2011 survey of 3,900 workers, nearly 20 percent indicated they had
dated co-workers at least twice in their working career, and about one-third
of those who did ended up marrying a person they dated at work. What’s
more—65 percent of those who date someone at work say they are open
about it at work.
Nathan Shaw and Maiko Sato met at a Cisco training program. For two
years, they dated openly as fellow employees. When Nathan decided to
propose to Maiko, he asked his boss to help with a ruse. During a fake test of
teleconferencing equipment, Nathan’s proposal flashed on the screen. Maiko
said yes, and they remain happily married and working at Cisco’s San Jose,
CA, headquarters.
To Stacie Taylor, who has been dating Cary Costello, a fellow employee
of Zoot Enterprises (a Bozeman, Montana, technical services provider), for
more than 3 years, finding a mate at work is logical. “People spend so much
of their time working that it’s unavoidable,” she said. Cary adds, “If you’re
around a bunch of like-minded people who have similar interests, it’s bound
to happen.”
There are risks. When 27-year-old Arti Banerjee’s relationship with her
co-worker went sour, her ex-boyfriend started spreading rumors about her
in the office and on Facebook. He forwarded some of her text messages to
co-workers. After two months, Banerjee quit.
Another risk is violations of privacy. Some employees—to protect their
privacy or from fear of their organization’s reaction—try to keep their
relationship under wraps. It generally doesn’t work. When GMR Marketing
co-workers Michelle Walters and Ryan Scholz began dating, they hid their
relationship, only to be found out. As it turns out, they had nothing to
fear. Their boss, Gary Reynolds, says GMR has no dating policy: “Why try to
mandate behavior and develop policy when you don’t need it?”
Sources: S. Shallenbarger, “For Office Romance, The Secret’s Out,” The Wall Street Journal
(February 10, 2010), pp. D1–D2; “Survey: Workplace Dating Losing Stigma,” UPI (February 13,
2011), www.upi.com ; R. T. Sharma, “How to Handle an Office Romance, Especially after a Messy
Breakup,” Economic Times (May 1, 2011), http://economictimes.indiatimes.com/ .
LEARNING
OBJECTIVES
After studying this chapter,
you should be able to:
1 Differentiate emotions from
moods and list the basic
emotions and moods.
2 Discuss whether emotions
are rational and what
functions they serve.
3 Identify the sources of
emotions and moods.
4 Show the impact emotional
labor has on employees.
5 Describe affective events
theory and identify its
applications.
6 Contrast the evidence for
and against the existence
of emotional intelligence.
7 Identify strategies for
emotion regulation and
their likely effects.
8 Apply concepts about
emotions and moods to
specific OB issues.
MyManagementLab
Access a host of interactive
learning aids to help strengthen
your understanding of the
chapter concepts at
www.mymanagementlab.com

www.mymanagementlab.com

www.upi.com

http://economictimes.indiatimes.com/

Emotions
and Moods 4
Time cools, time clarifies; no mood can be
maintained quite unaltered
through the course of hours. —Mark Twain
Ph
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to
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p
ho
to
. S
ou
rc
e:
©
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97

98 CHAPTER 4 Emotions and Moods
A s the preceding stories illustrate, emotions can be an important part of the way people behave at work. Given the obvious role emotions play in our lives, it might surprise you that, until recently, the field of OB has given
the topic of emotions little attention. 1 Why? We offer two possible explanations.
First is the myth of rationality. 2 Until very recently, the protocol of the work
world kept a damper on emotions. A well-run organization didn’t allow employ-
ees to express frustration, fear, anger, love, hate, joy, grief, or similar feelings
thought to be the antithesis of rationality. Though researchers and managers
knew emotions were an inseparable part of everyday life, they tried to create
organizations that were emotion-free. Of course, that wasn’t possible.
The second explanation is that many believed emotions of any kind were dis-
ruptive. 3 Researchers looked at strong negative emotions—especially anger—
that interfered with an employee’s ability to work effectively. They rarely viewed
emotions as constructive or contributing to enhanced performance.
Certainly some emotions, particularly exhibited at the wrong time, can
hinder performance. But employees do bring their emotions to work every day,
and no study of OB would be comprehensive without considering their role in
workplace behavior.
How Are You Feeling Right Now?
In the Self-Assessment Library (available on CD or online), take assessment
IV.D.1 (How Are You Feeling Right Now?) and answer the following questions.
1. What was higher—your positive mood score or negative mood score? How
do these scores compare with those of your classmates?
2. Did your score surprise you? Why or why not?
3. What sorts of things influence your positive moods, your negative moods?
S A L
SELF-ASSESSMENT LIBRARY
In our analysis, we’ll need three terms that are closely intertwined: affect,
emotions, and moods.
Affect is a generic term that covers a broad range of feelings people experience,
including both emotions and moods. 4 Emotions are intense feelings directed at
someone or something. 5 Moods are less intense feelings than emotions and often
(though not always) arise without a specific event acting as a stimulus. 6
Most experts believe emotions are more fleeting than moods. 7 For example,
if someone is rude to you, you’ll feel angry. That intense feeling probably comes
and goes fairly quickly, maybe even in a matter of seconds. When you’re in a
bad mood, though, you can feel bad for several hours.
Emotions are reactions to a person (seeing a friend at work may make you
feel glad) or an event (dealing with a rude client may make you feel frustrated).
You show your emotions when you’re “happy about something, angry at some-
one, afraid of something.” 8 Moods, in contrast, aren’t usually directed at a
person or an event. But emotions can turn into moods when you lose focus on
the event or object that started the feeling. And, by the same token, good or
bad moods can make you more emotional in response to an event. So when a
colleague criticizes how you spoke to a client, you might show emotion (anger)
What Are Emotions and Moods?
1 Differentiate emotions from
moods and list the basic
emotions and moods.

What Are Emotions and Moods? 99
toward a specific object (your colleague). But as the specific emotion dissipates,
you might just feel generally dispirited. You can’t attribute this feeling to any
single event; you’re just not your normal self. You might then overreact to other
events. This affect state describes a mood. Exhibit 4-1 shows the relationships
among affect, emotions, and mood.
First, as the exhibit shows, affect is a broad term that encompasses emotions
and moods. Second, there are differences between emotions and moods. Some
of these differences—that emotions are more likely to be caused by a specific
event, and emotions are more fleeting than moods—we just discussed. Other
differences are subtler. For example, unlike moods, emotions like anger and
disgust tend to be more clearly revealed by facial expressions. Also, some re-
searchers speculate that emotions may be more action-oriented—they may lead
us to some immediate action—while moods may be more cognitive, meaning
they may cause us to think or brood for a while. 9
Finally, the exhibit shows that emotions and moods are closely connected and
can influence each other. Getting your dream job may generate the emotion of
joy, which can put you in a good mood for several days. Similarly, if you’re in a
good or bad mood, it might make you experience a more intense positive or neg-
ative emotion than otherwise. In a bad mood, you might blow up in response to
a co-worker’s comment that would normally have generated only a mild reaction.
Affect, emotions, and moods are separable in theory; in practice the distinc-
tion isn’t always crystal-clear. In some areas, researchers have studied mostly
moods, in other areas mainly emotions. So, when we review the OB topics on
emotions and moods, you may see more information about emotions in one
area and about moods in another. This is simply the state of the research.
affect A broad range of feelings that
people experience.
emotions Intense feelings that are
directed at someone or something.
moods Feelings that tend to be less
intense than emotions and that lack a
contextual stimulus.
Affect, Emotions, and Moods Exhibit 4-1
Emotions
• Caused by specific event
• Very brief in duration (seconds
or minutes)
• Specific and numerous in nature
(many specific emotions such as
anger, fear, sadness, happiness,
disgust, surprise)
• Usually accompanied by distinct
facial expressions
• Action oriented in nature
Moods
• Cause is often general and unclear
• Last longer than emotions (hours
or days)
• More general (two main dimensions—
positive affect and negative affect—
that are composed of multiple specific
emotions)
• Generally not indicated by distinct
expressions
• Cognitive in nature
Affect
Defined as a broad range of feelings that people experience.
Affect can be experienced in the form of emotions or moods.

100 CHAPTER 4 Emotions and Moods
The Basic Emotions
How many emotions are there? There are dozens, including anger, contempt,
enthusiasm, envy, fear, frustration, disappointment, embarrassment, disgust,
happiness, hate, hope, jealousy, joy, love, pride, surprise, and sadness. Numerous
researchers have tried to limit them to a fundamental set. 10 But some argue that
it makes no sense to think in terms of “basic” emotions because even emotions
we rarely experience, such as shock, can have a powerful effect on us. 11 Other
researchers, even philosophers, say there are universal emotions common to
all. René Descartes, often called the founder of modern philosophy, identi-
fied six “simple and primitive passions”— wonder, love, hatred, desire, joy, and
sadness—and argued that “all the others are composed of some of these six or
are species of them.” 12 Although other philosophers like Hume, Hobbes, and
Spinoza identified categories of emotions, proof of the existence of a basic set
of emotions still waits for contemporary researchers.
Psychologists have tried to identify basic emotions by studying facial expres-
sions. 13 One problem is that some emotions are too complex to be easily repre-
sented on our faces. Many think of love as the most universal of all emotions, 14 for
example, yet it’s not easy to express it through only a facial expression. Cultures
also have norms that govern emotional expression, so the way we experience an emo-
tion isn’t always the same as the way we show it. People in the United States and the
Middle East recognize a smile as indicating happiness, but in the Middle East a smile
is also more likely to be seen as a sign of sexual attraction, so women have learned
not to smile at men. 15 In collectivist countries people are more likely to believe
another’s emotional displays have something to do with the relationship between
them, while people in individualistic cultures don’t think others’ emotional expres-
sions are directed at them. French retail clerks, in contrast, are infamous for being
surly toward customers (as a report from the French government itself confirmed).
Serious German shoppers have reportedly been turned off by Walmart’s friendly
greeters and helpful staff. 16 And many companies today offer anger- management
programs to teach people to contain or even hide their inner feelings. 17
It’s unlikely psychologists or philosophers will ever completely agree on a set
of basic emotions, or even on whether there is such a thing. Still, many research-
ers agree on six essentially universal emotions—anger, fear, sadness, happiness,
disgust, and surprise. 18 Some even plot them along a continuum: happiness—
surprise—fear—sadness—anger—disgust. 19 The closer two emotions are to each
other on this continuum, the more likely people will confuse them. We sometimes
mistake happiness for surprise, but rarely do we confuse happiness and disgust. In
addition, as we’ll see later on, cultural factors can also influence interpretations.
The Basic Moods: Positive and Negative Affect
One way to classify emotions is by whether they are positive or negative. 20
Positive emotions—such as joy and gratitude—express a favorable evaluation or
feeling. Negative emotions—such as anger or guilt—express the opposite. Keep
in mind that emotions can’t be neutral. Being neutral is being nonemotional. 21
When we group emotions into positive and negative categories, they become
mood states because we are now looking at them more generally instead of isolating
one particular emotion. In Exhibit 4-2 , excited is a pure marker of high positive af-
fect, while boredom is a pure marker of low positive affect. Nervous is a pure marker
of high negative affect; relaxed is a pure marker of low negative affect. Finally, some
emotions—such as contentment (a mixture of high positive affect and low negative
affect) and sadness (a mixture of low positive affect and high negative affect)—are
in between. You’ll notice this model does not include all emotions. Some, such as
surprise, don’t fit well because they’re not as clearly positive or negative.

What Are Emotions and Moods? 101
So, we can think of positive affect as a mood dimension consisting of posi-
tive emotions such as excitement, self-assurance, and cheerfulness at the high
end and boredom, sluggishness, and tiredness at the low end. Negative affect
is a mood dimension consisting of nervousness, stress, and anxiety at the high
end and relaxation, tranquility, and poise at the low end. ( Note: Positive and
negative affect are moods. We’re using these labels, rather than positive mood and
negative mood, because that’s how researchers label them.)
Positive affect and negative affect play out at work and beyond in that they
color our perceptions, and these perceptions can become their own reality. One
flight attendant posted an anonymous blog on the Web that said, “I work in a
pressurized aluminum tube and the environment outside my ‘office’ cannot
sustain human life. That being said, the human life inside is not worth sustain-
ing sometimes . . . in fact, the passengers can be jerks, and idiots. I am often
treated with no respect, nobody listens to me . . . until I threaten to kick them
off the plane.” 22 Clearly, if a flight attendant is in a bad mood, it’s going to influ-
ence his perceptions of passengers, which will, in turn, influence his behavior.
Negative emotions are likely to translate into negative moods. People think
about events that created strong negative emotions five times as long as they do
about events that created strong positive ones. 23 So, we should expect people
to recall negative experiences more readily than positive ones. Perhaps one rea-
son is that, for most of us, negative experiences also are more unusual. Indeed,
research finds a positivity offset , meaning that at zero input (when nothing in
particular is going on), most individuals experience a mildly positive mood. 24
So, for most people, positive moods are somewhat more common than nega-
tive moods. The positivity offset also appears to operate at work. One study of
The Structure of Mood Exhibit 4-2
High Negative
Affect
Low Negative
Affect
High Positive
Affect
Low Positive
Affect
Tense Alert
Excited
Elated
Happy
Content
Serene
Relaxed
CalmFatigued
Bored
Depressed
Sad
Upset
Stressed
Nervous
positive affect A mood dimension that
consists of specific positive emotions
such as excitement, self-assurance,
and cheerfulness at the high end and
boredom, sluggishness, and tiredness
at the low end.
negative affect A mood dimension
that consists of emotions such as
nervousness, stress, and anxiety at the
high end and relaxation, tranquility,
and poise at the low end.
positivity offset The tendency of most
individuals to experience a mildly
positive mood at zero input (when
nothing in particular is going on).

102 CHAPTER 4 Emotions and Moods
customer-service representatives in a British call center (a job where it’s proba-
bly pretty difficult to feel positive) revealed people reported experiencing posi-
tive moods 58 percent of the time. 25
Does the degree to which people experience these positive and nega-
tive emotions vary across cultures? Yes. In China, people report experienc-
ing fewer positive and negative emotions than people in other cultures, and
the emotions they experience are less intense. Compared with Mainland
Chinese, Taiwanese are more like U.S. workers in their experience of emo-
tions: on average, they report more positive and fewer negative emotions
than their Chinese counterparts. 26 People in most cultures appear to ex-
perience certain positive and negative emotions, but the frequency and in-
tensity varies to some degree. 27 Despite these differences, people from all
over the world interpret negative and positive emotions in much the same
way. We all view negative emotions, such as hate, terror, and rage, as dan-
gerous and destructive, and we desire positive emotions, such as joy, love,
and happiness. However, some cultures value certain emotions more than
others. U.S.  culture values enthusiasm, while the Chinese consider negative
emotions more useful and constructive than do people in the United States.
Pride is generally a positive emotion in Western individualistic cultures such
as the United States, but Eastern cultures such as China and Japan view pride
as undesirable. 28
The Function of Emotions
Do Emotions Make Us Irrational? How often have you heard someone say
“Oh, you’re just being emotional”? You might have been offended. The fa-
mous astronomer Carl Sagan once wrote, “Where we have strong emotions,
we’re liable to fool ourselves.” These observations suggest rationality and
emotion are in conflict, and that if you exhibit emotion you are likely to
act irrationally. One team of authors argues that displaying emotions such
as sadness to the point of crying is so toxic to a career that we should leave
the room rather than allow others to witness it. 29 These perspectives suggest
the demonstration or even experience of emotions can make us seem weak,
brittle, or irrational. However, research is increasingly showing that emotions
are actually critical to rational thinking. 30 There has been evidence of such a
link for a long time.
Consider Phineas Gage, a railroad worker in Vermont. One September
day in 1848, while Gage was setting an explosive charge at work, a 3-foot
7-inch iron bar flew into his lower-left jaw and out through the top of his
skull. Remarkably, Gage survived his injury. He was still able to read and
speak, and he per formed well above average on cognitive ability tests.
However, it became clear he had lost his ability to experience emotion; he
was emotionless at even the saddest misfortunes or the happiest occasions.
Gage’s inability to express emotion eventually took away his ability to
reason. He started making irrational choices about his life, often behaving
erratically and against his self-interests. Despite being an intelligent man
whose intellectual abilities were unharmed by the accident, Gage drifted
from job to job, eventually taking up with a circus. In commenting on
Gage’s condition, one expert noted, “Reason may not be as pure as most of
us think it is or wish it were . . . emotions and feelings may not be intruders
in the bastion of reason at all: they may be enmeshed in its networks, for
worse and for better.” 31
The example of Phineas Gage and many other brain injury studies show
emotions are critical to rational thinking. We must have the ability to experi-
ence emotions to be rational. Why? Because our emotions provide important
2 Discuss whether emotions
are rational and what
functions they serve.

What Are Emotions and Moods? 103
information about how we understand the world around us. Would we really
want a manager to make a decision about firing an employee without regarding
either his or the employee’s emotions? The key to good decision making is to
employ both thinking and feeling in our decisions.
Do Emotions Make Us Ethical? A growing body of research has begun to exam-
ine the relationship between emotions and moral attitudes. 32 It was previously
believed that, like decision making in general, most ethical decision making
was based on higher-order cognitive processes, but research on moral emotions
increasingly questions this perspective. Examples of moral emotions include
sympathy for the suffering of others, guilt about our own immoral behavior, an-
ger about injustice done to others, contempt for those who behave unethically,
and disgust at violations of moral norms. Numerous studies suggest that these
reactions are largely based on feelings rather than cold cognition.
You can think about this research in your own life to see how the emotional
model of ethics operates. Consider the massive earthquake that struck Japan
in 2011. When you heard about it, did you feel emotionally upset about the
suffering of others, or did you make more of a rational calculation about their
unfortunate situation? Consider a time when you have done something that
hurt someone else. Did you feel angry or upset with yourself? Or think about a
time when you have seen someone else treated unfairly. Did you feel contempt
for the person acting unfairly, or did you engage in a cool rational calculation
of the justice of the situation? Most people who think about these situations do
have at least some sense of an emotional stirring that might prompt them to
engage in ethical actions like donating money to help others, apologizing and
attempting to make amends, or intervening on behalf of those who have been
mistreated. In sum, we can conclude that people who are behaving ethically are
at least partially making decisions based on their emotions and feelings, and
this emotional reaction will often be a good thing.
Sources of Emotions and Moods
Have you ever said “I got up on the wrong side of the bed today”? Have you ever
snapped at a co-worker or family member for no particular reason? If you have,
it probably makes you wonder where emotions and moods come from. Here we
discuss some of the primary influences.
Personality Moods and emotions have a trait component: most people have
built-in tendencies to experience certain moods and emotions more frequently
than others do. People also experience the same emotions with different
intensities. Contrast Texas Tech basketball coach Bobby Knight to Microsoft
CEO Bill Gates. The first is easily moved to anger, while the other is relatively
distant and unemotional. Knight and Gates probably differ in affect intensity ,
or how strongly they experience their emotions. 33 Affectively intense people
experience both positive and negative emotions more deeply: when they’re sad,
they’re really sad, and when they’re happy, they’re really happy.
3 Identify the sources of
emotions and moods.
By studying brain injuries, such as
the one experienced by Phineas
Gage and whose skull is illustrated
here, researchers discovered an
important link between emotions
and rational thinking. They found
that losing the ability to emote led
to loss of the ability to reason. From
this discovery, researchers learned
that our emotions provide us with
valuable information that helps our
thinking process.
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affect intensity Individual differences
in the strength with which individuals
experience their emotions.

104 CHAPTER 4 Emotions and Moods
S A L
SELF-ASSESSMENT LIBRARY
What’s My Affect Intensity?
In the Self-Assessment Library (available on CD or online), take assessment
IV.D.2 (What’s My Affect Intensity?).
Day of the Week and Time of the Day Are people in their best moods on the
weekends? As Exhibit 4-3 shows, people tend to be in their worst moods (highest
negative affect and lowest positive affect) early in the week, and in their best
moods (highest positive affect and lowest negative affect) late in the week. 34
What about time of the day? (See Exhibit 4-4 .) We often think we are either
“morning” or “evening” people. However, most of us actually follow the same
pattern. Regardless of what time we go to bed at night or get up in the morning,
levels of positive affect tend to peak at around the halfway point between waking
and sleeping. Negative affect, however, shows little fluctuation throughout the day.
What does this mean for organizational behavior? Monday morning is prob-
ably not the best time to ask someone for a favor or convey bad news. Our work-
place interactions will probably be more positive from midmorning onward and
also later in the week.
Weather When do you think you would be in a better mood—when it’s
70  degrees and sunny, or on a gloomy, cold, rainy day? Many people believe
their mood is tied to the weather. However, a fairly large and detailed body of
evidence conducted by multiple researchers suggests weather has little effect on
mood. 35 One expert concluded, “Contrary to the prevailing cultural view, these
data indicate that people do not report a better mood on bright and sunny days
(or, conversely, a worse mood on dark and rainy days).” 36 Illusory correlation
explains why people tend to think nice weather improves their mood. It occurs
when people associate two events that in reality have no connection.
Our Moods Are Affected by the Day of the Week
Source: “Our Moods Are Affected by the Day of the Week” from Mood and Temperament, by D. Watson. Reprinted by permission
of Guilford Publications, Inc.
Exhibit 4-3
Sun. Mon. Tues. Wed. Thurs. Fri. Sat.
Day of the Week
M
o
o
d
High
Low
Average
Positive affect Negative affect
Negative moods are highest on Sundays and
Mondays and fall throughout the week
Positive moods are highest
at the end of the week

What Are Emotions and Moods? 105
Stress As you might imagine, stressful daily events at work (a nasty e-mail, an im-
pending deadline, the loss of a big sale, a reprimand from the boss) negatively affect
moods. The effects of stress also build over time. As the authors of one study note,
“a constant diet of even low-level stressful events has the potential to cause workers
to experience gradually increasing levels of strain over time.” 37 Mounting levels of
stress can worsen our moods, and we experience more negative emotions. Consider
the following entry from a worker’s blog: “I’m in a bit of a blah mood today . . .
physically, I feel funky, though, and the weather out combined with the amount of
personal and work I need to get done are getting to me.” Although sometimes we
thrive on stress, most of us, like this blogger, find stress takes a toll on our mood. 38
Social Activities Do you tend to be happiest when out with friends? For most
people, social activities increase positive mood and have little effect on nega-
tive mood. But do people in positive moods seek out social interactions, or do
social interactions cause people to be in good moods? It seems both are true. 39
Does the type of social activity matter? Indeed it does. Research suggests activities
that are physical (skiing or hiking with friends), informal (going to a party), or
epicurean (eating with others) are more strongly associated with increases in
positive mood than events that are formal (attending a meeting) or sedentary
(watching TV with friends). 40
illusory correlation The tendency of
people to associate two events when
in reality there is no connection.
Our Moods Are Affected by the Time of Day
Source: “Our Moods Are Affected by the Day of the Week” from Mood and Temperament, by D. Watson. Reprinted by permission of
Guilford Publications, Inc.
Exhibit 4-4
High
Low
Average
M
o
o
d
9:00 AM Noon 3:00 PM 6:00 PM 9:00 PM Midnight
Time of Day
Positive affect Negative affect
Positive mood peaks during
the middle part of the day
Negative moods show very
little variation over the day

106 CHAPTER 4 Emotions and Moods
Moods of the UnemployedOB Poll
Thriving
34
55
Worried
50
28
Sad
36
17
Stressed
54
35
Angry
25
12
Depressed
27
16
60
50
40
30
20
10
0
Unemployed
Employed
Source: E. Mendes and L. Saad, “For Unemployed, Length, Scale of Job Search Affects Well Being, Life Ratings,” Gallup News (February 25, 2011),
http://www.gallup.com/. Reprinted with permission.
Sleep U.S. adults report sleeping less than adults a generation ago. 41 Does
lack of sleep make people grumpier? Sleep quality does affect mood. Under-
graduates and adult workers who are sleep-deprived report greater feelings of
fatigue, anger, and hostility. 42 One reason is that poor or reduced sleep impairs
decision making and makes it difficult to control emotions. 43 A recent study
suggests poor sleep also impairs job satisfaction because people feel fatigued,
irritable, and less alert. 44
Exercise and social activities are
two of the primary sources of emo-
tions and moods. For most people,
working out and participating in
social activities that are informal
and physical increase positive
moods. Shown here are employees
of Blizzard Entertainment taking a
break from work to play volleyball.
Blizzard, a developer of entertain-
ment software, offers employees
yoga classes, a sand volleyball court,
basketball court, bike track, and fit-
ness center where they can exercise
and socialize. Like many other orga-
nizations, Blizzard believes these
activities result in happier, healthier,
and more productive employees.
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What Are Emotions and Moods? 107
Exercise You often hear people should exercise to improve their mood. Does
“sweat therapy” really work? It appears so. Research consistently shows exercise
enhances peoples’ positive mood. 45 While not terribly strong overall, the effects
are strongest for those who are depressed. So exercise may help put you in a
better mood, but don’t expect miracles.
Age Do young people experience more extreme positive emotions (so-called
youthful exuberance) than older people? If you answered “yes,” you were wrong.
One study of people ages 18 to 94 revealed that negative emotions seem to occur
less as people get older. Periods of highly positive moods lasted longer for older in-
dividuals, and bad moods faded more quickly. 46 The study implies emotional expe-
rience improves with age; as we get older, we experience fewer negative emotions.
Sex Many believe women are more emotional than men. Is there any truth to
this? Evidence does confirm women are more emotionally expressive than men; 47
they experience emotions more intensely, they tend to “hold onto” emotions
longer than men, and they display more frequent expressions of both positive
and negative emotions, except anger. 48 Evidence from a study of participants
from 37 different countries found that men consistently report higher levels of
powerful emotions like anger, whereas women report more powerless emotions
like sadness and fear. Thus, there are some sex differences in the experience
and expression of emotions. 49
T
his statement is generally true.
Consider the following scenario:
Assume you work with three
other people: Jane, Blake, and Morgan.
Jane received several calls from cus-
tomers unhappy with a product made
by her company. Blake broke up with
his fiancé. Morgan has had a recurrence
of depression. Yet at lunch today all
three seemed pretty happy. There were
smiles, laughter, and in general good
humor for all to see. Yet each person, in
his or her own way, is weathering tough
times. If you had to gauge the moods of
Jane, Blake, and Morgan, you might say
they were in relatively good moods. If
you asked each of them, however, they
might attribute their seeming good hu-
mor to impression management, “put-
ting on a good face,” or the effects of
the social environment.
This hypothetical scenario reflects
a phenomenon recent research
supports: we typically underestimate
the negative emotions experienced by
others. In other words, people often
feel worse than we believe they do. To
some extent, the same is true of posi-
tive emotions: We estimate people to
experience more positive emotions
than they do. Why do we think people
are in better moods than they really
are, and what are the implications?
There are two reasons we see oth-
ers as experiencing more positive and
fewer negative emotions than they do:
1. People generally experience more
negative emotions when they are
by themselves than when they
are  in the company of others. So
we tend to see others not at their
lowest, but at their highest.
2. Most people are reluctant to di-
vulge negative feelings in social
situations. Thus, when we’re feeling
low, we tend to avoid showing oth-
ers how bad we feel.
The upshot? First, we should appre-
ciate that in social situations like work,
people probably feel less happy than
they appear. Second, we should be
less afraid to disclose negative emo-
tions to friends, close coworkers, and
significant others, given the costs of
“keeping it all in.” Often the strongest
emotional links we form with others
occur when someone reports expe-
riencing something negative that we
too have experienced.
Sources: Based on: A. H. Jordan, B. Monin,
C. S. Dweck, B. J. Lovett, O. P. John, and
J. J. Gross, “Misery Has More Company Than
People Think: Underestimating the Prevalence
of Others’ Negative Emotions,” Personality
and Social Psychology Bulletin 37, no. 1
(2011),  pp. 120–135; M. Szalavitz, “Misery
Has More Company Than You Think, Especially
on Facebook,” Time (January 27, 2011), http://
healthland.time.com ; and C. Jarrett, “Other
People May Experience More Misery Than
You Realize,” Research Digest (January 24,
2011), http://bps-research-digest.blogspot
.com .
Myth or Science?
We Are Better Judges of When Others
Are Happy Than When They Are Sad

http://healthland.time.com

http://healthland.time.com

http://bps-research-digest.blogspot.com

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108 CHAPTER 4 Emotions and Moods
People also tend to attribute men’s and women’s emotions in ways that
might be based on stereotypes of what typical emotional reactions are. One
study showed that experimental participants who read about emotional expres-
sions interpreted women’s reactions as being dispositional (related to person-
ality), whereas men’s reactions were interpreted as being due to the situation
around them. 50 For example, a picture of a sad woman led observers to believe
she was acting consistently with an emotional personality type, whereas a picture
of a sad man was more likely to be attributed to his having a bad day. Another
study showed that participants were faster at detecting angry expressions on
male faces and happy expressions on female faces; neutral faces in men were at-
tributed as more angry and neutral faces in women were interpreted as happy. 51
I
n most customer service jobs in
the United States, there is a strong
social pressure for employees to dis-
play an upbeat demeanor at all times,
demonstrating happy and friendly
emotions in an effort to make custom-
ers feel pleasant and at ease. Experts
on emotional labor have found that
these rules encouraging “service with
a smile” are also found in many other
countries, but that doesn’t mean they
are followed to the same extent every-
where.
One study examined international
differences in emotional displays by
having participants from Israel, France,
Singapore, and the United States
explain how they would behave in a va-
riety of emotionally charged situations
as customer service agents. Their
results showed that although there
was a strongly consistent tendency
for respondents to report they would
try to show happiness and suppress
anger toward customers, there were
differences in the extent to which
people would engage in these forms
of emotional labor. Respondents from
Singapore were especially negatively
disposed toward expressing anger at
customers, while the French found it
more acceptable. U.S. respondents
were especially likely to display happi-
ness toward customers, while French
respondents were most reserved in
their expressions of happiness.
This is not to say there aren’t cross-
cultural similarities in customer service
expectations and customer reactions.
There are no cultures in which smiling
is seen as an expression of hostility or
in which a grimace or frown is seen
as a sign of friendliness. There also
appear to be consistently positive re-
actions to others who display positive
emotions. However, companies that
operate in multiple markets should
expect to see differences in the types
of emotions customer service employ-
ees will display.
Sources: A. Grandey, A Rafaeli, S. Ravid,
J. Wirtz, and D. D. Steiner, “Emotion
Display Rules at Work in the Global
Service Economy: The Special Case of the
Customer,” Journal of Service Management
21, (2010), pp. 388–412; and D. Matsumoto,
“Culture and Emotional Expression,” in
R. S. Wyer, C. Chiu, and Y. Hong (Eds.),
Understanding Culture: Theory, Research,
and Application (New York: Taylor and
Francis, 2009), pp. 271–288.
glOBalization!
Should You Expect “Service with a Smile”
All Around the World?
If you’ve ever had a job in retail sales or waited on tables in a restaurant, you know
the importance of projecting a friendly demeanor and smiling. Even though
there were days when you didn’t feel cheerful, you knew management expected
you to be upbeat when dealing with customers. So you faked it. Every employee
expends physical and mental labor by putting body and mind, respectively, into
the job. But jobs also require emotional labor , an employee’s expression of orga-
nizationally desired emotions during interpersonal transactions at work.
4 Show the impact emotional
labor has on employees.
Emotional Labor

Emotional Labor 109
The concept of emotional labor emerged from studies of service jobs.
Airlines expect their flight attendants to be cheerful; we expect funeral directors
to be sad and doctors emotionally neutral. But emotional labor is relevant to
almost every job. At the least your managers expect you to be courteous, not
hostile, in your interactions with co-workers. The true challenge arises when
employees have to project one emotion while feeling another. 52 This dispar-
ity is emotional dissonance , and it can take a heavy toll. Bottled-up feelings of
frustration, anger, and resentment can eventually lead to emotional exhaustion
and burnout. 53 It’s from the increasing importance of emotional labor as a key
component of effective job performance that we have come to understand the
relevance of emotion within the field of OB.
Emotional labor creates dilemmas for employees. There are people with
whom you have to work that you just plain don’t like. Maybe you consider their
personality abrasive. Maybe you know they’ve said negative things about you be-
hind your back. Regardless, your job requires you to interact with these people
on a regular basis. So you’re forced to feign friendliness.
It can help you, on the job especially, if you separate emotions into felt or dis-
played emotions . 54 Felt emotions are an individual’s actual emotions. In contrast,
displayed emotions are those that the organization requires workers to show and
considers appropriate in a given job. They’re not innate; they’re learned. “The
ritual look of delight on the face of the first runner-up as the new Miss America is
announced is a product of the display rule that losers should mask their sadness
with an expression of joy for the winner.” 55 Similarly, most of us know we’re ex-
pected to act sad at funerals, regardless of whether we consider the person’s death
a loss, and to appear happy at weddings even if we don’t feel like celebrating.
emotional labor A situation in
which an employee expresses
organizationally desired emotions
during interpersonal transactions
at work.
emotional dissonance Inconsistencies
between the emotions people feel
and the emotions they project.
displayed emotions Emotions that
are organizationally required and
considered appropriate in a given job.
In addition to physical and mental
labor, jobs also require emotional
labor. Emerging from studies of ser-
vice jobs, the concept of emotional
labor involves an employee’s expres-
sion of emotions that an organiza-
tion requires during interpersonal
transactions. Employees of this new
Apple store in Scottsdale, Arizona,
greeted shoppers standing in line
and waiting to get into the store
with a warm reception. Employees’
smiles and high fives are expres-
sions of emotional labor that Apple
requires and considers appropriate
for their jobs.
felt emotions An individual’s actual
emotions.
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110 CHAPTER 4 Emotions and Moods
Research suggests that at U.S. workplaces, it is expected that we should
typically display positive emotions like happiness and excitement and suppress
negative emotions like fear, anger, disgust, and contempt. 56 Effective managers
have learned to be serious when giving an employee a negative performance
evaluation and to hide their anger when they’ve been passed over for promo-
tion. A salesperson who hasn’t learned to smile and appear friendly, despite his
or her true feelings at the moment, typically won’t last long in the job. How we
experience an emotion isn’t always the same as how we show it. 57
Displaying fake emotions requires us to suppress real ones. Surface acting
is hiding inner feelings and forgoing emotional expressions in response to dis-
play rules. A worker who smiles at a customer even when he doesn’t feel like it
is surface acting. Deep acting is trying to modify our true inner feelings based
on display rules. A health care provider trying to genuinely feel more empathy
for her patients is deep acting. 58 Surface acting deals with displayed emotions,
and deep acting deals with felt emotions. Research shows that surface acting is
more stressful to employees because it entails denying their true emotions. 59
Displaying emotions we don’t really feel is exhausting, so it is important to give
employees who engage in surface displays a chance to relax and recharge. A
study that looked at how cheerleading instructors spent their breaks from teach-
ing found those who used their breaks to rest and relax were more effective
instructors after their breaks. 60 Instructors who did chores during their breaks
were only about as effective after their break as they were before. Another study
found that in hospital work groups where there were heavy emotional display
demands, burnout was higher than in other hospital work groups. 61
We’ve seen that emotions and moods are an important part of our lives and our
work lives. But how do they influence our job performance and satisfaction? A
model called affective events theory (AET) demonstrates that employees react
emotionally to things that happen to them at work, and this reaction influences
their job performance and satisfaction. 62
Exhibit 4-5 summarizes AET. The theory begins by recognizing that emotions
are a response to an event in the work environment. The work environment
includes everything surrounding the job—the variety of tasks and degree of
autonomy, job demands, and requirements for expressing emotional labor.
This environment creates work events that can be hassles, uplifting events, or
both. Examples of hassles are colleagues who refuse to carry their share of work,
conflicting directions from different managers, and excessive time pressures.
Uplifting events include meeting a goal, getting support from a colleague, and
receiving recognition for an accomplishment. 63
These work events trigger positive or negative emotional reactions, to which
employees’ personalities and moods predispose them to respond with greater
or lesser intensity. People who score low on emotional stability are more likely
to react strongly to negative events. And our emotional response to a given
event can change depending on mood. Finally, emotions influence a number
of performance and satisfaction variables, such as organizational citizenship
behavior, organizational commitment, level of effort, intention to quit, and
workplace deviance.
5 Describe affective events
theory and identify its
applications.
Affective Events Theory

Affective Events Theory 111
Tests of affective events theory suggest the following:
1. An emotional episode is actually a series of emotional experiences,
precipitated by a single event and containing elements of both emotions
and mood cycles.
2. Current emotions influence job satisfaction at any given time, along with
the history of emotions surrounding the event.
3. Because moods and emotions fluctuate over time, their effect on
performance also fluctuates.
4. Emotion-driven behaviors are typically short in duration and of high
variability.
5. Because emotions, even positive ones, tend to be incompatible with
behaviors required to do a job, they typically have a negative influence on
job performance. 64
Consider an example. 65 Say you work as an aeronautical engineer for Boeing.
Because of the downturn in demand for commercial jets, you’ve just learned
the company is considering laying off 10,000 employees, possibly including you.
This event is likely to make you feel negative emotions, especially fear that you
might lose your primary source of income. And because you’re prone to worry
a lot and obsess about problems, this event increases your feelings of insecurity.
The layoff also sets in motion a series of smaller events that create an episode:
you talk with your boss and he assures you your job is safe; you hear rumors your
department is high on the list to be eliminated; and you run into a former col-
league who was laid off 6 months ago and still hasn’t found work. These events,
surface acting Hiding one’s inner
feelings and forgoing emotional
expressions in response to display
rules.
affective events theory (AET) A model
that suggests that workplace events
cause emotional reactions on the part
of employees, which then influence
workplace attitudes and behaviors.
Affective Events Theory
Source: Based on N. M. Ashkanasy and C. S. Daus, “Emotion in the Workplace: The New Challenge for Managers,” Academy of
Management Executive (February 2002), p. 77.
Exhibit 4-5
Job satisfaction
Job performance
Emotional reactions
• Positive
• Negative
Personal dispositions
• Personality
• Mood
• Daily hassles
• Daily uplifts
Work events
• Characteristics of
the job
• Job demands
• Requirements for
emotional labor
Work environment
deep acting Trying to modify one’s
true inner feelings based on display
rules.

112 CHAPTER 4 Emotions and Moods
in turn, create emotional ups and downs. One day, you’re feeling upbeat that
you’ll survive the cuts. The next, you might be depressed and anxious. These
emotional swings take your attention away from your work and lower your job
performance and satisfaction. Finally, your response is magnified because this is
the fourth-largest layoff Boeing has initiated in the past 3 years.
In summary, AET offers two important messages. 66 First, emotions provide
valuable insights into how workplace hassles and uplifting events influence
employee performance and satisfaction. Second, employees and managers
shouldn’t ignore emotions or the events that cause them, even when they
appear minor, because they accumulate.
Diane Marshall is an office manager. Her awareness of her own and others’
emotions is almost nil. She’s moody and unable to generate much enthusi-
asm or interest in her employees. She doesn’t understand why employees get
upset with her. She often overreacts to problems and chooses the most inef-
fectual responses to emotional situations. 67 Diane has low emotional intelli-
gence. Emotional intelligence (EI) is a person’s ability to (1) perceive emotions
in the self and others, (2) understand the meaning of these emotions, and
(3) regulate one’s emotions accordingly in a cascading model, as shown in
Exhibit 4-6 . People who know their own emotions and are good at reading emo-
tional cues—for instance, knowing why they’re angry and how to express them-
selves without violating norms—are most likely to be effective. 68
Several studies suggest EI plays an important role in job performance. One
study that used functional magnetic resonance imaging (fMRI) technology
found executive MBA students who performed best on a strategic decision mak-
ing task were more likely to incorporate emotion centers of the brain into their
choice process. The students also de-emphasized the use of the more cogni-
tive parts of their brains. 69 Another study looked at the successes and failures
of 11  U.S. presidents—from Franklin Roosevelt to Bill Clinton—and evalu-
ated them on six qualities: communication, organization, political skill, vision,
cognitive style, and emotional intelligence. The key quality that differentiated
6 Contrast the evidence for
and against the existence
of emotional intelligence.
Emotional Intelligence
A Cascading Model of Emotional Intelligence Exhibit 4-6
Perceive Emotions in Self
and Others
Understand the Meaning of
Emotions
Regulate Emotions
Conscientiousness
Cognitive
Emotional Stability

Emotional Intelligence 113
the successful (such as Roosevelt, Kennedy, and Reagan) from the unsuccess-
ful (such as Johnson, Carter, and Nixon) was emotional intelligence. 70 One
simulation study also showed that students who were good at identifying and
distinguishing among their own feelings were able to make more profitable
investment decisions. 71
EI has been a controversial concept in OB, with supporters and detractors.
In the following sections, we review the arguments for and against its viability.
The Case for EI
The arguments in favor of EI include its intuitive appeal, the fact that it predicts
criteria that matter, and the idea that it is biologically based.
Intuitive Appeal Almost everyone agrees it is good to possess social intelli-
gence. Intuition suggests people who can detect emotions in others, control
their own emotions, and handle social interactions well have a powerful leg up
in the business world. Partners in a multinational consulting firm who scored
above the median on an EI measure delivered $1.2 million more in business
than did the other partners. 72
EI Predicts Criteria That Matter Evidence suggests a high level of EI means a
person will perform well on the job. One study found EI predicted the perfor-
mance of employees in a cigarette factory in China. 73 Another study found the
emotional intelligence (EI) The ability
to detect and to manage emotional
cues and information.
Diane Hoskins, a top leader at
Gensler, a global architectural firm,
has high emotional intelligence.
She is one of three executive direc-
tors who operate the firm along
with the management committee.
Hoskins is a star performer in a
job that demands interacting with
employees and developing their
careers to ensure that Gensler has
the talent it needs to serve clients.
Hoskins is shown here discussing
a new internship program that
could help Gensler build its global
business.
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114 CHAPTER 4 Emotions and Moods
ability to recognize emotions in others’ facial expressions and to emotionally
“eavesdrop” (pick up subtle signals about peoples’ emotions) predicted peer
ratings of how valuable people were to their organization. 74 Finally, a review
of studies indicated that, overall, EI weakly but consistently correlated with job
performance, even after researchers took cognitive ability, conscientiousness,
and neuroticism into account. 75
EI Is Biologically Based In one study, people with damage to the brain area
that governs emotional processing (part of the prefrontal cortex) scored no
lower on standard measures of intelligence than people without similar dam-
age. But they scored significantly lower on EI tests and were impaired in normal
decision making, as demonstrated by their poor performance in a card game
with monetary rewards. This study suggests EI is neurologically based in a way
that’s unrelated to standard measures of intelligence. 76 There is also evidence
EI is genetically influenced, further supporting the idea that it measures a real
underlying biological factor. 77
The Case Against EI
For all its supporters, EI has just as many critics who say it is vague and impossible
to measure, and they question its validity.
EI Researchers Do Not Agree on Definitions To many researchers, it’s not
clear what EI is because researchers use different definitions of the con-
struct. 78 Some researchers have focused on emotional intelligence via tests
with right and wrong answers, scoring the ability to recognize and control
emotions. This is the ability-based perspective on EI. Others focus on emo-
tional intelligence as a broad variety of constructs that can be measured by
self-reports and are connected primarily by the fact that they are not redun-
dant with cognitive intelligence. Not only are these two definitions different,
but the measures used by each perspective are barely correlated with one
another. 79
EI Can’t Be Measured Many critics have raised questions about measuring EI.
Because EI is a form of intelligence, they argue, there must be right and wrong
answers for it on tests. Some tests do have right and wrong answers, although
the validity of some questions is doubtful. One measure asks you to associate
feelings with colors, as if purple always makes us feel cool and not warm. Other
measures are self-reported, such as “I’m good at ‘reading’ other people,” and
have no right or wrong answers. However, these self-report measures could
reflect a variety of non-ability related constructs like general self-esteem or
self- efficacy. The measures of EI are diverse, and researchers have not sub-
jected them to as much rigorous study as they have measures of personality and
general intelligence. 80
EI Is Nothing but Personality with a Different Label Some critics argue that
because EI is so closely related to intelligence and personality, once you con-
trol for these factors, it has nothing unique to offer. There is some foundation
to this argument. EI appears to be correlated with measures of personality,
especially emotional stability. 81 If this is true, then the evidence for a biologi-
cal component to EI is spurious, and biological markers like brain activity and
heritability are attributable to other well-known and much better researched
psychological constructs. To some extent, researchers have resolved this issue
by noting that EI is a construct partially determined by traits like cognitive

S A L
SELF-ASSESSMENT LIBRARY
OB Applications of Emotions and Moods 115
intelligence, conscientiousness, and neuroticism, as shown in Exhibit 4-6 , so it
makes sense that EI is correlated with these characteristics. 82
Although the field is progressing in its understanding of EI, many questions have
not been answered. Still, EI is wildly popular among consulting firms and in the
popular press. One company’s promotional materials for an EI measure claimed,
“EI accounts for more than 85 percent of star performance in top leaders.” 83 To say
the least, it’s difficult to validate this statement with the research literature.
Emotion Regulation
Have you ever tried to cheer yourself up when you’re feeling down, or calm
yourself when you’re feeling angry? If so, you have engaged in emotion regula-
tion, which is part of the EI literature but has also been studied as an inde-
pendent concept. 84 The central idea behind emotion regulation is to identify
and modify the emotions you feel. Strategies to change your emotions include
thinking about more pleasant things, suppressing negative thoughts, distract-
ing yourself, reappraising the situation, or engaging in relaxation techniques.
As you might suspect based on our discussion up to this point, not everyone
is equally good at regulating their emotions. Individuals who are higher in the
personality trait of neuroticism have more trouble doing so and often find their
moods are beyond their ability to control. Individuals who have lower levels of
self-esteem are also less likely to try to improve their sad moods, perhaps because
they are less likely than others to feel like they deserve to be in a good mood. 85
While it might seem in some ways desirable to regulate your emotions, re-
search suggests there is a downside to trying to change the way you feel. Changing
your emotions takes effort, and this effort can be exhausting. Sometimes attempts
to change an emotion actually make the emotion stronger; for example, trying
to talk yourself out of being afraid can make you focus more on what scares you,
which makes you more afraid. 86 Emotion suppression appears to be especially
difficult to do effectively and can lead to more negative emotions; reappraising
situations is usually more effective in increasing positive emotions and limiting
negative emotions. 87 From another perspective, research suggests that avoiding
negative emotional experiences is less likely to lead to positive moods than seek-
ing out positive emotional experiences. 88 For example, you’re more likely to ex-
perience a positive mood if you have a pleasant conversation with a friend than
you would be if you avoided an unpleasant conversation with a hostile co-worker.
What’s My Emotional Intelligence Score?
In the Self-Assessment Library (available on CD or online), take assessment I.E.1
(What’s My Emotional Intelligence Score?).
7 Identify strategies for
emotion regulation and
their likely effects.
OB Applications of Emotions and Moods
In this section, we assess how an understanding of emotions and moods can
improve our ability to explain and predict the selection process in organiza-
tions, decision making, creativity, motivation, leadership, interpersonal conflict,
negotiation, customer service, job attitudes, and deviant workplace behaviors.
We also look at how managers can influence our moods.

116 CHAPTER 4 Emotions and Moods
Hiring employees with high
emotional intelligence is important
for companies such as Starbucks,
whose baristas have frequent social
interactions with customers. In
keeping with Starbucks mission
“to inspire and nurture the human
spirit,” the company selects baristas
who relate well to customers,
connect with them, and uplift their
lives. At Starbucks, emotional intel-
ligence plays an important role in
job performance, as the company
enjoys a loyal customer base and
a reputation as one of the most
admired companies in America.
Selection
One implication from the evidence on EI to date is that employers should consider
it a factor in hiring employees, especially in jobs that demand a high degree of social
interaction. In fact, more employers are starting to use EI measures to hire people.
A study of U.S. Air Force recruiters showed that top-performing recruiters exhib-
ited high levels of EI. Using these findings, the Air Force revamped its selection
criteria. A follow-up investigation found future hires who had high EI scores were
2.6 times more successful than those who didn’t. At L’Oreal, salespersons selected
on EI scores outsold those hired using the company’s old selection procedure. On
an annual basis, salespeople selected for their emotional competence sold $91,370
more than other salespeople did, for a net revenue increase of $2,558,360. 89
Decision Making
As you will see in Chapter 6 , traditional approaches to the study of decision making
in organizations have emphasized rationality. But OB researchers are increasingly
finding that moods and emotions have important effects on decision making.
Positive moods and emotions seem to help. People in good moods or expe-
riencing positive emotions are more likely than others to use heuristics, or rules
of thumb, 90 to help make good decisions quickly. Positive emotions also enhance
problem-solving skills, so positive people find better solutions to problems. 91
OB researchers continue to debate the role of negative emotions and moods
in decision making. Although one often-cited study suggested depressed people
reach more accurate judgments, 92 more recent evidence hints they make poorer
decisions. Why? Because depressed people are slower at processing information
and tend to weigh all possible options rather than the most likely ones. 93 They
search for the perfect solution, when there rarely is one.
Creativity
People in good moods tend to be more creative than people in bad moods. 94 They
produce more ideas and more options, and others think their ideas are original. 95
It seems people experiencing positive moods or emotions are more flexible and
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OB Applications of Emotions and Moods 117
open in their thinking, which may explain why they’re more creative. 96 Supervisors
should actively try to keep employees happy because doing so creates more good
moods (employees like their leaders to encourage them and provide positive
feedback on a job well done), which in turn leads people to be more creative. 97
Some researchers, however, do not believe a positive mood makes people more
creative. They argue that when people are in positive moods, they may relax (“If I’m
in a good mood, things must be going okay, and I must not need to think of new
ideas”) and not engage in the critical thinking necessary for some forms of creativ-
ity. 98 The answer may lie in thinking of moods somewhat differently. Rather than
looking at positive or negative affect, it’s possible to conceptualize moods as active
feelings like anger, fear, or elation and contrast these with deactivating moods like
sorrow, depression, or serenity. All the activating moods, whether positive or nega-
tive, seem to lead to more creativity, whereas deactivating moods lead to less. 99
Motivation
Several studies have highlighted the importance of moods and emotions on moti-
vation. One study set two groups of people to solving word puzzles. The first group
saw a funny video clip, intended to put the subjects in a good mood first. The
other group was not shown the clip and started working on the puzzles right away.
The results? The positive-mood group reported higher expectations of being able
to solve the puzzles, worked harder at them, and solved more puzzles as a result. 100
The second study found that giving people performance feedback—whether
real or fake—influenced their mood, which then influenced their motivation. 101
So a cycle can exist in which positive moods cause people to be more creative,
which leads to positive feedback from those observing their work. This posi-
tive feedback further reinforces the positive mood, which may make people
perform even better, and so on.
Another study looked at the moods of insurance sales agents in Taiwan. 102
Agents in a good mood were more helpful toward their co-workers and also felt
better about themselves. These factors in turn led to superior performance in
the form of higher sales and better supervisor reports of performance.
Leadership
Effective leaders rely on emotional appeals to help convey their messages. 103 In
fact, the expression of emotions in speeches is often the critical element that
makes us accept or reject a leader’s message. “When leaders feel excited, enthu-
siastic, and active, they may be more likely to energize their subordinates and
convey a sense of efficacy, competence, optimism, and enjoyment.” 104 Politicians,
as a case in point, have learned to show enthusiasm when talking about their
chances of winning an election, even when polls suggest otherwise.
Corporate executives know emotional content is critical if employees are to
buy into their vision of the company’s future and accept change. When higher-
ups offer new visions, especially with vague or distant goals, it is often difficult for
employees to accept the changes they’ll bring. By arousing emotions and link-
ing them to an appealing vision, leaders increase the likelihood that managers
and employees alike will accept change. 105 Leaders who focus on inspirational
goals also generate greater optimism and enthusiasm in employees, leading to
more positive social interactions with co-workers and customers. 106
Negotiation
Negotiation is an emotional process; however, we often say a skilled negotiator
has a “poker face.” The founder of Britain’s Poker Channel, Crispin Nieboer,
stated, “It is a game of bluff and there is fantastic human emotion and tension,

118 CHAPTER 4 Emotions and Moods
seeing who can bluff the longest.” 107 Several studies have shown that a negotia-
tor who feigns anger has an advantage over the opponent. Why? Because when
a negotiator shows anger, the opponent concludes the negotiator has conceded
all she can and so gives in. 108 Anger should be used selectively in negotiation:
angry negotiators who have less information or less power than their oppo-
nents have significantly worse outcomes. 109 It appears that a powerful, better-
informed individual will be less willing to share information or meet an angry
opponent halfway.
Displaying a negative emotion (such as anger) can be effective, but feeling
bad about your performance appears to impair future negotiations. Individuals
who do poorly in a negotiation experience negative emotions, develop negative
perceptions of their counterpart, and are less willing to share information or be
cooperative in future negotiations. 110 Interestingly, then, while moods and emo-
tions have benefits at work, in negotiation—unless we’re putting up a false front
like feigning anger—emotions may impair negotiator performance. A 2005 study
found people who suffered damage to the emotional centers of their brains (the
same part that was injured in Phineas Gage) may be the best negotiators, because
they’re not likely to overcorrect when faced with negative outcomes. 111
Customer Service
A worker’s emotional state influences customer service, which influences levels
of repeat business and of customer satisfaction. 112 Providing high-quality cus-
tomer service makes demands on employees because it often puts them in a
state of emotional dissonance. Over time, this state can lead to job burnout,
declines in job performance, and lower job satisfaction. 113
Employees’ emotions can transfer to the customer. Studies indicate a
matching effect between employee and customer emotions called emotional
contagion —the “catching” of emotions from others. 114 How does it work? The
primary explanation is that when someone experiences positive emotions and
laughs and smiles at you, you tend to respond positively. Emotional contagion
is important because customers who catch the positive moods or emotions
of employees shop longer. But are negative emotions and moods contagious,
The general manager of a profes-
sional sports team is the organi-
zational leader responsible for
developing a winning team. As
general manager of the Los Angeles
Dodgers, Ned Colletti is shown here
delivering an inspirational talk to
employees right before a game
between the Dodgers and the San
Diego Padres. Colletti relies on emo-
tional appeals to employees of all
the individual divisions of the team,
from administrative affairs to public
relations, to work well together in
achieving a victorious season.
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OB Applications of Emotions and Moods 119
too? Absolutely. When an employee feels unfairly treated by a customer, for
example, it’s harder for him to display the positive emotions his organization
expects of him. 115
Job Attitudes
Ever hear the advice “Never take your work home with you,” meaning you
should forget about work once you go home? That’s easier said than done.
Several studies have shown people who had a good day at work tend to be in a
better mood at home that evening, and vice versa. 116 People who have a stressful
day at work also have trouble relaxing after they get off work. 117 One study had
married couples describing their moods when responding to timed cell-phone
surveys through the course of the day. As most married readers might suspect,
if one member of the couple was in a negative mood during the workday, that
mood spilled over to the spouse at night. 118 In other words, if you’ve had a bad
day at work, your spouse is likely to have an unpleasant evening. Even though
people do emotionally take their work home with them, however, by the next
day the effect is usually gone. 119
Deviant Workplace Behaviors
Anyone who has spent much time in an organization realizes people often be-
have in ways that violate established norms and threaten the organization, its
members, or both. As we saw in Chapter 1 , these actions are called workplace
deviant behaviors . 120 Many can be traced to negative emotions.
For instance, envy is an emotion that occurs when you resent someone for
having something you don’t have but strongly desire—such as a better work
assignment, larger office, or higher salary. 121 It can lead to malicious deviant
behaviors. An envious employee could backstab another employee, negatively
distort others’ successes, and positively distort his own accomplishments. 122
Angry people look for other people to blame for their bad mood, interpret
other people’s behavior as hostile, and have trouble considering others’ point
of view. 123 It’s not hard to see how these thought processes, too, can lead directly
to verbal or physical aggression.
Evidence suggests people who feel negative emotions, particularly anger or
hostility, are more likely than others to engage in deviant behavior at work. 124
Once aggression starts, it’s likely that other people will become angry and ag-
gressive, so the stage is set for a serious escalation of negative behavior.
Safety and Injury at Work
Research relating negative affectivity to increased injuries at work suggests em-
ployers might improve health and safety (and reduce costs) by ensuring workers
aren’t engaged in potentially dangerous activities when they’re in a bad mood.
Bad moods can contribute to injury at work in several ways. 125 Individuals in
negative moods tend to be more anxious, which can make them less able to cope
effectively with hazards. A person who is always scared will be more pessimistic
about the effectiveness of safety precautions because she feels she’ll just get hurt
anyway, or she might panic or freeze up when confronted with a threatening
emotional contagion The process by
which peoples’ emotions are caused
by the emotions of others.

120 CHAPTER 4 Emotions and Moods
E
nglish may be a robust language,
but sometimes a word from
another language expresses
something that English misses. Such
is the case with a particular and inter-
esting emotional sentiment known by
a German name.
“Taking delight in the misery of oth-
ers,” or s chadenfreude, has recently
been studied by psychologists whose
findings have implications for work.
Neuropsychological research shows
that when we experience schaden-
freude, it is the pleasure centers of our
brains that light up, similar to what hap-
pens when we enjoy good food or win
a contest. It may explain why we take
a special interest in reading about the
misfortunes of Bernie Madoff, Lindsay
Lohan, Charlie Sheen, and others.
As you might experience, we are
more likely to experience schaden-
freude when the misfortune happens
to someone we envy or dislike, or, as a
recent study showed, to someone we
see as a rival, such as a co-worker with
whom we have a competitive relation-
ship. This effect persisted even when
researchers controlled for how much
the person liked the other.
What are the ethical and work
implications of schadenfreude?
1. Don’t judge yourself too harshly for
experiencing schadenfreude. As
one review noted, “it seems almost
inherent to social being.” If we ex-
pect ourselves to never experience
schadenfreude toward a disliked co-
worker, it’s a standard we’re bound
to fail to meet.
2. At the same time, try to recog-
nize that while social comparisons
are natural, they’re not particularly
healthy. As eminent psychologist
Susan Fiske noted, “Comparison
emotions can corrupt the comparer.”
Perhaps we can’t avoid some com-
parisons to our coworkers or friends,
but we can control how much we do
it. Schadenfreude can keep us from
empathizing not only with one indi-
vidual, but with those experiencing
misfortune more generally.
Sources: W. van Dijk, J. W. Ouwerkerk,
Y. M. Wesseling , and G. M. van
Koningsbruggen, “Towards Understanding
Pleasure at the Misfortunes of Others:
The Impact of Self-Evaluation Threat on
Schadenfreude,” Cognition and Emotion
25, no. 2 (2011), pp. 360–368; R. H. Smith,
C. A. Powell, D. J. Combs, and D. R. Schurtz,
“Exploring the When and Why of
Schadenfreude,” Social and Personality
Psychology Compass 3, no. 4 (2009),
pp. 530–546; S. T. Fiske, “Envy Up, Scorn
Down: How Comparison Divides Us,”
American Psychologist 65, no. 8 (2010),
pp. 698–706; and D. Rakoff, “When Bad
Things Happen To Do-Good People,” The
New York Times (May 1, 2011), p. WK12.
An Ethical Choice
Schadenfreude
situation. Negative moods also make people more distractable, and distractions
can obviously lead to careless behaviors.
How Managers Can Influence Moods
You can usually improve a friend’s mood by sharing a funny video clip, giving
the person a small bag of candy, or even offering a pleasant beverage. 126 But
what can companies do to improve employees’ moods? Managers can use hu-
mor and give their employees small tokens of appreciation for work well done.
Also, when leaders themselves are in good moods, group members are more
positive, and as a result they cooperate more. 127
Finally, selecting positive team members can have a contagion effect because
positive moods transmit from team member to team member. One study of
professional cricket teams found players’ happy moods affected the moods of
their team members and positively influenced their performance. 128 It makes
sense, then, for managers to select team members predisposed to experience
positive moods.
8 Apply concepts about
emotions and moods to
specific OB issues.
MyManagementLab
Now that you have finished this chapter, go back to www.mymanagementlab.com to continue
practicing and applying the concepts you’ve learned.

www.mymanagementlab.com

Questions for Review 121
Summary and Implications for Managers
Emotions and moods are similar in that both are affective in nature. But they’re
also different—moods are more general and less contextual than emotions.
And events do matter. The time of day and day of the week, stressful events,
social activities, and sleep patterns are some of the factors that influence emo-
tions and moods. Emotions and moods have proven relevant for virtually every
OB topic we study, and they have implications for managerial practice.
● Increasingly, organizations are selecting employees they believe have high
levels of emotional intelligence. Research has helped to refine theory re-
lated to emotional intelligence in recent years, which should lead to supe-
rior tools for assessing ability-based EI.
● Emotions and positive moods appear to facilitate effective decision mak-
ing and creativity.
● Recent research suggests mood is linked to motivation, especially through
feedback.
● Leaders rely on emotions to increase their effectiveness.
● The display of emotions is important to social behavior like negotiation
and customer service.
● The experience of emotions is closely linked to job attitudes and behav-
iors that follow from attitudes, such as deviant workplace behavior.
● Our final managerial implication is a question: can managers control col-
leagues’ and employees’ emotions and moods? Certainly there are limits,
practical and ethical. Emotions and moods are a natural part of an individu-
al’s makeup. Where managers err is in ignoring co-workers’ and employees’
emotions and assessing others’ behavior as if it were completely rational. As
one consultant aptly put it, “You can’t divorce emotions from the workplace
because you can’t divorce emotions from people.” 129 Managers who under-
stand the role of emotions and moods will significantly improve their ability
to explain and predict their co-workers’ and employees’ behavior.
1 What is the difference between emotions and moods?
What are the basic emotions and moods?
2 Are emotions rational? What functions do they serve?
3 What are the sources of emotions and moods?
4 What impact does emotional labor have on employees?
5 What is affective events theory? What are its
applications?
6 What is the evidence for and against the existence
of emotional intelligence?
7 What are some strategies for emotion regulation and
their likely effects?
8 How do you apply concepts about emotions and moods
to specific OB issues?
QUESTIONS FOR REVIEW

122 CHAPTER 4 Emotions and Moods
Sometimes Blowing Your Top Is a Good Thing
POINT COUNTERPOINT
Y
es, anger is a common emotion. But it’s also a toxic one. The
experience of anger and its close correlate, hostility, is linked
to many counterproductive behaviors in organizations. That
is why many organizations have developed anger management
programs—to blunt the harmful effects of anger in the workplace.
The Bureau of Labor Statistics estimates that 16 percent of
fatal workplace injuries resulted from workplace violence. Do
we think the individuals who committed these acts were feeling
joyful and contented?
To reduce anger in the workplace, many companies develop
policies that govern conduct such as yelling, shouting profani-
ties, and making hostile gestures. Others institute anger man-
agement programs. For example, one organization conducted
mandatory in-house workshops that showed individuals how to
deal with conflicts in the workplace before they boil over. The
director who instituted the training said it “gave people specific
tools for opening a dialogue to work things out.” MTS Systems,
an Eden Prairie, Minnesota, engineering firm, engages an out-
side consulting firm to conduct anger management programs for
its organization. Typically, MTS holds an eight-hour seminar that
discusses sources of anger, conflict resolution techniques, and
organizational policies. This is followed by one-on-one sessions
with individual employees that focus on cognitive behavioral
techniques to manage their anger. The outside trainer charges
$7,000–$10,000 for the seminar and one-on-one sessions. “You
want people to get better at communicating with each other,”
says MTS manager Karen Borre.
In the end, everyone wins when organizations seek to
diminish both the experience and, yes, the expression of anger
at work. The work environment is less threatening and stressful
to employees and customers. Employees are likely to feel safer.
And the angry employee is often helped as well.
A
nger is discussed throughout this chapter for a rea-
son: it’s an important emotion. However, what about
our responses to feeling anger? Work cultures teach
us to avoid showing any anger at all, lest we be seen as
poor service providers or, worse, unprofessional or even
deviant or violent. While, of course, there are times when
the expression of anger is harmful or unprofessional, we’ve
taken this view so far that we now teach people to sup-
press perfectly normal emotions. It is inappropriate to ask
people to behave in abnormal ways, and there is even more
evidence about the organizational and personal costs of
such suppression.
Emerging research shows that suppressing anger takes
a terrible toll on individuals. One Stanford University study
showed, for example, that when individuals were asked to
wear a poker face during the showing of the atomic bombings
of Japan during World War II, they were much more stressful
conversation partners once the video was over. Other research
shows that college students who suppress emotions like an-
ger have more trouble making friends and are more likely to be
depressed, and that employees who suppress anger feel more
stressed by work.
There is a better way. One recent study showed that even
when employees displayed anger deemed inappropriate by
co-workers, if co-workers responded supportively to the anger
(for example, by listening to the angry employee), favorable re-
sponses such as constructive work changes were the result.
Yes, managers must work to maintain a positive, respectful,
and nonviolent culture. However, asking employees to suppress
their anger not only is an ineffective and costly strategy, it ulti-
mately may backfire if appropriate ways to express and release
anger are blocked.
Sources: B. Carey, “The Benefits of Blowing Your Top,” The New York Times (July 6, 2010), p. D1; R. Y. Cheung and I. J. Park,
“Anger Suppression, Interdependent Self-Construal, and Depression Among Asian American and European American College
Students,” Cultural Diversity and Ethnic Minority Psychology 16, no. 4 (2010), pp. 517–525; D. Geddes and L. T. Stickney, “The
Trouble with Sanctions: Organizational Responses to Deviant Anger Displays at Work,” Human Relations 64, no. 2 (2011),
pp. 201–230; and J. Fairley, “Taking Control of Anger Management,” Workforce Management (October 2010), p. 10.

Ethical Dilemma 123
ETHICAL DILEMMA Happiness Coaches for Employees
We know there is considerable spillover from personal un-
happiness to negative emotions at work. Moreover, those
who experience negative emotions in life and at work are
more likely to engage in counterproductive behaviors with
customers, clients, or fellow employees.
Increasingly, organizations such as American Express,
UBS, and KPMG are turning to happiness coaches to ad-
dress this spillover from personal unhappiness to work
emotions and behaviors.
Srikumar Rao is a former college professor who has
the nickname, “the happiness guru.” Rao teaches peo-
ple to analyze negative emotions to prevent them from
becoming overwhelming. If your job is restructured, for
example, Rao suggests avoiding negative thoughts and
feelings about it. Instead, he advises, tell yourself it could
turn out well in the long run, and there is no way to know
at present.
Beyond reframing the emotional impact of work situa-
tions, some happiness coaches attack the negative emotional
spillover from life to work (and from work to life). A work-
ing mother found that a happiness talk by Shawn Actor
helped her stop focusing on her stressed-out life and in-
stead look for chances to smile, laugh, and be grateful.
In some cases, the claims made by happiness coaches
seem a bit trite. Jim Smith, who labels himself “The
Executive Happiness Coach,” asks: “What if I told you
that there are secrets nobody told you as a kid—or as
an adult, for that matter—that can unlock for you all
sorts of positive emotional experiences? What if the only
thing that gets in the way of you feeling more happiness
is—YOU?! What if you can change your experience of
the world by shifting a few simple things in your life, and
then practicing them until they become second nature?”
Then again, if employees leave their experiences with a
happiness coach feeling happier about their jobs and their
lives, is that not better for everyone? Says one individual,
Ivelisse Rivera, who felt she benefitted from a happiness
coach, “If I assume a negative attitude and complain all
the time, whoever is working with me is going to feel the
same way.”
Questions
1. Do you think happiness coaches are effective? How
might you assess their effectiveness?
2. Would you welcome happiness training in your
workplace? Why or why not?
3. Some argue that happiness coaches are a way for organi-
zations to avoid solving real work problems—a diversion,
if you will. How might we make this determination?
4. Under what circumstances—if any—is it ethically
appropriate for a supervisor to suggest a happiness
coach for a subordinate?
Sources: S. Shellenbarger, “Thinking Happy Thoughts at Work,” The Wall Street Journal (January 27, 2010),
p. D2; S. Sharma and D. Chatterjee, “Cos Are Keenly Listening to ‘Happiness Coach’,” Economic Times
(July 16, 2010), http://articles.economictimes.indiatimes.com ; and J. Smith, The Executive Happiness
Coach , www.lifewithhappiness.com / (Downloaded May 3, 2011).
EXPERIENTIAL EXERCISE Who Can Catch a Liar?
We mentioned earlier in the chapter that emotion re-
searchers are highly interested in facial expressions as
a window into individuals’ emotional worlds. Research
has also studied whether people can tell someone is lying
based on signs of guilt or nervousness in their facial
expressions. Let’s see who is good at catching liars.
Split up into teams and follow these instructions.
1. Randomly choose someone to be the team organizer.
Have this person write down on a piece of paper “T”
for truth and “L” for lie. If there are, say, six people
in the group (other than the organizer), then three
people will get a slip with a “T” and three a slip with
an “L.” It’s important that all team members keep
what’s on their paper a secret.
2. Each team member who holds a T slip needs to come
up with a true statement, and each team member who
holds an L slip needs to come up with a false state-
ment. Try not to make the statement so outrageous
that no one would believe it (for example, “I have
flown to the moon”).
3. The organizer will have each member make his or
her statement. Group members should then exam-
ine the person making the statement closely to try
to determine whether he or she is telling the truth
or lying. Once each person has made his or her
statement, the organizer will ask for a vote and record
the tallies.
4. Each person should now indicate whether the state-
ment was the truth or a lie.
5. How good was your group at catching the liars? Were
some people good liars? What did you look for to
determine whether someone was lying?

www.lifewithhappiness.com/

http://articles.economictimes.indiatimes.com

124 CHAPTER 4 Emotions and Moods
CASE INCIDENT 1 Is It Okay to Cry at Work?
As this chapter has shown, emotions are an inevitable part
of people’s behavior at work. At the same time, it’s not en-
tirely clear that we’ve reached a point where people feel
comfortable expressing all emotions at work. The reason
might be that business culture and etiquette remain poorly
suited to handling overt emotional displays. The question
is, can organizations become more intelligent about emo-
tional management? Is it ever appropriate to yell, laugh,
or cry at work?
Some people are skeptical about the virtues of more
emotional displays at the workplace. As the chapter notes,
emotions are automatic physiological responses to the en-
vironment, and as such, they can be difficult to control
appropriately. One 22-year-old customer service represen-
tative named Laura who was the subject of a case study
noted that fear and anger were routinely used as methods
to control employees, and employees deeply resented this
use of emotions to manipulate them. In another case, the
chairman of a major television network made a practice of
screaming at employees whenever anything went wrong,
leading to badly hurt feelings and a lack of loyalty to the
organization. Like Laura, workers at this organization were
hesitant to show their true reactions to these emotional
outbursts for fear of being branded as “weak” or “ineffec-
tual.” It might seem like these individuals worked in heav-
ily emotional workplaces, but in fact, only a narrow range
of emotions was deemed acceptable. Anger appears to be
more acceptable than sadness in many organizations, and
anger can have serious maladaptive consequences.
Others believe organizations that recognize and work
with emotions effectively are more creative, satisfying, and
productive. For example, Laura noted that if she could
express her hurt feelings without fear, she would be much
more satisfied with her work. In other words, the problem
with Laura’s organization is not that emotions are displayed,
but that emotional displays are handled poorly. Others note
that use of emotional knowledge, like being able to read and
understand the reactions of others, is crucial for workers
ranging from salespeople and customer service agents all the
way to managers and executives. One survey even found that
88 percent of workers feel being sensitive to the emotions of
others is an asset. Management consultant Erika Anderson
notes, “Crying at work is transformative and can open the
door to change.” The question then is, can organizations
take specific steps to become better at allowing emotional
displays without opening a Pandora’s Box of outbursts?
Questions
1. What factors do you think make some organizations
ineffective at managing emotions?
2. Do you think the strategic use and display of
emotions serve to protect employees, or does
covering your true emotions at work lead to more
problems than it solves?
3. Have you ever worked where emotions were used as
part of a management style? Describe the advantages
and disadvantages of this approach in your
experience.
4. Research shows that acts of co-workers (37 percent)
and management (22 percent) cause more negative
emotions for employees than do acts of customers
(7 percent). 130 What can Laura’s company do to
change its emotional climate?
Sources: A. Kreamer, “Go Ahead—Cry at Work,” Time (April 4, 2010), www.time.com ; J. S. Lerner and
K. Shonk, “How Anger Poisons Decision Making,” Harvard Business Review (September 2010), p. 26; and
J. Perrone and M. H. Vickers, “Emotions as Strategic Game in a Hostile Workplace: An Exemplar Case,”
Employee Responsibilities and Rights Journal 16, no. 3 (2004), pp. 167–178.
CASE INCIDENT 2 Can You Read Emotions from Faces?
We mentioned previously that some researchers—the psy-
chologist Paul Ekman is the best known—have studied
whether facial expressions reveal true emotions. These
researchers have distinguished real smiles ( so-called
Duchenne smiles, named after French physician Guillaume
Duchenne) from “fake” smiles. Duchenne found genuine
smiles raised not only the corners of the mouth (easily
faked) but also cheek and eye muscles (much more diffi-
cult to fake). So, one way to determine whether someone
is genuinely happy or amused is to look at the muscles
around the upper cheeks and eyes—if the person’s eyes are
smiling or twinkling, the smile is genuine. Ekman and his
associates have developed similar methods to detect other
emotions, such as anger, disgust, and distress. According to
Ekman, the key to identifying real emotions is to focus on
micro-expressions, or those facial muscles we cannot easily
manipulate.
Dan Hill has used these techniques to study the fa-
cial expressions of CEOs and found they vary dramati-
cally not only in their Duchenne smiles but also in the

www.time.com

Endnotes 125
Sources: Based on P. Ekman, Telling Lies: Clues to Deceit in the Marketplace, Politics, and Marriage (New York:
W. W. Norton & Co., 2009); D. Jones, “It’s Written All Over Their Faces,” USA Today (February 25, 2008),
pp. 1B–2B; and N. O. Rule and N. Ambady, “The Face of Success,” Psychological Science 19, no. 2 (2008),
pp. 109–111.
degree to which they display positive versus negative fa-
cial expressions. The accompanying table shows Hill’s
analysis of the facial expressions of some prominent male
executives:
Jeff Bezos, Amazon 51% positive
Warren Buffet, Berkshire Hathaway 69% positive
Michael Dell, Dell Computers 47% positive
Larry Ellison, Oracle 0% positive
Bill Gates, Microsoft 73% positive
Steve Jobs, Apple 48% positive
Phil Knight, Nike 67% positive
Donald Trump,
The Trump Organization
16% positive
It’s interesting to note that these individuals, all of whom are
successful in various ways, have such different levels of posi-
tive facial expressions. It also raises the question: is a smile
from Larry Ellison worth more than a smile from Bill Gates?
Questions
1. Most research suggests we are not very good at detect-
ing fake emotions, and we think we’re much better at
it than we are. Do you believe training would improve
your ability to detect emotional displays in others?
2. Do you think the information in this case could help
you tell whether someone’s smile is genuine?
3. Is your own impression of the facial expressions of
the eight business leaders consistent with what the
researcher found? If not, why do you think your views
might be at odds with his?
4. One research study found people’s ratings of the
positive affect displayed in CEO’s faces had very little
correlation to their company’s profits. Does that sug-
gest to you that Hill’s analysis is immaterial?
5. Assuming you could become better at detecting the
real emotions in facial expressions, do you think it
would help your career? Why or why not?
ENDNOTES
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2. See, for example, L. L. Putnam and D. K. Mumby,
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4. S. G. Barsade and D. E. Gibson, “Why Does Affect Matter in
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6. H. M. Weiss and R. Cropanzano, “Affective Events
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and Consequences of Affective Experiences at Work,”
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8. Frijda, “Moods, Emotion Episodes and Emotions,” p. 381.
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pp. 81–96.
15. Ibid.

126 CHAPTER 4 Emotions and Moods
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www.tourisme.gouv.fr/fr/navd/presse/dossiers/att00005767/dp_plasait

www.tourisme.gouv.fr/fr/navd/presse/dossiers/att00005767/dp_plasait

www.ashidome.com/blogger/housearrest.asp?c=809&m=5&y=2005

www.ashidome.com/blogger/housearrest.asp?c=809&m=5&y=2005

www.aboutmyjob.com/?p=2111

www.kintera.org/atf/cf/%7Bf6bf2668-a1b4-4fe8-8d1a-a5d39340d9cb%7D/2005_summary_of_findings

www.kintera.org/atf/cf/%7Bf6bf2668-a1b4-4fe8-8d1a-a5d39340d9cb%7D/2005_summary_of_findings

www.kintera.org/atf/cf/%7Bf6bf2668-a1b4-4fe8-8d1a-a5d39340d9cb%7D/2005_summary_of_findings

www.womensmedia.com/new/Crying-at-Work.shtml

www.womensmedia.com/new/Crying-at-Work.shtml

Endnotes 127
49. A. H. Fischer, P. M. Rodriguez Mosquera, A. E. M. van Vianen,
and A. S. R. Manstead, “Gender and Culture Differences in
Emotion,” Emotion 4 (2004), pp. 84–87.
50. L. F. Barrett and E. Bliss-Moreau, “She’s Emotional. He’s
Having a Bad Day: Attributional Explanations for Emotion
Stereotypes,” Emotion 9 (2009), pp. 649–658.
51. D. V. Becker, D. T. Kenrick, S. L. Neuberg, K. C. Blackwell,
and D. M. Smith, “The Confounded Nature of Angry Men
and Happy Women,” Journal of Personality and Social Psychology
92 (2007), pp. 179–190.
52. P. Ekman, W. V. Friesen, and M. O’Sullivan, “Smiles When
Lying,” in P. Ekman and E. L. Rosenberg (eds.), What the
Face Reveals: Basic and Applied Studies of Spontaneous Expression
Using the Facial Action Coding System (FACS) (London: Oxford
University Press, 1997), pp. 201–216.
53. A. Grandey, “Emotion Regulation in the Workplace: A
New Way to Conceptualize Emotional Labor,” Journal of
Occupational Health Psychology 5, no. 1 (2000), pp. 95–110;
and R. Cropanzano, D. E. Rupp, and Z. S. Byrne, “The
Relationship of Emotional Exhaustion to Work Attitudes,
Job Per formance, and Organizational Citizenship
Behavior,” Journal of Applied Psychology (February 2003),
pp. 160–169.
54. A. R. Hochschild, “Emotion Work, Feeling Rules, and Social
Structure,” American Journal of Sociology (November 1979),
pp. 551–575; W.-C. Tsai, “Determinants and Consequences
of Employee Displayed Positive Emotions,” Journal of
Management 27, no. 4 (2001), pp. 497–512; M. W. Kramer
and J. A. Hess, “Communication Rules for the Display
of Emotions in Organizational Settings,” Management
Communication Quarterly (August 2002), pp. 66–80; and
J. M. Diefendorff and E. M. Richard, “Antecedents and
Consequences of Emotional Display Rule Perceptions,”
Journal of Applied Psychology (April 2003), pp. 284–294.
55. B. M. DePaulo, “Nonverbal Behavior and Self-Presentation,”
Psychological Bulletin (March 1992), pp. 203–243.
56. J. M. Diefendorff and G. J. Greguras, “Contextualizing
Emotional Display Rules: Examining the Roles of Targets and
Discrete Emotions in Shaping Display Rule Perceptions,”
Journal of Management 35 (2009), pp. 880–898.
57. Solomon, “Back to Basics.”
58. C. M. Brotheridge and R. T. Lee, “Development and Validation
of the Emotional Labour Scale,” Journal of Occupational &
Organizational Psychology 76 (2003), pp. 365–379.
59. A. A. Grandey, “When ‘The Show Must Go On’: Surface
Acting and Deep Acting as Determinants of Emotional
Exhaustion and Peer-Rated Service Delivery,” Academy
of Management Journal (February 2003), pp. 86–96; and
A. A. Grandey, D. N. Dickter, and H. Sin, “The Customer
Is Not Always Right: Customer Aggression and Emotion
Regulation of Service Employees,” Journal of Organizational
Behavior 25 (2004), pp. 397–418.
60. J. P. Trougakos, D. J. Beal, S. G. Green, and H. M. Weiss,
“Making the Break Count: An Episodic Examination of
Recovery Activities, Emotional Experiences, and Positive
Affective Displays,” Academy of Management Journal 51 (2008),
pp. 131–146.
61. J. M. Diefendorff, R. J. Erickson, A. A. Grandey, and
J. J. Dahling, “Emotional Display Rules as Work Unit
Norms: A Multilevel Analysis of Emotional Labor among
Nurses,” Journal of Occupational Health Psychology 16 (2011),
pp. 170–186.
62. H. M. Weiss and R. Cropanzano, “An Affective Events
Approach to Job Satisfaction,” Research in Organizational
Behavior 18 (1996), pp. 1–74.
63. J. Basch and C. D. Fisher, “Affective Events–Emotions Matrix:
A Classification of Work Events and Associated Emotions,”
in N. M. Ashkanasy, C. E. J. Hartel, and W. J. Zerbe (eds.),
Emotions in the Workplace (Westport, CT: Quorum Books,
2000), pp. 36–48.
64. See, for example, H. M. Weiss and R. Cropanzano, “Affective
Events Theory”; and C. D. Fisher, “Antecedents and
Consequences of Real-Time Affective Reactions at Work,”
Motivation and Emotion (March 2002), pp. 3–30.
65. Based on Weiss and Cropanzano, “Affective Events Theory,”
p. 42.
66. N. M. Ashkanasy, C. E. J. Hartel, and C. S. Daus, “Diversity
and Emotion: The New Frontiers in Organizational Behavior
Research,” Journal of Management 28, no. 3 (2002), p. 324.
67. Based on D. R. Caruso, J. D. Mayer, and P. Salovey, “Emotional
Intelligence and Emotional Leadership,” in R. E. Riggio,
S. E. Murphy, and F. J. Pirozzolo (eds.), Multiple Intelligences
and Leadership (Mahwah, NJ: Lawrence Erlbaum, 2002), p. 70.
68. This section is based on Daniel Goleman, Emotional
Intelligence (New York: Bantam, 1995); P. Salovey and
D. Grewal, “The Science of Emotional Intelligence,”
Current Directions in Psychological Science 14, no. 6 (2005),
pp. 281–285; M. Davies, L. Stankov, and R. D. Roberts,
“Emotional Intelligence: In Search of an Elusive Construct,”
Journal of Personality and Social Psychology (October 1998),
pp. 989–1015; D. Geddes and R. R. Callister, “Crossing the
Line(s): A Dual Threshold Model of Anger in Organizations,”
Academy of Management Review 32, no. 3 (2007), pp. 721–746.
69. R. Gilkey, R. Caceda, and C. Kilts, “When Emotional
Reasoning Trumps IQ,” Harvard Business Review (September
2010), p. 27.
70. F. I. Greenstein, The Presidential Difference: Leadership Style from
FDR to Clinton (Princeton, NJ: Princeton University Press,
2001).
71. M. Seo and L. F. Barrett, “Being Emotional During Decision
Making—Good or Bad? An Empirical Investigation,”
Academy of Management Journal 50, no. 4 (2007), pp. 923–940.
72. C. Cherniss, “The Business Case for Emotional Intelligence,”
Consortium for Research on Emotional Intelligence in Organizations ,
1999, www.eiconsortium.org/reports/business_case_for_
ei.html .
73. K. S. Law, C. Wong, and L. J. Song, “The Construct and
Criterion Validity of Emotional Intelligence and Its Potential
Utility for Management Studies,” Journal of Applied Psychology
89, no. 3 (2004), pp. 483–496.
74. H. A. Elfenbein and N. Ambady, “Predicting Workplace
Outcomes from the Ability to Eavesdrop on Feelings,”
Journal of Applied Psychology 87, no. 5 (October 2002),
pp. 963–971.
75. D. L. Joseph and D. A. Newman, “Emotional Intelligence:
An Integrative Meta-Analysis and Cascading Model,” Journal
of Applied Psychology 95 (2010), pp. 54–78.
76. R. Bar-On, D. Tranel, N. L. Denburg, and A. Bechara,
“Exploring the Neurological Substrate of Emotional and Social
Intelligence,” Brain 126, no. 8 (August 2003), pp. 1790–1800.

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www.eiconsortium.org/reports/business_case_for_ei.html

128 CHAPTER 4 Emotions and Moods
77. P. A. Vernon, K. V. Petrides, D. Bratko, and J. A. Schermer, “A
Behavioral Genetic Study of Trait Emotional Intelligence,”
Emotion 8, no. 5 (2008), pp. 635–642.
78. E. A. Locke, “Why Emotional Intelligence Is an Invalid
Concept,” Journal of Organizational Behavior 26, no. 4 (June
2005), pp. 425–431.
79. J. D. Mayer, R. D. Roberts, and S. G. Barsade, “Human
Abilities: Emotional Intelligence,” Annual Review of Psychology
59 (2008), pp. 507–536; H. A. Elfenbein, “Emotion in
Organizations: A Review and Theoretical Integration,”
Academy of Management Annals 1 (2008), pp. 315–386; and
D. L. Joseph and D. A. Newman, “Emotional Intelligence:
An Integrative Meta-Analysis and Cascading Model,” Journal
of Applied Psychology 95 (2010), pp. 54–78.
80. J. M. Conte, “A Review and Critique of Emotional
Intelligence Measures,” Journal of Organizational Behavior 26,
no. 4 (June 2005), pp. 433–440; and M. Davies, L. Stankov,
and R. D. Roberts, “Emotional Intelligence,” pp. 989–1015.
81. T. Decker, “Is Emotional Intelligence a Viable Concept?” Academy
of Management Review 28, no. 2 (April 2003), pp. 433–440; and
Davies, Stankov, and Roberts, “Emotional Intelligence.”
82. D. L. Joseph and D. A. Newman, “Emotional Intelligence:
An Integrative Meta-Analysis and Cascading Model,” Journal
of Applied Psychology 95 (2010), pp. 54–78.
83. F. J. Landy, “Some Historical and Scientific Issues Related
to Research on Emotional Intelligence,” Journal of
Organizational Behavior 26, no. 4 (June 2005), pp. 411–424.
84. S. L. Koole, “The Psychology of Emotion Regulation:
An Integrative Review,” Cognition and Emotion 23 (2009),
pp. 4–41; H. A. Wadlinger and D. M. Isaacowitz, “Fixing Our
Focus: Training Attention to Regulate Emotion,” Personality
and Social Psychology Review 15 (2011), pp. 75–102.
85. J. V. Wood, S. A. Heimpel, L. A. Manwell, and
E. J. Whittington, “This Mood Is Familiar and I Don’t Deserve
to Feel Better Anyway: Mechanisms Underlying Self-Esteem
Differences in Motivation to Repair Sad Moods,” Journal of
Personality and Social Psychology 96 (2009), pp. 363–380.
86. S. L. Koole, “The Psychology of Emotion Regulation: An
Integrative Review,” Cognition and Emotion 23 (2009), pp. 4–41.
87. S. Srivastava, M. Tamir, K. M. McGonigal, O. P. John, and
J. J. Gross, “The Social Costs of Emotional Suppression:
A Prospective Study of the Transition to College,”
Journal of Personality and Social Psychology 96 (2009),
pp. 883–897; Y. Liu, L. M. Prati, P. L. Perrewé, and
R. A. Brymer, “Individual Differences in Emotion
Regulation, Emotional Experiences at Work, and Work-
Related Outcomes: A Two-Study Investigation,” Journal
of Applied Social Psychology 40 (2010), pp. 1515–1538; and
H. A. Wadlinger and D. M. Isaacowitz, “Fixing our Focus:
Training Attention to Regulate Emotion,” Personality and
Social Psychology Review 15 (2011), pp. 75–102.
88. L. K. Barber, P. G. Bagsby, and D. C. Munz, “Affect Regulation
Strategies for Promoting (or Preventing) Flourishing
Emotional Health,” Personality and Individual Differences 49
(2010), pp. 663–666.
89. L. M. J. Spencer, D. C. McClelland, and S. Kelner, Competency
Assessment Methods: History and State of the Art (Boston: Hay/
McBer, 1997).
90. J. Park and M. R. Banaji, “Mood and Heuristics: The
Influence of Happy and Sad States on Sensitivity and Bias in
Stereotyping,” Journal of Personality and Social Psychology
78, no. 6 (2000), pp. 1005–1023.
91. See A. M. Isen, “Positive Affect and Decision Making,” in
M. Lewis and J. M. Haviland-Jones (eds.), Handbook of
Emotions, 2nd ed. (New York: Guilford, 2000), pp. 261–277.
92. L. B. Alloy and L. Y. Abramson, “Judgment of Contingency
in Depressed and Nondepressed Students: Sadder but
Wiser?” Journal of Experimental Psychology: General 108
(1979), pp. 441–485.
93. N. Ambady and H. M. Gray, “On Being Sad and Mistaken:
Mood Effects on the Accuracy of Thin-Slice Judgments,”
Journal of Personality and Social Psychology 83, no. 4 (2002),
pp. 947–961.
94. S. Lyubomirsky, L. King, and E. Diener, “The Benefits of
Frequent Positive Affect: Does Happiness Lead to Success?”
Psychological Bulletin 131, no. 6 (2005), pp. 803–855; and
M. Baas, C. K. W. De Dreu, and B. A. Nijstad, “A Meta-
Analysis of 25 Years of Mood-Creativity Research: Hedonic
Tone, Activation, or Regulatory Focus,” Psychological Bulletin
134 (2008), pp. 779–806.
95. M. J. Grawitch, D. C. Munz, and E. K. Elliott, “Promoting
Creativity in Temporary Problem-Solving Groups: The
Effects of Positive Mood and Autonomy in Problem
Definition on Idea-Generating Per formance,” Group
Dynamics 7, no. 3 (September 2003), pp. 200–213.
96. S. Lyubomirsky, L. King, and E. Diener, “The Benefits of
Frequent Positive Affect: Does Happiness Lead to Success?”
Psychological Bulletin 131, no. 6 (2005), pp. 803–855.
97. N. Madjar, G. R. Oldham, and M. G. Pratt, “There’s No
Place Like Home? The Contributions of Work and Nonwork
Creativity Support to Employees’ Creative Performance,”
Academy of Management Journal 45, no. 4 (2002), pp. 757–767.
98. J. M. George and J. Zhou, “Understanding When Bad
Moods Foster Creativity and Good Ones Don’t: The Role of
Context and Clarity of Feelings,” Journal of Applied Psychology
87, no. 4 (August 2002), pp. 687–697; and J. P. Forgas and
J. M. George, “Affective Influences on Judgments and
Behavior in Organizations: An Information Processing
Perspective,” Organizational Behavior and Human Decision
Processes 86, no. 1 (2001), pp. 3–34.
99. C. K. W. De Dreu, M. Baas, and B. A. Nijstad, “Hedonic
Tone and Activation Level in the Mood-Creativity Link:
Toward a Dual Pathway to Creativity Model,” Journal of
Personality and Social Psychology 94, no. 5 (2008), pp. 739–756;
J. M. George and J. Zhou, “Dual Tuning in a Supportive
Context: Joint Contributions of Positive Mood, Negative
Mood, and Supervisory Behaviors to Employee Creativity,”
Academy of Management Journal 50, no. 3 (2007), pp. 605–622.
100. A. Erez and A. M. Isen, “The Influence of Positive Affect
on the Components of Expectancy Motivation,” Journal of
Applied Psychology 87, no. 6 (2002), pp. 1055–1067.
101. R. Ilies and T. A. Judge, “Goal Regulation Across Time: The
Effect of Feedback and Affect,” Journal of Applied Psychology
90, no. 3 (May 2005), pp. 453–467.
102. W. Tsai, C. Chen, and H. Liu, “Test of a Model Linking
Employee Positive Moods and Task Performance,” Journal
of Applied Psychology 92, no. 6 (2007), pp. 1570–1583.
103. K. M. Lewis, “When Leaders Display Emotion: How
Followers Respond to Negative Emotional Expression of
Male and Female Leaders,” Journal of Organizational Behavior,

Endnotes 129
March 2000, pp. 221–234; and J. M. George, “Emotions and
Leadership: The Role of Emotional Intelligence,” Human
Relations (August 2000), pp. 1027–1055.
104. J. M. George, “Trait and State Affect,” In K. Murphy (ed.),
Individual Differences and Behavior in Organizations
(San Francisco: Jossey Bass, 1996), pp. 145–171.
105. Ashforth and Humphrey, “Emotion in the Workplace,”
p. 116.
106. J. E. Bono, H. J. Foldes, G. Vinson, and J. P. Muros,
“Workplace Emotions: The Role of Supervision and
Leadership,” Journal of Applied Psychology 92, no. 5 (2007),
pp. 1357–1367.
107. N. Reynolds, “Whiz-Kids Gamble on TV Channel for
Poker,” telegraph.co.uk (April 16, 2005), www.telegraph
.co.uk/news/uknews/1487949/Whiz-kids-gamble-on-TV-
channel-for-poker.html .
108. G. A. Van Kleef, C. K. W. De Dreu, and A. S. R. Manstead,
“The Interpersonal Effects of Emotions in Negotiations:
A Motivated Information Processing Approach,” Journal
of Personality and Social Psychology 87, no. 4 (2004),
pp. 510–528; and G. A. Van Kleef, C. K. W. De Dreu, and
A. S. R. Manstead, “The Interpersonal Effects of Anger and
Happiness in Negotiations,” Journal of Personality and Social
Psychology 86, no. 1 (2004), pp. 57–76.
109. E. van Dijk, G. A. Van Kleef, W. Steinel, and I. van Beest,
“A Social Functional Approach to Emotions in Bargaining:
When Communicating Anger Pays and When It Backfires,”
Journal of Personality and Social Psychology 94, no. 4 (2008),
pp. 600–614.
110. K. M. O’Connor and J. A. Arnold, “Distributive Spirals:
Negotiation Impasses and the Moderating Role of
Disputant Self-Efficacy,” Organizational Behavior and Human
Decision Processes 84, no. 1 (2001), pp. 148–176.
111. B. Shiv, G. Loewenstein, A. Bechara, H. Damasio, and
A. R. Damasio, “Investment Behavior and the Negative
Side of Emotion,” Psychological Science 16, no. 6 (2005),
pp. 435–439.
112. W.-C. Tsai and Y.-M. Huang, “Mechanisms Linking
Employee Affective Delivery and Customer Behavioral
Intentions,” Journal of Applied Psychology (October 2002),
pp. 1001–1008.
113. Grandey, “When ‘The Show Must Go On.’ ”
114. See P. B. Barker and A. A. Grandey, “Service with a
Smile and Encounter Satisfaction: Emotional Contagion
and Appraisal Mechanisms,” Academy of Management
Journal 49, no. 6 (2006), pp. 1229–1238; and S. D. Pugh,
“Service with a Smile: Emotional Contagion in the Service
Encounter,” Academy of Management Journal (October 2001),
pp. 1018–1027.
115. D. E. Rupp and S. Spencer, “When Customers Lash
Out: The Effects of Customer Interactional Injustice on
Emotional Labor and the Mediating Role of Emotions,
Journal of Applied Psychology 91, no. 4 (2006), pp. 971–978;
and Tsai and Huang, “Mechanisms Linking Employee
Affective Delivery and Customer Behavioral Intentions.”
116. R. Ilies and T. A. Judge, “Understanding the Dynamic
Relationships Among Personality, Mood, and Job
Satisfaction: A Field Experience Sampling Study,”
Organizational Behavior and Human Decision Processes 89
(2002), pp. 1119–1139.
117. R. Rau, “Job Strain or Healthy Work: A Question of Task
Design,” Journal of Occupational Health Psychology 9, no. 4
(October 2004), pp. 322–338; and R. Rau and A. Triemer,
“Overtime in Relation to Blood Pressure and Mood During
Work, Leisure, and Night Time,” Social Indicators Research
67, no. 1–2 (June 2004), pp. 51–73.
118. Z. Song, M. Foo, and M. A. Uy, “Mood Spillover and
Crossover Among Dual-Earner Couples: A Cell Phone
Event Sampling Study,” Journal of Applied Psychology 93, no. 2
(2008), pp. 443–452.
119. T. A. Judge and R. Ilies, “Affect and Job Satisfaction: A
Study of Their Relationship at Work and at Home,” Journal
of Applied Psychology 89 (2004), pp. 661–673.
120. See R. J. Bennett and S. L. Robinson, “Development of
a Measure of Workplace Deviance,” Journal of Applied
Psychology, June 2000, pp. 349–360; see also P. R. Sackett
and C. J. DeVore, “Counterproductive Behaviors at
Work,” in N. Anderson, D. S. Ones, H. K. Sinangil, and
C. Viswesvaran (eds.), Handbook of Industrial, Work &
Organizational Psychology, vol. 1 (Thousand Oaks, CA: Sage,
2001), pp. 145–164.
121. A. G. Bedeian, “Workplace Envy,” Organizational Dynamics
(Spring 1995), p. 50; and Ben-Ze’ev, The Subtlety of Emotions,
pp. 281–326.
122. Bedeian, “Workplace Envy,” p. 54.
123. S. C. Douglas, C. Kiewitz, M. Martinko, P. Harvey, Y. Kim,
and J. U. Chun, “Cognitions, Emotions, and Evaluations: An
Elaboration Likelihood Model for Workplace Aggression,”
Academy of Management Review 33, no. 2 (2008), pp. 425–451.
124. K. Lee and N. J. Allen, “Organizational Citizenship Behavior
and Workplace Deviance: The Role of Affect and Cognition,”
Journal of Applied Psychology 87, no. 1 (2002), pp. 131–142;
T. A. Judge, B. A. Scott, and R. Ilies, “Hostility, Job Attitudes,
and Workplace Deviance: Test of a Multilevel Model,” Journal
of Applied Psychology 91, no. 1 (2006), 126–138; and S. Kaplan,
J. C. Bradley, J. N. Luchman, and D. Haynes, “On the Role
of Positive and Negative Affectivity in Job Performance:
A Meta-Analytic Investigation,” Journal of Applied Psychology
94, no. 1 (2009), pp. 162–176.
125. R. D. Iverson and P. J. Erwin, “Predicting Occupational
Injury: The Role of Affectivity,” Journal of Occupational and
Organizational Psychology 70, no. 2 (1997), pp. 113–128; and
Kaplan, Bradley, Luchman, and Haynes, “On the Role of
Positive and Negative Affectivity in Job Performance: A
Meta-Analytic Investigation.”
126. A. M. Isen, A. A. Labroo, and P. Durlach, “An Influence of
Product and Brand Name on Positive Affect: Implicit and
Explicit Measures,” Motivation & Emotion 28, no. 1 (March
2004), pp. 43–63.
127. T. Sy, S. Côté, and R. Saavedra, “The Contagious Leader:
Impact of the Leader’s Mood on the Mood of Group
Members, Group Affective Tone, and Group Processes,”
Journal of Applied Psychology 90, no. 2 (2005), pp. 295–305.
128. P. Totterdell, “Catching Moods and Hitting Runs: Mood
Linkage and Subjective Performance in Professional
Sports Teams,” Journal of Applied Psychology 85, no. 6 (2000),
pp. 848–859.
129. S. Nelton, “Emotions in the Workplace,” Nation’s Business
(February 1996), p. 25.
130. Kruml and Geddes, “Catching Fire Without Burning Out.”

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CHANGING OF THE GUARD IN JAPAN:
IS IT THE ECONOMY, OR THE VALUES?
130
A
mong the world’s largest economies, none has been more frustrat-
ingly stuck in neutral than Japan. Until 2010, when it was surpassed
by China, Japan was the world’s second-largest economy (after the
United States). However, it has now experienced two “lost decades” in a row,
spanning 1990 to 2010, and many recent college graduates have no memory
of the halcyon days of the 1980s, when Japan was the most envied economy
in the world. The horrendous aftermath of the earthquake and tsunami that
struck in March 2011, sending Japan into another recession, has only added
to the misery. Many now fear the Japanese economy will forever remain
stuck in the doldrums.
Perhaps it will rebound sooner than expected; Japan has been underesti-
mated before. However, two decades of stagnant economic growth seem to
have had a permanent effect on new entrants’ work values.
At one time, Japan was famous for the close psychological and behavioral
bond between company and worker. Most employees expected to remain
with their employer for their entire career, based on the belief that if they
took care of their company, their company would take care of them. To these
individuals, quitting, or taking a side job, would be an unthinkable act of
disloyalty.
How things have changed. While unemployment in Japan remains
low in comparison to the United States, it is at historic highs. Moreover,
earnings continue to shrink—down more than 12 percent over the past
decade. The Japanese Ministry of Health, Labor and Welfare estimates that
56 percent of workers age 15 to 34 need another form of income to pay
living expenses.
Hiroko Yokogawa, 32, makes one-third of her income from her second
job. “It’s not that I hate my main job, but I want to have a stable income
without being completely dependent on the company,” she said.
At first, Kirito Nakano, 28, followed the traditional career path, expecting
to remain forever in his job as a Web engineer with a large Japanese
multinational. Soon, however, he found that his salary, and lack of salary
growth, began to crimp his lifestyle. He began moonlighting, developing
affiliate marketing programs. As his side job grew, Kirito quit his main job. He
felt he was left with little choice. “The Japanese economy is not just stagnant,
it’s in retreat,” he said. “When people believe the future is going to be better
than the present, they are happy. But if they think that the future holds no
hope, then they become unhappy. It’s that unhappiness that people are
trying to negate with side jobs.”
LEARNING
OBJECTIVES
After studying this chapter,
you should be able to:
1 Define personality, describe
how it is measured, and
explain the factors that
determine an individual’s
personality.
2 Describe the Myers-Briggs
Type Indicator personality
framework and assess its
strengths and weaknesses.
3 Identify the key traits in the
Big Five personality model.
4 Demonstrate how the Big
Five traits predict behavior
at work.
5 Identify other personality
traits relevant to OB.
6 Define values, demonstrate
the importance of values,
and contrast terminal and
instrumental values.
7 Compare generational
differences in values and
identify the dominant
values in today’s workforce.
8 Identify Hofstede’s five
value dimensions of
national culture.
MyManagementLab
Access a host of interactive
learning aids to help strengthen
your understanding of the
chapter concepts at
www.mymanagementlab.com.

www.mymanagementlab.com

Personality
and Values
I am driven by fear of failure.
It is a strong motivator for me.
—Dennis Manning, CEO of Guardian Life Insurance Co.
5
131Ph
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132 CHAPTER 5 Personality and Values
S A L
SELF-ASSESSMENT LIBRARY
The choice of young Japanese employees to work more hours is an inter-
esting contrast to workers in the United States and Europe, who express a
preference to work fewer hours. As for the hours she works—generally her side
job takes 25 hours a week— Hiroko Yokogawa remains undeterred. “I wouldn’t
say I want to leave my main job—rather, I’d like to have a couple of different
jobs at once.”
P
e
rc
e
n
t
In
d
ic
a
ti
n
g
V
a
lu
e
W
a
s
“V
e
ry
I
m
p
o
rt
a
n
t”
60
50
40
30
20
10
0
Generational Changes in What Is Valued in a JobOB Poll
College
Senior 1980
A job where you have more
than 2 weeks vacation
A job that gives you a
chance to make friends
A job that most
people respect
College
Senior 1995
College
Senior 2010
53.0
33.9
17.3
42.9
47.9
25.3
40.7
43.0
31.3
Source: Based on “What Millennial Workers Want: How to Attract and Retain Gen Y Employees,” Robert Half International web interviews of 1,007
individuals age 21–28, 2008.
A s the opening vignette indicates, employees with different values may enact different behaviors to achieve their work goals, and these differ-ences can be a reflection of culture. In the first half of this chapter, we
review the research on personality and its relationship to behavior. In the latter
half, we look at how values shape many of our work-related behaviors.
Although we focus much of our discussion on the Big Five personality traits,
they are not the only traits that describe people. One of the others we’ll discuss
is narcissism. Check out the Self-Assessment Library to see how you score on
narcissism (remember: be honest!).
Am I a Narcissist?
In the Self-Assessment Library (available on CD or online), take assessment
IV.A.1 (Am I a Narcissist?) and answer the following questions.
1. How did you score? Did your scores surprise you? Why or why not?
2. On which facet of narcissism did you score highest? Lowest?
3. Do you think this measure is accurate? Why or why not?

Personality 133
Personality
Why are some people quiet and passive, while others are loud and aggressive?
Are certain personality types better adapted than others for certain job types?
Before we can answer these questions, we need to address a more basic one:
What is personality?
What Is Personality?
When we talk of personality, we don’t mean a person has charm, a positive
attitude toward life, or a constantly smiling face. When psychologists talk of
personality, they mean a dynamic concept describing the growth and develop-
ment of a person’s whole psychological system.
Defining Personality The definition of personality we most frequently use was
produced by Gordon Allport nearly 70 years ago. Allport said personality is “the
dynamic organization within the individual of those psychophysical systems that
determine his unique adjustments to his environment.” 1 For our purposes, you
should think of personality as the sum total of ways in which an individual reacts
to and interacts with others. We most often describe it in terms of the measur-
able traits a person exhibits.
Measuring Personality The most important reason managers need to know
how to measure personality is that research has shown personality tests are
useful in hiring decisions and help managers forecast who is best for a job. 2
The most common means of measuring personality is through self-report
surveys, with which individuals evaluate themselves on a series of factors, such
as “I worry a lot about the future.” Though self-report measures work well when
well constructed, one weakness is that the respondent might lie or practice
impression management to create a good impression. When people know their
personality scores are going to be used for hiring decisions, they rate themselves
as about half a standard deviation more conscientious and emotionally stable
than if they are taking the test just to learn more about themselves. 3 Another
problem is accuracy. A perfectly good candidate could have been in a bad mood
when taking the survey, and that will make the scores less accurate.
Observer-ratings surveys provide an independent assessment of personal-
ity. Here, a co-worker or another observer does the rating (sometimes with
the subject’s knowledge and sometimes not). Though the results of self- report
surveys and observer-ratings surveys are strongly correlated, research sug-
gests observer-ratings surveys are a better predictor of success on the job. 4
However, each can tell us something unique about an individual’s behavior in
the workplace. An analysis of a large number of observer-reported personality
studies shows that a combination of self-report and observer-reports predicts
performance better than any one type of information. The implication is clear:
use both observer ratings and self-report ratings of personality when making
important employment decisions.
1 Define personality, describe
how it is measured, and
explain the factors that
determine an individual’s
personality.
personality Enduring characteristics
that describe an individual’s behavior.
MyManagementLab
For an interactive application of this
topic, check out this chapter’s
simulation activity at
www.mymanagementlab.com.

www.mymanagementlab.com

134 CHAPTER 5 Personality and Values
Personality Determinants An early debate in personality research centered on
whether an individual’s personality was the result of heredity or of environment.
It appears to be a result of both. However, it might surprise you that research
tends to support the importance of heredity over the environment.
Heredity refers to factors determined at conception. Physical stature, facial
attractiveness, gender, temperament, muscle composition and reflexes, energy
level, and biological rhythms are generally considered to be either completely
or substantially influenced by who your parents are—that is, by their biologi-
cal, physiological, and inherent psychological makeup. The heredity approach
argues that the ultimate explanation of an individual’s personality is the
molecular structure of the genes, located in the chromosomes.
Researchers in many different countries have studied thousands of sets of
identical twins who were separated at birth and raised separately. 5 If heredity
played little or no part in determining personality, you would expect to find
few similarities between the separated twins. But twins raised apart have much
in common, and a significant part of the behavioral similarity between them
turns out to be associated with genetic factors. One set of twins separated for
39 years and raised 45 miles apart were found to drive the same model and
color car. They chain-smoked the same brand of cigarette, owned dogs with
the same name, and regularly vacationed within three blocks of each other in
a beach community 1,500 miles away. Researchers have found that genetics
accounts for about 50 percent of the personality similarities between twins and
more than 30 percent of the similarities in occupational and leisure interests.
Interestingly, twin studies have suggested parents don’t add much to our
personality development. The personalities of identical twins raised in different
households are more similar to each other than to the personalities of siblings
with whom the twins were raised. Ironically, the most important contribution
our parents may make to our personalities is giving us their genes!
This is not to suggest that personality never changes. People’s scores on
measures of dependability tend to increase over time, as when young adults
take on roles like starting a family and establishing a career that require great
responsibility. However, strong individual differences in dependability remain;
Personality traits are enduring
characteristics that describe an
individual’s behavior. British entre-
preneur Richard Branson, chairman
of Virgin Group, is described as
energetic, enthusiastic, charismatic,
decisive, ambitious, adaptable,
courageous, and industrious. These
traits helped Branson build one of
the most recognized and respected
global brands for products and
services in the areas of business
travel, entertainment, and lifestyle.
In this photo Branson is joined
by his daughter Holly during the
promotional launch of a new
venture—the Marussia Virgin racing
partnership with Disney’s Cars 2
film. Identifying personality traits
helps organizations select employ-
ees and match workers to job.
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Personality 135
everyone tends to change by about the same amount, so their rank order stays
roughly the same. 6 An analogy to intelligence may make this clearer. Children
become smarter as they age, so nearly everyone is smarter at age 20 than at
age 10. Still, if Madison is smarter than Blake at age 10, she is likely to be so
at age 20, too. Consistent with the notion that the teenage years are periods
of great exploration and change, research has shown that personality is more
changeable in adolescence and more stable among adults. 7
Early work on the structure of personality tried to identify and label enduring
characteristics that describe an individual’s behavior, including shy, aggressive, sub-
missive, lazy, ambitious, loyal, and timid. When someone exhibits these characteris-
tics in a large number of situations, we call them personality traits of that person. 8
The more consistent the characteristic over time, and the more frequently it occurs
in diverse situations, the more important that trait is in describing the individual.
Early efforts to identify the primary traits that govern behavior 9 often
resulted in long lists that were difficult to generalize from and provided little
practical guidance to organizational decision makers. Two exceptions are the
Myers-Briggs Type Indicator and the Big Five Model, now the dominant frame-
works for identifying and classifying traits.
The Myers-Briggs Type Indicator
The Myers-Briggs Type Indicator (MBTI) is the most widely used personality-
assessment instrument in the world. 10 It is a 100-question personality test that
asks people how they usually feel or act in particular situations. Respondents
are classified as extraverted or introverted (E or I), sensing or intuitive (S or N),
thinking or feeling (T or F), and judging or perceiving (J or P). These terms are
defined as follows:
● Extraverted (E) versus Introverted (I). Extraverted individuals are outgoing,
sociable, and assertive. Introverts are quiet and shy.
● Sensing (S) versus Intuitive (N). Sensing types are practical and prefer
routine and order. They focus on details. Intuitives rely on unconscious
processes and look at the “big picture.”
● Thinking (T) versus Feeling (F). Thinking types use reason and logic to handle
problems. Feeling types rely on their personal values and emotions.
● Judging (J) versus Perceiving (P). Judging types want control and prefer their
world to be ordered and structured. Perceiving types are flexible and
spontaneous.
These classifications together describe 16 personality types, identifying every
person by one trait from each of the four pairs. For example, Introverted/
Intuitive/Thinking/Judging people (INTJs) are visionaries with original minds
and great drive. They are skeptical, critical, independent, determined, and
often stubborn. ESTJs are organizers. They are realistic, logical, analytical, and
decisive and have a natural head for business or mechanics. The ENTP type is a
conceptualizer, innovative, individualistic, versatile, and attracted to entrepre-
neurial ideas. This person tends to be resourceful in solving challenging prob-
lems but may neglect routine assignments.
The MBTI has been widely used by organizations including Apple Computer,
AT&T, Citigroup, GE, 3M Co., many hospitals and educational institutions, and
2 Describe the Myers-Briggs
Type Indicator personality
framework and assess its
strengths and weaknesses.
personality traits Enduring
characteristics that describe an
individual’s behavior.
Myers-Briggs Type Indicator (MBTI)
A personality test that taps four
characteristics and classifies people
into 1 of 16 personality types.
heredity Factors determined
at conception; one’s biological,
physiological, and inherent
psychological makeup.

136 CHAPTER 5 Personality and Values
even the U.S. Armed Forces. Evidence is mixed about its validity as a measure
of personality, however; most of the evidence is against it. 11 One problem is that
it forces a person into one type or another; that is, you’re either introverted
or extraverted. There is no in-between, though in reality people can be both
extraverted and introverted to some degree. The best we can say is that the
MBTI can be a valuable tool for increasing self-awareness and providing career
guidance. But because results tend to be unrelated to job performance, manag-
ers probably shouldn’t use it as a selection test for job candidates.
The Big Five Personality Model
The MBTI may lack strong supporting evidence, but an impressive body of
research supports the thesis of the Big Five Model —that five basic dimensions
underlie all others and encompass most of the significant variation in human
personality. 12 Moreover, test scores of these traits do a very good job of predict-
ing how people behave in a variety of real-life situations. 13 The following are the
Big Five factors:
● Extraversion. The extraversion dimension captures our comfort level with
relationships. Extraverts tend to be gregarious, assertive, and sociable.
Introverts tend to be reserved, timid, and quiet.
● Agreeableness. The agreeableness dimension refers to an individual’s
propensity to defer to others. Highly agreeable people are cooperative,
warm, and trusting. People who score low on agreeableness are cold,
disagreeable, and antagonistic.
● Conscientiousness. The conscientiousness dimension is a measure of
reliability. A highly conscientious person is responsible, organized,
dependable, and persistent. Those who score low on this dimension are
easily distracted, disorganized, and unreliable.
● Emotional stability. The emotional stability dimension—often labeled
by its converse, neuroticism—taps a person’s ability to withstand stress.
People with positive emotional stability tend to be calm, self-confident,
and secure. Those with high negative scores tend to be nervous, anxious,
depressed, and insecure.
● Openness to experience. The openness to experience dimension addresses
range of interests and fascination with novelty. Extremely open people
are creative, curious, and artistically sensitive. Those at the other end of
the category are conventional and find comfort in the familiar.
How Do the Big Five Traits Predict Behavior at Work? Research has found
relationships between these personality dimensions and job performance. 14 As
the authors of the most-cited review put it, “The preponderance of evidence
shows that individuals who are dependable, reliable, careful, thorough, able
to plan, organized, hardworking, persistent, and achievement-oriented tend
to have higher job performance in most if not all occupations.” 15 In addition,
employees who score higher in conscientiousness develop higher levels of job
knowledge, probably because highly conscientious people learn more (a review
of 138 studies revealed conscientiousness was rather strongly related to GPA). 16
Higher levels of job knowledge then contribute to higher levels of job perfor-
mance. Conscientious individuals who are more interested in learning than in
just performing on the job are also exceptionally good at maintaining perfor-
mance in the face of negative feedback. 17 There can be “too much of a good
thing,” however, as extremely conscientious individuals typically do not perform
better than those who are simply above average in conscientiousness. 18
3 Identify the key traits in the
Big Five personality model.
Andrea Jung, chairman and CEO of
Avon, scores high on all personality
dimensions of the Big Five Model.
She is sociable, agreeable, conscien-
tious, emotionally stable, and open
to experiences. These personality
traits have contributed to Jung’s
high job performance and career
success. Since joining Avon in 1994,
Jung has led a dramatic turnaround
of a company that had a poor
image, slow growth, and decline in
sales to one of the world’s top cos-
metics companies and the world’s
leading direct sales brand. She
transformed Avon by developing
and executing growth strategies,
launching new brand initiatives,
and developing earnings opportuni-
ties for women worldwide.
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Personality 137
Conscientiousness is as important for managers as for front-line employees.
As Exhibit 5-1 shows, a study of the personality scores of 313 CEO candidates
in private equity companies (of whom 225 were hired, and their com-
pany’s performance later correlated with their personality scores) found
conscientiousness—in the form of persistence, attention to detail, and setting
of high standards—was more important than other traits. These results attest to
the importance of conscientiousness to organizational success.
Interestingly, conscientious people live longer because they take better care
of themselves (they eat better and exercise more) and engage in fewer risky
behaviors like smoking, drinking and drugs, and risky sexual or driving behav-
ior. 19 Still, probably because they’re so organized and structured, conscientious
people don’t adapt as well to changing contexts. They are generally perfor-
mance oriented and have more trouble learning complex skills early in the
training process because their focus is on performing well rather than on
learning. Finally, they are often less creative than less conscientious people,
especially artistically. 20
Although conscientiousness is most consistently related to job performance,
the other Big Five traits are also related to aspects of performance and have other
implications for work and for life. Let’s look at them one at a time. Exhibit 5-2
summarizes.
Of the Big Five traits, emotional stability is most strongly related to life
satisfaction, job satisfaction, and low stress levels. This is probably true because
high scorers are more likely to be positive and optimistic and experience fewer
negative emotions. They are happier than those who score low. People low
on emotional stability are hypervigilant (looking for problems or impending
signs of danger) and are especially vulnerable to the physical and psychological
effects of stress. Extraverts tend to be happier in their jobs and in their lives as
a whole. They experience more positive emotions than do introverts, and they
more freely express these feelings. They also tend to perform better in jobs that
require significant interpersonal interaction, perhaps because they have more
social skills—they usually have more friends and spend more time in social
Traits That Matter Most to Business Success
at Buyout Companies
Exhibit 5-1
Most Important Less Important
Persistence Strong oral communication
Attention to detail Teamwork
Efficiency Flexibility/adaptability
Analytical skills Enthusiasm
Setting high standards Listening skills
4 Demonstrate how the Big
Five traits predict behavior
at work.
Big Five Model A personality
assessment model that taps five basic
dimensions.
agreeableness A personality
dimension that describes someone
who is good natured, cooperative, and
trusting.
conscientiousness A personality
dimension that describes someone
who is responsible, dependable,
persistent, and organized.
emotional stability A personality
dimension that characterizes someone
as calm, self-confident, secure
(positive) versus nervous, depressed,
and insecure (negative).
openness to experience A personality
dimension that characterizes someone
in terms of imagination, sensitivity,
and curiosity.
extraversion A personality dimension
describing someone who is sociable,
gregarious, and assertive.

138 CHAPTER 5 Personality and Values
situations than introverts. Finally, extraversion is a relatively strong predictor of
leadership emergence in groups; extraverts are more socially dominant, “take
charge” sorts of people, and they are generally more assertive than introverts. 21
One downside is that extraverts are more impulsive than introverts; they are
more likely to be absent from work and engage in risky behavior such as
unprotected sex, drinking, and other impulsive or sensation-seeking acts. 22 One
study also found extraverts were more likely than introverts to lie during job
interviews. 23
Individuals who score high on openness to experience are more cre-
ative in science and art than those who score low. Because creativity is im-
portant to leadership, open people are more likely to be effective leaders,
and more comfortable with ambiguity and change. They cope better with
organizational change and are more adaptable in changing contexts. Recent
evidence also suggests, however, that they are especially susceptible to work-
place accidents. 24
You might expect agreeable people to be happier than disagreeable people.
They are, but only slightly. When people choose romantic partners, friends,
or organizational team members, agreeable individuals are usually their first
choice. Agreeable individuals are better liked than disagreeable people, which
explains why they tend to do better in interpersonally oriented jobs such as
customer service. They also are more compliant and rule abiding and less likely
to get into accidents as a result. People who are agreeable are more satisfied in
their jobs and contribute to organizational performance by engaging in citizen-
Model of How Big Five Traits Influence OB Criteria
* In jobs requiring significant teamwork or frequent interpersonal interactions.
Exhibit 5-2
• Less negative thinking and
fewer negative emotions
• Less hyper-vigilant
• Higher job & life satisfaction
• Lower stress levels
• Better interpersonal skills
• Greater social dominance
• More emotionally expressive
Extroversion
• Higher performance*
• Enhanced leadership
• Higher job & life satisfaction
• Increased learning
• More creative
• More flexible & autonomous
Openness
• Training performance
• Enhanced leadership
• More adaptable to change
• Better liked
• More compliant and
conforming
Agreeableness
• Higher performance*
• Lower levels of deviant
behavior
• Greater effort & persistence
• More drive and discipline
• Better organized & planning
Conscientiousness
• Higher performance
• Enhanced leadership
• Greater longevity
BIG FIVE TRAITS WHY IS IT RELEVANT? WHAT DOES IT AFFECT?
Emotional stability

Personality 139
ship behavior. 25 They are also less likely to engage in organizational deviance.
One downside is that agreeableness is associated with lower levels of career
success (especially earnings).
The five personality factors identified in the Big Five model appear in
almost all cross-cultural studies. 26 These studies have included a wide variety
of diverse cultures—such as China, Israel, Germany, Japan, Spain, Nigeria,
Norway, Pakistan, and the United States. Differences are complex but tend to
be primarily about whether countries are predominantly individualistic or col-
lectivistic. Chinese managers use the category of conscientiousness more often
and agreeableness less often than do U.S. managers. And the Big Five appear
to predict a bit better in individualistic than in collectivist cultures. 27 But there
is a surprisingly high amount of agreement, especially across individuals from
developed countries. A comprehensive review of studies covering people from
what was then the 15-nation European Community found conscientiousness a
valid predictor of performance across jobs and occupational groups. 28 This is
exactly what U.S. studies have found.
Other Personality Traits Relevant to OB
Although the Big Five traits have proven highly relevant to OB, they don’t
exhaust the range of traits that can describe someone’s personality. Now we’ll
look at other, more specific, attributes that are powerful predictors of behav-
ior in organizations. The first relates to our core self-evaluation. The others
are Machiavellianism, narcissism, self-monitoring, propensity for risk taking,
proactive personality, and other-orientation.
Core Self-Evaluation People who have positive core self-evaluations like
themselves and see themselves as effective, capable, and in control of their
environment. Those with negative core self-evaluations tend to dislike them-
selves, question their capabilities, and view themselves as powerless over their
environment. 29 We discussed in Chapter 3 that core self-evaluations relate to job
satisfaction because people positive on this trait see more challenge in their job
and actually attain more complex jobs.
But what about job performance? People with positive core self-evaluations
perform better than others because they set more ambitious goals, are more
committed to their goals, and persist longer in attempting to reach these goals.
One study of life insurance agents found core self-evaluations were critical
predictors of performance. Ninety percent of life insurance sales calls end in
rejection, so an agent has to believe in him- or herself to persist. In fact, this
study showed the majority of successful salespersons did have positive core
self-evaluations. 30 Such people also provide better customer service, are more
popular co-workers, and have careers that both begin on better footing and
ascend more rapidly over time. 31 Some evidence suggests that individuals high in
core self-evaluations perform especially well if they also feel their work provides
meaning and is helpful to others. 32
Can we be too positive? What happens when someone thinks he is capable
but is actually incompetent? One study of Fortune 500 CEOs showed that many
are overconfident, and their perceived infallibility often causes them to make
bad decisions. 33 Teddy Forstmann, chairman of the sports marketing giant
core self-evaluation Bottom-line
conclusions individuals have about
their capabilities, competence, and
worth as a person.
The personality trait of positive core
self-evaluation helps Satoru Iwata
meet the challenges and complex-
ity of his job as CEO of Nintendo.
Confident and capable, Iwata has
applied his years of experience and
innovation as a game developer to
introducing new products, such as
the Wii gaming console and the 3DS
portable console. Iwata views his
job as an opportunity to cultivate
new customers by widening the
appeal of video games to new mar-
ket segments in developed nations
and by introducing products to
developing countries.
5 Identify other personality
traits relevant to OB.
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140 CHAPTER 5 Personality and Values
IMG, said of himself, “I know God gave me an unusual brain. I can’t deny that.
I have a God-given talent for seeing potential.” 34 We might say people like
Forstmann are overconfident, but very often we humans sell ourselves short
and are less happy and effective than we could be because of it. If we decide we
can’t do something, for example, we won’t try, and not doing it only reinforces
our self-doubts.
Machiavellianism Kuzi is a young bank manager in Taiwan. He’s had three
promotions in the past 4 years and makes no apologies for the aggressive tactics
he’s used to propel his career upward. “I’m prepared to do whatever I have to
do to get ahead,” he says. Kuzi would properly be called Machiavellian.
The personality characteristic of Machiavellianism (often abbreviated Mach )
is named after Niccolo Machiavelli, who wrote in the sixteenth century on how
to gain and use power. An individual high in Machiavellianism is pragmatic,
maintains emotional distance, and believes ends can justify means. “If it works,
use it” is consistent with a high-Mach perspective. A considerable amount of
research has found high Machs manipulate more, win more, are persuaded
less, and persuade others more than do low Machs. 35 They like their jobs less,
are more stressed by their work, and engage in more deviant work behaviors. 36
Yet high-Mach outcomes are moderated by situational factors. High Machs
flourish (1) when they interact face to face with others rather than indirectly;
(2) when the situation has minimal rules and regulations, allowing latitude for
improvisation; and (3) when emotional involvement with details irrelevant to
winning distracts low Machs. 37 Thus, in jobs that require bargaining skills (such
as labor negotiation) or that offer substantial rewards for winning (such as
commissioned sales), high Machs will be productive. But if ends can’t justify the
means, there are absolute standards of behavior, or the three situational factors
we noted are not in evidence, our ability to predict a high Mach’s performance
will be severely curtailed.
Narcissism Hans likes to be the center of attention. He looks at himself in the
mirror a lot, has extravagant dreams, and considers himself a person of many
talents. Hans is a narcissist. The term is from the Greek myth of Narcissus, a
man so vain and proud he fell in love with his own image. In psychology, narcis-
sism describes a person who has a grandiose sense of self-importance, requires
excessive admiration, has a sense of entitlement, and is arrogant. Evidence
suggests that narcissists are more charismatic and thus more likely to emerge as
leaders, and they may even display better psychological health (at least as they
self-report). 38
Despite having some advantages, most evidence suggests that narcissism
is undesirable. A study found that while narcissists thought they were better
leaders than their colleagues, their supervisors actually rated them as worse.
An Oracle executive described that company’s CEO Larry Ellison as fol-
lows: “The difference between God and Larry is that God does not believe
he is Larry.” 39 Because narcissists often want to gain the admiration of oth-
ers and receive affirmation of their superiority, they tend to “talk down” to
those who threaten them, treating others as if they were inferior. Narcissists
also tend to be selfish and exploitive and believe others exist for their ben-
efit. 40 Their bosses rate them as less effective at their jobs than others, par-
ticularly when it comes to helping people. 41 Subsequent research using data
compiled over 100 years has shown that narcissistic CEOs of baseball or-
ganizations tend to generate higher levels of manager turnover, although
curiously, members of external organizations see them as more influential. 42

Personality 141
Self-Monitoring Joyce McIntyre is always in trouble at work. Though she’s
competent, hardworking, and productive, in performance reviews she is rated
no better than average, and she seems to have made a career of irritating
bosses. Joyce’s problem is that she’s politically inept. She’s unable to adjust her
behavior to fit changing situations. As she puts it, “I’m true to myself. I don’t
remake myself to please others.” We would describe Joyce as a low self-monitor.
Self-monitoring refers to an individual’s ability to adjust his or her behav-
ior to external, situational factors. 43 Individuals high in self-monitoring show
considerable adaptability in adjusting their behavior to external situational
factors. They are highly sensitive to external cues and can behave differently
in different situations, sometimes presenting striking contradictions between
their public persona and their private self. Low self-monitors, like Joyce, can’t
disguise themselves in that way. They tend to display their true dispositions and
attitudes in every situation; hence, there is high behavioral consistency between
who they are and what they do.
Evidence indicates high self-monitors pay closer attention to the behavior
of others and are more capable of conforming than are low self-monitors. 44
They also receive better performance ratings, are more likely to emerge as
leaders, and show less commitment to their organizations. 45 In addition, high
self- monitoring managers tend to be more mobile in their careers, receive
more promotions (both internal and cross-organizational), and are more likely
to occupy central positions in an organization. 46
Risk Taking Donald Trump stands out for his willingness to take risks. He
started with almost nothing in the 1960s. By the mid-1980s, he had made a
fortune by betting on a resurgent New York City real estate market. Then,
trying to capitalize on his successes, Trump overextended himself. By 1994, he
had a negative net worth of $850 million. Never fearful of taking chances, “The
Donald” leveraged the few assets he had left on several New York, New Jersey,
and Caribbean real estate ventures and hit it big again. In 2011, when Trump
was contemplating a presidential run, The Atlantic estimated his net worth at
more than $7 billion. 47
People differ in their willingness to take chances, a quality that affects
how much time and information they need to make a decision. For instance,
79 managers worked on simulated exercises that required them to make hiring
decisions. 48 High risk-taking managers made more rapid decisions and used less
information than did the low risk takers. Interestingly, decision accuracy was
the same for both groups.
Although previous studies have shown managers in large organizations to
be more risk averse than growth-oriented entrepreneurs who actively manage
small businesses, recent findings suggest managers in large organizations may
actually be more willing to take risks than entrepreneurs. 49 The work popula-
tion as a whole also differs in risk propensity. 50 It makes sense to recognize
these differences and even consider aligning them with specific job demands.
A high risk-taking propensity may lead to more effective performance for a stock
trader in a brokerage firm because that type of job demands rapid decision
Machiavellianism The degree to
which an individual is pragmatic,
maintains emotional distance, and
believes that ends can justify means.
self-monitoring A personality
trait that measures an individual’s
ability to adjust his or her behavior to
external, situational factors.
narcissism The tendency to be
arrogant, have a grandiose sense
of self-importance, require excessive
admiration, and have a sense of
entitlement.  

142 CHAPTER 5 Personality and Values
making. On the other hand, a willingness to take risks might prove a major
obstacle to an accountant who performs auditing activities.
Proactive Personality Did you ever notice that some people actively take the
initiative to improve their current circumstances or create new ones? These are
proactive personalities. 51 Those with a proactive personality identify opportuni-
ties, show initiative, take action, and persevere until meaningful change occurs,
compared to others who passively react to situations. Proactives create positive
change in their environment, regardless of, or even in spite of, constraints or
obstacles. 52 Not surprisingly, they have many desirable behaviors that organiza-
tions covet. They are more likely than others to be seen as leaders and to act as
change agents. 53 Proactive individuals are more likely to be satisfied with work
and help others more with their tasks, largely because they build more relation-
ships with others. 54
Proactives are also more likely to challenge the status quo or voice their
displeasure when situations aren’t to their liking. 55 If an organization requires
people with entrepreneurial initiative, proactives make good candidates;
however, they’re also more likely to leave an organization to start their own busi-
ness. 56 As individuals, proactives are more likely than others to achieve career
success. 57 They select, create, and influence work situations in their favor. They
seek out job and organizational information, develop contacts in high places,
engage in career planning, and demonstrate persistence in the face of career
obstacles.
Other-orientation Some people just naturally seem to think about other peo-
ple a lot, being concerned about their well-being and feelings. Others behave
like “economic actors,” primarily rational and self-interested. These differences
T
his statement is true.
Studies of identical twins
reared apart suggest striking
career similarities—if one twin became
an entrepreneur, the other twin was
more likely to do the same. The expla-
nation may lie in personality.
One recent analysis of 60 stud-
ies linked individuals’ personali-
ties to their intentions to undertake
an entrepreneurial career, and to
the performance of their ventures
once they made that decision. The
Big Five personality traits—except
agreeableness, which didn’t matter—
significantly predicted entrepreneurial
intentions and, more significantly,
entrepreneurial firm performance.
Especially important were openness
to experience and conscientiousness,
both of which also predicted firm
growth over time. Interestingly, risk
propensity—the tendency to take and
be comfortable with taking risks—was
not associated with entrepreneurial
performance.
What are the implications of these
findings? Traditionally, people who saw
themselves as risk averse were steered
away from entrepreneurship. However,
these results suggest it is more impor-
tant to steer low scorers on openness
and conscientiousness away. The best
entrepreneurs appear not to be the
swashbuckling risk-takers, but rather
the methodical ones who have the
discipline to turn their open thinking
and creative ideas into reality.
Sources: H. Zhao, S. E. Seibert, and G. T.
Lumpkin, “The Relationship of Personality
t o E n t r e p r e n e u r i a l I n t e n t i o n s a n d
Performance: A Meta-Analytic Review,”
Journal of Management 36, no.  2 (2010),
pp. 381–404; M. Herper, “Could We Invent
an Antibody to Make You an Entrepreneur?”
Forbes (May 5, 2011), downloaded on
May 23, 2011, from http://blogs.forbes.com/ .
Myth or Science?
Personality Predicts the Performance
of Entrepreneurs

http://blogs.forbes.com/

Personality 143
reflect varying levels of other-orientation, a personality trait that reflects the
extent to which decisions are affected by social influences and concerns vs. our
own well-being and outcomes. 58
What are the consequences of having a high level of other-orientation?
Those who are other-oriented feel more obligated to help others who have
helped them (pay me back), whereas those who are more self-oriented will
help others when they expect to be helped in the future (pay me forward). 59
Employees high in other-orientation also exert especially high levels of effort
when engaged in helping work or prosocial behavior. 60 In sum, it appears that
having a strong orientation toward helping others does affect some behaviors
that actually matter for organizations. However, research is still needed to
clarify this emerging construct and its relationship with agreeableness.
Having discussed personality traits—the enduring characteristics that
describe a person’s behavior—we now turn to values. Values are often very
specific and describe belief systems rather than behavioral tendencies. Some
beliefs or values don’t say much about a person’s personality, and we don’t
always act consistently with our values.
A
s work becomes increas-
ingly international in focus,
successful managers need to
be able to operate across cultures eas-
ily. Obviously, expatriate managers
working in other countries will need
personality traits that make them better
able to work overseas, but managers
at home who order parts and services
from overseas or prepare marketing
plans for other countries, for example,
will also conduct cross-cultural com-
munications. In the workforce of the
future, everyone from mechanics to
customer service representatives to
advertisers will need to understand the
global market. What is the right per-
sonality for a global workplace?
You might suspect that, of the Big
Five traits, openness to experience
would be most important to effective-
ness in international assignments. Open
people are more likely to be culturally
flexible—to “go with the flow” when
things are different in another country.
Research is not fully consistent on the
issue, but most does suggest that man-
agers who score high on openness per-
form better than others in international
assignments. Other evidence suggests
that employees who are more agree-
able and extraverted have an easier
time with international assignments.
They may be better at establishing
new relationships and developing social
networks in unfamiliar contexts.
What do these results imply for
organizations? Given continuing
globalization in the future, organiza-
tions should select employees with
traits related to better performance in
international assignments. Managers
will need to foster an open-minded
perspective about other cultures
among their employees.
Sources: Based on M. A. Shaffer, D. A.
Harrison, and H. Gregersen, “You Can
Take It with You: Individual Differences and
Expatriate Effectiveness,” Journal of Applied
Psychology 91 , no. 1 (2006), pp.  109–125;
M. van Woerkom and R. S. M. de Reuver,
“Predicting Excellent Management
Performance in an Intercultural Context:
A Study of the Influence of Multicultural
Personality on Transformational Leadership
and Performance,” International Journal of
Human Resource Management 20, no. 10
(2009), pp. 2013–2029; and M. Downes,
I. I. Varner, and M. Hemmasi, “Individual
Profiles as Predictors of Expatriate
Effectiveness,” Competitiveness Review
20 , no. 3 (2010), pp. 235–247.
glOBalization!
The Right Personality for a Global Workplace
proactive personality People who
identify opportunities, show initiative,
take action, and persevere until
meaningful change occurs.

144 CHAPTER 5 Personality and Values
Values
Is capital punishment right or wrong? If a person likes power, is that good or
bad? The answers to these questions are value laden. Some might argue capital
punishment is right because it is an appropriate retribution for crimes such as
murder and treason. Others might argue, just as strongly, that no government
has the right to take anyone’s life.
Values represent basic convictions that “a specific mode of conduct or
end-state of existence is personally or socially preferable to an opposite or con-
verse mode of conduct or end-state of existence.” 61 They contain a judgmental
element in that they carry an individual’s ideas as to what is right, good, or
desirable. Values have both content and intensity attributes. The content
attribute says a mode of conduct or end-state of existence is important. The in-
tensity attribute specifies how important it is. When we rank an individual’s values
in terms of their intensity, we obtain that person’s value system . All of us have
a hierarchy of values that forms our value system. We find it in the relative
importance we assign to values such as freedom, pleasure, self-respect, honesty,
obedience, and equality.
Are values fluid and flexible? Generally speaking, no. They tend to be
relatively stable and enduring. 62 A significant portion of the values we hold
is established in our early years—by parents, teachers, friends, and others.
As children, we are told certain behaviors or outcomes are always desirable
or always undesirable, with few gray areas. You were never taught to be just a
little bit honest or a little bit responsible, for example. It is this absolute, or
“black- or-white,” learning of values that ensures their stability and endurance.
If we question our values, of course, they may change, but more often they are
reinforced. There is also evidence linking personality to values, implying our
values may be partly determined by our genetically transmitted traits. 63
The Importance of Values
Values lay the foundation for our understanding of people’s attitudes and
motivation and influence our perceptions. We enter an organization with
preconceived notions of what “ought” and “ought not” to be. These notions
are not value-free; on the contrary, they contain our interpretations of right
and wrong and our preference for certain behaviors or outcomes over others.
As a result, values cloud objectivity and rationality; they influence attitudes and
behavior. 64
Suppose you enter an organization with the view that allocating pay on the
basis of performance is right, while allocating pay on the basis of seniority is
wrong. How will you react if you find the organization you’ve just joined rewards
seniority and not performance? You’re likely to be disappointed—and this
can lead to job dissatisfaction and a decision not to exert a high level of effort
because “It’s probably not going to lead to more money anyway.” Would your
attitudes and behavior be different if your values aligned with the organization’s
pay policies? Most likely.
Terminal versus Instrumental Values
Can we classify values? Yes. In this section, we review two approaches to
developing value typologies.
6 Define values, demonstrate
the importance of values,
and contrast terminal and
instrumental values.

Values 145
Rokeach Value Survey Milton Rokeach created the Rokeach Value Sur-
vey (RVS). 65 It consists of two sets of values, each containing 18 individual
value items. One set, called terminal values , refers to desirable end-states.
These are the goals a person would like to achieve during his or her lifetime.
The other set, called instrumental values , refers to preferable modes of be-
havior, or means of achieving the terminal values. Some examples of terminal
values in the Rokeach Value Survey are: Prosperity and economic success, Free-
dom, Health and well-being, World peace, Social recognition, and Meaning in
life. The types of instrumental values illustrated in RVS are Self-improvement,
Autonomy and self-reliance, Personal discipline, kindness, Ambition, and
Goal-orientation.
Several studies confirm that RVS values vary among groups. 66 People in
the same occupations or categories (corporate managers, union members,
parents, students) tend to hold similar values. One study compared corporate
executives, members of the steelworkers’ union, and members of a commu-
nity activist group. Although there was a good deal of overlap among them, 67
there were also significant differences (see Exhibit 5-3 ). The activists ranked
“equality” as their most important terminal value; executives and union mem-
bers ranked this value 12 and 13, respectively. Activists ranked “helpful” as
their second-highest instrumental value. The other two groups both ranked it
14. Because executives, union members, and activists all have a vested interest
in what corporations do, these differences can create serious conflicts when
groups contend with each other over an organization’s economic and social
policies. 68
Generational Values
Contemporary Work Cohorts Researchers have integrated several recent anal-
yses of work values into four groups that attempt to capture the unique values
EXECUTIVES UNION MEMBERS ACTIVISTS
Terminal Instrumental Terminal Instrumental Terminal Instrumental
1. Self-respect 1. Honest 1. Family security 1. Responsible 1. Equality 1. Honest
2. Family security 2. Responsible 2. Freedom 2. Honest 2. A world of peace 2. Helpful
3. Freedom 3. Capable 3. Happiness 3. Courageous 3. Family security 3. Courageous
4. A sense of accomplishment 4. Ambitious 4. Self-respect 4. Independent 4. Self-respect 4. Responsible
5. Happiness 5. Independent 5. Mature love 5. Capable 5. Freedom 5. Capable
Mean Value Ranking Executives, Union Members, and Activisits (Top Five Only)
Source: Based on W. C. Frederick and J. Weber, “The Values of Corporate Managers and Their Critics: An Empirical Description and Normative Implications,” in W. C. Frederick and L. E. Preston
(eds.), Business Ethics: Research Issues and Empirical Studies (Greenwich, CT: JAI Press, 1990), pp. 123–144.
Exhibit 5-3
values Basic convictions that a
specific mode of conduct or end-state
of existence is personally or socially
preferable to an opposite or converse
mode of conduct or end-state of
existence.
value system A hierarchy based on
a ranking of an individual’s values in
terms of their intensity.
terminal values Desirable end-states of
existence; the goals a person would like
to achieve during his or her lifetime.
instrumental values Preferable modes
of behavior or means of achieving
one’s terminal values.
7 Compare generational
differences in values and
identify the dominant values
in today’s workforce.

146 CHAPTER 5 Personality and Values
of different cohorts or generations in the U.S. workforce. 69 Exhibit 5-4 segments
employees by the era during which they entered the workforce. Because most
people start work between the ages of 18 and 23, the eras also correlate closely
with employee age.
Let’s start with some limitations of this analysis. First, we make no assump-
tion that the framework applies across all cultures. Second, despite a steady
stream of press coverage, there is very little rigorous research on generational
values, so we have to rely on an intuitive framework. Finally, these are imprecise
categories. There is no law that someone born in 1985 can’t have values similar
to those of someone born in 1955. Despite these limitations, values do change
over generations, 70 and we can gain some useful insights from analyzing values
this way.
Boomers ( Baby Boomers ) are a large cohort born after World War II when
veterans returned to their families and times were good. Boomers entered the
workforce from the mid-1960s through the mid-1980s. They brought with them
a large measure of the “hippie ethic” and distrust of authority. But they place a
great deal of emphasis on achievement and material success. Pragmatists who
believe ends can justify means, they work hard and want to enjoy the fruits of
their labors. Boomers see the organizations that employ them merely as vehi-
cles for their careers. Terminal values such as a sense of accomplishment and
social recognition rank high with them.
The lives of Xers ( Generation Xers ) have been shaped by globalization,
two-career parents, MTV, AIDS, and computers. Xers value flexibility, life
options, and the achievement of job satisfaction. Family and relationships are
very important. Xers are skeptical, particularly of authority. They also enjoy
team-oriented work. In search of balance in their lives, Xers are less willing
to make personal sacrifices for the sake of their employer than previous
generations were. On the RVS, they rate high on true friendship, happiness,
and pleasure.
The most recent entrants to the workforce, the Millennials (also called
Netters, Nexters, Generation Yers, and Generation Nexters ) grew up during
prosperous times. They have high expectations and seek meaning in their
work. Millennials have life goals more oriented toward becoming rich
(81 percent) and famous (51 percent) than do Generation Xers (62 per-
cent and 29 percent, respectively), but they also see themselves as socially
responsible. At ease with diversity, Millennials are the first generation to
take technology for granted. More than other generations, they tend to be
questioning, electronically networked, and entrepreneurial. At the same
time, some have described Millennials as entitled and needy. They may clash
Entered the Approximate
Cohort Workforce Current Age Dominant Work Values
Boomers 1965–1985 Mid-40s to mid-60s Success, achievement, ambition,
dislike of authority; loyalty to
career
Xers 1985–2000 Late 20s to early 40s Work/life balance, team-oriented,
dislike of rules; loyalty to
relationships
Nexters 2000 to present Under 30 Confident, financial success, self-
reliant but team-oriented; loyalty
to both self and relationships
Dominant Work Values in Today’s Workforce Exhibit 5-4

Values 147
A
s we have noted, individuals
differ in terms of their per-
sonality scores, and these
differences contribute to effective
performance. It isn’t always possible
to identify personality traits success-
fully during the hiring process, and
sometimes there simply aren’t enough
people with the “right” personality
traits available. So should organiza-
tions try to shape their employees
to make them more conscientious,
agreeable, open, emotionally stable,
and extraverted? Is there a potential
ethical problem with exercising this
type of control over workers?
Some evidence suggests that
people’s basic temperament is largely
fixed by biology, and in this case, at-
tempts to change personality will
mostly lead to frustration and dissat-
isfaction. An employee who tends
to see things negatively is unlikely
to suddenly become an optimist
just because a manager pushes him
or her to read self-help books and
take up meditation. Moreover, such
efforts may send a strong message of
disapproval—who would want a man-
ager saying, “We don’t like you the
way you are, you need to change!”
Employees who are forced into work-
ing environments that don’t fit their
dispositions will also likely experience
high levels of psychological strain.
On the other hand, it is possible
to change the way personality is ex-
pressed. Biological anthropologist
Helen Fisher notes that despite the im-
portance of biology, “the environment
always molds your biology.” Someone
who isn’t particularly open to experi-
ence might be comfortable with new
work assignments if they’re framed
appropriately, and someone who isn’t
very conscientious can display orga-
nization and dutifulness if the right
environmental supports like check-
lists and formalized goal-setting are
in place. And personality does change
somewhat over time. As people age,
their scores on conscientiousness and
agreeableness increase rather dramati-
cally, and neuroticism decreases sub-
stantially (the results for openness and
extraversion are more complex).
So what might employers do to
accommodate employee personality
differences while still obtaining maxi-
mum performance? One strategy is
to focus on outcomes and allow em-
ployees to determine their own way
to achieve them. An extrovert and an
introvert might both be able to produce
a very high quality report, even if the
extrovert will want to collaborate and
discuss during the process of writing
whereas the introvert will prefer to work
out problems alone. Employers can also
try to assign employees to activities that
best match their personality types.
Sources: B. W. Roberts and D. Mroczek,
“Personality Trait Change in Adulthood,”
Current Directions in Psychological Science,
no. 1, Vol. 17 (2008), pp. 31–35; “Five Ways
to Change Your Personality,” CBS News
(August 21, 2010), www.cbsnews.com .
An Ethical Choice
Should You Try to Change Someone’s Personality?
EBay’s young employees rank
their employer as one of the best
places to work for millennials. The
company’s culture of fun, casual
dress, and flexible work schedules
that provide for a work/life balance
appeal to Generation Y employees
like those shown here at eBay’s
offices in San Jose, California.
Young employees say that eBay
managers give them job responsibil-
ity quickly, generous recognition
for their achievements, and learn-
ing opportunities to advance their
careers. They also admire eBay’s
“Social Venture” initiatives such
as WorldofGood.com , eBay Giving
Works, and MicroPlace that make
a positive difference in the lives of
people throughout the world.
So
ur
ce
: J
im
W
ils
on
/T
he
N
ew
Y
or
k
Ti
m
es
/R
ed
ux
P
ic
tu
re
ss
.

www.cbsnews.com

148 CHAPTER 5 Personality and Values
with other generations over work attire and communication. They also like
feedback. An Ernst & Young survey found that 85  percent of Millennials
want “frequent and candid performance feedback,” compared to only half
of Boomers. 71
Though it is fascinating to think about generational values, remem-
ber these classifications lack solid research support. Recent reviews suggest
many of the generalizations are either overblown or incorrect. 72 Studies
that have found differences across generations do not support the popular
conceptions of how generations differ, and most are plagued with method-
ological problems that make it difficult to assess whether differences actually
exist. One study that used an appropriate longitudinal design did find the
value placed on leisure increased over generations from the Baby Boomers
to the Millennials and work centrality has declined, but it did not find that
Millennials had higher altruistic work values as expected. 73 Generational clas-
sifications may help us understand our own and other generations better, but
we must also appreciate their limits.
Linking an Individual’s Personality
and Values to the Workplace
Thirty years ago, organizations were concerned only with personality because
their primary focus was to match individuals to specific jobs. That concern has
expanded to include how well the individual’s personality and values match the
organization. Why? Because managers today are less interested in an applicant’s
ability to perform a specific job than with his or her flexibility to meet changing
situations and commitment to the organization.
We’ll now discuss person–job fit and person–organization fit in more detail.
Person–Job Fit
The effort to match job requirements with personality characteristics is best
articulated in John Holland’s personality–job fit theory . 74 Holland presents
six personality types and proposes that satisfaction and the propensity to leave
a position depend on how well individuals match their personalities to a job.
Exhibit 5-5 describes the six types, their personality characteristics, and exam-
ples of the congruent occupations for each.
Holland developed the Vocational Preference Inventory questionnaire,
which contains 160 occupational titles. Respondents indicate which they like or
dislike, and their answers form personality profiles. Research strongly supports
the resulting hexagonal diagram shown in Exhibit 5-6 . 75 The closer two fields or
orientations are in the hexagon, the more compatible they are. Adjacent cate-
gories are quite similar, whereas diagonally opposite ones are highly dissimilar.
What does all this mean? The theory argues that satisfaction is highest and
turnover lowest when personality and occupation are in agreement. A realistic
person in a realistic job is in a more congruent situation than a realistic person in
an investigative job. A realistic person in a social job is in the most incongruent
situation possible. The key points of this model are that (1) there do appear to

Linking an Individual’s Personality and Values to the Workplace 149
be intrinsic differences in personality among individuals, (2) there are different
types of jobs, and (3) people in jobs congruent with their personality should
be more satisfied and less likely to voluntarily resign than people in incongru-
ent jobs. Evidence supports the value of assessing vocational interests in the
selection process, with a match between interests and job requirements predict-
ing job knowledge, performance, and low likelihood of turnover. 76
Type Personality Characteristics Congruent Occupations
Realistic: Prefers physical activities that Shy, genuine, persistent, stable, conforming, Mechanic, drill press operator,
require skill, strength, and coordination practical assembly-line worker, farmer
Investigative: Prefers activities that involve Analytical, original, curious, independent Biologist, economist, mathematician,
thinking, organizing, and understanding news reporter
Social: Prefers activities that involve Sociable, friendly, cooperative, understanding Social worker, teacher, counselor,
helping and developing others clinical psychologist
Conventional: Prefers rule-regulated, Conforming, efficient, practical, unimaginative, Accountant, corporate manager, bank
orderly, and unambiguous activities inflexible teller, file clerk
Enterprising: Prefers verbal activities Self-confident, ambitious, energetic, Lawyer, real estate agent, public
in which there are opportunities to domineering relations specialist, small business
influence others and attain power manager
Artistic: Prefers ambiguous and Imaginative, disorderly, idealistic, emotional, Painter, musician, writer, interior
unsystematic activities that allow impractical decorator
creative expression
Holland’s Typology of Personality and Congruent Occupations Exhibit 5-5
A
rtistic
(A
)
Rea
listi
c
(R)
Investigative(I)
Enterprising(E)
C
on
ve
nt
io
na
l
(C
)
Soc
ial
(S)
Relationships Among Occupational Personality Types
Source: Reprinted by special permission of the publisher, Psychological Assessment Resources, Inc., from Making Vocational Choices,
copyright 1973, 1985, 1992 by Psychological Assessment Resources, Inc. All rights reserved.
Exhibit 5-6
personality–job fit theory A theory
that identifies six personality types
and proposes that the fit between
personality type and occupational
environment determines satisfaction
and turnover.

150 CHAPTER 5 Personality and Values
As you might expect, Holland types relate to personality scales. One study
found individuals higher in openness to experience as children were more
likely to take jobs high on the investigative and artistic dimensions as adults,
and those higher in conscientiousness as children were more likely to work in
conventional jobs as adults. 77
Person–Organization Fit
We’ve noted that researchers have looked at matching people to organizations
as well as to jobs. If an organization faces a dynamic and changing environment
and requires employees able to readily change tasks and move easily between
teams, it’s more important that employees’ personalities fit with the overall
organization’s culture than with the characteristics of any specific job.
The person–organization fit essentially argues that people are attracted to
and selected by organizations that match their values, and they leave organiza-
tions that are not compatible with their personalities. 78 Using the Big Five termi-
nology, for instance, we could expect that people high on extraversion fit well
with aggressive and team-oriented cultures, that people high on agreeableness
match up better with a supportive organizational climate than one focused on
aggressiveness, and that people high on openness to experience fit better in or-
ganizations that emphasize innovation rather than standardization. 79 Following
these guidelines at the time of hiring should identify new employees who fit
better with the organization’s culture, which should, in turn, result in higher
employee satisfaction and reduced turnover. Research on person–organization
fit has also looked at whether people’s values match the organization’s culture.
This match predicts job satisfaction, commitment to the organization, and low
turnover. 80 Interestingly, some research found that person-organization fit was
more important in predicting turnover in a collectivistic nation (India) than in
a more individualistic nation (the United States). 81
8 Identify Hofstede’s five
value dimensions of national
culture.
One of the most widely referenced approaches for analyzing variations among
cultures was done in the late 1970s by Geert Hofstede. 82 He surveyed more than
116,000 IBM employees in 40 countries about their work-related values and found
that managers and employees vary on five value dimensions of national culture:
● Power distance. Power distance describes the degree to which people in a
country accept that power in institutions and organizations is distributed
unequally. A high rating on power distance means that large inequalities
of power and wealth exist and are tolerated in the culture, as in a class or
caste system that discourages upward mobility. A low power distance rat-
ing characterizes societies that stress equality and opportunity.
● Individualism versus collectivism. Individualism is the degree to which peo-
ple prefer to act as individuals rather than as members of groups and
believe in individual rights above all else. Collectivism emphasizes a tight
social framework in which people expect others in groups of which they
are a part to look after them and protect them.
● Masculinity versus femininity. Hofstede’s construct of masculinity is the
degree to which the culture favors traditional masculine roles such as
achievement, power, and control, as opposed to viewing men and women
as equals. A high masculinity rating indicates the culture has separate roles
International Values
MyManagementLab
For an interactive application of this
topic, check out this chapter’s
simulation activity at
www.mymanagementlab.com.

www.mymanagementlab.com

International Values 151
for men and women, with men dominating the society. A high femininity
rating means the culture sees little differentiation between male and fe-
male roles and treats women as the equals of men in all respects.
● Uncertainty avoidance. The degree to which people in a country pre-
fer structured over unstructured situations defines their uncertainty
avoidance . In cultures that score high on uncertainty avoidance, people
have an increased level of anxiety about uncertainty and ambiguity and
use laws and controls to reduce uncertainty. People in cultures low on
uncertainty avoidance are more accepting of ambiguity, are less rule ori-
ented, take more risks, and more readily accept change.
● Long-term versus short-term orientation. This newest addition to Hofstede’s
typology measures a society’s devotion to traditional values. People in a
culture with long-term orientation look to the future and value thrift, per-
sistence, and tradition. In a short-term orientation , people value the here
and now; they accept change more readily and don’t see commitments as
impediments to change.
How do different countries score on Hofstede’s dimensions? Exhibit 5-7
shows the ratings for the countries for which data are available. For example,
power distance is higher in Malaysia than in any other country. The United
States is very individualistic; in fact, it’s the most individualistic nation of all
(closely followed by Australia and Great Britain). The United States also tends
to be short term in orientation and low in power distance (people in the United
States tend not to accept built-in class differences between people). It is also
relatively low on uncertainty avoidance, meaning most adults are relatively tol-
erant of uncertainty and ambiguity. The United States scores relatively high on
masculinity; most people emphasize traditional gender roles (at least relative to
countries such as Denmark, Finland, Norway, and Sweden).
You’ll notice regional differences. Western and northern nations such as
Canada and the Netherlands tend to be more individualistic. Poorer countries
such as Mexico and the Philippines tend to be higher on power distance. South
American nations tend to be higher than other countries on uncertainty avoid-
ance, and Asian countries tend to have a long-term orientation.
Hofstede’s culture dimensions have been enormously influential on OB re-
searchers and managers. Nevertheless, his research has been criticized. First,
although the data have since been updated, the original work is more than
30 years old and was based on a single company (IBM). A lot has happened on
the world scene since then. Some of the most obvious changes include the fall
of the Soviet Union, the transformation of central and eastern Europe, the end
of apartheid in South Africa, and the rise of China as a global power. Second,
few researchers have read the details of Hofstede’s methodology closely and are
power distance A national culture
attribute that describes the extent to
which a society accepts that power
in institutions and organizations is
distributed unequally.
individualism A national culture
attribute that describes the degree to
which people prefer to act as individuals
rather than as members of groups.
collectivism A national culture attribute
that describes a tight social framework
in which people expect others in groups
of which they are a part to look after
them and protect them.
masculinity A national culture attribute
that describes the extent to which the
culture favors traditional masculine
work roles of achievement, power, and
control. Societal values are characterized
by assertiveness and materialism.
femininity A national culture attribute
that indicates little differentiation
between male and female roles; a high
rating indicates that women are treated
as the equals of men in all aspects of
the society.
uncertainty avoidance A national
culture attribute that describes
the extent to which a society
feels threatened by uncertain and
ambiguous situations and tries to
avoid them.
long-term orientation A national
culture attribute that emphasizes the
future, thrift, and persistence.
short-term orientation A national
culture attribute that emphasizes
the past and present, respect for
tradition, and fulfillment of social
obligations.

Power Distance
Individualism
versus Collectivism
Masculinity
versus Femininity
Uncertainty
Avoidance
Long- versus
Short-Term
Orientation
Country Index Rank Index Rank Index Rank Index Rank Index Rank
Argentina 49 35–36 46 22–23 56 20–21 86 10–15
Australia 36 41 90 2 61 16 51 37 31 22–24
Austria 11 53 55 18 79 2 70 24–25 31 22–24
Belgium 65 20 75 8 54 22 94 5–6 38 18
Brazil 69 14 38 26–27 49 27 76 21–22 65 6
Canada 39 39 80 4–5 52 24 48 41–42 23 30
Chile 63 24–25 23 38 28 46 86 10–15
Colombia 67 17 13 49 64 11–12 80 20
Costa Rica 35 42–44 15 46 21 48–49 86 10–15
Denmark 18 51 74 9 16 50 23 51 46 10
Ecuador 78 8–9 8 52 63 13–14 67 28
El Salvador 66 18–19 19 42 40 40 94 5–6
Finland 33 46 63 17 26 47 59 31–32 41 14
France 68 15–16 71 10–11 43 35–36 86 10–15 39 17
Germany 35 42–44 67 15 66 9–10 65 29 31 22–24
Great Britain 35 42–44 89 3 66 9–10 35 47–48 25 28–29
Greece 60 27–28 35 30 57 18–19 112 1
Guatemala 95 2–3 6 53 37 43 101 3
Hong Kong 68 15–16 25 37 57 18–19 29 49–50 96 2
India 77 10–11 48 21 56 20–21 40 45 61 7
Indonesia 78 8–9 14 47–48 46 30–31 48 41–42
Iran 58 29–30 41 24 43 35–36 59 31–32
Ireland 28 49 70 12 68 7–8 35 47–48 43 13
Israel 13 52 54 19 47 29 81 19
Italy 50 34 76 7 70 4–5 75 23 34 19
Jamaica 45 37 39 25 68 7–8 13 52
Japan 54 33 46 22–23 95 1 92 7 80 4
Korea (South) 60 27–28 18 43 39 41 85 16–17 75 5
Malaysia 104 1 26 36 50 25–26 36 46
Mexico 81 5–6 30 32 69 6 82 18
The Netherlands 38 40 80 4–5 14 51 53 35 44 11–12
New Zealand 22 50 79 6 58 17 49 39–40 30 25–26
Norway 31 47–48 69 13 8 52 50 38 44 11–12
Pakistan 55 32 14 47–48 50 25–26 70 24–25 0 34
Panama 95 2–3 11 51 44 34 86 10–15
Peru 64 21–23 16 45 42 37–38 87 9
Philippines 94 4 32 31 64 11–12 44 44 19 31–32
Portugal 63 24–25 27 33–35 31 45 104 2 30 25–26
Singapore 74 13 20 39–41 48 28 8 53 48 9
South Africa 49 35–36 65 16 63 13–14 49 39–40
Spain 57 31 51 20 42 37–38 86 10–15 19 31–32
Sweden 31 47–48 71 10–11 5 53 29 49–50 33 20
Switzerland 34 45 68 14 70 4–5 58 33 40 15–16
Taiwan 58 29–30 17 44 45 32–33 69 26 87 3
Thailand 64 21–23 20 39–41 34 44 64 30 56 8
Turkey 66 18–19 37 28 45 32–33 85 16–17
United States 40 38 91 1 62 15 46 43 29 27
Uruguay 61 26 36 29 38 42 100 4
Venezuela 81 5–6 12 50 73 3 76 21–22
Yugoslavia 76 12 27 33–35 21 48–49 88 8
Regions:
Arab countries 80 7 38 26–27 53 23 68 27
East Africa 64 21–23 27 33–35 41 39 52 36 25 28–29
West Africa 77 10–11 20 39–41 46 30–31 54 34 16 33
Scores range from 0 5 extremely low on dimension to 100 5 extremely high.
Note: 1 5 highest rank. LTO ranks: 1 5 China; 15–16 5 Bangladesh; 21 5 Poland; 34 5 lowest.
Source: Copyright Geert Hofstede BV, hofstede@bart.nl . Reprinted with permission.
Hofstede’s Cultural Values by Nation Exhibit 5-7
152

International Values 153
therefore unaware of the many decisions and judgment calls he had to make
(for example, reducing the number of cultural values to just five). Some re-
sults are unexpected. Japan, which is often considered a highly collectivist na-
tion, is considered only average on collectivism under Hofstede’s dimensions. 83
Despite these concerns, Hofstede has been one of the most widely cited social
scientists ever, and his framework has left a lasting mark on OB.
Recent research across 598 studies with more than 200,000 respondents has
investigated the relationship of cultural values and a variety of organizational
criteria at both the individual and national level of analysis. 84 Overall, the four
original culture dimensions were equally strong predictors of relevant outcomes,
meaning researchers and practicing managers need to think about culture ho-
listically and not just focus on one or two dimensions. Cultural values were more
strongly related to organizational commitment, citizenship behavior, and team-
related attitudes than were personality scores. On the other hand, personality was
more strongly related to behavioral criteria like performance, absenteeism, and
turnover. The researchers also found that individual scores were much better
predictors of most outcomes than assigning all people in a country the same cul-
tural values. In sum, this research suggests that Hofstede’s value framework may
be a valuable way of thinking about differences among people, but we should be
cautious about assuming all people from a country have the same values.
The GLOBE Framework for Assessing Cultures Begun in 1993, the Global
Leadership and Organizational Behavior Effectiveness (GLOBE) research
program is an ongoing cross-cultural investigation of leadership and national
culture. Using data from 825 organizations in 62 countries, the GLOBE team
identified nine dimensions on which national cultures differ. 85 Some—such
as power distance, individualism/collectivism, uncertainty avoidance, gender
differentiation (similar to masculinity versus femininity), and future orientation
Understanding differences in
values across cultures helps explain
the behavior of employees from
different countries. According to
Hofstede’s framework for assess-
ing cultures, China, like all Asian
nations, ranks high in long-term
orientation. China also ranks high in
power distance, where the inequal-
ity of power and wealth within
the country is accepted by citizens
as part of their cultural heritage.
Ranking low in individualism, China
has a strong collectivist culture that
fosters relationships where every-
one takes responsibility for group
members. Using these and other
ratings can help organizations con-
sidering doing business in China to
predict the behavior of employees
shown here at a glassware factory.
So
ur
ce
: I
m
ag
in
ec
hi
na
v
ia
A
P
Im
ag
es
.

154 CHAPTER 5 Personality and Values
(similar to long-term versus short-term orientation)—resemble the Hofstede
dimensions. The main difference is that the GLOBE framework added dimen-
sions, such as humane orientation (the degree to which a society rewards in-
dividuals for being altruistic, generous, and kind to others) and performance
orientation (the degree to which a society encourages and rewards group mem-
bers for performance improvement and excellence).
Which framework is better? That’s hard to say, and each has its adherents.
We give more emphasis to Hofstede’s dimensions here because they have stood
the test of time and the GLOBE study confirmed them. However, researchers
continue to debate the differences between them, and future studies may favor
the more nuanced perspective of the GLOBE study. 86
MyManagementLab
Now that you have finished this chapter, go back to www.mymanagementlab.com to continue
practicing and applying the concepts you’ve learned.
Personality What value, if any, does the Big Five model provide to managers?
From the early 1900s through the mid-1980s, researchers sought a link between
personality and job performance. “The outcome of those 80-plus years of re-
search was that personality and job performance were not meaningfully related
across traits or situations.” 87 However, the past 20 years have been more promis-
ing, largely due to the findings about the Big Five.
● Screening job candidates for high conscientiousness—as well as the other
Big Five traits, depending on the criteria an organization finds most
important—should pay dividends. Of course, managers still need to take
situational factors into consideration. 88
● Factors such as job demands, the degree of required interaction with
others, and the organization’s culture are examples of situational variables
that moderate the personality–job performance relationship.
● You need to evaluate the job, the work group, and the organization to
determine the optimal personality fit.
● Other traits, such as core self-evaluation or narcissism, may be relevant in
certain situations, too.
● Although the MBTI has been widely criticized, it may have a place in
organizations. In training and development, it can help employees better
understand themselves, help team members better understand each other,
and open up communication in work groups and possibly reduce conflicts.
Values Why is it important to know an individual’s values? Values often un-
derlie and explain attitudes, behaviors, and perceptions. So knowledge of an
individual’s value system can provide insight into what makes the person “tick.”
● Employees’ performance and satisfaction are likely to be higher if their val-
ues fit well with the organization. The person who places great importance
on imagination, independence, and freedom is likely to be poorly matched
with an organization that seeks conformity from its employees.
Summary and Implications for Managers

www.mymanagementlab.com

Summary and Implications for Managers 155
Millennials Are More Narcissistic
POINT COUNTERPOINT
S
peaking of music, this argument is like a broken record
that seems to play over and over: “THE YOUTH OF
TODAY ARE LOST!” Every generation tends to think the
new generation is without values, and the new generation
thinks the older generation is hopelessly judgmental and out
of touch. Wasn’t the “Me generation” supposedly a genera-
tion ago? Let’s send the broken record to the recycling bin and
review the evidence.
One recent study that tracked nearly half a million young
people on measures of egotistic traits such as self-perceived
intelligence, self-esteem, and self-enhancement found
little evidence to suggest changes since the 1970s. In short,
Millennials aren’t any more narcissistic than young people
were in the 1970s or 1980s. The authors of this study conclude,
“Today’s youth seem no more egotistical than previous
generations . . . In fact, today’s youth seem to have psycho-
logical profiles that are remarkably similar to youth from the
past 30 years.”
Another study offered an interesting explanation for why
people think Millennials are more narcissistic. Specifically, young
people in general are more self-focused, but as people age,
they become more “other” focused. So we think young people
are different when in fact they’re just the way older folks were
when they were younger. As these authors conclude, “Every
generation is Generation Me.” Our level of narcissism appears to
be one of the many things that change as we get older.
More broadly, narcissistic folks exist in every generation.
We need to be careful when generalizing about entire groups
(whether one sex, one race, one culture, or one generation).
While generalizations have caused no small amount of trouble,
we still like to simplify the world, sometimes for good reason.
In this case, however, the good reason isn’t there, especially
considering the latest evidence.
T
hose in college today have many good qualities: they are
more technologically savvy, more socially tolerant, and
more balanced in their work and family priorities than
previous generations. Thus, those poised to enter the workforce
today do so with some important virtues. Humility, however, is
not one of them.
A large-scale, longitudinal study found that those graduating
from college in 2010 were more likely than those from previous
generations to have seemingly inflated views of themselves.
The 2010 graduates were more likely than 1980 graduates to
agree they would be “very good” spouses (56 percent of 2010
graduates, compared to 37 percent among 1980 graduates),
parents (54 percent of 2010 graduates, 36 percent among 1980
graduates), and workers (65 percent of 2010 graduates, 49 per-
cent among 1980 graduates).
Studies measuring narcissism suggests that scores are ris-
ing, especially among younger generations. For example, by
presenting a choice between two statements—“I try not to be a
show-off” versus “I will usually show off if I get the chance”—
psychologists have found that narcissism has been growing
since the early 1980s.
A 2011 study by University of Kentucky researcher Dr. Nathan
DeWall even found that popular songs are becoming more
narcissistic. Analyzing the lyrics of songs on the Billboard Hot
100 Chart from 1980 to 2007, DeWall found a clear trend toward
narcissism. The words “I” and “me” have replaced “we” and
“us.” Two recent examples: “I’m bringing sexy back. Yeah. Them
other boys don’t know how to act. Yeah” (Justin Timberlake), and
“I am the greatest man that ever lived. I was born to give and give
and give” (Weezer).
Narcissism’s rise is all around us. The sooner we admit it,
the sooner we can begin to address the problem in families, in
education, and at work.
Sources: N. Wolchover, “Song Lyrics Suggest Narcissism Is on the Rise,” LiveScience (April, 26, 2011), downloaded May 16,
2011, from www.livescience.com ; M. Norris, “Study: Narcissism on Rise in Pop Lyrics,” All Things Considered (April 26, 2011),
downloaded May 15 from www.npr.org/ ; K. H. Trzesniewski and M. B. Donnellan, “Rethinking ‘Generation Me’: A Study
of Cohort Effects from 1976–2006,” Perspectives on Psychological Science 5, no. 1 (2010), pp. 58–75; and B. W. Roberts,
G. Edmonds, and E. Grijalva, “It Is Developmental Me, Not Generation Me: Developmental Changes Are More Important Than
Generational Changes in Narcissism—Comment on Trzesniewski & Donnellon (2010),” Perspectives on Psychological Science
5, No. 1 (2010), pp. 97–102.

www.livescience.com

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156 CHAPTER 5 Personality and Values
● Managers are more likely to appreciate, evaluate positively, and allocate
rewards to employees who fit in, and employees are more likely to be sat-
isfied if they perceive they do fit in. This argues for management to seek
job candidates who have not only the ability, experience, and motivation
to perform but also a value system compatible with the organization’s.
1 What is personality? How do we typically measure it?
What factors determine personality?
2 What is the Myers-Briggs Type Indicator (MBTI), and
what does it measure?
3 What are the Big Five personality traits?
4 How do the Big Five traits predict work behavior?
5 Besides the Big Five, what other personality traits are
relevant to OB?
6 What are values, why are they important, and what is
the difference between terminal and instrumental values?
7 Do values differ across generations? How so?
8 Do values differ across cultures? How so?
QUESTIONS FOR REVIEW
EXPERIENTIAL EXERCISE What Organizational Culture Do You Prefer?
The Organizational Culture Profile (OCP) can help assess
whether an individual’s values match the organization’s. 89
The OCP helps individuals sort their characteristics in
terms of importance, which indicates what a person
values.
1. Working on your own, complete the OCP found at
www.jstor.org/stable/256404 .
2. Your instructor may ask you the following questions
individually or as a group of three or four students
(with a spokesperson appointed to speak to the class
for each group):
a. What were your most preferred and least preferred
values? Do you think your most preferred and least
preferred values are similar to those of other class
or group members?
b. Do you think there are generational differences in
the most preferred and least preferred values?
c. Research has shown that individuals tend to be
happier, and perform better, when their OCP
values match those of their employer. How impor-
tant do you think a “values match” is when you’re
deciding where you want to work?
ETHICAL DILEMMA Freedom or Lack of Commitment?
Lifelong commitment to one employer is a thing of the
past. An analysis by Princeton economist Henry Farber
revealed that the percentage of private-sector employees
who remained with the same employer for 10 or more
years has dropped from 50 percent in 1973 to less than
35  percent today. Those with 20 or more years with the
same employer dropped from 35 percent to 20 percent.
To be sure, some of this movement is employer-driven.
Lifetime job security is long gone for most positions. So are
benefit packages that would keep employees secure, such as
rock-solid pensions and generous health benefits. But does
a generational shift in values also explain the drop?
According to Pew Research, 66 percent of Millennials
say they want to switch careers some time in their life,
while 62 percent of Generation X members and 84 per-
cent of Baby Boomers say they would prefer to stay at their
current job for the rest of their lives. Another study sug-
gested that while 64 percent of Baby Boomers “really care
about the fate” of their organization, this figure is only
47  percent for Millennials. Yet another study indicated
that two-thirds of Millennials had plans to move or “surf”
from one job to another as a means of gaining desired
skills and increasing their pay.
One Millennial, Rebecca Thorman, notes that mobility
makes sense only because if you aren’t mobile, you limit
your options. She says you can’t expect your pay to grow
“by staying at the same job . . . You just can’t.”

www.jstor.org/stable/256404

Case Incident 1 157
These values don’t sit well with some employers. “We
prefer long tenured employees who have stuck with us
and been loyal,” says Dave Foster, CEO of AvreaFoster,
an advertising agency in Dallas. “It appears that a lot of
Millennials don’t think that one path is the answer. This is
a problem because the commitment isn’t there.”
To attitudes like that, Thorman retorts, “We’re not
going to settle.”
Questions
1. In your experience, do younger individuals differ
from older individuals in their plans to remain with
one employer for a long time? Do you think these
differences, if you believe they exist, are due to shift-
ing economic realities or to changing work values?
2. Do you think you should feel free to “job surf”—
purposely moving from job to job as soon as the desire
strikes? Do you think employers have a right to ask
about “job surfing” plans when they interview you?
3. If you had an interview with Foster or someone with
his views of Millennials, how might you combat his
preconceptions?
Sources: S. Collins, “Millennials Take on the Workforce,” SHIFT Magazine (May 3, 2011), downloaded
May 12, 2011, from www.smudailymustang.com ; and R. Wartzman, “Generation Mobility,” Los Angeles
Times (July 16, 2010), downloaded May 12, 2011, from www.dailytidings.com/ .
CASE INCIDENT 1 Is There a Price for Being Too Nice?
Agreeable people tend to be kinder and more accommo-
dating in social situations, which you might think could
add to their success in life. However, we’ve already noted
that one downside of agreeableness is potentially lower
earnings. We’re not sure why this is so, but agreeable indi-
viduals may be less aggressive in negotiating starting sala-
ries and pay raises.
Yet there is clear evidence that agreeableness is some-
thing employers value. Several recent books argue in fa-
vor of “leading with kindness” (Baker & O’Malley, 2008)
and “capitalizing on kindness” (Tillquist, 2008). Other
articles in the business press have argued that the sensi-
tive, agreeable CEO—such as GE’s Jeffrey Immelt and
Boeing’s James McNerney—signals a shift in business cul-
ture (Brady, 2007). In many circles, individuals desiring
success in their careers are exhorted to be “complimen-
tary,” “kind,” and “good” (for example, Schillinger, 2007).
Take the example of 500-employee Lindblad
Expeditions. It emphasizes agreeableness in its hiring deci-
sions. The VP of HR commented, “You can teach people
any technical skill, but you can’t teach them how to be a
kindhearted, generous-minded person with an open spirit.”
So, while employers want agreeable employees, agree-
able employees are not better job performers, and they
are less successful in their careers. We might explain this
apparent contradiction by noting that employers value
agreeable employees for other reasons: they are more
pleasant to be around, and they may help others in ways
that aren’t reflected in their job performance. Most evi-
dence suggests that agreeable people like agreeable peo-
ple, which you might expect because people like those
who are similar to themselves. However, even disagree-
able people like agreeable people, perhaps because they
are easier to manipulate than individuals who are lower in
agreeableness. Perhaps everyone wants to hire agreeable
people just because everyone likes to be around them.
Moreover, a 2008 study of CEO and CEO candidates
revealed that this contradiction applies to organizational
leaders as well. Using ratings made by an executive search
firm, researchers studied the personalities and abilities
of 316 CEO candidates for companies involved in buyout
and venture capital transactions. They found that what
gets a CEO candidate hired is not what makes him or her
effective. Specifically, CEO candidates who were rated
high on “nice” traits such as respecting others, develop-
ing others, and teamwork were more likely to be hired.
However, these same characteristics—especially teamwork
and respecting others for venture capital CEOs—made
the organizations they led less successful.

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158 CHAPTER 5 Personality and Values
agreeableness is an important virtue? And in which it
is harmful?
3. In some research we’ve conducted, we’ve found that
the negative effects of agreeableness on earnings
is stronger for men than for women (that is, being
agreeable hurt men’s earnings more than women’s).
Why do you think this might be the case?
Questions
1. Do you think there is a contradiction between what
employers want in employees (agreeable employees)
and what employees actually do best (disagreeable
employees)? Why or why not?
2. Often, the effects of personality depend on the situ-
ation. Can you think of some job situations in which
Sources: A. M. Grant, F. Gino, and D. A. Hofman, “The Hidden Advantages of Quiet Bosses,” Harvard
Business Review (December 2010), p. 28; B. O’Keefe and D. Burke, “Meet the CEO of the Biggest
Company on Earth,” Fortune (September 27, 2010), pp. 80–94; and J. S. Lubin, “Introverted Execs Find
Ways to Shine,” The Wall Street Journal (April 14, 2011), online.wsj.com .
CASE INCIDENT 2 Leadership from an Introvert’s Perspective
When people think of a stereotypical leader, they often
conjure up the image of a dynamic public speaker, a force-
ful and dominant personality, and someone who can cul-
tivate relationships with a broad number of people. These
are all hallmarks of the extroverted personality type, so it’s
often been the case that extroverts rise to leadership posi-
tions more readily than introverts.
However, some question whether the social dominance
and ability to command attention shown by extraverts
might make them less effective leaders in certain ways.
In particular, extroverts may be less likely to take advice
from followers. One study investigated how quickly groups
of college students could fold shirts in 10 minutes. Each
group had a leader who was cued to be either extroverted
or introverted. The introverted leaders took more advice
from their proactive followers, and this led the groups
with introverted leaders to be more effective. Thus, even
though there are cases where introverts are less success-
ful as leaders, in some conditions they are more effective.
Others note that introverted leaders can be better than
extroverts at one-on-one interactions, empathy, and delib-
erate decision making.
Are there business executives who break the extroverted
leader mold? One is Google co-founder Larry Page, well-
known for developing a small number of close relation-
ships and being an excellent listener. Colgate-Palmolive
chief Ian Cook might feel uncomfortable in front of large
groups of people he doesn’t know, but he has learned to
partner with more extroverted colleagues for presenta-
tions to offset his natural shyness. Wal-Mart Stores CEO
Mike Duke is famously low-key and reserved, but he has
utilized his natural introvert skills of managing details and
engineering solutions to maintain the retail giant’s domi-
nant market position. These examples show that although
extroverts might get all the attention, introverts can still
make effective leaders.
Questions
1. Are you more of an introverted or extraverted leader?
What can you do to leverage your personality to be a
more effective leader?
2. Under what conditions do you think extraverts make
more effective leaders than introverts? What unique
abilities of introverts could make them more effective
in some situations?
3. The case describes some problems introverts might
have in leadership situations. What techniques might
they employ to help them overcome these?
4. What types of developmental experiences do you
think would be especially valuable for introverted
leaders?
Sources: T. A. Judge, B. A. Livingston, and C. Hurst, “Do Nice Guys—and Gals—Really Finish Last? The
Joint Effects of Sex and Agreeableness on Earnings,” working paper, University of Florida (2009); S. N.
Kaplan, M. M. Klebanov, and M. Sorensen, “Which CEO Characteristics and Abilities Matter?” work-
ing paper, University of Chicago Graduate School of Business (2008), faculty.chicagobooth.edu/steven
.kaplan/research/kks ; W. F. Baker and M. O’Malley, Leading with Kindness: How Good People
Consistently Get Superior Results (New York: AMACOM, 2008); K. Tillquist, Capitalizing on Kindness: When
21st Century Professionals Need to Be Nice (Pompton Plains, NJ: Career Press, 2008); D. Brady, “Being Mean
Is So Last Millennium,” BusinessWeek (January 15, 2007), p. 61; and L. Schillinger, “Nice and Ambitious:
Either, Neither, or Both?” The New York Times (January 14, 2007), p. 1.

Endnotes 159
ENDNOTES
1. G. W. Allport, Personality: A Psychological Interpretation (New
York: Holt, Rinehart & Winston, 1937), p. 48. For a brief
critique of current views on the meaning of personal-
ity, see R.  T. Hogan and B. W. Roberts, “Introduction:
Personality and Industrial and Organizational Psychology,”
in B. W. Roberts and R. Hogan (eds.), Personality Psychology
in the Workplace (Washington, DC: American Psychological
Association, 2001), pp. 11–12.
2. K. I. van der Zee, J. N. Zaal, and J. Piekstra, “Validation of
the Multicultural Personality Questionnaire in the Context
of Personnel Selection,” European Journal of Personality 17,
Supl. 1 (2003), pp. S77–S100.
3. S. A. Birkeland, T. M. Manson, J. L. Kisamore, M. T. Brannick,
and M. A. Smith, “A Meta-Analytic Investigation of Job
Applicant Faking on Personality Measures,” International Journal
of Selection and Assessment 14, no. 14 (2006), pp. 317–335.
4. T. A. Judge, C. A. Higgins, C. J. Thoresen, and M. R. Barrick,
“The Big Five Personality Traits, General Mental Ability, and
Career Success Across the Life Span,” Personnel Psychology 52,
no. 3 (1999), pp. 621–652; I. Oh, G. Wang, and M. K. Mount,
“Validity of Observer Ratings of the Five-Factor Model
of Personality Traits: A Meta-Analysis,” Journal of Applied
Psychology 96, No. 4 (2011), pp. 762-773.
5. See R. Illies, R. D. Arvey, and T. J. Bouchard, “Darwinism,
Behavioral Genetics, and Organizational Behavior: A Review
and Agenda for Future Research,” Journal of Organizational
Behavior 27, no. 2 (2006), pp. 121–141; and W. Johnson,
E. Turkheimer, I. I. Gottesman, and T. J. Bouchard, Jr.,
“Beyond Heritability: Twin Studies in Behavioral Research,”
Current Directions in Psychological Science 18, no. 4 (2009),
pp. 217–220.
6. S. Srivastava, O. P. John, and S. D. Gosling, “Development
of Personality in Early and Middle Adulthood: Set Like
Plaster or Persistent Change?” Journal of Personality and Social
Psychology 84, no. 5 (2003), pp. 1041–1053; and B. W. Roberts,
K. E. Walton, and W. Viechtbauer, “Patterns of Mean-Level
Change in Personality Traits Across the Life Course: A Meta-
Analysis of Longitudinal Studies,” Psychological Bulletin 132,
no. 1 (2006), pp. 1–25.
7. S. E. Hampson and L. R. Goldberg, “A First Large Cohort
Study of Personality Trait Stability Over the 40 Years Between
Elementary School and Midlife,” Journal of Personality and
Social Psychology 91, no. 4 (2006), pp. 763–779.
8. See A. H. Buss, “Personality as Traits,” American Psychologist
44, no. 11 (1989), pp. 1378–1388; R. R. McCrae, “Trait
Psychology and the Revival of Personality and Culture
Studies,” American Behavioral Scientist 44, no. 1 (2000),
pp. 10–31; and L. R. James and M. D. Mazerolle, Personality
in Work Organizations (Thousand Oaks, CA: Sage, 2002).
9. See, for instance, G. W. Allport and H. S. Odbert, “Trait
Names, A Psycholexical Study,” Psychological Monographs,
no. 47 (1936); and R. B. Cattell, “Personality Pinned Down,”
Psychology Today (July 1973), pp. 40–46.
10. R. B. Kennedy and D. A. Kennedy, “Using the Myers-Briggs
Type Indicator in Career Counseling,” Journal of Employment
Counseling 41 , no. 1 (2004), pp. 38–44.
11. See, for instance, D. J. Pittenger, “Cautionary Comments
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or Artifact?” Journal of Personality Assessment 78 , no. 1
(2002), pp.  176–186; R. M. Capraro and M. M. Capraro,
“Myers-Briggs Type Indicator Score Reliability Across
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Educational  & Psychological Measurement 62 , no. 4 (2002),
pp. 590–602; and R. C. Arnau, B. A. Green, D. H. Rosen, D.
H. Gleaves, and J.  G. Melancon, “Are Jungian Preferences
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12. See, for example, I. Oh, G. Wang, and M. K. Mount,
“Validity of Observer Ratings of the Five-Factor Model
of Personality Traits: A Meta-Analysis,” Journal of Applied
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(2005), pp. 359–372.
13. W. Fleeson and P. Gallagher, “The Implications of Big Five
Standing for the Distribution of Trait Manifestation in
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Model of Personality and Managerial Performance: Validity
Gains Through the Use of 360 Degree Performance
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and Job Performance: The Big Five Revisited,” Journal of
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M. R. Barrick and M. K. Mount, “Select on Conscientiousness
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15. M. K. Mount, M. R. Barrick, and J. P. Strauss, “Validity of
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of Applied Psychology 79, no. 2 (1994), p. 272. Additionally
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and Job Performance: The Big Five Revisited”; and Oh and
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16. A. E. Poropat, “A Meta-Analysis of the Five-Factor Model
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17. A. M. Cianci, H. J. Klein, and G. H. Seijts, “The Effect
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18. H. Le, I. Oh, S. B. Robbins, R. Ilies, E. Holland, and P. Westrick,
“Too Much of a Good Thing: Curvilinear Relationships

160 CHAPTER 5 Personality and Values
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Changing Task Contexts: Effects of General Cognitive
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26. See, for instance, S. Yamagata, A. Suzuki, J. Ando, Y. Ono,
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Human Personality Universal? A Cross-Cultural Twin
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Personality and Social Psychology 90, no. 6 (2006), pp. 987–998;
H. C. Triandis and E. M. Suh, “Cultural Influences
on Personality,” Annual Review of Psychology 53, no. 1
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et al., “Consensual Validation of Personality Traits Across
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Philippines,” American Behavioral Scientist 44, no. 1, (2000),
pp. 73–94.
28. J. F. Salgado, “The Five Factor Model of Personality and
Job Performance in the European Community,” Journal of
Applied Psychology 82, no. 1 (1997), pp. 30–43.
29. T. A. Judge and J. E. Bono, “A Rose by Any Other Name
. . . Are Self-Esteem, Generalized Self-Efficacy, Neuroticism,
and Locus of Control Indicators of a Common Construct?”
in B. W. Roberts and R. Hogan (eds.), Personality Psychology
in the Workplace (Washington, DC: American Psychological
Association, 2001), pp. 93–118.
30. A. Erez and T. A. Judge, “Relationship of Core Self-Evaluations
to Goal Setting, Motivation, and Performance,” Journal of
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31. A. N. Salvaggio, B. Schneider, L. H. Nishi, D. M. Mayer,
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Service Quality Orientation, and Service Climate: Test of
a Model,” Journal of Applied Psychology 92, no. 6 (2007),
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Core Self-Evaluations to Trajectories in Attaining Work
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32. A. M. Grant and A. Wrzesniewksi, “I Won’t Let You Down
. . . or Will I? Core Self-Evaluations, Other-Orientation,
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33. U. Malmendier and G. Tate, “CEO Overconfidence and
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34. R. Sandomir, “Star Struck,” The New York Times (January 12,
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36. J. J. Dahling, B. G. Whitaker, and P. E. Levy, “The
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Relationship between Narcissism and Attributions of Leader
Charisma,” Personnel Psychology 63, no. 3 (2010), pp. 509–537;
and T. A. Judge, R. F. Piccolo, and T. Kosalka, “The Bright
and Dark Sides of Leader Traits: A Review and Theoretical
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39. M. Maccoby, “Narcissistic Leaders: The Incredible Pros,
the Inevitable Cons,” The Harvard Business Review (January–
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NarLeaders.shtml .
40. W. K. Campbell and C. A. Foster, “Narcissism and
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Endnotes 161
41. T. A. Judge, J. A. LePine, and B. L. Rich, “The Narcissistic
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42. C. J. Resick, D. S. Whitman, S. M. Weingarden,  and
N. J. Hiller, “The Bright-Side and Dark-Side of CEO
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43. See M. Snyder, Public Appearances/Private Realities: The
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44. F. J. Flynn and D. R. Ames, “What’s Good for the Goose
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Dyadic Conflicts,” Journal of Applied Psychology 91, no.  2
(2006), pp. 272–281; and Snyder, Public Appearances/
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45. D. V. Day, D. J. Shleicher, A. L. Unckless, and N. J. Hiller,
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46. H. Oh and M. Kilduff, “The Ripple Effect of Personality
on Social Structure: Self-monitoring Origins of Network
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47. E. Reeve, “A History of Donald Trump’s Net Worth Publicity,”
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49. I. L. Janis and L. Mann, Decision Making: A Psychological
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N. S. Raju, “Risk Propensity Differences Between
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55. Crant, “Proactive Behavior in Organizations,” p. 436.
56. See, for instance, R. C. Becherer and J. G. Maurer,
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58. B. M. Meglino and M. A. Korsgaard, “Considering Situational
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59. M. A. Korsgaard, B. M. Meglino, S. W. Lester, and S. S. Jeong,
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60. Grant and Wrzesniewski, “I Won’t Let You Down . . .
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61. M. Rokeach, The Nature of Human Values (New York: The
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62. M. Rokeach and S. J. Ball-Rokeach, “Stability and
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pp. 913–929.

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162 CHAPTER 5 Personality and Values
63. S. Roccas, L. Sagiv, S. H. Schwartz, and A. Knafo, “The
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64. See, for instance, B. M. Meglino and E. C. Ravlin, “Individual
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65. Rokeach, The Nature of Human Values, p. 6.
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67. Frederick and Weber, “The Values of Corporate Managers
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68. Ibid., p. 132.
69. See, for example, N. R. Lockwood, F. R. Cepero, and
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71. B. Hite, “Employers Rethink How They Give Feedback,” The
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74. J. L. Holland, Making Vocational Choices: A Theory of Vocational
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75. See, for example, J. L. Holland and G. D. Gottfredson,
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76. C. H. Van Iddekinge, D. J. Putka, and J. P. Campbell,
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77. S. A. Woods and S. E. Hampson, “Predicting Adult
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78. See B. Schneider, H. W. Goldstein, and D. B. Smith, “The
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79. Based on T. A. Judge and D. M. Cable, “Applicant Personality,
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82. G. Hofstede, Cultures and Organizations: Software of the Mind
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83. G. Ailon, “Mirror, Mirror on the Wall: Culture’s Consequences
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of Culture’s Consequences: A Three-Decade, Multilevel,

Endnotes 163
Meta-Analytic Review of Hofstede’s Cultural Value
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85. M. Javidan and R. J. House, “Cultural Acumen for the Global
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86. P. C. Early, “Leading Cultural Research in the Future:
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Versus Respondents’ Minds,” Journal of International
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M. Javidan, R. J. House, P. W. Dorfman, P. J. Hanges,
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89. B. Adkins and D. Caldwell, “Firm or Subgroup Culture:
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Person–Organization Fit: The Impact of Socialization Tactics
on Perceived and Actual P–O Fit,” European Journal of Work &
Organizational Psychology 13, no. 1 (2004), pp.  52–78; and
C. A. O’Reilly, 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. 487–516.

DO MACHINES MAKE BETTER DECISIONS?
164
H
edge fund managers are unlike other people in ways that are fairly
obvious. Typically, they are unusually quantitatively oriented and
not made uncomfortable with the thought of losing thousands or
even millions of dollars on a bet gone bad. Their careers may rise or fall based
on factors over which they have little control.
Even in this unusual group, Spencer Greenberg is unusual. Only 27, he is
chief executive and co-chair of a Manhattan investment firm. After graduat-
ing from Columbia Business School, Greenberg founded Rebellion Research
Technologies with two other recent Amherst College graduates (Alexander
Fleiss and Jonathan Sturges) and another partner (Jeremy Newton) who was
still in college. Greenberg and his compatriots are, of course, very young to
be leading a New York investment firm. What is even more interesting is the
way they’re doing it.
All investment bankers and hedge fund managers are comfortable with
analytics. What makes Rebellion unusual is the degree to which the firm has
taken them. The firm uses computers to actually make buy, sell, or hold de-
cisions and to learn from its mistakes. “It’s pretty clear that human beings
aren’t improving,” says Greenberg. “But computers and algorithms are only
getting more robust.”
Based on the returns Rebellion has been able to generate, other com-
panies, including Cerebellum Capital and RGM Advisors, have followed
suit. The computers outperform humans, their advocates say, because
they can crunch numbers more quickly, “learn” what works, and adapt
more readily and objectively. Rebellion’s program analyzes more than
a decade of financial activity and the latest market results to evaluate
stocks. When buy, sell, or hold decisions stop working, the computer ad-
justs by automatically incorporating new information. Rebellion’s leaders
have faith in their artificial intelligence (AI). “I’ve learned not to question
the AI,” says Fleiss.
Machines are not only taking over financial decision making. From
flying airplanes to making medical decisions to running nuclear power
plants, computers are gradually supplanting and even replacing human
judgment.
Not everyone is convinced that AI always improves on human judg-
ment and decision making. Some argue that reliance on computers makes
complex systems more susceptible to errors because no computer can antic-
ipate every scenario, and humans function less well as the passive monitors
LEARNING
OBJECTIVES
After studying this chapter,
you should be able to:
1 Define perception and
explain the factors that
influence it.
2 Explain attribution
theory and list the three
determinants of attribution.
3 Identify the shortcuts
individuals use in making
judgments about others.
4 Explain the link between
perception and decision
making.
5 Apply the rational model
of decision making and
contrast it with bounded
rationality and intuition.
6 List and explain the common
decision biases or errors.
7 Explain how individual
differences and organiza-
tional constraints affect
decision making.
8 Contrast the three ethical
decision criteria.
9 Define creativity and discuss
the three-component
model of creativity.
MyManagementLab
Access a host of interactive
learning aids to help strengthen
your understanding of the
chapter concepts at
www.mymanagementlab.com.

www.mymanagementlab.com

Perception
and Individual
Decision Making 6
Indecision may or may not
be my problem.
—Jimmy Buffett
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166 CHAPTER 6 Perception and Individual Decision Making
S A L
SELF-ASSESSMENT LIBRARY
into which AI makes them. Says an observer of one complex system—airline
piloting, “When the person has no role in the task, there’s a much greater risk of
complacency.”
Sources: A. Shell, “Wall Street Traders Mine Tweets to Gain a Trading Edge,” USA Today (May 4,
2011), downloaded May 23, 2011, from www.usatoday.com/money/ ; “Soon, Your Computer Will
Have Emotions Like You,” The Economic Times (April 20, 2011), downloaded May 23, 2011, from
http://articles.economictimes.indiatimes.com ; S. Patterson, “Letting the Machines Decide,” The
Wall Street Journal (July 14, 2010), p. C1; and C. Negroni, “As Attention Wanders, Second Thoughts
About the Autopilot,” The New York Times (May 18, 2010), pp. B1, B5.
T he preceding example illustrates some of the issues that arise when people look for techniques to improve their decision making. One reason some like computerized decision making is that human decision makers can be
incorrect or biased in many ways. This chapter will review some of these biases
in human decision making, but it also explores how human decision makers
can outperform machines, especially in the area of creativity. The Case Incident 1
(at the end of the chapter) considers computerized decision making further.
In the following Self-Assessment Library, consider one perception—that of
appropriate gender roles.
What Are My Gender Role Perceptions?
In the Self-Assessment Library (available on CD or online), take assessment IV.C.2
(What Are My Gender Role Perceptions?) and answer the following questions.
1. Did you score as high as you thought you would?
2. Do you think a problem with measures like this is that people aren’t honest
in responding?
3. If others, such as friends, classmates, and family members, rated you, would
they rate you differently? Why or why not?
4. Research has shown that people’s gender role perceptions are becoming less
traditional over time. Why do you suppose this is so?
Perception is a process by which individuals organize and interpret their
sensory impressions in order to give meaning to their environment. However,
what we perceive can be substantially different from objective reality. For
example, all employees in a firm may view it as a great place to work—favorable
working conditions, interesting job assignments, good pay, excellent benefits,
understanding and responsible management—but, as most of us know, it’s very
unusual to find such agreement.
Why is perception important in the study of OB? Simply because people’s
behavior is based on their perception of what reality is, not on reality itself. The
world as it is perceived is the world that is behaviorally important.
1 Define perception and
explain the factors that
influence it.
What Is Perception?

www.usatoday.com/money/

http://articles.economictimes.indiatimes.com

What Is Perception? 167
Factors That Influence Perception
How do we explain the fact that individuals may look at the same thing yet
perceive it differently? A number of factors operate to shape and sometimes
distort perception. These factors can reside in the perceiver; in the object, or
target, being perceived; or in the context of the situation in which the perception
is made (see Exhibit 6-1 ).
When you look at a target and attempt to interpret what you see, your
interpretation is heavily influenced by your personal characteristics—your at-
titudes, personality, motives, interests, past experiences, and expectations. For
instance, if you expect police officers to be authoritative or young people to be
lazy, you may perceive them as such, regardless of their actual traits.
Characteristics of the target also affect what we perceive. Loud people are more
likely to be noticed in a group than quiet ones. So, too, are extremely attractive or
unattractive individuals. Because we don’t look at targets in isolation, the relation-
ship of a target to its background also influences perception, as does our tendency
to group close things and similar things together. We often perceive women, men,
Whites, African Americans, Asians, or members of any other group that has clearly
distinguishable characteristics as alike in other, unrelated ways as well.
Context matters too. The time at which we see an object or event can influ-
ence our attention, as can location, light, heat, or any number of situational
factors. At a nightclub on Saturday night, you may not notice a young guest
“dressed to the nines.” Yet that same person so attired for your Monday morn-
ing management class would certainly catch your attention (and that of the
rest of the class). Neither the perceiver nor the target has changed between
Saturday night and Monday morning, but the situation is different.
perception A process by which
individuals organize and interpret their
sensory impressions in order to give
meaning to their environment.
Factors That Influence Perception Exhibit 6-1
Perception
• Attitudes
• Motives
• Interests
• Experience
• Expectations
Factors in the perceiver
Factors in the target
• Novelty
• Motion
• Sounds
• Size
• Background
• Proximity
• Similarity
Factors in the situation
• Time
• Work setting
• Social setting

168 CHAPTER 6 Perception and Individual Decision Making
Now we turn to the application of perception concepts most relevant to
OB— person perception, or the perceptions people form about each other.
Attribution Theory
Nonliving objects such as desks, machines, and buildings are subject to the laws
of nature, but they have no beliefs, motives, or intentions. People do. That’s why
when we observe people, we attempt to explain why they behave in certain ways.
Our perception and judgment of a person’s actions, therefore, will be significantly
influenced by the assumptions we make about that person’s internal state.
Attribution theory tries to explain the ways in which we judge people
differently, depending on the meaning we attribute to a given behavior. 1 It
suggests that when we observe an individual’s behavior, we attempt to deter-
mine whether it was internally or externally caused. That determination, how-
ever, depends largely on three factors: (1) distinctiveness, (2) consensus, and
(3) consistency. First, let’s clarify the differences between internal and external
causation, and then we’ll elaborate on each of the three determining factors.
Internally caused behaviors are those we believe to be under the personal
control of the individual. Externally caused behavior is what we imagine the situ-
ation forced the individual to do. If one of your employees is late for work, you
might attribute that to his partying into the wee hours and then oversleeping.
This is an internal attribution. But if you attribute lateness to an automobile
accident that tied up traffic, you are making an external attribution.
Now let’s discuss the three determining factors. Distinctiveness refers to
whether an individual displays different behaviors in different situations. Is the
employee who arrives late today also one who regularly “blows off” commit-
ments? What we want to know is whether this behavior is unusual. If it is, we
are likely to give it an external attribution. If it’s not, we will probably judge the
behavior to be internal.
If everyone who faces a similar situation responds in the same way, we can
say the behavior shows consensus. The behavior of our tardy employee meets this
criterion if all employees who took the same route were also late. From an at-
tribution perspective, if consensus is high, you would probably give an external
attribution to the employee’s tardiness, whereas if other employees who took
the same route made it to work on time, you would attribute his lateness to an
internal cause.
Finally, an observer looks for consistency in a person’s actions. Does the
person respond the same way over time? Coming in 10 minutes late for work
is not perceived in the same way for an employee who hasn’t been late for
several months as it is for an employee who is late two or three times a week.
The more consistent the behavior, the more we are inclined to attribute it to
internal causes.
Exhibit 6-2 summarizes the key elements in attribution theory. It tells us,
for instance, that if an employee, Kim Randolph, generally performs at about
the same level on related tasks as she does on her current task (low distinc-
tiveness), other employees frequently perform differently—better or worse—
than Kim on that task (low consensus), and Kim’s performance on this current
task is consistent over time (high consistency), anyone judging Kim’s work
will likely hold her primarily responsible for her task performance (internal
attribution).
2 Explain attribution theory
and list the three determi-
nants of attribution.
Person Perception: Making Judgments About Others

Person Perception: Making Judgments About Others 169
One of the most interesting findings from attribution theory research is that
errors or biases distort attributions. When we make judgments about the behav-
ior of other people, we tend to underestimate the influence of external factors
and overestimate the influence of internal or personal factors. 2 This fundamental
attribution error can explain why a sales manager is prone to attribute the poor
performance of her sales agents to laziness rather than to the innovative prod-
uct line introduced by a competitor. Individuals and organizations also tend
to attribute their own successes to internal factors such as ability or effort, while
blaming failure on external factors such as bad luck or unproductive co-workers.
People also tend to attribute ambiguous information as relatively flattering and
accept positive feedback while rejecting negative feedback. This is the self-serving
bias . 3 A U.S. News & World Report study showed its power. Researchers asked one
group of people “If someone sues you and you win the case, should he pay your
legal costs?” Eighty-five percent responded “yes.” Another group was asked “If
you sue someone and lose the case, should you pay his costs?” Only 44 percent
answered “yes.” 4
The evidence on cultural differences in perception is mixed, but most sug-
gest there are differences across cultures in the attributions people make. 5
One study found Korean managers less likely to use the self-serving bias—they
tended to accept responsibility for group failure “because I was not a capable
leader” instead of attributing failure to group members. 6 On the other hand,
Asian managers are more likely to blame institutions or whole organizations,
whereas Western observers believe individual managers should get blame or
praise. 7 That probably explains why U.S. newspapers prominently report the
names of individual executives when firms do poorly, whereas Asian media
cover how the firm as a whole has failed. This tendency to make group-based
attributions also explains why individuals from Asian cultures are more likely to
make group-based stereotypes. 8 Attribution theory was developed largely based
attribution theory An attempt to
determine whether an individual’s
behavior is internally or externally
caused.
fundamental attribution error The
tendency to underestimate the
influence of external factors and
overestimate the influence of internal
factors when making judgments about
the behavior of others.
self-serving bias The tendency for
individuals to attribute their own
successes to internal factors and put
the blame for failures on external
factors.
Attribution Theory Exhibit 6-2
Individual behavior
External
Internal
External
Internal
Internal
External
Distinctiveness
Observation
Attribution
of cause
High
Low
High
Low
High
Low
Interpretation
Consistency
Consensus

170 CHAPTER 6 Perception and Individual Decision Making
on experiments with U.S. and Western European workers. But these studies
suggest caution in making attribution theory predictions in non-Western
societies, especially in countries with strong collectivist traditions.
Differences in attribution tendencies don’t mean the basic concepts of
attribution and blame completely differ across cultures, though. Self-serving
biases may be less common in East Asian cultures, but evidence suggests they
still operate across cultures. 9 Recent studies indicate Chinese managers assess
blame for mistakes using the same distinctiveness, consensus, and consistency
cues Western managers use. 10 They also become angry and punish those
deemed responsible for failure, a reaction shown in many studies of Western
managers. This means the basic process of attribution applies across cultures,
but that it takes more evidence for Asian managers to conclude someone else
should be blamed.
Common Shortcuts in Judging Others
The shortcuts we use in judging others are frequently valuable: they allow us to
make accurate perceptions rapidly and provide valid data for making predic-
tions. However, they are not foolproof. They can and do get us into trouble
when they result in significant distortions.
Selective Perception Any characteristic that makes a person, an object, or an
event stand out will increase the probability we will perceive it. Why? Because it
is impossible for us to assimilate everything we see; we can take in only certain
stimuli. This explains why you’re more likely to notice cars like your own, or why a
boss may reprimand some people and not others doing the same thing. Because
we can’t observe everything going on about us, we engage in selective perception .
A classic example shows how vested interests can significantly influence which
problems we see.
Dearborn and Simon asked 23 business executives (6 in sales, 5 in production,
4 in accounting, and 8 in miscellaneous functions) to read a comprehensive case
describing the organization and activities of a steel company. 11 Each manager
was asked to write down the most important problem in the case. Eighty-three
percent of the sales executives rated sales important; only 29 percent of the oth-
ers did so. The researchers concluded that participants perceived as important
the aspects of a situation specifically related to their own unit’s activities and
goals. A group’s perception of organizational activities is selectively altered to
align with the vested interests the group represents.
Because we cannot assimilate all that we observe, we take in bits and pieces.
But we don’t choose randomly; rather, we select according to our interests, back-
ground, experience, and attitudes. Selective perception allows us to speed-read
others, but not without the risk of drawing an inaccurate picture. Seeing what we
want to see, we can draw unwarranted conclusions from an ambiguous situation.
We find another example of selective perception in financial analysis. From
2007 to 2009, the U.S. stock market lost roughly half its value. Yet during that
time, analysts’ sell ratings (typically, analysts rate a company’s stock with three
recommendations: buy, sell, or hold) actually decreased slightly. Although there
are several reasons analysts are reluctant to put sell ratings on stocks, one is
selective perception. When prices are going down, analysts often attend to the
past (saying the stock is a bargain relative to its prior price), rather than the
future (the downward trend may well continue). As one money manager noted,
“Each time the market went down was a new opportunity to buy the stock even
cheaper.” 12 That much is true, of course, but it shows the dangers of selective
perception: by looking only at the past price, analysts were relying on a false ref-
erence point and failing to recognize that what has fallen can fall further still.
3 Identify the shortcuts
individuals use in making
judgments about others.

Person Perception: Making Judgments About Others 171
Halo Effect When we draw a general impression about an individual on the
basis of a single characteristic, such as intelligence, sociability, or appearance, a
halo effect is operating. 13 If you’re a critic of President Obama, try listing 10 things
you admire about him. If you’re an admirer, try listing 10 things you dislike about
him. No matter which group describes you, odds are you won’t find this an easy
exercise! That’s the halo effect: our general views contaminate our specific ones.
The reality of the halo effect was confirmed in a classic study in which sub-
jects were given a list of traits such as intelligent, skillful, practical, industrious,
determined, and warm and asked to evaluate the person to whom those traits
applied. 14 Subjects judged the person to be wise, humorous, popular, and imag-
inative. When the same list was modified to include “cold” instead of “warm,” a
completely different picture emerged. Clearly, the subjects were allowing a sin-
gle trait to influence their overall impression of the person they were judging.
Contrast Effects An old adage among entertainers is “Never follow an act that
has kids or animals in it.” Why? Audiences love children and animals so much
that you’ll look bad in comparison. This example demonstrates how a contrast
effect can distort perceptions. We don’t evaluate a person in isolation. Our
reaction is influenced by other persons we have recently encountered.
W
e realize just how much we
take our perceptions of the
world for granted when we
try to see through the eyes of some-
one who grew up in a culture totally
different from our own.
For instance, people see the pas-
sage of time quite differently in different
cultures. Some cultures tend to focus
more on the past, others on the future.
Li-Jun Ji and colleagues investigated
how Chinese perceive events relative
to Canadians’ perceptions. Participants
read a description of a theft, along with
descriptions of events that occurred in
the distant past, recent past, or present.
When attempting to solve the case,
Chinese participants were more likely
to rely on events from the distant past
and recent past, whereas Canadians
were more attentive to recent events.
Even the way we visualize the pas-
sage of time differs across cultures.
Lera Boroditsky, Orly Fuhrman, and
Kelly McCormick from Stanford
University examined how American
English speakers and Mandarin
(Chinese) speakers differed in their
perception of time. Because English
uses phrases like “looking forward
to” events or “putting the past behind
us,” English speakers tend to think
about time as a horizontal timeline.
Mandarin however uses words like
shàng (up) and xià (down) to refer to
time, so events accumulate in a stack.
Could this difference in language struc-
ture explain why Chinese speakers pay
more attention to history when think-
ing about events? Do Chinese think
more about events “piling up” on top
of one another (making them more
relevant), whereas North Americans
think about events moving away in
time so that what is in the past is over
and done? Further research will have
to examine whether this is the case,
but it remains an interesting possibility.
Sources: L. Ji, Z. Zhang, and D. Messervey,
“Looking Into the Past: Cultural Differences
in Perception and Representation of
Past Information,” Journal of Personality
and Social Psychology 96, no. 4 (2009),
pp. 761–769; L. Boroditsky, O. Fuhrman,
and K. McCormick, “Do English and
Mandarin Speakers Think about Time
Differently?” Cognition 118, no. 1 (2011),
pp. 123–129; and A. J. Shipp, J. R. Edwards,
and L. S. Lambert, “Conceptualization and
Measurement of Temporal Focus: The
Subjective Experience of Past, Present,
and Future,” Organizational Behavior and
Human Decision Processes 110, no. 1
(2009), pp. 1–22.
glOBalization!
Chinese Time, North American Time
selective perception The tendency
to selectively interpret what one
sees on the basis of one’s interests,
background, experience, and attitudes.
halo effect The tendency to draw a
general impression about an individual
on the basis of a single characteristic.
contrast effect Evaluation of a
person’s characteristics that is affected
by comparisons with other people
recently encountered who rank higher
or lower on the same characteristics.

172 CHAPTER 6 Perception and Individual Decision Making
In a series of job interviews, for instance, interviewers can make distortions
in any given candidate’s evaluation as a result of his or her place in the inter-
view schedule. A candidate is likely to receive a more favorable evaluation if
preceded by mediocre applicants and a less favorable evaluation if preceded by
strong applicants.
Stereotyping When we judge someone on the basis of our perception
of the group to which he or she belongs, we are using the shortcut called
stereotyping . 15
We rely on generalizations every day because they help us make decisions
quickly; they are a means of simplifying a complex world. It’s less difficult to
deal with an unmanageable number of stimuli if we use heuristics or stereo-
types. For example, it does make sense to assume that Tre, the new employee
from accounting, is going to know something about budgeting, or that Allie
from finance will be able to help you figure out a forecasting problem. The
problem occurs, of course, when we generalize inaccurately or too much. In
organizations, we frequently hear comments that represent stereotypes based
on gender, age, race, religion, ethnicity, and even weight (see Chapter 2 ): 16
“Men aren’t interested in child care,” “Older workers can’t learn new skills,”
“Asian immigrants are hardworking and conscientious.” A growing body of re-
search suggests stereotypes operate emotionally and often below the level of
conscious awareness, making them particularly hard to challenge and change. 17
Stereotypes can be deeply ingrained and powerful enough to influence
life-and-death decisions. One study, controlling for a wide array of factors
(such as aggravating or mitigating circumstances), showed that the degree to
which black defendants in murder trials looked “stereotypically black” essen-
tially doubled their odds of receiving a death sentence if convicted. 18 Another
experimental study found that students who read scenarios describing leaders
tended to assign higher scores for leadership potential and effective leader-
ship to Whites than to minorities even though the content of the scenarios was
equivalent, supporting the idea of a stereotype of Whites as better leaders. 19
These young women are taking
part in a running test for employ-
ment in a police force in Peshawar,
Pakistan. But women in America
and European, Eastern European,
Asian, and Latin American countries
report that gender stereotyping
makes it difficult for them to enter
the profession because it is largely
regarded as a job strictly for men.
Even in countries like the United
States where the law requires hir-
ing police officers without regard
to gender, the stereotypical view
of women inaccurately generalizes
them as lacking the mental, physi-
cal, and emotional fitness required
to perform police work. But women
who want to do police work con-
tend that they satisfy the fitness
requirements and even bring special
qualities to the job such as compas-
sion and good communication skills.
So
ur
ce
:
Pa
ki
st
an
P
re
ss
In
te
rn
at
io
na
l P
ho
to
/N
ew
sc
om

Person Perception: Making Judgments About Others 173
One problem of stereotypes is that they are widespread and often useful
generalizations, though they may not contain a shred of truth when applied to a
particular person or situation. So we constantly have to check ourselves to make
sure we’re not unfairly or inaccurately applying a stereotype in our evaluations
and decisions. Stereotypes are an example of the warning “The more useful,
the more danger from misuse.”
Specific Applications of Shortcuts in Organizations
People in organizations are always judging each other. Managers must appraise
their employees’ performances. We evaluate how much effort our co-workers are
putting into their jobs. Team members immediately “size up” a new person. In
many cases, our judgments have important consequences for the organization.
Let’s look at the most obvious applications.
Employment Interview Few people are hired without an interview. But
interviewers make perceptual judgments that are often inaccurate 20 and draw
early impressions that quickly become entrenched. Research shows we form
impressions of others within a tenth of a second, based on our first glance. 21 If
these first impressions are negative, they tend to be more heavily weighted in
the interview than if that same information came out later. 22 Most interviewers’
decisions change very little after the first 4 or 5 minutes of an interview. As a
result, information elicited early in the interview carries greater weight than
does information elicited later, and a “good applicant” is probably character-
ized more by the absence of unfavorable characteristics than by the presence of
favorable ones.
Performance Expectations People attempt to validate their perceptions of
reality even when these are faulty. 23 The terms self-fulfilling prophecy and
Pygmalion effect describe how an individual’s behavior is determined by others’
expectations. If a manager expects big things from her people, they’re not likely
to let her down. Similarly, if she expects only minimal performance, they’ll likely
meet those low expectations. Expectations become reality. The self-fulfilling
prophecy has been found to affect the performance of students, soldiers, and
even accountants. 24
Performance Evaluation We’ll discuss performance evaluations more fully in
Chapter 17 , but note for now that they very much depend on the perceptual
process. 25 An employee’s future is closely tied to the appraisal—promotion,
pay raises, and continuation of employment are among the most obvious
outcomes. Although the appraisal can be objective (for example, a sales-person
is appraised on how many dollars of sales he generates in his territory), many
jobs are evaluated in subjective terms. Subjective evaluations, though often
necessary, are problematic because all the errors we’ve discussed thus far—
selective perception, contrast effects, halo effects, and so on—affect them.
Ironically, sometimes performance ratings say as much about the evaluator as
they do about the employee!
stereotyping Judging someone on the
basis of one’s perception of the group
to which that person belongs.
self-fulfilling prophecy A situation in
which a person inaccurately perceives
a second person, and the resulting
expectations cause the second person
to behave in ways consistent with the
original perception.

174 CHAPTER 6 Perception and Individual Decision Making
Individuals in organizations make decisions , choices from among two or more
alternatives. Top managers determine their organization’s goals, what products
or services to offer, how best to finance operations, or where to locate a new
manufacturing plant. Middle- and lower-level managers set production sched-
ules, select new employees, and decide how to allocate pay raises. Nonmanagerial
employees decide how much effort to put forth at work and whether to comply
with a boss’s request. Organizations have begun empowering their nonmanage-
rial employees with decision-making authority historically reserved for managers
alone. Individual decision making is thus an important part of organizational
behavior. But the way individuals make decisions and the quality of their choices
are largely influenced by their perceptions.
Decision making occurs as a reaction to a problem . 26 That is, a discrepancy
exists between the current state of affairs and some desired state, requiring
us to consider alternative courses of action. If your car breaks down and you
rely on it to get to work, you have a problem that requires a decision on your
part. Unfortunately, most problems don’t come neatly labeled “problem.” One
person’s problem is another person’s satisfactory state of affairs. One manager may
view her division’s 2 percent decline in quarterly sales to be a serious prob-
lem requiring immediate action on her part. In contrast, her counterpart in
another division, who also had a 2 percent sales decrease, might consider that
quite acceptable. So awareness that a problem exists and that a decision might
or might not be needed is a perceptual issue.
Every decision requires us to interpret and evaluate information. We
typically receive data from multiple sources and need to screen, process, and
interpret them. Which data are relevant to the decision, and which are not?
Our perceptions will answer that question. We also need to develop alter-
natives and evaluate their strengths and weaknesses. Again, our perceptual
4 Explain the link between
perception and decision
making.
The Link Between Perception and Individual Decision Making
Delta Airlines management made a
decision in reaction to the problem
of negative publicity resulting from
a growing number of customer
complaints about poor service. To
improve service, Delta reinstated
the personal assistance of its elite
Red Coat airport agents that it
started in the 1960s but eliminated
in 2005 due to budget cuts. The
primary mission of the Red Coats,
such as Charmaine Gordon shown
here helping customers at Kennedy
International Airport in New York,
is to fix customer problems. Today,
Delta has about 800 Red Coats who
walk around airports and use hand-
held devices to give one-on-one,
on-the-spot help to customers in
everything ranging from printing
boarding passes to directing passen-
gers to the right concourse.
MyManagementLab
For an interactive application of this
topic, check out this chapter’s
simulation activity at
www.mymanagementlab.com.
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Decision Making in Organizations 175
process will affect the final outcome. Finally, throughout the entire decision-
making process, perceptual distortions often surface that can bias analysis and
conclusions.
Decision Making in Organizations
Business schools generally train students to follow rational decision-making
models. While models have considerable merit, they don’t always describe how
people actually make decisions. This is where OB enters the picture: to improve
the way we make decisions in organizations, we must understand the decision-
making errors people commit (in addition to the perception errors we’ve
discussed). Next we describe these errors, beginning with a brief overview of
the rational decision-making model.
The Rational Model, Bounded Rationality, and Intuition
Rational Decision Making We often think the best decision maker is rational
and makes consistent, value-maximizing choices within specified constraints. 27
These decisions follow a six-step rational decision-making model . 28 The six steps
are listed in Exhibit 6-3 .
The rational decision-making model relies on a number of assumptions,
including that the decision maker has complete information, is able to iden-
tify all the relevant options in an unbiased manner, and chooses the option
with the highest utility. 29 As you might imagine, most decisions in the real
world don’t follow the rational model. People are usually content to find an
acceptable or reasonable solution to a problem rather than an optimal one.
Choices tend to be limited to the neighborhood of the problem symptom and
the current alternative. As one expert in decision making put it, “Most signifi-
cant decisions are made by judgment, rather than by a defined prescriptive
model.” 30 What’s more, people are remarkably unaware of making subopti-
mal decisions. 31
5 Apply the rational model
of decision making and
contrast it with bounded
rationality and intuition.
rational Characterized by making
consistent, value-maximizing choices
within specified constraints.
rational decision-making model A
decision-making model that describes
how individuals should behave in
order to maximize some outcome.
decisions Choices made from among
two or more alternatives.
problem A discrepancy between
the current state of affairs and some
desired state.
Steps in the Rational Decision-Making Model Exhibit 6-3
1. Define the problem.
2. Identify the decision criteria.
3. Allocate weights to the criteria.
4. Develop the alternatives.
5. Evaluate the alternatives.
6. Select the best alternative.

176 CHAPTER 6 Perception and Individual Decision Making
Bounded Rationality Our limited information-processing capability makes it
impossible to assimilate and understand all the information necessary to opti-
mize. 32 So most people respond to a complex problem by reducing it to a level at
which they can readily understand it. Also many problems don’t have an optimal
solution because they are too complicated to fit the rational decision-making
model. So people satisfice; they seek solutions that are satisfactory and sufficient.
When you considered which college to attend, did you look at every viable
alternative? Did you carefully identify all the criteria that were important in
your decision? Did you evaluate each alternative against the criteria in order
to find the optimal college? The answers are probably “no.” Well, don’t feel
bad. Few people made their college choice this way. Instead of optimizing, you
probably satisficed.
Because the human mind cannot formulate and solve complex problems
with full rationality, we operate within the confines of bounded rationality . We
construct simplified models that extract the essential features from problems
without capturing all their complexity. 33 We can then behave rationally within
the limits of the simple model.
How does bounded rationality work for the typical individual? Once we’ve
identified a problem, we begin to search for criteria and alternatives. But the
criteria are unlikely to be exhaustive. We identify choices that are easy to find
and highly visible and that usually represent familiar criteria and tried- and-
true solutions. Next, we begin reviewing them, focusing on alternatives that
differ little from the choice currently in effect until we identify one that is
“good enough”—that meets an acceptable level of performance. That ends our
search. So the solution represents a satisficing choice—the first acceptable one
we encounter—rather than an optimal one.
Satisficing is not always a bad idea—a simple process may frequently be
more sensible than the traditional rational decision-making model. 34 To use the
rational model in the real world, you need to gather a great deal of information
about all the options, compute applicable weights, and then calculate values
across a huge number of criteria. All these processes can cost time, energy,
Top managers of Nike, Inc.
operated within the confines of
bounded rationality in making a
decision about its operations in
China. To reinforce its future devel-
opment and rapid growth in China,
Nike decided to invest $99 million
to build the China Logistics Center,
a new distribution facility in Jiangsu
for the company’s footwear,
apparel, and equipment products.
With China overtaking Japan as
Nike’s second largest market after
the United States, the new distribu-
tion center is expected to reduce
product delivery times by up to
14 percent to the more than
3,000 Nike retail stores in China.
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Decision Making in Organizations 177
and money. And if there are many unknown weights and preferences, the fully
rational model may not be any more accurate than a best guess. Sometimes a
fast-and-frugal process of solving problems might be your best option. Returning
to your college choice, would it really be smarter to fly around the country
to visit dozens of potential campuses, paying application fees for all these
options? Can you really even know what type of college is “best” for you when
you’re just graduating from high school, or is there a lot of unknown informa-
tion about how your interests are going to develop over time? Maybe you won’t
major in the same subject you started with. It might be much smarter to find a
few colleges that match most of your preferences and then focus your attention
on differentiating between those.
Intuition Perhaps the least rational way of making decisions is intuitive decision
making , an unconscious process created from distilled experience. 35 It occurs
outside conscious thought; it relies on holistic associations, or links between
disparate pieces of information; it’s fast; and it’s affectively charged, meaning it
usually engages the emotions. 36
While intuition isn’t rational, it isn’t necessarily wrong. Nor does it always
contradict rational analysis; rather, the two can complement each other. But nor
is intuition superstition, or the product of some magical or paranormal sixth
sense. As one recent review noted, “Intuition is a highly complex and highly de-
veloped form of reasoning that is based on years of experience and learning.” 37
For most of the twentieth century, experts believed decision makers’ use
of intuition was irrational or ineffective. That’s no longer the case. 38 We now
recognize that rational analysis has been overemphasized and, in certain
instances, relying on intuition can improve decision making. 39 But we can’t rely
on it too much. Because it is so unquantifiable, it’s hard to know when our
hunches are right or wrong. The key is neither to abandon nor rely solely on
intuition, but to supplement it with evidence and good judgment.
Common Biases and Errors in Decision Making
Decision makers engage in bounded rationality, but they also allow systematic
biases and errors to creep into their judgments. 40 To minimize effort and avoid
difficult trade-offs, people tend to rely too heavily on experience, impulses,
gut feelings, and convenient rules of thumb. These shortcuts can be helpful.
However, they can also distort rationality. Following are the most common
biases in decision making. Exhibit 6-4 provides some suggestions for how to
avoid falling into these biases and errors.
Overconfidence Bias It’s been said that “no problem in judgment and deci-
sion making is more prevalent and more potentially catastrophic than overconfi-
dence.” 41 When we’re given factual questions and asked to judge the probability
that our answers are correct, we tend to be far too optimistic. When people say
they’re 90 percent confident about the range a certain number might take, their
estimated ranges contain the correct answer only about 50 percent of the time—
and experts are no more accurate in setting up confidence intervals than are
bounded rationality A process of
making decisions by constructing
simplified models that extract the
essential features from problems
without capturing all their complexity.
intuitive decision making An
unconscious process created out of
distilled experience.
6 List and explain the
common decision
biases or errors.

178 CHAPTER 6 Perception and Individual Decision Making
novices. 42 When people say they’re 100 percent sure of an outcome, they tend
to be 70 to 85 percent correct. 43 Here’s another interesting example. In one
random-sample national poll, 90 percent of U.S. adults said they expected to go
to heaven. But in another random-sample national poll, only 86 percent thought
Mother Teresa was in heaven. Talk about an overconfidence bias!
Individuals whose intellectual and interpersonal abilities are weakest are most
likely to overestimate their performance and ability. 44 There’s also a negative
relationship between entrepreneurs’ optimism and the performance of their
new ventures: the more optimistic, the less successful. 45 The tendency to be
too confident about their ideas might keep some from planning how to avoid
problems that arise.
Investor overconfidence operates in a variety of ways. 46 Finance professor
Terrance Odean says “people think they know more than they do, and it costs
them.” Investors, especially novices, overestimate not just their own skill in
processing information, but also the quality of the information they’re working
with. Test your own confidence level with investments: compare the long-term
returns of your stock market picks relative to index funds. You’ll find an overall
index performs as well as, or better than, carefully hand-picked stocks. The
main reason many people resist index funds is that they think they’re better at
picking stocks than the average person, but most investors will actually do only
as well as or only slightly better than the market as a whole.
Anchoring Bias The anchoring bias is a tendency to fixate on initial infor-
mation and fail to adequately adjust for subsequent information. 47 It occurs
because our mind appears to give a disproportionate amount of emphasis to the
first information it receives. Anchors are widely used by people in professions
in which persuasion skills are important—advertising, management, politics,
real estate, and law. Assume two pilots—Jason and Glenda—have been laid
Reducing Biases and Errors Exhibit 6-4
Focus on Goals. Without goals, you can’t be rational, you don’t know what information you
need, you don’t know which information is relevant and which is irrelevant, you’ll find it
difficult to choose between alternatives, and you’re far more likely to experience regret
over the choices you make. Clear goals make decision making easier and help you eliminate
options that are inconsistent with your interests.
Look for Information That Disconfirms Your Beliefs. One of the most effective means for
counteracting overconfidence and the confirmation and hindsight biases is to actively look
for information that contradicts your beliefs and assumptions. When we overtly consider
various ways we could be wrong, we challenge our tendencies to think we’re smarter than
we actually are.
Don’t Try to Create Meaning out of Random Events. The educated mind has been trained
to look for cause-and-effect relationships. When something happens, we ask why. And
when we can’t find reasons, we often invent them. You have to accept that there are events
in life that are outside your control. Ask yourself if patterns can be meaningfully explained
or whether they are merely coincidence. Don’t attempt to create meaning out of
coincidence.
Increase Your Options. No matter how many options you’ve identified, your final choice can
be no better than the best of the option set you’ve selected. This argues for increasing your
decision alternatives and for using creativity in developing a wide range of diverse choices.
The more alternatives you can generate, and the more diverse those alternatives, the
greater your chance of finding an outstanding one.
Source: S. P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper Saddle River, NJ: Financial
Times/Prentice Hall, 2004), pp. 164–168.

Decision Making in Organizations 179
off their current jobs, and after an extensive search their best offers are from
Delta Airlines. Each would earn the average annual pay of Delta’s narrow-body
jet pilots: $126,000. Jason was a pilot for Pinnacle, a regional airline where
the average annual salary is $82,000. Glenda was a pilot for FedEx, where
the average annual salary is $200,000. Which pilot is most likely to accept, or
be happiest with, Delta’s offer? Obviously Jason, because he is anchored by the
lower salary. 48
Any time a negotiation takes place, so does anchoring. When a prospective
employer asks how much you made in your prior job, your answer typically an-
chors the employer’s offer. (Remember this when you negotiate your salary,
but set the anchor only as high as you realistically can.) Finally, the more
precise your anchor, the smaller the adjustment. Some research suggests
people think of making an adjustment after an anchor is set as rounding off
a number. If you suggest a target salary of $55,000, your boss will consider
$50,000 to $60,000 a reasonable range for negotiation, but if you mention
$55,650, your boss is more likely to consider $55,000 to $56,000 the range of
likely values. 49
Confirmation Bias The rational decision-making process assumes we
objectively gather information. But we don’t. We selectively gather it. The
confirmation bias represents a specific case of selective perception: we seek
out information that reaffirms our past choices, and we discount informa-
tion that contradicts them. 50 We also tend to accept at face value information
that confirms our preconceived views, while we are critical and skeptical of
information that challenges them. Therefore, the information we gather is
typically biased toward supporting views we already hold. We even tend to
seek sources most likely to tell us what we want to hear, and we give too much
weight to supporting information and too little to contradictory. Interestingly,
we are most prone to the confirmation bias when we believe we have good
information and strongly believe in our opinions. Fortunately, those who feel
there is a strong need to be accurate in making a decision are less prone to
the confirmation bias.
Availability Bias More people fear flying than fear driving in a car. But if flying
on a commercial airline really were as dangerous as driving, the equivalent of
two 747s filled to capacity would crash every week, killing all aboard. Because
the media give much more attention to air accidents, we tend to overstate the
risk of flying and understate the risk of driving.
The availability bias is our tendency to base judgments on information read-
ily available. 51 Events that evoke emotions, are particularly vivid, or are more
recent tend to be more available in our memory, leading us to overestimate the
chances of unlikely events such as an airplane crash. The availability bias can
also explain why managers doing performance appraisals give more weight to
recent employee behaviors than to behaviors of 6 or 9 months earlier, or why
credit-rating agencies such as Moody’s or Standard & Poor’s may issue overly
positive ratings by relying on information presented by debt issuers, who have
an incentive to offer data favorable to their case. 52
anchoring bias A tendency to fixate
on initial information, from which
one then fails to adequately adjust for
subsequent information.
confirmation bias The tendency to
seek out information that reaffirms
past choices and to discount
information that contradicts past
judgments.
availability bias The tendency for
people to base their judgments on
information that is readily available to
them.

180 CHAPTER 6 Perception and Individual Decision Making
Escalation of Commitment Another distortion that creeps into decisions is a
tendency to escalate commitment. 53 Escalation of commitment refers to staying
with a decision even when there is clear evidence it’s wrong. Consider a friend
who has been dating someone for several years. Although he admits things
aren’t going too well, he says he is still going to marry her. His justification:
“I have a lot invested in the relationship!”
Individuals escalate commitment to a failing course of action when they view
themselves as responsible for the failure. 54 They “throw good money after bad”
to demonstrate their initial decision wasn’t wrong and to avoid admitting they
made a mistake. 55 In fact, people who carefully gather and consider information
consistent with the rational decision-making model are more likely to engage in
escalation of commitment than those who spend less time thinking about their
choices. 56 Perhaps they have invested so much time and energy in making their
decisions that they have convinced themselves they’re taking the right course of
action and don’t update their knowledge in the face of new information. Many
an organization has suffered because a manager determined to prove his or her
original decision right continued to commit resources to a lost cause.
Randomness Error Most of us like to think we have some control over our
world and our destiny. Our tendency to believe we can predict the outcome of
random events is the randomness error .
Decision making suffers when we try to create meaning in random events,
particularly when we turn imaginary patterns into superstitions. 57 These can be
completely contrived (“I never make important decisions on Friday the 13th”)
or can evolve from a reinforced past pattern of behavior (Tiger Woods often
wears a red shirt during a golf tournament’s final round because he won many
junior tournaments wearing red shirts). Superstitious behavior can be debilitat-
ing when it affects daily judgments or biases major decisions.
Risk Aversion Mathematically, we should find a 50–50 flip of the coin for
$100 to be worth as much as a sure promise of $50. After all, the expected value
of the gamble over a number of trials is $50. However, nearly everyone but
committed gamblers would rather have the sure thing than a risky prospect. 58
For many people, a 50–50 flip of a coin even for $200 might not be worth as
much as a sure promise of $50, even though the gamble is mathematically
worth twice as much! This tendency to prefer a sure thing over a risky outcome
is risk aversion .
Risk aversion has important implications. To offset the risks inherent in a
commission-based wage, companies pay commissioned employees consider-
ably more than they do those on straight salaries. Risk-averse employees will
stick with the established way of doing their jobs, rather than taking a chance
on innovative or creative methods. Sticking with a strategy that has worked
in the past does minimize risk, but in the long run it will lead to stagnation.
Ambitious people with power that can be taken away (most managers) appear
to be especially risk averse, perhaps because they don’t want to lose on a gamble
everything they’ve worked so hard to achieve. 59 CEOs at risk of being termi-
nated are also exceptionally risk averse, even when a riskier investment strategy
is in their firms’ best interests. 60
Because people are less likely to escalate commitment where there is a great
deal of uncertainty, the implications of risk aversion aren’t all bad. 61 When a
risky investment isn’t paying off, most people would rather play it safe and cut
their losses, but if they think the outcome is a sure thing, they’ll keep escalating.
Risk preference is sometimes reversed: people prefer to take their chances when
trying to prevent a negative outcome. 62 They would rather take a 50–50 gamble on

Decision Making in Organizations 181
losing $100 than accept the certain loss of $50. Thus they will risk losing a lot of
money at trial rather than settle out of court. Trying to cover up wrongdoing instead
of admitting a mistake, despite the risk of truly catastrophic press coverage or even
jail time, is another example. Stressful situations can make these risk preferences
stronger. People will more likely engage in risk-seeking behavior for negative out-
comes, and risk-averse behavior for positive outcomes, when under stress. 63
Hindsight Bias The hindsight bias is the tendency to believe falsely, after
the outcome is known, that we’d have accurately predicted it. 64 When we have
accurate feedback on the outcome, we seem pretty good at concluding it was
obvious.
Over the past 10 years, the home video rental industry has been collapsing
fast as online distribution outlets have eaten away at the market. 65 Hollywood
Video declared bankruptcy in May 2010 and began liquidating its assets;
Blockbuster filed for bankruptcy in September 2010. Some have suggested that
if only these organizations had leveraged their brand and distribution resources
O
ne article of faith in creativity
research and practice is that
whereas the left brain gov-
erns analytical, rational thinking, the
right brain underlies creative think-
ing. However, judging from a recent
review of neuropsychology research,
this accepted wisdom is false.
Neuropsychologists study creativity
by asking people to engage in creative
thinking, which they measure in differ-
ent ways. In the Remote Associates
Test, individuals indicate what word
links a series of three words (such as
Falling Actor Dust; Salt Deep Foam).
Other tests ask individuals to compose
creative stories, write captions for car-
toons, or provide unique solutions to
unusual hypothetical problems. While
participants are thinking creatively, the
researchers assess their brain activity
using various techniques, including
MRI.
A recent review of 72 studies found
right brain activity was not associated
with creative thinking. The authors
conclude, “Creativity, or any alleged
stage of it, is not particularly associ-
ated with the right brain or any part
of the right brain.” Indeed, the review
showed it was difficult to isolate cre-
ative thinking in any one region of the
brain.
Another review of 45 studies
reached the same conclusion, noting
that the diverse ways in which creativ-
ity and brain activity were measured
made generalizations difficult.
These results do not discourage all
neuropsychologists. One neuroscien-
tist, Oshin Vartanian, summed up the
literature as follows: “Initially, a lot of
people were looking for the holy grail.
They were searching for the creativity
module in the brain. Now we know it
is more complicated.”
Sources: A. Dietrich and R. Kanso, “A Review
of EEG, ERP, and Neuroimaging Studies
of Creativity and Insight,” Psychological
Bulletin 136, no. 5 (2010), pp. 822–848;
R. Ardena, R. S. Chavez, R. Grazioplene,
& R. E. Jung, “Neuroimaging Creativity:
A Psychometric View,” Behavioural Brain
Research 214, no. 2 (2010), pp. 143–156;
and A. McIlroy, “Neuroscientists Try to
Unlock the Origins of Creativity,” Globe and
Mail (January 28, 2011), downloaded May 20,
2011, from www.theglobeandmail.com/ .
Myth or Science?
Creative Decision Making Is a Right-Brain Activity
hindsight bias The tendency to
believe falsely, after an outcome of
an event is actually known, that one
would have accurately predicted that
outcome.
escalation of commitment An
increased commitment to a previous
decision in spite of negative
information.
randomness error The tendency of
individuals to believe that they can
predict the outcome of random events.
risk aversion The tendency to prefer
a sure gain of a moderate amount over
a riskier outcome, even if the riskier
outcome might have a higher expected
payoff.

www.theglobeandmail.com/

182 CHAPTER 6 Perception and Individual Decision Making
effectively and sooner to develop web-based delivery, as Netflix does, and low-
cost distribution in grocery and convenience stores, which Redbox offers, they
could have been avoided failure. While that might seem obvious now, many
experts with good information failed to see these two major trends that would
upend the industry.
Of course, after the fact, it is easy to see that a combination of automated
and mail-order distribution would outperform the traditional brick-and-mortar
movie rental business. Similarly, former Merrill Lynch CEO John Thain—and
many other Wall Street executives—took blame for failing to see what now
seems obvious (that housing prices were inflated, too many risky loans were
made, and the values of many “securities” were based on fragile assumptions).
Though the criticisms may have merit, things are often all too clear in hind-
sight. As Malcolm Gladwell, author of Blink and The Tipping Point, writes, “What
is clear in hindsight is rarely clear before the fact.” 66
The hindsight bias reduces our ability to learn from the past. It lets us think
we’re better predictors than we are and can make us falsely confident. If your
actual predictive accuracy is only 40 percent but you think it’s 90, you’re likely
to be less skeptical about your predictive skills.
Application: Financial Decision Making This discussion of decision mak-
ing errors may have you thinking about how organizations and individuals
make financial decisions. Did decision errors influence capital markets and
even lead to crises like the financial meltdown of 2008? How are financial de-
cisions affected by errors and biases? Experts have identified several ways this
can occur. 67
One of the core problems that created the financial crisis was that large
loans were made to individuals who could not repay them, and finance com-
panies purchased these bad debts without realizing how poor the prospects
of repayment were. Thus, overconfidence bias by both lenders and borrowers
When the U.S.-based global finan-
cial services firm Lehman Brothers
failed, many people blamed Richard
Fuld, the company’s chief executive,
accusing him of overconfidence,
confirmation, and anchoring biases
and a lack of knowledge about
complicated financial investment
instruments. Even as Lehman
Brothers continued to post billion-
dollar losses, Fuld exuded confi-
dence that the investment bank was
sound, and he rebuffed criticism of
the bank’s failure to value its assets
accurately. Comments by former
employees and passersby blam-
ing Fuld for the bankruptcy were
recorded on an artists’ rendering
of him placed in front of Lehman’s
offices in New York City.
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Decision Making in Organizations 183
about the ability to pay back loans was clearly a major factor. Most studies
suggest that people are more willing to buy on credit and spend more
money when they feel confident. Although experts were no more accurate at
predicting financial outcomes than were people without knowledge or skills
in finance, they were more confident in their predictions. Unfortunately, as
confidence decreases in the face of poor economic data, businesses and con-
sumers become more conservative in their spending. This further decreases
demand for products and services, which deepens the economic crisis in a
vicious cycle.
Overconfidence isn’t the only decision error implicated in the financial
crisis. Investors deliberately avoid negative information about investments,
an example of the confirmation bias. Lenders may have overlooked potential
problems with borrowers’ accounts when making loans, and stock traders may
have ignored information about potential problems with complex derivatives
when making purchasing decisions. Once a loan has been paid off, lenders also
selectively ignore the negative effects of debt, making them more likely to make
unwise loans in the future.
What might prevent these situations from occurring in the future? Both in-
vestors and consumers may need to more carefully consider whether their con-
fidence level is aligned with their actual future ability to pay. It is also always
a good idea to seek information that goes against your initial inclinations, to
ensure you’re getting the whole picture. Be careful not to commit the hindsight
bias and conclude after financial crises have dissipated that it should have been
obvious problems were about to occur.
Gloomy Perceptions ReturnOB Poll
February, 2008
33%
12%
September, 2008
36%
33%
April, 2011
26%
29%
Percent Indicating Economy Is in Recession or Depression
Depression
Recession
80
70
60
50
40
30
20
10
0
Source: Based on C. Merkle and M. Weber, “True Overconfidence—The Inability of Rational Information Processing to Account for Apparent Overconfidence”
(March 2009). Available at SSRN: http://ssrn.com/abstract�1373675
S A L
SELF-ASSESSMENT LIBRARY
Am I A Deliberate Decision Maker?
In the Self-Assessment Library (available on CD or online), take assessment IV.A.2
(Am I a Deliberate Decision Maker?). Would it be better to be a more deliberate
decision maker? Why or why not?

http://ssrn.com/abstract=1373675

184 CHAPTER 6 Perception and Individual Decision Making
We turn here to factors that influence how people make decisions and the de-
gree to which they are susceptible to errors and biases. We discuss individual
differences and organizational constraints.
Individual Differences
Decision making in practice is characterized by bounded rationality, common
biases and errors, and the use of intuition. In addition, individual differences
create deviations from the rational model. In this section, we look at two such
differences: personality and gender.
Personality The little research so far conducted on personality and decision
making suggests personality does influence our decisions. Let’s look at consci-
entiousness and self-esteem (both discussed in Chapter 5 ).
Specific facets of conscientiousness—rather than the broad trait itself—
may affect escalation of commitment (above). 68 Two such facets—achievement
striving and dutifulness—actually had opposite effects. Achievement-striving
people were more likely to escalate their commitment, whereas dutiful peo-
ple were less likely. Why? Generally, achievement-oriented people hate to
fail, so they escalate their commitment, hoping to forestall failure. Dutiful
people, however, are more inclined to do what they see as best for the orga-
nization. Second, achievement-striving individuals appear more susceptible to
the hindsight bias, perhaps because they have a greater need to justify their
actions. 69 Unfortunately, we don’t have evidence on whether dutiful people
are immune to this bias.
Finally, people with high self-esteem are strongly motivated to maintain it, so
they use the self-serving bias to preserve it. They blame others for their failures
while taking credit for successes. 70
Gender Research on rumination offers insights into gender differences in de-
cision making. 71 Rumination refers to reflecting at length. In terms of decision
making, it means overthinking problems. Twenty years of study find women
spend much more time than men analyzing the past, present, and future.
They’re more likely to overanalyze problems before making a decision and to
rehash a decision once made. This can lead to more careful consideration of
problems and choices. However, it can make problems harder to solve, increase
regret over past decisions, and increase depression. Women are nearly twice as
likely as men to develop depression. 72
Why women ruminate more than men is not clear. One view is that parents
encourage and reinforce the expression of sadness and anxiety more in girls
than in boys. Another theory is that women, more than men, base their self-
esteem and well-being on what others think of them. A third idea is that women
are more empathetic and more affected by events in others’ lives, so they have
more to ruminate about.
By age 11, girls are ruminating more than boys. But this gender difference
seems to lessen with age. Differences are largest during young adulthood and
smallest after age 65, when both men and women ruminate the least. 73
7 Explain how individual
differences and organiza-
tional constraints affect
decision making.
Influences on Decision Making: Individual Differences
and Organizational Constraints

Influences on Decision Making: Individual Differences and Organizational Constraints 185
Mental Ability We know people with higher levels of mental ability are able to
process information more quickly, solve problems more accurately, and learn
faster, so you might expect them also to be less susceptible to common deci-
sion errors. However, mental ability appears to help people avoid only some of
these. 74 Smart people are just as likely to fall prey to anchoring, overconfidence,
and escalation of commitment, probably because just being smart doesn’t alert
you to the possibility you’re too confident or emotionally defensive. That doesn’t
mean intelligence never matters. Once warned about decision-making errors,
more intelligent people learn more quickly to avoid them. They are also better
able to avoid logical errors like false syllogisms or incorrect interpretation of data.
Cultural Differences The rational model makes no acknowledgment of cultural
differences, nor does the bulk of OB research literature on decision making.
But Indonesians, for instance, don’t necessarily make decisions the same way
Australians do. Therefore, we need to recognize that the cultural background
of a decision maker can significantly influence the selection of problems, the
depth of analysis, the importance placed on logic and rationality, and whether
organizational decisions should be made autocratically by an individual man-
ager or collectively in groups. 75
Cultures differ in their time orientation, the importance of rationality, their
belief in the ability of people to solve problems, and their preference for col-
lective decision making. Differences in time orientation help us understand
why managers in Egypt make decisions at a much slower and more deliberate
pace than their U.S. counterparts. While rationality is valued in North America,
that’s not true elsewhere in the world. A North American manager might make
an important decision intuitively but know it’s important to appear to proceed
A
s we note in the chapter, dif-
ferent standards identify ethical
behavior in different cultures.
Managers who work in international
contexts frequently run into complex
problems when behavior acceptable
for the home office is unacceptable in
local cultures, and vice versa.
How difficult is it to arrive at a global
policy for ethical decision making?
Consider these examples. Individuals
from countries higher in Hofstede’s di-
mension of power distance, like those
in Latin America, were more likely to
report that bribery was acceptable than
were individuals from lower power dis-
tance countries, like the United States
and much of Europe. An international
scandal ensued after German corpo-
ration Siemens set aside money for
bribes when working in Africa, but
company executives initially defended
the actions as consistent with busi-
ness practices in those countries.
Such differences don’t mean business
ethics are “higher” or “lower” in dif-
ferent countries. Although U.S. execu-
tives might frown on bribery, they may
view it as ethical and necessary to
lay workers off during poor economic
times, whereas other cultures view
layoffs as a betrayal of the relationship
between workers and employers.
So how are managers to decide
which ethical standards to observe?
Is it better to act consistently with
your own culture, or adopt the ethi-
cal standards of the countries where
you operate? This question isn’t easy
to answer. Ethics experts suggest
leaders should adhere to universal val-
ues of human life and welfare as the
core of their international codes of eth-
ics, and they note there are few cases
where values are directly in conflict
(no culture actively encourages bribery
as moral; it’s just that some societ-
ies view it as less of a problem than
others do).
Source: Based on L. J. Thompson, “The
Global Moral Compass for Business Leaders,”
Journal of Business Ethics 93, no.  S1
(2010), pp. 15–32; C. Baughn, N. L. Bodie,
M. A. Buchanan, and M. B. Bixby, “Bribery
in International Business Transactions,”
Journal of Business Ethics 92, no. 1 (2010),
pp.  15–32; and T. Patel and A. Schaefer,
“Making Sense of the Diversity of Ethical
Decision Making in Business: An Illustration
of the Indian Context,” Journal of Business
Ethics 90, no. 2 (2009), pp. 171–186.
An Ethical Choice
Whose Ethical Standards to Follow?

186 CHAPTER 6 Perception and Individual Decision Making
in a rational fashion because rationality is highly valued in the West. In coun-
tries such as Iran, where rationality is not as paramount as other factors, efforts
to appear rational are not necessary.
Some cultures emphasize solving problems, while others focus on accepting
situations as they are. The United States falls in the first category; Thailand and
Indonesia are examples of the second. Because problem-solving managers be-
lieve they can and should change situations to their benefit, U.S. managers might
identify a problem long before their Thai or Indonesian counterparts would
choose to recognize it as such. Decision making by Japanese managers is much
more group-oriented than in the United States. The Japanese value conformity
and cooperation. So before Japanese CEOs make an important decision, they col-
lect a large amount of information, which they use in consensus-forming group
decisions. In short, there are probably important cultural differences in decision
making, but unfortunately not yet much research to identify them.
Organizational Constraints
Organizations can constrain decision makers, creating deviations from the ra-
tional model. For instance, managers shape their decisions to reflect the orga-
nization’s performance evaluation and reward system, to comply with its formal
regulations, and to meet organizationally imposed time constraints. Precedent
can also limit decisions.
Performance Evaluation Managers are strongly influenced by the criteria on
which they are evaluated. If a division manager believes the manufacturing
plants under his responsibility are operating best when he hears nothing nega-
tive, we shouldn’t be surprised to find his plant managers spending a good part
of their time ensuring that negative information doesn’t reach him.
Reward Systems The organization’s reward system influences decision mak-
ers by suggesting which choices have better personal payoffs. If the organization
rewards risk aversion, managers are more likely to make conservative decisions.
From the 1930s through the mid-1980s, General Motors consistently gave pro-
motions and bonuses to managers who kept a low profile and avoided con-
troversy. These executives became adept at dodging tough issues and passing
controversial decisions on to committees.
Formal Regulations David Gonzalez, a shift manager at a Taco Bell restau-
rant in San Antonio, Texas, describes constraints he faces on his job: “I’ve
got rules and regulations covering almost every decision I make—from how
to make a burrito to how often I need to clean the restrooms. My job doesn’t
come with much freedom of choice.” David’s situation is not unique. All but
the smallest organizations create rules and policies to program decisions and
get individuals to act in the intended manner. And of course, in so doing, they
limit decision choices.
System-Imposed Time Constraints Almost all important decisions come with
explicit deadlines. A report on new-product development may have to be ready
for executive committee review by the first of the month. Such conditions often
make it difficult, if not impossible, for managers to gather all the information
they might like before making a final choice.
Historical Precedents Decisions aren’t made in a vacuum; they have a context.
In fact, individual decisions are points in a stream of choice. Those made in the

What About Ethics in Decision Making? 187
past are like ghosts that haunt and constrain current choices. It’s common knowl-
edge that the largest determinant of the size of any given year’s budget is last year’s
budget. 76 Choices made today are largely a result of choices made over the years.
Formal regulations shape employee
decisions at McDonald’s restaurants
throughout the world. McDonald’s
standardizes the behavior of
restaurant crew members such as
the employee shown here prepar-
ing the company’s specialty coffee,
McCafe Mocha. McDonald’s requires
employees to follow rules and regu-
lations for food preparation and
service to meet the company’s high
standards of food quality and safety
and reliable and friendly service.
For example, McDonald’s requires
72 safety protocols to be conducted
every day in each restaurant as part
of a daily monitoring routine for
restaurant managers.
What About Ethics in Decision Making?
Ethical considerations should be an important criterion in all organizational
decision making. In this section, we present three ways to frame decisions
ethically. 77
Three Ethical Decision Criteria
The first ethical yardstick is utilitarianism , which proposes making decisions
solely on the basis of their outcomes, ideally to provide the greatest good for the
greatest number. This view dominates business decision making. It is consistent
with goals such as efficiency, productivity, and high profits.
Another ethical criterion is to make decisions consistent with fundamental
liberties and privileges, as set forth in documents such as the Bill of Rights.
An emphasis on rights in decision making means respecting and protecting the
basic rights of individuals, such as the right to privacy, free speech, and due
process. This criterion protects whistle-blowers when they reveal an organiza-
tion’s unethical practices to the press or government agencies, using their right
to free speech.
8 Contrast the three ethical
decision criteria.
utilitarianism A system in which
decisions are made to provide the
greatest good for the greatest number.
whistle-blowers Individuals who
report unethical practices by their
employer to outsiders.
So
ur
ce
:
N
ew
sc
om

188 CHAPTER 6 Perception and Individual Decision Making
A third criterion is to impose and enforce rules fairly and impartially to
ensure justice or an equitable distribution of benefits and costs. Union members
typically favor this view. It justifies paying people the same wage for a given
job regardless of performance differences and using seniority as the primary
determination in layoff decisions.
Each criterion has advantages and liabilities. A focus on utilitarianism
promotes efficiency and productivity, but it can sideline the rights of some
individuals, particularly those with minority representation. The use of rights
protects individuals from injury and is consistent with freedom and privacy, but
it can create a legalistic environment that hinders productivity and efficiency.
A focus on justice protects the interests of the underrepresented and less pow-
erful, but it can encourage a sense of entitlement that reduces risk taking,
innovation, and productivity.
Decision makers, particularly in for-profit organizations, feel comfortable
with utilitarianism. The “best interests” of the organization and its stockholders
can justify a lot of questionable actions, such as large layoffs. But many critics
feel this perspective needs to change. 78 Public concern about individual rights
and social justice suggests managers should develop ethical standards based on
nonutilitarian criteria. This presents a challenge because satisfying individual
rights and social justice creates far more ambiguities than utilitarian effects on
efficiency and profits. However, while raising prices, selling products with ques-
tionable effects on consumer health, closing down inefficient plants, laying off
large numbers of employees, and moving production overseas to cut costs can
be justified in utilitarian terms, that may no longer be the single measure by
which good decisions are judged.
Improving Creativity in Decision Making
Although the rational decision-making model will often improve decisions, a
rational decision maker also needs creativity , the ability to produce novel and
useful ideas. 79 These are different from what’s been done before but appropriate
to the problem presented.
Creativity allows the decision maker to more fully appraise and understand
the problem, including seeing problems others can’t see. L’Oréal puts its
managers through creative exercises such as cooking or making music, and the
University of Chicago requires MBA students to make short movies about their
experiences.
Creative Potential Most people have useful creative potential. But to unleash
it, they have to escape the psychological ruts many of us fall into and learn how
to think about a problem in divergent ways.
Exceptional creativity is scarce. We all know of creative geniuses in science
(Albert Einstein), art (Pablo Picasso), and business (Steve Jobs). But what
about the typical individual? Intelligent people and those who score high on
openness to experience (see Chapter 5 ) are more likely to be creative. 80 Other
traits of creative people are independence, self-confidence, risk taking, an
internal locus of control, tolerance for ambiguity, a low need for structure, and
perseverance. 81 Exposure to a variety of cultures can also improve creativity. 82
So taking an international assignment, or even an international vacation, could
jump-start your creative process.
A study of the lifetime creativity of 461 men and women found fewer than
1 percent were exceptionally creative. 83 But 10 percent were highly creative and
about 60 percent were somewhat creative. This reinforces that most of us have
creative potential; we just need to learn to unleash it.
9 Define creativity and discuss
the three-component model
of creativity.
MyManagementLab
For an interactive application of this
topic, check out this chapter’s
simulation activity at
www.mymanagementlab.com.

www.mymanagementlab.com

What About Ethics in Decision Making? 189
Three-Component Model of Creativity What can individuals and
organizations do to stimulate employee creativity? The best answer lies in
the three-component model of creativity , 84 which proposes that individual
creativity essentially requires expertise, creative thinking skills, and intrinsic
task motivation. Studies confirm that the higher the level of each, the higher
the creativity.
Expertise is the foundation for all creative work. Film writer, producer, and di-
rector Quentin Tarantino spent his youth working in a video rental store, where
he built up an encyclopedic knowledge of movies. The potential for creativity is
enhanced when individuals have abilities, knowledge, proficiencies, and similar
expertise in their field of endeavor. You wouldn’t expect someone with mini-
mal knowledge of programming to be very creative as a software engineer.
The second component is creative-thinking skills. This encompasses personal-
ity characteristics associated with creativity, the ability to use analogies, and the
talent to see the familiar in a different light.
A meta-analysis of 102 studies found positive moods increase creativity, but
it depends on what sort of positive mood was considered. 85 Moods such as
happiness that encourage interaction with the world are more conducive to
creativity than passive moods such as calm. This means the common advice
to relax and clear your mind to develop creative ideas may be misplaced. It
would be better to get in an upbeat mood and then frame your work as an
opportunity to have fun and experiment. Negative moods also don’t always
have the same effects on creativity. Passive negative moods such as sadness
doesn’t seem to have much effect, but avoidance-oriented negative moods
such as fear and anxiety decrease creativity. Feeling threatened reduces your
desire to try new activities; risk aversion increases when you’re scared. Active
negative moods, such as anger, however, do appear to enhance creativity,
especially if you are taking your task seriously.
Being around creative others can make us more inspired, especially if
we’re creatively “stuck.” 86 One study found that having “weak ties” to creative
people—knowing them but not well—facilitates creativity because the people
are there as a resource if we need them but not so close as to stunt our own
independent thinking. 87
Analogies allow decision makers to apply an idea from one context to another.
One of the most famous examples was Alexander Graham Bell’s observation that
it might be possible to apply the way the ear operates to his “talking box.” Bell
noticed the bones in the ear are operated by a delicate, thin membrane. He won-
dered why a thicker and stronger membrane shouldn’t be able to move a piece
of steel. From that analogy, the telephone was conceived. Thinking in terms of
analogies is a complex intellectual skill, which helps explain why cognitive ability
is related to creativity. Demonstrating this effect, one study found children who
got high scores on cognitive ability tests at age 13 were significantly more likely to
have made creative achievements in their professional lives 25 years later. 88
Some people develop creative skills because they see problems in a new
way. They’re able to make the strange familiar and the familiar strange. 89 For
instance, most of us think of hens laying eggs. But how many of us have consid-
ered that a hen is only an egg’s way of making another egg?
three-component model of
creativity The proposition that
individual creativity requires expertise,
creative thinking skills, and intrinsic
task motivation.
creativity The ability to produce novel
and useful ideas.

190 CHAPTER 6 Perception and Individual Decision Making
Creative people often love their work, to the point of seeming obsession.
The final component in the three-component model of creativity is intrinsic
task motivation. This is the desire to work on something because it’s interest-
ing, involving, exciting, satisfying, or personally challenging. It’s what turns cre-
ativity potential into actual creative ideas. Environmental stimulants that foster
creativity include a culture that encourages the flow of ideas; fair and construc-
tive judgment of ideas; rewards and recognition for creative work; sufficient
financial, material, and information resources; freedom to decide what work is
to be done and how to do it; a supervisor who communicates effectively, shows
confidence in others, and supports the work group; and work group members
who support and trust each other. 90
International Differences There are no global ethical standards, 91 as contrasts
between Asia and the West illustrate. 92 Because bribery is commonplace in
countries such as China, a Canadian working in China might face a dilemma:
should I pay a bribe to secure business if it is an accepted part of that country’s
culture? A manager of a large U.S. company operating in China once caught
an employee stealing. Following company policy, she fired him and turned him
over to the local authorities. Later, she was horrified to learn the employee had
been summarily executed. 93
Although ethical standards may seem ambiguous in the West, criteria defin-
ing right and wrong are actually much clearer there than in Asia, where few is-
sues are black and white and most are gray. Global organizations must establish
ethical principles for decision makers in countries such as India and China and
modify them to reflect cultural norms if they want to uphold high standards
and consistent practices.
MyManagementLab
Now that you have finished this chapter, go back to www.mymanagementlab.com to continue
practicing and applying the concepts you’ve learned.
Perception Individuals base their behavior not on the way their external
environment actually is but rather on what they see or believe it to be.
● Whether a manager successfully plans and organizes the work of
employees and actually helps them to structure their work more effi-
ciently and effectively is far less important than how employees perceive
the manager’s efforts.
● Employees judge issues such as fair pay, performance appraisals, and
working conditions in very individual ways. To influence productivity, we
need to assess how workers perceive their jobs.
S A L
SELF-ASSESSMENT LIBRARY
How Creative Am I?
In the Self-Assessment Library (available on CD or online), take assessment I.A.5 (How
Creative Am I?).
Summary and Implications for Managers

www.mymanagementlab.com

Summar y and Implications for Managers 191
Checklists Lead to Better Decisions
POINT COUNTERPOINT
C
hecklists work well, except when they don’t.
Checklists have a paradox that makes them of
dubious usefulness: the more complex the decision mak-
ing, ostensibly the more important the checklist. But the more
complex the decision making, the less likely that a checklist
can or should be followed. Checklists can take an impractical
amount of time to follow. Driving an automobile is a routine but
complex process. Do you keep a checklist in your car for every
time you get behind the wheel?
Moreover, by their very nature, complex tasks can pose
problems that fall outside the scope of the checklist. The last
thing we need to solve unanticipated or complicated prob-
lems is rote allegiance to a checklist that is poorly suited to the
problem at hand.
Indeed, a problem with many poor decisions is that heuris-
tics are too often followed, with little thought to whether the
assumptions behind them still hold true. If we have learned
anything from the financial crisis, it is that a model or heuristic
is only as good as its assumptions. Assume housing prices are
properly valued and likely to continue to increase, and it makes
all the sense in the world to be aggressive in making loans.
Countrywide and Fannie Mae had all sorts of rules, protocols,
and checklists they followed in making catastrophically bad
loan decisions.
As for the medical decision making, as another physician
and author, Sandeep Jauhar, noted, advocates of check-
lists often ignore the unintended consequences. Insurers
compensate doctors for ticking off boxes on checklists—like
prescribing antibiotics—even when there is no evidence they
are warranted. Because this protocol encourages the growth
of antibiotic-resistant bacteria, we all are endangered by this
checklist-adhering behavior.
We want to think we live in a world where decision-
making errors can be easily solved. We can mitigate some
decisions by learning more about decision-making errors, but
one of the main learning points is that we need a healthier
respect for the degree to which we’re susceptible to errors.
Checklists provide a false sense of security and an ignorance
about when they cause more problems than they solve.
W
hile life and lives sometimes turn on the basis of big
decisions, it’s often the little ones that matter more.
Our failure to follow routine, everyday protocols
makes the world a more dangerous place for ourselves, and for
others. A few examples . . .
Nearly 100,000 U.S. patients are killed every year by the fail-
ure of doctors and nurses to follow simple instructions. Really.
Hospital-acquired infections kill that many people every year,
and nearly all those deaths are entirely preventable.
Most airline crashes occur because pilots ignore the rules.
Pilot failure to follow protocols is a primary contributing factor
to the majority of incidents and accidents.
An important way of attacking these errors is to use
checklists.
Support for a checklist approach is provided by a new
book, The Checklist Manifesto . In it, the author, Harvard
Medical School surgeon Atul Gawande notes, “The volume and
complexity of what we know has exceeded our ability to deliver
its benefits correctly, safely, or reliably.” Unless, of course, we
use checklists.
Dr. Peter Pronovost, a critical care specialist at Johns
Hopkins, developed his own operating room checklist, which
included some “no brainers” such as wash your hands with
soap, put drapes over entire patient, and put sterile dressing
over incisions. Within 1 year of the checklist’s adoption at Johns
Hopkins, the post-op infection rate went from 11 percent to zero.
According to Gawande, in using checklists to improve
decisions, we should keep the following guidelines in mind:
● Include all “stupid but critical” tasks so they’re not
overlooked.
● Make it mandatory for team members to inform others when
an item on the list is completed (or not).
● Empower team members to question superiors about the
checklist.
● Allow for improvisation in unusual circumstances.
● Thoroughly test-drive the checklist before implementing it.
Gawande notes that checklists aren’t important only for
medical decision making. Engineering, business, technology,
safety, and transportation are all industries that would benefit
from greater development and use of checklists in everyday
decision making.
As a project manager noted, “Successful checklists detail
both the sequence of necessary activities as well as the
communication checkpoints to ensure dialog among project
participants.”
Sources: S. Jauhar, “One Thing After Another,” New York Times Book Review (January 24, 2010), p. 7; C. Arnst, “Make a List.
Check it Twice,” Bloomberg Businessweek (February 22, 2010), pp. 78–79; J. Ross, “The Checklist Manifesto and the Digital
Divide,” Forbes (July 27, 2010), downloaded on May 7, 2011, from www.forbes.com .

www.forbes.com

192 CHAPTER 6 Perception and Individual Decision Making
● Absenteeism, turnover, and job satisfaction are also reactions to an
individual’s perceptions. Dissatisfaction with working conditions and the
belief that an organization lacks promotion opportunities are judgments
based on attempts to create meaning in the job.
● The employee’s conclusion that a job is good or bad is an interpretation.
Managers must spend time understanding how each individual interprets
reality and, when there is a significant difference between what someone
sees and what exists, try to eliminate the distortions.
Individual Decision Making Individuals think and reason before they act. This
is why an understanding of how people make decisions can be helpful for ex-
plaining and predicting their behavior. In some decision situations, people fol-
low the rational decision-making model. But few important decisions are simple
or unambiguous enough for the rational model’s assumptions to apply. So we
find individuals looking for solutions that satisfice rather than optimize, inject-
ing biases and prejudices into the decision process, and relying on intuition.
What can managers do to improve their decision making? We offer four
suggestions.
● Analyze the situation. Adjust your decision-making approach to the national
culture you’re operating in and to the criteria your organization evaluates
and rewards. If you’re in a country that doesn’t value rationality, don’t feel
compelled to follow the rational decision-making model or to try to make
your decisions appear rational. Similarly, organizations differ in the impor-
tance they place on risk, the use of groups, and the like. Adjust your deci-
sion approach to ensure it’s compatible with the organization’s culture.
● Second, be aware of biases. Then try to minimize their impact. Exhibit 6-4
offers some suggestions.
● Third, combine rational analysis with intuition. These are not conflicting
approaches to decision making. By using both, you can actually improve
your decision-making effectiveness. As you gain managerial experience,
you should feel increasingly confident in imposing your intuitive pro-
cesses on top of your rational analysis.
● Finally, try to enhance your creativity. Actively look for novel solutions to
problems, attempt to see problems in new ways, and use analogies. Try to
remove work and organizational barriers that might impede your creativity.
1 What is perception, and what factors influence our
perception?
2 What is attribution theory? What are the three determi-
nants of attribution? What are its implications for explaining
organizational behavior?
3 What shortcuts do people frequently use in making
judgments about others?
4 What is the link between perception and decision
making? How does one affect the other?
5 What is the rational model of decision making? How is it
different from bounded rationality and intuition?
6 What are some of the common decision biases or errors
that people make?
7 What are the influences of individual differences,
organizational constraints, and culture on decision
making?
8 Are unethical decisions more a function of an individual
decision maker or the decision maker’s work environment?
Explain.
9 What is creativity, and what is the three-component
model of creativity?
QUESTIONS FOR REVIEW

Ethical Dilemma 193
EXPERIENTIAL EXERCISE Biases in Decision Making
Step 1
Answer each of the following problems.
1. Fortune magazine ranked the following 10 corpora-
tions among the 500 largest U.S.–based firms accord-
ing to sales volume for 2008:
Group A: Apple Computer, Hershey Foods, Kellogg,
McDonald’s, U.S. Airways
Group B: Altria Group, AmerisourceBergen, Cardinal
Health, McKesson, Valero Energy
Which group would you say had the larger total
sales volume—A or B? By what percentage—10 per-
cent, 50 percent, 100 percent?
2. The best student in your introductory MBA class
this past semester writes poetry and is rather shy
and small in stature. What was the student’s
undergraduate major—Chinese studies or
psychology?
3. Which of the following causes more deaths in the
United States each year?
a. Stomach cancer
b. Motor vehicle accidents
4. Which would you choose?
a. A sure gain of $240
b. A 25 percent chance of winning $1,000 and
a 75 percent chance of winning nothing
5. Which would you choose?
a. A sure loss of $750
b. A 75 percent chance of losing $1,000 and a
25 percent chance of losing nothing
6. Which would you choose?
a. A sure loss of $3,000
b. An 80 percent chance of losing $4,000 and a
20 percent chance of losing nothing
Step 2
Break into groups of three to five students. Compare your
answers. Explain why you chose the answers you did.
Step 3
Your instructor will give you the correct answers to each
problem. Now discuss the accuracy of your decisions, the
biases evident in the decisions you reached, and how you
might improve your decision making to make it more
accurate.
Source: These problems are based on examples provided in M. H. Bazerman, Judgment in Managerial
Decision Making, 3rd ed. (New York: Wiley, 1994).
ETHICAL DILEMMA Do Unethical Decisions Come from Bad Character?
Why would former New York Attorney General and then
Governor Eliot Spitzer decide to use a prostitution ser-
vice? Why would highly respected attorney Marc Dreier,
with degrees from Harvard and Yale and a successful
Park Avenue law firm, decide to impersonate people in
order to swindle others? From Tiger Woods to Bernie
Madoff, it’s not hard to find examples of unethical be-
havior. But what causes people to make unfortunate
choices?
Behavioral genetics research has taught us that virtu-
ally every human characteristic has genetic origins and
that genetic differences are a central reason people differ
in their behavior. Thus, some personality traits probably
predispose people toward unethical behavior. One study
of white-collar criminals, for example, showed they were
significantly lower on a conscientiousness scale than the
general population.
On the other hand, recent research shows that all of
us perform unethical behavior to some degree while
subconsciously fooling ourselves about it. We may bend a
rule to help a colleague, overlook information that might
damage a case we want to make, or lie to avoid a negative
consequence—blithely unaware that others might view
this behavior as unethical.
Why do we do this? Evidence suggests that when we fail
to notice a decision has an ethical component, it enables
us to behave in a self-interested manner without having
to feel badly about it. No wonder, then, that people tend
to believe they are more ethical than they are.
Many think that transparency and accountability in-
crease ethical behavior. Behavioral ethics research, how-
ever, shows us that often these actions increase unethical
behavior, because they cause individuals to think disclo-
sure absolves them of ethical responsibilities to be ob-
jective, or to deny to an even greater degree the ethical
components of their decisions.
The first step toward behaving more ethically is, ironi-
cally, admitting to ourselves that we adhere to ethical stan-
dards less well than we admit.

194 CHAPTER 6 Perception and Individual Decision Making
Questions
1. Do you think people see themselves as more ethical
than they really are? And you?
2. The authors of one study noted that “disclosures can
exacerbate [unethical behavior] by causing people
to feel absolved of their duty to be objective.” Do you
agree? Why or why not?
3. Do you think if we admitted it to ourselves times
when we behaved unethically we would be less likely
to behave unethically in the future?
Sources: M. H. Bazerman and A. E. Tenbrunsel, Blind Spots: Why We Fail to Do What’s Right and What to
Do about It (Princeton, NJ: Princeton University Press, 2011); M. H. Bazerman and A. E. Tenbrunsel,
“Stumbling into Bad Behavior,” The New York Times (April 21, 2011), p. A23); and S. Jayson, “What
Propels Us to Do Bad Things?” USA Today (May 3, 2011), p. 6D.
CASE INCIDENT 1 Computerized Decision Making
As you saw in the opening vignette, computerized decision
making has really taken off in recent years. Some have
blamed the financial crisis that began in 2007–2008 on ex-
cessive reliance on these computerized decision-making
models. Lending officers who used to make individualized
decisions about credit worthiness through personal judg-
ment were replaced by computerized and statistical mod-
els, which resulted in mechanistic decision making. As a
result, large numbers of decisions were tied to a common
set of assumptions, and when those assumptions proved
to be wrong, the entire credit system fell apart and the
economy faltered.
Besides the use of computerized decision models,
the use of computerized systems like Twitter for in-
formation sharing and the burgeoning number of
computer “apps” may be leading to information over-
load, so facts and figures replace analysis and thought
in making human decisions. Eric Kessler from Pace
University’s Lubin School of Business notes, “What
starts driving decisions is the urgent rather than the im-
portant.” Researchers have begun to find that people
using too much information actually make worse deci-
sions than people with less information, or they get so
swamped in information that they are unable to reach
a decision at all.
Computer decision models do present certain advan-
tages. Computers are capable of amassing and compiling
enormous amounts of data and using them to spot trends
and patterns a human observer would simply never see.
Computers also are not prone to emotional decision mak-
ing or falling into the heuristics and biases we discussed
in this chapter. Finally, computerized decision making sys-
tems are generally faster than human beings.
However, computer decision-making systems have cer-
tain faults that might severely constrain their usefulness.
Although computers can grind through masses of data,
they are not capable of intuition or creative thought. As
scholar Amar Bhidé notes, “An innovator cannot sim-
ply rely on historical patterns in placing bets on future
opportunities.” People are much more likely to spot op-
portunities that lie just beyond what the data can tell us
directly. Also, groups of people working in collabora-
tion can discuss and question assumptions and conclu-
sions. Computers cannot actively consider whether their
programming makes sense or adapt automatically when
values change.
Questions
1. What are the specific advantages of using computer-
ized decision making? How can computers be better
decision makers than humans?
2. What are the weaknesses of using computers as
decision tools? Are computers likely to have any
specific problems in making decisions that people
wouldn’t have?
3. Do you think computer decision making systems can
effectively take ethical issues into account? What is
the role of human decision makers in creating ethical
choices?
4. Are there advantages to completely disconnecting
from the wired world when possible? What can you
do to try to retain your ability to focus and process
information deeply?
Sources: Based on S. Begley, “I Can’t Think!” Newsweek (March 7, 2011), www.newsweek.com ; A. Bhidé,
“The Judgment Deficit” Harvard Business Review (September 2010), pp. 44–53; and T. H. Davenport and
J. H. Snabe, “How Fast and Flexible Do You Want Your Information, Really?” Sloan Management Review
52 (Spring 2011), pp. 57–62.

www.newsweek.com

Endnotes 195
CASE INCIDENT 2 Predictions That Didn’t Quite Pan Out
Consider the following examples of predictions:
● Prediction: “More people are going to be put to work
this summer.”— Vice President Joe Biden (June 17, 2010)
● Status: By August, job growth in the private sector
fell by two-thirds and unemployment increased to
9.8 percent in November.
● Prediction: “The market is telling you that something
is not quite right. . . . The Chinese economy is going to
slow down regardless.”—Investment analyst Marc Faber
(May 3, 2010)
● Status: The Chinese economy grew by 9.5 percent over
the rest of the year.
● Prediction: A quick, prepackaged bankruptcy for
General Motors might stall, leading to “a long period
of bankruptcy which I believe would result in liquida-
tion of the company.”—CEO Rick Wagoner (March 17,
2009)
● Status: GM’s bankruptcy court lasted a mere 40 days,
and by September the company held $43 billion in cash.
● Prediction: “My long-term opinion is that the bear mar-
ket has several years left to run, and stock prices will go
a lot lower. . . . So any rally that happens is going to be a
bear market rally.”—Robert Prechter, CEO at research
company Elliot Wave International (February 27, 2009)
● Status: The S&P 500 was up 64 percent from its lowest
point by the middle of December, and stocks have con-
tinued to perform well since.
● Prediction: “I think this is a case where Freddie Mac
(FRE) and Fannie Mae (FNM) are fundamentally
sound. They’re not in danger of going under. . . . I think
they are in good shape going forward.”—Representative
Barney Frank (July 14, 2008)
● Status: Just 2 months later, the mortgage companies
were in conservatorship, and the government had
pledged to invest $100 billion in each.
● Prediction: “I think Bob Steel’s the one guy I trust to
turn this bank around, which is why I’ve told you on
weakness to buy Wachovia.”—CNBC commentator Jim
Cramer (March 11, 2008)
● Status: Investors fled Wachovia within the next 2 weeks,
and the company nearly failed, with shares losing half
their value from September 15 to December 29.
Questions
1. Despite the difficulty of making predictions, many
people confidently make assertions about what will
happen in the future. Why do you think this is?
2. What perceptual or decision-making errors can you
identify in these predictions?
3. Can you think of some predictions you’ve made that
haven’t turned out the way you expected?
4. Why do you think it’s so hard to make accurate
predictions?
Sources: Based on J. E. Keating, “The 10 Worst Predictions for 2010,” Foreign Policy (December 17, 2010),
www.foreignpolicy.com ; P. Coy, “Worst Predictions about 2009,” Bloomberg Businessweek (December 15,
2009), www.businessweek.com ; and P. Coy, “Worst Predictions about 2008,” BusinessWeek (January 12,
2009), pp. 15–16.
ENDNOTES
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www.foreignpolicy.com

www.businessweek.com

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Endnotes 197
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Interest 10 (2009), pp.1–47; T. Zaleskiewicz, “Financial
Forecasts During the Crisis: Were Experts More Accurate
than Laypeople?” Journal of Economic Psychology 32 (2011),
pp. 384–390; and G. A. Akerlof and R. J. Shiller, Animal
Spirits: How Human Psychology Drives the Economy and Why
It Matters for Global Capitalism (Princeton, NJ: Princeton
University Press, 2009).
68. H. Moon, J. R. Hollenbeck, S. E. Humphrey, and B. Maue,
“The Tripartite Model of Neuroticism and the Suppression of
Depression and Anxiety within an Escalation of Commitment
Dilemma,” Journal of Personality 71 (2003), pp. 347–368;
and H. Moon, “The Two Faces of Conscientiousness: Duty
and Achievement Striving in Escalation of Commitment
Dilemmas,” Journal of Applied Psychology 86 (2001),
pp. 535–540.
69. J. Musch, “Personality Differences in Hindsight Bias,” Memory
11 (2003), pp. 473–489.
70. W. K. Campbell and C. Sedikides, “Self-Threat Magnifies
the Self-Serving Bias: A Meta-Analytic Integration,” Review of
General Psychology 3 (1999), pp. 23–43.
71. This section is based on S. Nolen-Hoeksema, J. Larson,
and C. Grayson, “Explaining the Gender Difference in
Depressive Symptoms,” Journal of Personality & Social
Psychology (November 1999), pp. 1061–1072; and J. S.
Hyde, A. H. Mezulis, and L. Y. Abramson, “The ABCs of
Depression: Integrating Affective, Biological, and Cognitive
Models to Explain the Emergence of the Gender Difference
in Depression,” Psychological Review 115, no. 2 (2008),
pp. 291–313.
72. H. Connery and K. M. Davidson, “A Survey of Attitudes to
Depression in the General Public: A Comparison of Age and
Gender Differences,” Journal of Mental Health 15, no. 2 (April
2006), pp. 179–189.
73. M. Elias, “Thinking It Over, and Over, and Over,” USA Today
(February 6, 2003), p. 10D.
74. K. E. Stanovich and R. F. West, “On the Relative
Independence of Thinking Biases and Cognitive Ability,”

Endnotes 199
Journal of Personality and Social Psychology 94, no. 4 (2008),
pp. 672–695.
75. N. J. Adler, International Dimensions of Organizational Behavior,
4th ed. (Cincinnati, OH: South-Western Publishing, 2002),
pp. 182–189.
76. A. Wildavsky, The Politics of the Budgetary Process (Boston:
Little, Brown, 1964).
77. G. F. Cavanagh, D. J. Moberg, and M. Valasquez, “The Ethics
of Organizational Politics,” Academy of Management Journal
(June 1981), pp. 363–374.
78. See, for example, T. Machan, ed., Commerce and Morality
(Totowa, NJ: Rowman and Littlefield, 1988).
79. T. M. Amabile, “A Model of Creativity and Innovation in
Organizations,” in B. M. Staw and L. L. Cummings (eds.),
Research in Organizational Behavior, vol. 10 (Greenwich,
CT: JAI Press, 1988), p. 126; and J. E. Perry-Smith and
C. E. Shalley, “The Social Side of Creativity: A Static and
Dynamic Social Network Perspective,” Academy of Management
Review (January 2003), pp. 89–106.
80. G. J. Feist and F. X. Barron, “Predicting Creativity from Early
to Late Adulthood: Intellect, Potential, and Personality,”
Journal of Research in Personality (April 2003), pp. 62–88.
81. R. W. Woodman, J. E. Sawyer, and R. W. Griffin, “Toward
a Theory of Organizational Creativity,” Academy of
Management Review (April 1993), p. 298; J. M. George
and J. Zhou, “When Openness to Experience and
Conscientiousness Are Related to Creative Behavior: An
Interactional Approach,” Journal of Applied Psychology (June
2001), pp. 513–524; and E. F. Rietzschel, C. K. W. de
Dreu, and B. A. Nijstad, “Personal Need for Structure and
Creative Performance: The Moderating Influence of Fear
of Invalidity,” Personality and Social Psychology Bulletin (June
2007), pp. 855–866.
82. A. K. Leung, W. W. Maddux, A. D. Galinsky, and C. Chiu,
“Multicultural Experience Enhances Creativity,” American
Psychologist 63, no. 3 (2008), pp. 169–180.
83. Cited in C. G. Morris, Psychology: An Introduction, 9th ed.
(Upper Saddle River, NJ: Prentice Hall, 1996), p. 344.
84. This section is based on T. M. Amabile, “Motivating
Creativity in Organizations: On Doing What You Love and
Loving What You Do,” California Management Review 40, no. 1
(Fall 1997), pp. 39–58.
85. M. Baas, C. K. W. De Dreu, and B. A. Nijstad, “A Meta-
Analysis of 25 Years of Mood-Creativity Research: Hedonic
Tone, Activation, or Regulatory Focus?” Psychological Bulletin
134, no. 6 (2008), pp. 779–806.
86. J. Zhou, “When the Presence of Creative Coworkers Is
Related to Creativity: Role of Supervisor Close Monitoring,
Developmental Feedback, and Creative Personality,” Journal
of Applied Psychology 88, no. 3 (June 2003), pp. 413–422.
87. J. E. Perry-Smith, “Social yet Creative: The Role of Social
Relationships in Facilitating Individual Creativity,” Academy
of Management Journal 49, no. 1 (2006), pp. 85–101.
88. G. Park, D. Lubinski, and C. P. Benbow, “Contrasting
Intellectual Patterns Predict Creativity in the Arts
and Sciences,” Psychological Science 18, no. 11 (2007),
pp. 948–952.
89. W. J. J. Gordon, Synectics (New York: Harper & Row, 1961).
90. See C. E. Shalley, J. Zhou, and G. R. Oldham, “The
Effects of Personal and Contextual Characteristics on
Creativity: Where Should We Go from Here?” Journal of
Management (November 2004), pp. 933–958; G. Hirst,
D. Van Knippenberg, and J. Zhou, “A Cross-Level Perspective
on Employee Creativity: Goal Orientation, Team Learning
Behavior, and Individual Creativity,” Academy of Management
Journal 52, no. 2 (2009), pp. 280–293; and C. E. Shalley,
L. L. Gilson, and T. C. Blum, “Interactive Effects of Growth
Need Strength, Work Context, and Job Complexity on Self-
Reported Creative Performance,” Academy of Management
Journal 52, no. 3 (2009), pp. 489–505.
91. T. Jackson, “Cultural Values and Management Ethics:
A 10-Nation Study,” Human Relations (October 2001),
pp. 1267–1302; see also J. B. Cullen, K. P. Parboteeah, and
M. Hoegl, “Cross-National Differences in Managers’
Willingness to Justify Ethically Suspect Behaviors: A Test of
Institutional Anomie Theory,” Academy of Management Journal
(June 2004), pp. 411–421.
92. W. Chow Hou, “To Bribe or Not to Bribe?” Asia, Inc.
(October 1996), p. 104.
93. P. Digh, “Shades of Gray in the Global Marketplace,”
HRMagazine (April 1997), p. 91.

THE MOTIVATIONS OF THE 99ERS
200
W
hile the economy shows signs of improving, the sluggish nature
of the recovery has left behind more long-term unemployed than
anyone has seen since the Great Depression.
Typically, unemployment insurance lasts 6 months. As the great recession
continued, Congress extended these benefits—up to 99 weeks for those in
27 states hit hardest by the recession.
The 99ers are those who have been unemployed more than 99 weeks.
They number about 2 million, and millions more are underemployed or have
withdrawn from the labor market altogether. Among the hardest hit are
older workers who struggle to convince employers to hire them.
St. Louis resident Peter Gordon, 53, has been unemployed more than a
year. Once he becomes a 99er, his unemployment check will run out. “I will
be OK for another 20 weeks,” Gordon said. “But I’m going crazy.” Akron’s
Susan Harrell has been jobless more than 2 years and has exhausted her
unemployment benefits. Laid off from her $60,000/year telecommunications
job, she finds employers unwilling to hire her because she is unemployed, 58,
or both. “They look at me and say, ‘How long are you really going to work?’ ”
Should the government help those in need by extending unemployment
benefits further? The question is complicated and divides Republicans and
Democrats. But put aside ideology for a moment, and consider the motiva-
tional dynamics at play. Many have lost their jobs through no fault of their
own. Not only are unemployment benefits compassionate, they provide an
opportunity for people to retrain for a new occupation. Benefits thus moti-
vate them to move into more viable occupations.
On the other hand, many economists argue that extending benefits
provides disincentives for finding employment. One concludes,
“Unemployment insurance is not free: It results in less employment and less
output, not more.” Paying people not to work gives them incentives not to
work, this argument goes.
Our nation will probably never agree on the motivational effects of
unemployment insurance. However, with or without insurance, there is
troubling evidence that some individuals like Peter Gordon and Susan Harrell
will remain out of work for a very long time. “This is horrible,” says Harrell. “It’s
embarrassing and humiliating.”
Sources: W. M. Welch, “Long-Term Unemployed See Benefits Rolled Back,” USA Today (May 17,
2011), p. A1; D. Hunsinger, Long-Term Unemployed Face Stigmas in Job Search,” USA Today
(January 23, 2011), downloaded May 2, 2011, from www.usatoday.com/money/ ; M. Thornton,
“99ers and the Long-term Unemployed Are the Elephants in the Economic Recovery Room,”
Huffington Post (May 15, 2011), downloaded May 25, 2011, from www.huffingtonpost.com/ ;
C. B. Mulligan, “Do Jobless Benefits Discourage People From Finding Jobs?” New York Times
(March 17, 2010), downloaded May 2, 2011, from http://economix.blogs.nytimes.com/ .
LEARNING
OBJECTIVES
After studying this chapter,
you should be able to:
1 Describe the three key
elements of motivation.
2 Identify early theories of
motivation and evaluate
their applicability today.
3 Apply the predictions of
self-determination theory
to intrinsic and extrinsic
rewards.
4 Understand the impli cations
of employee engagement
for management.
5 Compare and contrast
goal-setting theory and
management by objectives.
6 Contrast reinforcement
theory and goal-setting
theory.
7 Demonstrate how
organizational justice is a
refinement of equity theory.
8 Apply the key tenets of
expectancy theory to
motivating employees.
9 Compare contemporary
theories of motivation.

MyManagementLab
Access a host of interactive
learning aids to help strengthen
your understanding of the
chapter concepts at
www.mymanagementlab.com.

www.mymanagementlab.com

www.usatoday.com/money/

www.huffingtonpost.com/

http://economix.blogs.nytimes.com/

Motivation
Concepts 7
Luke: “I don’t believe it.”
Yoda: “That is why you fail.”
—The Empire Strikes Back
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201

202 CHAPTER 7 Motivation Concepts
D ebates about motivation can occupy a central role in important public policy debates, and as we will see, they also rank among the most important questions managers need to answer.
However, motivation is not simply about working hard—it also reflects your
view of your own abilities. Try a self-assessment of your confidence in your
ability to succeed.
Motivation is one of the most frequently researched topics in OB. 1 A recent
Gallup poll revealed one reason—a majority of U.S. employees (54 percent) are
not actively engaged in their work, and another portion (17 percent) are ac-
tively disengaged. 2 In another study, workers reported wasting roughly 2 hours
per day, not counting lunch and scheduled breaks (usually Internet surfing and
talking with co-workers). 3 Clearly, motivation is an issue. The good news is that
all this research provides useful insights into how to improve it.
In this chapter, we’ll review the basics of motivation, assess motivation
theories, and provide an integrative model that fits the best of these theories
together.
Some individuals seem driven to succeed. But the same student who struggles
to read a textbook for more than 20 minutes may devour a Harry Potter book in a
day. The difference is the situation. So as we analyze the concept of motivation,
keep in mind that the level of motivation varies both between individuals and
within individuals at different times.
We define motivation as the processes that account for an individual’s
intensity, direction, and persistence of effort toward attaining a goal. 4 While
general motivation is concerned with effort toward any goal, we’ll narrow
the focus to organizational goals in order to reflect our singular interest in
work-related behavior.
The three key elements in our definition are intensity, direction, and
persistence. Intensity describes how hard a person tries. This is the element
most of us focus on when we talk about motivation. However, high intensity
is unlikely to lead to favorable job-performance outcomes unless the effort
is channeled in a direction that benefits the organization. Therefore, we con-
sider the quality of effort as well as its intensity. Effort directed toward, and
consistent with, the organization’s goals is the kind of effort we should be seek-
ing. Finally, motivation has a persistence dimension. This measures how long a
person can maintain effort. Motivated individuals stay with a task long enough
to achieve their goal.
1 Describe the three key
elements of motivation.
S A L
SELF-ASSESSMENT LIBRARY
How Confident Am I in My Abilities to Succeed?
In the Self-Assessment Library (available on CD or online), take assessment
IV.A.3 (How Confident Am I in My Abilities to Succeed?) and answer the following
questions.
1. How did you score relative to other class members? Does that surprise you?
2. Do you think self-confidence is critical to success? Can a person be too
confident?
Defining Motivation

Early Theories of Motivation 203
Four theories of employee motivation formulated during the 1950s, although
now of questionable validity, are probably still the best known. We discuss more
valid explanations later, but these four represent a foundation on which they
have grown, and practicing managers still use them and their terminology.
Hierarchy of Needs Theory
The best-known theory of motivation is Abraham Maslow’s hierarchy of needs . 5
Maslow hypothesized that within every human being, there exists a hierarchy of
five needs:
1. Physiological. Includes hunger, thirst, shelter, sex, and other bodily needs.
2. Safety. Security and protection from physical and emotional harm.
3. Social. Affection, belongingness, acceptance, and friendship.
4. Esteem. Internal factors such as self-respect, autonomy, and achievement,
and external factors such as status, recognition, and attention.
5. Self-actualization. Drive to become what we are capable of becoming;
includes growth, achieving our potential, and self-fulfillment.
Although no need is ever fully gratified, a substantially satisfied need no lon-
ger motivates. Thus as each becomes substantially satisfied, the next one becomes
dominant. So if you want to motivate someone, according to Maslow, you need to
understand what level of the hierarchy that person is currently on and focus on
satisfying needs at or above that level, moving up the steps in Exhibit 7-1 .
Maslow separated the five needs into higher and lower orders. Physiological
and safety needs, where the theory says people start, were lower-order needs ,
2 Identify early theories of
motivation and evaluate
their applicability today.
motivation The processes that
account for an individual’s intensity,
direction, and persistence of effort
toward attaining a goal.
hierarchy of needs Abraham Maslow’s
hierarchy of five needs—physiological,
safety, social, esteem, and self-
actualization—in which, as each need
is substantially satisfied, the next need
becomes dominant.
lower-order needs Needs that
are satisfied externally, such as
physiological and safety needs.
Early Theories of Motivation
Maslow’s Hierarchy of Needs Exhibit 7-1
Source: A. H. Maslow, Motivation and Personality, 3rd ed., R. D. Frager and J. Fadiman (eds.). © 1997. Adapted by permission of
Pearson Education, Inc., Upper Saddle River, New Jersey.

204 CHAPTER 7 Motivation Concepts
and social, esteem, and self-actualization were higher-order needs . Higher-order
needs are satisfied internally (within the person), whereas lower-order needs are
predominantly satisfied externally (by things such as pay, union contracts, and
tenure).
The hierarchy, if it applies at all, aligns with U.S. culture. In Japan, Greece,
and Mexico, where uncertainty-avoidance characteristics are strong, security
needs would be on top of the hierarchy. Countries that score high on nurturing
characteristics—Denmark, Sweden, Norway, the Netherlands, and Finland—
would have social needs on top. 6 Group work will motivate employees more
when the country’s culture scores high on the nurturing criterion.
Maslow’s theory has received wide recognition, particularly among practic-
ing managers. It is intuitively logical and easy to understand. When introduced,
it provided a compelling alternative to behaviorist theories that posited only
physiological and safety needs as important. Unfortunately, however, research
does not validate it. Maslow provided no empirical substantiation, and several
studies that sought to validate it found no support for it. 7 There is little evidence
that need structures are organized as Maslow proposed, that unsatisfied needs
motivate, or that a satisfied need activates movement to a new need level. 8 But
old theories, especially intuitively logical ones, apparently die hard.
Some researchers have attempted to revive components of the need hier-
archy concept, using principles from evolutionary psychology. 9 They propose
that lower-level needs are the chief concern of immature animals or those
with primitive nervous systems, whereas higher needs are more frequently
observed in mature animals with more developed nervous systems. They also
note distinct underlying biological systems for different types of needs. Time
will tell whether these revisions to Maslow’s hierarchy will be useful to practic-
ing managers.
S
urprisingly, this statement appears
to be false.
There is some research on how
team goals facilitate team performance.
However, until recently, we knew very
little about whether others help or hinder
our individual chances of meeting a goal.
Generally, whether it’s reaching a
weight loss goal, successfully com-
pleting an undergraduate course, or
completing a work task, help and
support from others actually appears
to hinder our chances and make us
feel worse rather than better.
Why? First, research has found that
help is often, well, unhelpful. Advice
and direction from others is seldom
well suited for accomplishing our
goal. If you’re trying to meet a work
deadline using your approach, it’s not
often useful for a co-worker to advise
you to use his or her method instead.
Second, such advice and assistance
generally makes us feel less confident
and positive about achieving the goal.
The more help is offered, the more
negative feelings and stress we have
about the goal.
The upshot? Generally, you’ll do a
better job of meeting your individual
work goals if you “just do it” by your-
self. Of course, sometimes you do
need the help of others. But keep that
help focused on specific questions
and not on advice for attaining the
general goal.
Sources: H. B. Kappes and P. E. Shrout,
“When Goal Sharing Produces Support
That Is Not Caring,” Personality and Social
Psychology Bulletin 37, no. 5 (2011),
pp. 662–673; P. E. Shrout, N. Bolger,
M. Iida, C. Burke, M. E. Gleason, and
S.  P. Lane, “The Effects of Daily Support
Transactions During Acute Stress:
Results from a Diary Study of Bar Exam
Preparation,” in K. Sullivan and J. Davila
(Eds.), Support Processes in Intimate
Relationships (New York: Oxford University
Press, 2010), pp. 175–199.
Myth or Science?
“The Support of Others Improves Our Chances
of Accomplishing Our Goals”

Early Theories of Motivation 205
Theory X The assumption that
employees dislike work, are lazy,
dislike responsibility, and must be
coerced to perform.
two-factor theory A theory that relates
intrinsic factors to job satisfaction
and associates extrinsic factors with
dissatisfaction. Also called motivation-
hygiene theory.
hygiene factors Factors—such as
company policy and administration,
supervision, and salary—that, when
adequate in a job, placate workers.
When these factors are adequate,
people will not be dissatisfied.
Theory X and Theory Y
Douglas McGregor proposed two distinct views of human beings: one basically
negative, labeled Theory X, and the other basically positive, labeled Theory Y. 10
After studying managers’ dealings with employees, McGregor concluded that
their views of the nature of human beings are based on certain assumptions
that mold their behavior.
Under Theory X , managers believe employees inherently dislike work and must
therefore be directed or even coerced into performing it. Under Theory Y , in con-
trast, managers assume employees can view work as being as natural as rest or play,
and therefore the average person can learn to accept, and even seek, responsibility.
To understand more fully, think in terms of Maslow’s hierarchy. Theory Y
assumes higher-order needs dominate individuals. McGregor himself believed
Theory Y assumptions were more valid than Theory X. Therefore, he proposed
such ideas as participative decision making, responsible and challenging jobs,
and good group relations to maximize an employee’s job motivation.
Unfortunately, no evidence confirms that either set of assumptions is valid
or that acting on Theory Y assumptions will lead to more motivated workers.
OB theories need empirical support before we can accept them. Theory X and
Theory Y lack such support as much as the hierarchy of needs.
Two-Factor Theory
Believing an individual’s relationship to work is basic, and that attitude toward
work can determine success or failure, psychologist Frederick Herzberg won-
dered, “What do people want from their jobs?” He asked people to describe,
in detail, situations in which they felt exceptionally good or bad about their
jobs. The responses differed significantly and led Hertzberg to his two-factor
theory —also called motivation-hygiene theory. 11
As shown in Exhibit 7-2 , intrinsic factors such as advancement, recognition,
responsibility, and achievement seem related to job satisfaction. Respondents
who felt good about their work tended to attribute these factors to them-
selves, while dissatisfied respondents tended to cite extrinsic factors, such as
supervision, pay, company policies, and working conditions.
To Hertzberg, the data suggest that the opposite of satisfaction is not
dissatisfaction, as was traditionally believed. Removing dissatisfying character-
istics from a job does not necessarily make the job satisfying. As illustrated in
Exhibit 7-3 , Herzberg proposed a dual continuum: The opposite of “satisfaction”
is “no satisfaction,” and the opposite of “dissatisfaction” is “no dissatisfaction.”
According to Herzberg, the factors that lead to job satisfaction are sepa-
rate and distinct from those that lead to job dissatisfaction. Therefore, manag-
ers who seek to eliminate factors that can create job dissatisfaction may bring
about peace, but not necessarily motivation. They will be placating rather than
motivating their workers. As a result, Herzberg characterized conditions such
as quality of supervision, pay, company policies, physical working conditions,
relationships with others, and job security as hygiene factors . When they’re
Theory Y The assumption that
employees like work, are creative, seek
responsibility, and can exercise self-
direction.
self-actualization The drive to
become what a person is capable of
becoming.
higher-order needs Needs that are
satisfied internally, such as social,
esteem, and self-actualization needs.

206 CHAPTER 7 Motivation Concepts
Contrasting View of Satisfaction and Dissatisfaction Exhibit 7-3
Satisfaction
Traditional view
Herzberg’s view
Dissatisfaction
Satisfaction No satisfaction
No dissatisfaction Dissatisfaction
Satisfaction Dissatisfaction
No dissatisfaction Dissatisfaction
Satisfaction No satisfaction
Motivators
Hygiene factors
adequate, people will not be dissatisfied; neither will they be satisfied. If we
want to motivate people on their jobs, Herzberg suggested emphasizing factors
associated with the work itself or with outcomes directly derived from it, such
as promotional opportunities, personal growth opportunities, recognition,
responsibility, and achievement. These are the characteristics people find
intrinsically rewarding.
Comparison of Satisfiers and Dissatisfiers Exhibit 7-2
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
A
ch
ie
ve
m
en
t
Re
co
gn
iti
on
W
or
k
Its
el
f
Re
sp
on
si
bi
lit
y
A
dv
an
ce
m
en
t
G
ro
w
th
Factors characterizing 1,753
events on the job that lead to
extreme satisfaction
0%
5%
10%
15%
20%
25%
30%
35%
40%
Po
lic
y
an
d
ad
m
in
is
tra
tio
n
Su
pe
rv
is
io
n
Re
la
tio
ns
hi
p
w
ith
su
pe
rv
is
or
W
or
k
co
nd
iti
on
s
Sa
la
ry
Re
la
tio
ns
hi
p
w
ith
p
ee
rs
Factors characterizing 1,844
events on the job that lead to
extreme dissatisfaction
Source: Based on Harvard Business Review. “Comparison of Satisfiers and Dissatisfiers.” An exhibit from One More Time: How Do You
Motivate Employees? by Frederick Herzberg, January 2003. Copyright © 2003 by the Harvard Business School Publishing Corporation.
All rights reserved.

Early Theories of Motivation 207
The two-factor theory has not been well supported in the literature, and it
has many detractors. 12 Criticisms include the following:
1. Herzberg’s methodology is limited because it relies on self-reports. When
things are going well, people tend to take credit. Contrarily, they blame
failure on the extrinsic environment.
2. The reliability of Herzberg’s methodology is questionable. Raters have to
make interpretations, so they may contaminate the findings by interpreting
one response in one manner while treating a similar response differently.
3. No overall measure of satisfaction was utilized. A person may dislike part of
a job yet still think the job is acceptable overall.
4. Herzberg assumed a relationship between satisfaction and productivity,
but he looked only at satisfaction. To make his research relevant, we must
assume a strong relationship between satisfaction and productivity.
Regardless of the criticisms, Herzberg’s theory has been widely read, and few
managers are unfamiliar with its recommendations.
McClelland’s Theory of Needs
You have one beanbag and five targets set up in front of you, each farther away
than the last. Target A sits almost within arm’s reach. If you hit it, you get $2.
Target B is a bit farther out, but about 80 percent of the people who try can hit
it. It pays $4. Target C pays $8, and about half the people who try can hit it. Very
few people can hit Target D, but the payoff is $16 for those who do. Finally,
Target E pays $32, but it’s almost impossible to achieve. Which would you try
for? If you selected C, you’re likely to be a high achiever. Why? Read on.
McClelland’s theory of needs was developed by David McClelland and his
associates. 13 It looks at three needs:
● Need for achievement (nAch) is the drive to excel, to achieve in
relationship to a set of standards.
● Need for power (nPow) is the need to make others behave in a way they
would not have otherwise.
● Need for affiliation (nAff) is the desire for friendly and close interpersonal
relationships.
McClelland and subsequent researchers focused most of their attention
on nAch. High achievers perform best when they perceive their probability
of success as 0.5—that is, a 50–50 chance. They dislike gambling with high
odds because they get no achievement satisfaction from success that comes
by pure chance. Similarly, they dislike low odds (high probability of success)
because then there is no challenge to their skills. They like to set goals that
require stretching themselves a little.
Relying on an extensive amount of research, we can predict some
relationships between achievement need and job performance. First, when jobs
have a high degree of personal responsibility and feedback and an intermedi-
ate degree of risk, high achievers are strongly motivated. They are successful in
McClelland’s theory of needs A theory
that states achievement, power, and
affiliation are three important needs
that help explain motivation.
need for achievement (nAch) The drive
to excel, to achieve in relationship
to a set of standards, and to strive to
succeed.
need for power (nPow) The need
to make others behave in a way in
which they would not have behaved
otherwise.
need for affiliation (nAff) The desire
for friendly and close interpersonal
relationships.
As a high achiever, Patricia Woertz
is motivated by work that demands
a high degree of personal responsi-
bility. Today, she is the CEO, presi-
dent, and chair of Archer Daniels
Midland, an agricultural food
processing business. She started her
career as a certified public accoun-
tant but was attracted to the com-
plexity and opportunity of global
energy. For the next 30 years she
worked for Gulf Oil and Chevron in
refining, marketing, strategic plan-
ning, and finance positions. Since
joining ADM, Woertz continues to
shift company resources toward fuel
production in a drive to accelerate
ADM’s global leadership in bioen-
ergy and has led the company to
record financial results.
So
u
rc
e
:
Se
th
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208 CHAPTER 7 Motivation Concepts
entrepreneurial activities such as running their own businesses, for example,
and managing self-contained units within large organizations. 14 Second, a high
need to achieve does not necessarily make someone a good manager, especially
in large organizations. People with a high achievement need are interested in
how well they do personally, and not in influencing others to do well. High-
nAch salespeople do not necessarily make good sales managers, and the good
general manager in a large organization does not typically have a high need
to achieve. 15 Third, needs for affiliation and power tend to be closely related
to managerial success. The best managers are high in their need for power
and low in their need for affiliation. 16 In fact, a high power motive may be a
requirement for managerial effectiveness. 17
The view that a high achievement need acts as an internal motivator presup-
poses two U.S. cultural characteristics—willingness to accept a moderate degree
of risk (which excludes countries with strong uncertainty-avoidance character-
istics) and concern with performance (which applies to countries with strong
achievement characteristics). This combination is found in Anglo-American
countries such as the United States, Canada, and Great Britain 18 and much less
in Chile and Portugal.
Among the early theories of motivation, McClelland’s has had the best
research support. Unfortunately, it has less practical effect than the others.
Because McClelland argued that the three needs are subconscious—we may
rank high on them but not know it—measuring them is not easy. In the most
common approach, a trained expert presents pictures to individuals, asks
them to tell a story about each, and then scores their responses in terms of the
three needs. However, the process is time consuming and expensive, and few
organizations have been willing to invest in measuring McClelland’s concept.
Early theories of motivation either have not held up under close examination
or have fallen out of favor. In contrast, contemporary theories have one thing
in common: each has a reasonable degree of valid supporting documentation.
This doesn’t mean they are unquestionably right. We call them “contemporary
theories” because they represent the current state of thinking in explaining
employee motivation.
Self-Determination Theory
“It’s strange,” said Marcia. “I started work at the Humane Society as a volunteer.
I put in 15 hours a week helping people adopt pets. And I loved coming to
work. Then, 3 months ago, they hired me full-time at $11 an hour. I’m doing
the same work I did before. But I’m not finding it nearly as much fun.”
Does Marcia’s reaction seem counterintuitive? There’s an explanation for
it. It’s called self-determination theory , which proposes that people prefer
to feel they have control over their actions, so anything that makes a previ-
ously enjoyed task feel more like an obligation than a freely chosen activity will
undermine motivation. 19 Much research on self-determination theory in OB
has focused on cognitive evaluation theory , which hypothesizes that extrinsic
rewards will reduce intrinsic interest in a task. When people are paid for work,
it feels less like something they want to do and more like something they have
to do. Self-determination theory also proposes that in addition to being driven
3 Apply the predictions of
self-determination theory
to intrinsic and extrinsic
rewards.
Contemporary Theories of Motivation

Contemporary Theories of Motivation 209
by a need for autonomy, people seek ways to achieve competence and positive
connections to others. A large number of studies support self-determination
theory. 20 As we’ll show, its major implications relate to work rewards.
When organizations use extrinsic rewards as payoffs for superior
performance, employees feel they are doing a good job less because of their
own intrinsic desire to excel than because that’s what the organization wants.
Eliminating extrinsic rewards can also shift an individual’s perception of why
she works on a task from an external to an internal explanation. If you’re read-
ing a novel a week because your English literature instructor requires you to,
you can attribute your reading behavior to an external source. However, if you
find yourself continuing to read a novel a week after the course is over, your
natural inclination is to say, “I must enjoy reading novels because I’m still
reading one a week.”
Studies examining how extrinsic rewards increased motivation for some
creative tasks suggest we might need to place cognitive evaluation theory’s
predictions in a broader context. 21 Goal-setting is more effective in improving
T
he popular press often reports
about ethical lapses in business
by focusing on employees and
managers who are “loose cannons,”
deviating from organizational rules and
norms to produce bad consequences
for society and business. However,
sometimes unethical behavior is not
just ignored by organizational leaders
but actively encouraged by the com-
pany’s motivational structures. In fact,
one survey found that 56 percent of
U.S. workers experience pressure from
their superiors to behave in an unethi-
cal manner. Craig E. Johnson sums up
the problem, noting, “Examine nearly
any corporate scandal—AIG Insurance,
Arthur Andersen, Enron, Health South,
Sotheby’s Auction House, Fannie
Mae, Hollinger International, Marsh  &
McLennan, Quest—and you’ll find
leaders who engaged in immoral
behavior and encouraged their follow-
ers to do the same.”
How do managers create pressure
to behave unethically? Management
scholar Ben Tepper notes that struc-
tures in place in organizations often en-
courage unethical behavior. Incentives
might go to individuals who maxi-
mize sales without regard to whether
they achieved these ends honestly.
Lawyers often are paid in such a way
that tacitly encourages them to over-
bill their clients. Or perhaps rewards
might be offered for producing prod-
ucts at low cost without considering
the social and environmental impacts
of production decisions. In all these
cases, the reward systems in place
in organizations can serve to motivate
unethical behavior.
So what can you do as a man-
ager or employee to confront these
powerful motivations to behave un-
ethically? First and foremost, decision
makers should consider the unintended
consequences of reward systems.
Second, top management should fos-
ter an organizational culture of honesty
and fair dealing and disseminate it
through all levels of the organizational
hierarchy. Finally, organizations might
even consider finding ways to explicitly
reward those employees who engage
in “above and beyond” instances of
ethical behavior.
Sources: B. J. Tepper, “When Managers
Pressure Employees to Behave Badly:
Toward a Comprehensive Response,”
Business Horizons 53, no. 6 (2010),
pp. 591–598; C. E. Johnson, Meeting the
Ethical Challenges of Leadership: Casting
Light or Shadow, 3rd ed. (San Francisco:
Sage, 2009).
An Ethical Choice
Motivated to Behave Unethically
self-determination theory A theory of
motivation that is concerned with the
beneficial effects of intrinsic motivation
and the harmful effects of extrinsic
motivation.
cognitive evaluation theory A version
of self-determination theory which
holds that allocating extrinsic rewards
for behavior that had been previously
intrinsically rewarding tends to
decrease the overall level of motivation
if the rewards are seen as controlling.

210 CHAPTER 7 Motivation Concepts
motivation, for instance, when we provide rewards for achieving the goals.
The original authors of self-determination theory acknowledge that extrinsic
rewards such as verbal praise and feedback about competence can improve
even intrinsic motivation under specific circumstances. Deadlines and specific
work standards do, too, if people believe they are in control of their behavior. 22
This is consistent with the central theme of self-determination theory: rewards
and deadlines diminish motivation if people see them as coercive.
What does self-determination theory suggest for providing rewards? If a
senior sales representative really enjoys selling and making the deal, a commis-
sion indicates she’s been doing a good job and increases her sense of compe-
tence by providing feedback that could improve intrinsic motivation. On the
other hand, if a computer programmer values writing code because she likes
to solve problems, a reward for working to an externally imposed standard she
does not accept, such as writing a certain number of lines of code every day,
could feel coercive, and her intrinsic motivation would suffer. She would be less
interested in the task and might reduce her effort.
A recent outgrowth of self-determination theory is self-concordance ,
which considers how strongly peoples’ reasons for pursuing goals are consis-
tent with their interests and core values. If individuals pursue goals because of
an intrinsic interest, they are more likely to attain their goals and are happy
even if they do not. Why? Because the process of striving toward them is fun.
In contrast, people who pursue goals for extrinsic reasons (money, status, or
other benefits) are less likely to attain their goals and less happy even when
they do. Why? Because the goals are less meaningful to them. 23 OB research
suggests that people who pursue work goals for intrinsic reasons are more
satisfied with their jobs, feel they fit into their organizations better, and may
perform better. 24
What does all this mean? For individuals, it means choose your job for rea-
sons other than extrinsic rewards. For organizations, it means managers should
provide intrinsic as well as extrinsic incentives. They need to make the work
M
uch of the research we have
presented on needs for auton-
omy and self-determination
has been conducted in the United
States and Canada, two countries that
place a high value on personal inde-
pendence and freedom of choice. But
some researchers question whether
a need for autonomy is universal
or whether some cultures foster a
greater need for relatedness.
Some research does suggest
universal needs for autonomy, while
other studies find that different cultures
see autonomy differently. In a survey
of 40 nations, collectivistic countries
valued social order, obedience, and
respect for tradition more, and within
cultures, individuals who value auton-
omy tend to put less value on social
connectedness and vice versa.
In a study with Chinese Canadian
and European Canadian participants,
those from Chinese culture expressed
lower levels of autonomy, but auton-
omy was related to well-being for both
Chinese and European respondents.
Although different cultures view their
autonomy differently, it appears peo-
ple across cultures are higher in well-
being when they perceive they have
freedom of choice.
Sources: C. Vauclair, K. Hanke, R. Fischer,
and J. Fontaine, “The Structure of Human
Values at the Culture Level: A Meta-Analytical
Replication of Schwartz’s Value Orientations
Using the Rokeach Value Survey,” Journal of
Cross-Cultural Psychology 42, no. 2 (2011),
pp. 186–205; and D. Rudy, K. M. Sheldon,
T. Awong, and H. H. Tan, “Autonomy,
Culture, and Well-Being: The Benefits of
Inclusive Autonomy,” Journal of Research in
Personality 41, no. 5 (2007), pp. 983–1007.
glOBalization!
Autonomy Needs Around the Globe

interesting, provide recognition, and support employee growth and develop-
ment. Employees who feel what they do is within their control and a result of
free choice are likely to be more motivated by their work and committed to
their employers. 25
Job Engagement
When nurse Melissa Jones comes to work, it seems that everything else in her
life goes away, and she becomes completely absorbed in what she is doing. Her
emotions, her thoughts, and her behavior are all directed toward patient care.
In fact, she can get so caught up in her work that she isn’t even aware of how
long she’s been there. As a result of this total commitment, she is more effective
in providing patient care and feels uplifted by her time at work.
Melissa has a high level of job engagement , the investment of an employee’s
physical, cognitive, and emotional energies into job performance. 26 Practicing
managers and scholars alike have lately become interested in facilitating job
engagement, believing something deeper than liking a job or finding it inter-
esting drives performance. Many studies attempt to measure this deeper level
of commitment.
The Gallup organization has been using 12 questions to assess the extent to
which employee engagement is linked to positive work outcomes for millions
of employees over the past 30 years. 27 There are far more engaged employ-
ees in highly successful than in average organizations, and groups with more
engaged employees have higher levels of productivity, fewer safety incidents,
and lower turnover. Academic studies have also found positive outcomes. One
examined multiple business units for their level of engagement and found a
Contemporary Theories of Motivation 211
self-concordance The degree to
which peoples’ reasons for pursuing
goals are consistent with their interests
and core values.
job engagement The investment of
an employee’s physical, cognitive,
and emotional energies into job
performance.
More Employees Are Disengaged Than Engaged
by Their JobsOB Poll
Actively disengaged Disengaged Engaged Actively engaged
Degree to which employee is engaged by his/her job
40
35
30
25
20
15
10
5
0
Source: A. Fox, “Raising Engagement,” HR Magazine (May 2010), pp. 35–40; “Gallup’s Customer Engagement Index”
(March 11, 2010), www.smartKPIs.com .

www.smartKPIs.com

212 CHAPTER 7 Motivation Concepts
positive relationship with a variety of practical outcomes. 28 Another reviewed
91  distinct investigations and found higher levels of engagement associated
with task performance and citizenship behavior. 29
What makes people more likely to be engaged in their jobs? One key is the
degree to which an employee believes it is meaningful to engage in work. This
is partially determined by job characteristics and access to sufficient resources
to work effectively. 30 Another factor is a match between the individual’s values
and those of the organization. 31 Leadership behaviors that inspire workers to
a greater sense of mission also increase employee engagement. 32
One of the critiques of engagement is that the construct is partially
redundant with job attitudes like satisfaction or stress. 33 However, engagement
questionnaires usually assess motivation and absorption in a task, quite unlike
job satisfaction questionnaires. Engagement may also predict important work
outcomes better than traditional job attitudes. 34 Other critics note there may
be a “dark side” to engagement, as evidenced by positive relationships between
engagement and work–family conflict. 35 Individuals might grow so engaged in
their work roles that family responsibilities become an unwelcome intrusion.
Further research exploring how engagement relates to these negative outcomes
may help clarify whether some highly engaged employees might be getting “too
much of a good thing.”
Goal-Setting Theory
Gene Broadwater, coach of the Hamilton High School cross-country team,
gave his squad these last words before they approached the starting line for the
league championship race: “Each one of you is physically ready. Now, get out
there and do your best. No one can ever ask more of you than that.”
You’ve heard the sentiment a number of times yourself: “Just do your best.
That’s all anyone can ask.” But what does “do your best” mean? Do we ever
know whether we’ve achieved that vague goal? Would the cross-country runners
have recorded faster times if Coach Broadwater had given each a specific goal?
Research on goal-setting theory in fact reveals impressive effects of goal specific-
ity, challenge, and feedback on performance.
In the late 1960s, Edwin Locke proposed that intentions to work toward a
goal are a major source of work motivation. 36 That is, goals tell an employee
what needs to be done and how much effort is needed. 37 Evidence strongly
suggests that specific goals increase performance; that difficult goals, when
accepted, result in higher performance than do easy goals; and that feedback
leads to higher performance than does nonfeedback. 38
Specific goals produce a higher level of output than the generalized goal
“do your best.” Why? Specificity itself seems to act as an internal stimulus. When
a trucker commits to making 12 round-trip hauls between Toronto and Buffalo,
New York, each week, this intention gives him a specific objective to attain.
All things being equal, he will outperform a counterpart with no goals or the
generalized goal “do your best.”
If factors such as acceptance of the goals are held constant, the more difficult
the goal, the higher the level of performance. Of course, it’s logical to assume
easier goals are more likely to be accepted. But once a hard task is accepted, we
can expect the employee to exert a high level of effort to try to achieve it.
But why are people motivated by difficult goals? 39 First, challenging goals get
our attention and thus tend to help us focus. Second, difficult goals energize
us because we have to work harder to attain them. Do you study as hard for an
easy exam as you do for a difficult one? Probably not. Third, when goals are dif-
ficult, people persist in trying to attain them. Finally, difficult goals lead us to
discover strategies that help us perform the job or task more effectively. If we
4 Understand the implications
of employee engagement
for management.

Contemporary Theories of Motivation 213
have to struggle to solve a difficult problem, we often think of a better way to
go about it.
People do better when they get feedback on how well they are progressing
toward their goals, because it helps identify discrepancies between what they
have done and what they want to do—that is, feedback guides behavior. But all
feedback is not equally potent. Self-generated feedback—with which employ-
ees are able to monitor their own progress—is more powerful than externally
generated feedback. 40
If employees can participate in the setting of their own goals, will they
try harder? The evidence is mixed. 41 In some cases, participatively set goals
yielded superior performance; in others, individuals performed best when as-
signed goals by their boss. But a major advantage of participation may be that
it increases acceptance of the goal as a desirable one toward which to work. 42
Commitment is important. Without participation, the individual assigning the
goal needs to clearly explain its purpose and importance. 43
In addition to feedback, three other factors influence the goals– performance
relationship: goal commitment, task characteristics, and national culture.
Goal-setting theory assumes an individual is committed to the goal and de-
termined not to lower or abandon it. The individual (1) believes he or she
can achieve the goal and (2) wants to achieve it. 44 Goal commitment is most
likely to occur when goals are made public, when the individual has an internal
locus of control (see Chapter 4 ), and when the goals are self-set rather than
assigned. 45 Goals themselves seem to affect performance more strongly when
tasks are simple rather than complex, well learned rather than novel, and inde-
pendent rather than interdependent. 46 On interdependent tasks, group goals
are preferable.
Finally, setting specific, difficult, individual goals may have different ef-
fects in different cultures. Most goal-setting research has been done in the
United States and Canada, where individual achievement and performance
are most highly valued. To date, research has not shown that group-based
goal-setting theory A theory that says
that specific and difficult goals, with
feedback, lead to higher performance.
Chung Mong-koo, chairman of
Hyundai Motor Company, is well
known for articulating difficult
and specific goals as a potent
motivating force. For example,
although Hyundai was a latecomer
in the development of a hybrid
vehicle, the South Korean auto-
maker launched its first U.S.
hybrid in 2010, with annual sales
set at 50,000 units. By 2018, the
company expects hybrid sales to
balloon to 500,000 units worldwide.
Challenging employees to reach
high goals has helped Hyundai
experience tremendous growth in
recent years.
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214 CHAPTER 7 Motivation Concepts
goals are more effective in collectivists than in individualist cultures. In
collectivistic and high-power-distance cultures, achievable moderate goals
can be more highly motivating than difficult ones. 47 Finally, assigned goals
appear to generate greater goal commitment in high than in low power-
distance cultures. 48 More research is needed to assess how goal constructs
might differ across cultures.
Although goal-setting has positive outcomes, some goals may be too ef-
fective. 49 When learning something is important, goals related to perfor-
mance undermine adaptation and creativity because people become too
focused on outcomes and ignore changing conditions. In this case, a goal
to learn and generate alternative solutions will be more effective than a
goal to perform. Some authors argue that goals can lead employees to focus
on a single standard and exclude all others. Consider the narrow focus on
boosting short-term stock prices in many businesses—it may have led orga-
nizations to ignore long-term success and even to engage in such unethical
behavior as accounting fraud or excessively risky investments. (Of course,
organizations can establish goals for ethical performance.) Other studies
show that employees low in conscientiousness and emotional stability expe-
rience greater emotional exhaustion when their leaders set goals. 50 Despite
differences of opinion, most researchers do agree that goals are powerful in
shaping behavior. Managers should make sure they are actually aligned with
the company’s objectives.
Research has begun to examine subconscious goals—that is, goals we
are not even aware of setting. 51 One study primed people to think about
goals by having them assemble scrambled words into sentences with achieve-
ment themes, while other people assembled sentences without achievement
themes. The people who made the achievement sentences were subcon-
sciously primed. That might not sound like a very strong manipulation, but
this group performed more effectively in a brainstorming task than those
given easier goals. Another study found similar results when a picture of a
woman winning a race was the subconscious prime rather than assembling
sentences. Interestingly, these studies do not find that conscious and sub-
conscious goal-setting are related.
S A L
SELF-ASSESSMENT LIBRARY
What Are My Course Performance Goals?
In the Self-Assessment Library (available on CD or online), take assessment I.C.5
(What Are My Course Performance Goals?).
Implementing Goal-Setting As a manager, how do you make goal-setting
theory operational? That’s often left up to the individual. Some managers
set aggressive performance targets—what General Electric called “stretch
goals.” Some CEOs, such as Procter & Gamble’s A. G. Lafley and SAP AG’s
Hasso Plattner, are known for the demanding performance goals they
set. But many managers don’t set goals. When asked whether their job
had clearly defined goals, only a minority of employees in a recent survey
said yes. 52
A more systematic way to utilize goal-setting is with management by
objectives (MBO) , which emphasizes participatively set goals that are tan-
gible, verifiable, and measurable. As in Exhibit 7-4 , the organization’s over-
all objectives are translated into specific objectives for each level (divisional,

Contemporary Theories of Motivation 215
departmental, individual). But because lower-unit managers jointly partici-
pate in setting their own goals, MBO works from the bottom up as well as
from the top down. The result is a hierarchy that links objectives at one level
to those at the next. And for the individual employee, MBO provides specific
personal performance objectives.
Four ingredients are common to MBO programs: goal specificity, participa-
tion in decision making (including the setting of goals or objectives), an explicit
time period, and performance feedback. 53 Many elements in MBO programs
match propositions of goal-setting theory. For example, having an explicit time
period to accomplish objectives matches goal-setting theory’s emphasis on goal
specificity. Similarly, we noted earlier that feedback about goal progress is a
critical element of goal-setting theory. The only area of possible disagreement
between MBO and goal-setting theory is participation: MBO strongly advocates
it, whereas goal-setting theory demonstrates that managers’ assigned goals are
usually just as effective.
You’ll find MBO programs in many business, health care, educational, gov-
ernment, and nonprofit organizations. 54 Their popularity does not mean they
always work. 55 When MBO fails, the culprits tend to be unrealistic expectations,
lack of commitment by top management, and inability or unwillingness to
allocate rewards based on goal accomplishment.
Self-Efficacy Theory
Self-efficacy (also known as social cognitive theory or social learning theory ) refers
to an individual’s belief that he or she is capable of performing a task. 56 The
higher your self-efficacy, the more confidence you have in your ability to suc-
ceed. So, in difficult situations, people with low self-efficacy are more likely to
lessen their effort or give up altogether, while those with high self-efficacy will
Cascading of Objectives Exhibit 7-4
Overall
organizational
objectives
Divisional
objectives
Departmental
objectives
Individual
objectives
XYZ Company
Industrial products divisionConsumer products division
Production Sales Marketing Research Development
Customer
service
management by objectives (MBO) A
program that encompasses specific
goals, participatively set, for an explicit
time period, with feedback on goal
progress.
self-efficacy An individual’s belief
that he or she is capable of performing
a task.

216 CHAPTER 7 Motivation Concepts
try harder to master the challenge. 57 Self-efficacy can create a positive spiral in
which those with high efficacy become more engaged in their tasks and then,
in turn, increase performance, which increases efficacy further. 58 Changes in
self-efficacy over time are related to changes in creative performance as well. 59
Individuals high in self-efficacy also seem to respond to negative feedback with
increased effort and motivation, while those low in self-efficacy are likely to
lessen their effort after negative feedback. 60 How can managers help their em-
ployees achieve high levels of self- efficacy? By bringing goal-setting theory and
self-efficacy theory together.
Goal-setting theory and self-efficacy theory don’t compete; they comple-
ment each other. As Exhibit 7-5 shows, employees whose manager sets difficult
goals for them will have a higher level of self-efficacy and set higher goals for
their own performance. Why? Setting difficult goals for people communicates
your confidence in them. Imagine you learn your boss sets a higher goal for you
than for your co-workers. How would you interpret this? As long as you didn’t
feel you were being picked on, you would probably think, “Well, I guess my
boss thinks I’m capable of performing better than others.” This sets in motion
a psychological process in which you’re more confident in yourself (higher self-
efficacy) and you set higher personal goals, performing better both inside and
outside the workplace.
The researcher who developed self-efficacy theory, Albert Bandura, proposes
four ways self-efficacy can be increased: 61
1. Enactive mastery.
2. Vicarious modeling.
3. Verbal persuasion.
4. Arousal.
According to Bandura, the most important source of increasing self-efficacy
is enactive mastery —that is, gaining relevant experience with the task or job. If
you’ve been able to do the job successfully in the past, you’re more confident
you’ll be able to do it in the future.
Individual has
higher level of job
or task performance
Manager sets
difficult, specific
goal for job or task
Individual sets
higher personal
(self-set) goal for
their performance
Individual has
confidence that given
level of performance
will be attained
(self-efficacy)
Joint Effects of Goals and Self-Efficacy on Performance
Source: Based on E. A. Locke and G. P. Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation: A 35-Year
Odyssey,” American Psychologist (September 2002), pp. 705–717.
Exhibit 7-5

Contemporary Theories of Motivation 217
The second source is vicarious modeling —becoming more confident because
you see someone else doing the task. If your friend slims down, it increases your
confidence that you can lose weight, too. Vicarious modeling is most effective
when you see yourself as similar to the person you are observing. Watching
Tiger Woods play a difficult golf shot might not increase your confidence in
being able to play the shot yourself, but if you watch a golfer with a handicap
similar to yours, it’s persuasive.
The third source is verbal persuasion: becoming more confident because
someone convinces you that you have the skills necessary to be successful.
Motivational speakers use this tactic.
Finally, Bandura argues that arousal increases self-efficacy. Arousal leads to
an energized state, so the person gets “psyched up” and performs better. But if
the task requires a steady, lower-key perspective (say, carefully editing a manu-
script), arousal may in fact hurt performance.
What are the OB implications of self-efficacy theory? Well, it’s a matter
of applying Bandura’s sources of self-efficacy to the work setting. Training
programs often make use of enactive mastery by having people practice
and build their skills. In fact, one reason training works is that it increases
self-efficacy. 62 Individuals with higher levels of self-efficacy also appear to
reap more benefits from training programs and are more likely to use their
training on the job. 63
The best way for a manager to use verbal persuasion is through the Pygmalion
effect or the Galatea effect. As discussed in Chapter 5 , the Pygmalion effect is a
form of self-fulfilling prophecy in which believing something can make it true.
In some studies, teachers were told their students had very high IQ scores when,
in fact, they spanned a range from high to low. Consistent with the Pygmalion
effect, the teachers spent more time with the students they thought were smart,
gave them more challenging assignments, and expected more of them—all of
which led to higher student self-efficacy and better grades. 64 This strategy also
has been used in the workplace. 65 Sailors who were told convincingly that they
would not get seasick were in fact much less likely to do so. 66
Intelligence and personality are absent from Bandura’s list, but they can
increase self-efficacy. 67 People who are intelligent, conscientiousness, and
Toyota Motor Corporation applies
social learning theory in teaching
employees skills they need to meet
the company’s high standards of
quality and efficiency. At its Global
Production Center training facilities
in Japan, England, and the United
States, workers and managers from
factories around the world learn
production techniques through
observation and direct experience.
Trainees first watch computer-
ized visual manuals to learn basic
skills. Then, under the tutelage of
an experienced production mas-
ter, they practice the skills. In this
photo, a trainee practices the skill
of bolt tightening at Toyota’s train-
ing center in Toyota City, Japan.
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218 CHAPTER 7 Motivation Concepts
emotionally stable are so much more likely to have high self-efficacy that some
researchers argue self-efficacy is less important than prior research would sug-
gest. 68 They believe it is partially a by-product in a smart person with a confident
personality. Although Bandura strongly disagrees with this conclusion, more
research is needed.
Reinforcement Theory
Goal-setting is a cognitive approach, proposing that an individual’s purposes
direct his action. Reinforcement theory , in contrast, takes a behavioristic view,
arguing that reinforcement conditions behavior. The two theories are clearly at
odds philosophically. Reinforcement theorists see behavior as environmentally
caused. You need not be concerned, they would argue, with internal cognitive
events; what controls behavior is reinforcers—any consequences that, when
immediately following responses, increase the probability that the behavior will
be repeated.
Reinforcement theory ignores the inner state of the individual and
concentrates solely on what happens when he or she takes some action. Because
it does not concern itself with what initiates behavior, it is not, strictly speak-
ing, a theory of motivation. But it does provide a powerful means of analyzing
what controls behavior, and this is why we typically consider it in discussions of
motivation. 69
Operant conditioning theory, probably the most relevant component of
reinforcement theory for management, argues that people learn to behave
to get something they want or to avoid something they don’t want. Unlike
reflexive or unlearned behavior, operant behavior is influenced by the
reinforcement or lack of reinforcement brought about by its consequences.
Therefore, reinforcement strengthens a behavior and increases the likelihood
it will be repeated. 70 B. F. Skinner, one of the most prominent advocates of
operant conditioning, argued that creating pleasing consequences to follow
specific forms of behavior would increase the frequency of that behavior.
He demonstrated that people will most likely engage in desired behaviors if
they are positively reinforced for doing so; that rewards are most effective if
they immediately follow the desired response; and that behavior that is not
rewarded, or is punished, is less likely to be repeated. We know a professor
who places a mark by a student’s name each time the student makes a contri-
bution to class discussions. Operant conditioning would argue this practice is
motivating because it conditions a student to expect a reward (earning class
credit) each time she demonstrates a specific behavior (speaking up in class).
The concept of operant conditioning was part of Skinner’s broader concept
of behaviorism , which argues that behavior follows stimuli in a relatively
unthinking manner. Skinner’s form of radical behaviorism rejects feelings,
thoughts, and other states of mind as causes of behavior. In short, people
learn to associate stimulus and response, but their conscious awareness of this
association is irrelevant. 71
You can see illustrations of operant conditioning everywhere that reinforce-
ments are contingent on some action on your part. Your instructor says if you
want a high grade in the course, you must supply correct answers on the test.
A commissioned salesperson wanting to earn a sizable income finds doing so is
contingent on generating high sales in her territory. Of course, the linkage can
also teach individuals to engage in behaviors that work against the best inter-
ests of the organization. Assume your boss says if you work overtime during the
next 3-week busy season you’ll be compensated for it at your next performance
appraisal. However, when performance-appraisal time comes, you are given no
positive reinforcement for your overtime work. The next time your boss asks
5 Compare and contrast
goal-setting theory and
management by objectives.

Contemporary Theories of Motivation 219
you to work overtime, what will you do? You’ll probably decline! Your behavior
can be explained by operant conditioning: if a behavior fails to be positively
reinforced, the probability it will be repeated declines.
Although reinforcers such as pay can motivate people, the process is much
more complicated than stimulus–response. In its pure form, reinforcement
theory ignores feelings, attitudes, expectations, and other cognitive variables
known to affect behavior. In fact, some researchers look at the same experi-
ments reinforcement theorists use to support their position and interpret the
findings in a cognitive framework. 72
Reinforcement is undoubtedly an important influence on behavior, but few
scholars are prepared to argue it is the only one. The behaviors you engage in
at work and the amount of effort you allocate to each task are affected by the
consequences that follow. If you’re consistently reprimanded for outproducing
your colleagues, you’ll likely reduce your productivity. But we might also ex-
plain your lower productivity in terms of goals, inequity, or expectancies.
Individuals can learn by being told or by observing what happens to other
people, as well as through direct experiences. Much of what we have learned
comes from watching models—parents, teachers, peers, film and television per-
formers, bosses, and so forth. This view that we can learn through both observa-
tion and direct experience is called social-learning theory . 73
Although social-learning theory is an extension of operant conditioning—
that is, it assumes behavior is a function of consequences—it also acknowledges
the effects of observational learning and perception. People respond to the
way they perceive and define consequences, not to the objective consequences
themselves.
Models are central to the social-learning viewpoint. Four processes deter-
mine their influence on an individual:
1. Attentional processes. People learn from a model only when they recog-
nize and pay attention to its critical features. We tend to be most influenced
by models that are attractive, repeatedly available, important to us, or simi-
lar to us in our estimation.
2. Retention processes. A model’s influence depends on how well the indi-
vidual remembers the model’s action after the model is no longer readily
available.
3. Motor reproduction processes. After a person has seen a new behavior by
observing the model, watching must be converted to doing. This process
demonstrates that the individual can perform the modeled activities.
4. Reinforcement processes. Individuals are motivated to exhibit the mod-
eled behavior if positive incentives or rewards are provided. Positively rein-
forced behaviors are given more attention, learned better, and performed
more often.
Equity Theory/Organizational Justice
Jane Pearson graduated from State University last year with a degree in account-
ing. After interviews with a number of organizations on campus, she accepted
a position with a top public accounting firm and was assigned to its Boston of-
fice. Jane was very pleased with the offer she received: challenging work with
a prestigious firm, an excellent opportunity to gain valuable experience, and
6 Contrast reinforcement
theory and goal-setting
theory.
reinforcement theory A theory that
says that behavior is a function of its
consequences.
behaviorism A theory that argues that
behavior follows stimuli in a relatively
unthinking manner.
social-learning theory The view that
we can learn through both observation
and direct experience.

220 CHAPTER 7 Motivation Concepts
the highest salary any accounting major at State was offered last year—$4,550
per month—but Jane was the top student in her class; she was articulate and
mature, and she fully expected to receive a commensurate salary.
Twelve months have passed. The work has proved to be as challenging
and satisfying as Jane had hoped. Her employer is extremely pleased with her
performance; in fact, Jane recently received a $200-per-month raise. However,
her motivational level has dropped dramatically in the past few weeks. Why?
Jane’s employer has just hired a fresh graduate out of State University who
lacks the year of experience Jane has gained, for $4,600 per month—$50
more than Jane now makes! Jane is irate. She is even talking about looking for
another job.
Jane’s situation illustrates the role that equity plays in motivation. Employees
perceive what they get from a job situation (salary levels, raises, recogni-
tion) in relationship to what they put into it (effort, experience, education,
competence), and then they compare their outcome–input ratio with that of
relevant others. This is shown in Exhibit 7-6 . If we perceive our ratio to be equal
to that of the relevant others with whom we compare ourselves, a state of eq-
uity exists; we perceive that our situation is fair and justice prevails. When we
see the ratio as unequal and we feel underrewarded, we experience equity ten-
sion that creates anger. When we see ourselves as overrewarded, tension creates
guilt. J. Stacy Adams proposed that this negative state of tension provides the
motivation to do something to correct it. 74
The referent an employee selects adds to the complexity of equity theory . 75
There are four referent comparisons:
1. Self–inside. An employee’s experiences in a different position inside the
employee’s current organization.
2. Self–outside. An employee’s experiences in a situation or position outside
the employee’s current organization.
3. Other–inside. Another individual or group of individuals inside the
employee’s organization.
4. Other–outside. Another individual or group of individuals outside the
employee’s organization.
Employees might compare themselves to friends, neighbors, co-workers, or
colleagues in other organizations or compare their present job with past jobs.
Which referent an employee chooses will be influenced by the information the
employee holds about referents as well as by the attractiveness of the referent.
Four moderating variables are gender, length of tenure, level in the organiza-
tion, and amount of education or professionalism. 76
Ratio Comparisons* Perception
Inequity due to being underrewarded
Equity
Inequity due to being overrewarded
*Where represents the employee; and represents relevant others
O
I B
O
I A
> O
IB
O
IA
= O
IB
O
IA
< O IB O IA Equity Theory Exhibit 7-6 Contemporary Theories of Motivation 221 Women are typically paid less than men in comparable jobs and have lower pay expectations than men for the same work. 77 So a woman who uses another woman as a referent tends to calculate a lower comparative standard. Of course, employers’ stereotypes about women (for example, the belief that women are less committed to the organization or that “women’s work” is less valuable) also may contribute to the pay gap. 78 While both men and women prefer same-sex comparisons, employees in jobs that are not sex segregated will likely make more cross-sex comparisons than those in jobs that are male or female dominated. Employees with short tenure in their current organizations tend to have little information about others inside the organization, so they rely on their personal experiences. Employees with long tenure rely more heavily on co-workers for comparison. Upper-level employees, those in the profes- sional ranks, and those with higher amounts of education tend to have better information about people in other organizations and will make more other– outside comparisons. Based on equity theory, employees who perceive inequity will make one of six choices: 79 1. Change inputs (exert less effort if underpaid or more if overpaid). 2. Change outcomes (individuals paid on a piece-rate basis can increase their pay by producing a higher quantity of units of lower quality). 3. Distort perceptions of self (“I used to think I worked at a moderate pace, but now I realize I work a lot harder than everyone else.”). 4. Distort perceptions of others (“Mike’s job isn’t as desirable as I thought.”). 5. Choose a different referent (“I may not make as much as my brother-in-law, but I’m doing a lot better than my Dad did when he was my age.”). 6. Leave the field (quit the job). equity theory A theory that says that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any inequities. In perceiving inequity in pay, these American Airline pilots used an “other-inside” referent comparison when comparing their pay to that of the airline’s managers. The pilots agreed to accept wage and benefit cuts after the airline reported an $8 billion loss. When they returned to profitability, the CEO and other top managers received stock bonuses. Marching in protest, the pilots argued that their sacrifices in pay and benefits helped save the airline from bankruptcy and that they deserved to be rewarded with pay increases. So u rc e : LM O te ro /A P I m a g e s 222 CHAPTER 7 Motivation Concepts Some of these propositions have been supported, but others haven’t. 80 First, inequities created by overpayment do not seem to significantly affect behavior in most work situations. Apparently, people have more toler- ance of  overpayment inequities than of underpayment inequities or are better able  to rationalize them. It’s pretty damaging to a theory when half the equation falls apart. Second, not all people are equity sensitive. 81 A few actually prefer outcome–input ratios lower than the referent comparisons. Predictions from equity theory are not likely to be very accurate about these “benevolent types.” While most research on equity theory has focused on pay, some employ- ees also look for equity in the distribution of other organizational rewards like high-status job titles and large and lavishly furnished offices. 82 Finally, recent research has expanded the meaning of equity, or fairness . 83 Historically, equity theory focused on distributive justice , the employee’s perceived fairness of the amount rewards among individuals and who received them. But organizational justice draws a bigger picture. Employees perceive their organizations as just when they believe rewards and the way they are distributed are fair. In other words, fairness or equity can be subjective; what one person sees as unfair, another may see as perfectly appropriate. In general, people see allocations or procedure favoring themselves as fair. 84 In a recent poll, 61 percent of respondents said they pay their fair share of taxes, but an almost equal number (54 percent) felt the system as a whole is unfair, saying some people skirt it. 85 Most of the equity theory research we’ve described proposes a fairly rational, calculative way of estimating what is fair and unfair. But few people really make mathematical calculations of their inputs relative to the outcomes of others. Instead, they base distributive judgments on a feeling or an emotional reaction to how they think they are treated relative to others, and their reactions are often emotional as well. 86 Our discussion has also focused on reactions to personal mistreatment. However, people also react emotionally to injustices committed against others, prompting them to take retributive actions. 87 Beyond perceptions of fairness, the other key element of organizational justice is the view that justice is multidimensional. How much we get paid relative to what we think we should be paid (distributive justice) is obviously important. But, according to researchers, how we get paid is just as important. Thus, the model of organizational justice in Exhibit 7-7 includes procedural justice —the perceived fairness of the process used to determine the distribu- tion of rewards. Two key elements of procedural justice are process control and explanations. Process control is the opportunity to present your point of view about desired outcomes to decision makers. Explanations are clear reasons management gives for the outcome. Thus, for employees to see a process as fair, they need to feel they have some control over the outcome and that they were given an adequate explanation about why the outcome occurred. It’s also important that a manager is consistent (across people and over time), is unbiased, makes decisions based on accurate information, and is open to appeals. 88 The effects of procedural justice become more important when distributive justice is lacking. This makes sense. If we don’t get what we want, we tend to focus on why. If your supervisor gives a cushy office to a co-worker instead of to you, you’re much more focused on your supervisor’s treatment of you than if you had gotten the office. Explanations are beneficial when they take the form of post hoc excuses (“I know this is bad, and I wanted to give you the office, but it wasn’t my decision”) rather than justifications (“I decided to give the office to Sam, but having it isn’t a big deal.”). 89 Contemporary Theories of Motivation 223 Interactional justice describes an individual’s perception of the degree to which she is treated with dignity, concern, and respect. When people are treated in an unjust manner (at least in their own eyes), they retaliate (for example, badmouthing a supervisor). 90 Because people intimately connect interactional justice or injustice to the conveyer of the information, we would expect percep- tions of injustice to be more closely related to the supervisor. Generally, that’s what the evidence suggests. 91 Of these three forms of justice, distributive justice is most strongly related to organizational commitment and satisfaction with outcomes such as pay. Procedural justice relates most strongly to job satisfaction, employee trust, withdrawal from the organization, job performance, and citizenship behaviors. There is less evidence about interactional justice. 92 Equity theory has gained a strong following in the United States because U.S.-style reward systems assume workers are highly sensitive to equity in reward allocations. And in the United States, equity is meant to closely tie pay to performance. However, in collectivist cultures employees expect re- wards to reflect their individual needs as well as their performance. 93 Other research suggests that inputs and outcomes are valued differently in various Organizational Justice Definition: overall perception of what is fair in the workplace Example: I think this is a fair place to work. Distributive Justice Definition: perceived fairness of outcome Example: I got the pay raise I deserved. Procedural Justice Definition: perceived fairness of process used to determine outcome Example: I had input into the process used to give raises and was given a good explanation of why I received the raise I did. Interactional Justice Definition: perceived degree to which one is treated with dignity and respect Example: When telling me about my raise, my supervisor was very nice and complimentary. Model of Organizational Justice Exhibit 7-7 interactional justice The perceived degree to which an individual is treated with dignity, concern, and respect. distributive justice Perceived fairness of the amount and allocation of rewards among individuals. procedural justice The perceived fairness of the process used to determine the distribution of rewards. organizational justice An overall perception of what is fair in the workplace, composed of distributive, procedural, and interactional justice. 224 CHAPTER 7 Motivation Concepts cultures. 94 Some cultures emphasize status over individual achievement as a basis for allocating resources. Materialistic cultures are more likely to see cash compensation and rewards as the most relevant outcomes of work, whereas relational cultures will see social rewards and status as important outcomes. International managers must consider the cultural preferences of each group of employees when determining what is “fair” in different contexts. Studies suggest that managers are indeed motivated to foster employees’ perceptions of justice because they wish to ensure compliance, maintain a posi- tive identity, and establish fairness at work. 95 To enhance perceptions of justice, they should realize that employees are especially sensitive to unfairness in pro- cedures when bad news has to be communicated (that is, when distributive jus- tice is low). Thus, it’s especially important to openly share information about how allocation decisions are made, follow consistent and unbiased procedures, and engage in similar practices to increase the perception of procedural justice. Second, when addressing perceived injustices, managers need to focus their actions on the source of the problem. If employees feel they have been treated unjustly, having opportunities to express their frustration has been shown to reduce their desire for retribution. 96 Meta-analytic evidence shows individuals in both individualistic and collectivistic cultures prefer an equitable distribution of rewards (the most effective workers get paid the most) over an equal division (everyone gets paid the same regardless of performance). 97 Across nations, the same basic princi- ples of procedural justice are respected, and workers around the world prefer rewards based on performance and skills over rewards based on seniority. 98 Expectancy Theory One of the most widely accepted explanations of motivation is Victor Vroom’s expectancy theory . 99 Although it has its critics, most of the evidence supports it. 100 Expectancy theory argues that the strength of our tendency to act a certain way depends on the strength of our expectation of a given outcome and its attractiveness. In more practical terms, employees will be motivated to exert a high level of effort when they believe it will lead to a good performance appraisal; that a good appraisal will lead to organizational rewards such as bonuses, salary increases, or promotions; and that the rewards will satisfy the employees’ personal goals. The theory, therefore, focuses on three relation- ships (see Exhibit 7-8 ): 1. Effort–performance relationship. The probability perceived by the indi- vidual that exerting a given amount of effort will lead to performance. 2. Performance–reward relationship. The degree to which the individual believes performing at a particular level will lead to the attainment of a desired outcome. 7 Demonstrate how organizational justice is a refinement of equity theory. Individual effort 1 2 3 Individual performance Effort–performance relationship Performance–reward relationship Rewards–personal goals relationship Organizational rewards Personal goals 1 2 3 Expectancy Theory Exhibit 7-8 MyManagementLab For an interactive application of this topic, check out this chapter’s simulation activity at www.mymanagementlab.com. www.mymanagementlab.com Contemporary Theories of Motivation 225 3. Rewards–personal goals relationship. The degree to which organizational rewards satisfy an individual’s personal goals or needs and the attractiveness of those potential rewards for the individual. 101 Expectancy theory helps explain why a lot of workers aren’t motivated on their jobs and do only the minimum necessary to get by. Let’s frame the theory’s three relationships as questions employees need to answer in the affirmative if their motivation is to be maximized. First, if I give a maximum effort, will it be recognized in my performance appraisal? For many employees, the answer is “no.” Why? Their skill level may be deficient, which means no matter how hard they try, they’re not likely to be high performers. The organization’s performance appraisal system may be designed to assess nonperformance factors such as loyalty, initiative, or courage, which means more effort won’t necessarily result in a higher evaluation. Another possibility is that employees, rightly or wrongly, perceive the boss doesn’t like them. As a result, they expect a poor appraisal, regardless of effort. These examples suggest one possible source of low motivation is employees’ belief that, no matter how hard they work, the likelihood of getting a good perfor- mance appraisal is low. Second, if I get a good performance appraisal, will it lead to organizational rewards? Many organizations reward things besides performance. When pay is based on factors such as having seniority, being cooperative, or “kissing up” to the boss, employees are likely to see the performance–reward relationship as weak and demotivating. Finally, if I’m rewarded, are the rewards attractive to me? The employee works hard in the hope of getting a promotion but gets a pay raise instead. Or the employee wants a more interesting and challenging job but receives only a few words of praise. Unfortunately, many managers are limited in the rewards they can distribute, which makes it difficult to tailor rewards to individual em- ployee needs. Some incorrectly assume all employees want the same thing, thus overlooking the motivational effects of differentiating rewards. In either case, employee motivation is submaximized. As a vivid example of how expectancy theory can work, consider stock ana- lysts. They make their living trying to forecast a stock’s future price; the accu- racy of their buy, sell, or hold recommendations is what keeps them in work or gets them fired. But it’s not quite that simple. Analysts place few sell ratings on stocks, although in a steady market, by definition, as many stocks are falling as are rising. Expectancy theory provides an explanation: analysts who place a sell rating on a company’s stock have to balance the benefits they receive by being accurate against the risks they run by drawing that company’s ire. What are these risks? They include public rebuke, professional blackballing, and exclu- sion from information. When analysts place a buy rating on a stock, they face no such trade-off because, obviously, companies love it when analysts recommend that investors buy their stock. So the incentive structure suggests the expected outcome of buy ratings is higher than the expected outcome of sell ratings, and that’s why buy ratings vastly outnumber sell ratings. 102 expectancy theory A theory that says that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. 226 CHAPTER 7 Motivation Concepts Does expectancy theory work? Some critics suggest it has only limited use and is more valid where individuals clearly perceive effort– performance and performance–reward linkages. 103 Because few individuals do, the theory tends to be idealistic. If organizations actually rewarded individuals for performance rather than seniority, effort, skill level, and job difficulty, expectancy theory might be much more valid. However, rather than invalidating it, this criti- cism can explain why a significant segment of the workforce exerts low effort on the job. At Mary Kay Cosmetics, the performance-reward relationship is strong. The company offers a generous rewards and recognition program based on the achieve- ment of personal goals set by each employee. Mary Kay also understands the motivational effects of differentiating rewards. For some employees, the best reward is the opportunity to work from home, while other employees are motivated by the opportunity to win a trip, jewelry, or the use of a pink Cadillac. In this photo, a Mary Kay sales director explains career opportunities at a job fair to women interested in joining the company. Integrating Contemporary Theories of Motivation Things might be simpler if, after presenting a half dozen theories, we could say only one was found valid. But many of the theories in this chapter are complementary. We now tie them together to help you understand their interrelationships. 104 Exhibit 7-9 integrates much of what we know about motivation. Its basic foundation is the expectancy model shown in Exhibit 7-8 . Let’s walk through Exhibit 7-9 . (We will look at job design closely in Chapter 8 .) We begin by explicitly recognizing that opportunities can either aid or hinder individual effort. The individual effort box on the left also has another arrow leading into it, from the person’s goals. Consistent with goal-setting theory, the goals–effort loop is meant to remind us that goals direct behavior. Expectancy theory predicts employees will exert a high level of effort if they perceive a strong relationship between effort and performance, performance and rewards, and rewards and satisfaction of personal goals. Each of these relationships is, in turn, influenced by other factors. For 8 Apply the key tenets of expectancy theory to motivating employees. 9 Compare contemporary theories of motivation. So u rc e : E ri c R is b e rg /A P I m a g e s Integrating Contemporary Theories of Motivation 227 effort to lead to good performance, the individual must have the ability to perform and perceive the performance appraisal system as fair and objec- tive. The performance–reward relationship will be strong if the individual perceives that performance (rather than seniority, personal favorites, or other criteria) is rewarded. If cognitive evaluation theory were fully valid in the actual workplace, we would predict here that basing rewards on perfor- mance should decrease the individual’s intrinsic motivation. The final link in expectancy theory is the rewards–goals relationship. Motivation is high if the rewards for high performance satisfied the dominant needs consistent with individual goals. A closer look at Exhibit 7-9 also reveals that the model considers achievement motivation, job design, reinforcement, and equity theories/organizational justice. A high achiever is not motivated by an organization’s assessment of performance or organizational rewards, hence the jump from effort to personal goals for those with a high nAch. Remember, high achievers are internally driven as long as their jobs provide them with personal responsibility, feedback, and moderate risks. They are not concerned with the effort–performance, performance–rewards, or rewards–goal linkages. Reinforcement theory enters the model by recognizing that the organization’s rewards reinforce the individual’s performance. If employees see a reward system as “paying off” for good performance, the rewards will reinforce and encourage good performance. Rewards also play the key part in Individual performance Organizational rewards Personal goals Opportunity Ability Performance evaluation criteria High nAch Equity comparison/ Organizational justice Objective performance evaluation system Individual effort Reinforcement Dominant needs Goals direct behavior Job design O IA IB O: Integrating Contemporary Theories of Motivation Exhibit 7-9 228 CHAPTER 7 Motivation Concepts The motivation theories in this chapter differ in their predictive strength. Here, we (1) review the most established to determine their relevance in explaining turnover, productivity, and other outcomes and (2) assess the predictive power of each. 105 ● Need theories. Maslow’s hierarchy, McClelland’s needs, and the two- factor theory focus on needs. None has found widespread support, although McClelland’s is the strongest, particularly regarding the relationship between achievement and productivity. In general, need theories are not very valid explanations of motivation. ● Self-determination theory and cognitive evaluation theory. As research on the motivational effects of rewards has accumulated, it increasingly appears extrinsic rewards can undermine motivation if they are seen as coercive. They can increase motivation if they provide information about competence and relatedness. ● Goal-setting theory. Clear and difficult goals lead to higher levels of employee productivity, supporting goal-setting theory’s explanation of this dependent variable. The theory does not address absenteeism, turnover, or satisfaction, however. ● Reinforcement theory. This theory has an impressive record for predicting quality and quantity of work, persistence of effort, absentee- ism, tardiness, and accident rates. It does not offer much insight into employee satisfaction or the decision to quit. ● Equity theory/organizational justice. Equity theory deals with produc- tivity, satisfaction, absence, and turnover variables. However, its strongest legacy is that it provided the spark for research on organizational justice, which has more support in the literature. ● Expectancy theory. Expectancy theory offers a powerful explana- tion of performance variables such as employee productivity, absentee- ism, and turnover. But it assumes employees have few constraints on decision making, such as bias or incomplete information, and this limits its applicability. Expectancy theory has some validity because, for many behaviors, people consider expected outcomes. Summary and Implications for Managers MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. organizational justice research. Individuals will judge the favorability of their outcomes (for example, their pay) relative to what others receive but also with respect to how they are treated: when people are disappointed in their rewards, they are likely to be sensitive to the perceived fairness of the procedures used and the consideration given to them by their supervisor. www.mymanagementlab.com Summary and Implications for Managers 229 Fear Is a Powerful Motivator POINT COUNTERPOINT H ow cynical! Fear is a natural emotion, but it gener- ally serves a purpose only in crisis situations. Those unfortunate enough to work under a manager who consciously uses fear to “motivate” behavior will leave as soon as they can or get even in some hidden way. Fear never works as a motivational tool. Various areas of research in psychology and organizational behavior prove the point. Fear generates a “fight-flight-freeze” response, in which an individual (or animal) experiencing fear or extreme stress is forced to choose one of these behaviors. Any sane manager wants none of them. Imagine supervising Chris, who flees work when fearful or stressed, Sanjay, who fights with others when he feels cornered, and Mercedes, who locks up whenever she is chastised. Does effective management mean eliciting these behaviors? One workplace expert noted, “Fear motivation always results in inner anger and resentment against the person using the fear tactics . . . Fear motivation is the lowest form of motivation and usu- ally results in ‘when the cat is away, the mice will play.’” So, ironi- cally, fear actually undermines performance monitoring, because employees will get even when they know they can’t be caught. And they will never go out of their way to help the organization. As one Canadian manager noted, “Exercising unilateral power [through fear] can be effective for those leaders whose modest ambitions are matched by the modest successes that such tactics bring.” Zappos founder Tony Hsieh, who tries to create a happy work environment at Zappos by giving employ- ees the sense that they are part of something bigger, argues that inspiration is a much better motivator than fear. Fear may motivate short-term performance, but in the long run, it is always a losing motivational tool. T his is a “dark side” topic that no one likes to discuss, but fear works as a motivator. Few of us like the idea of feeling fearful in the workplace. But what we like and what moti- vates us are not the same. Ever studied harder for an exam for fear of doing poorly, or worried about doing something that would draw your parents’ ire? If you answer “yes,” you’re on your way to admitting this essential truth: we engage in a lot of behaviors, and refrain from others, out of fear. Too often in organizational behavior we sing this happy song that when employees are happy, they will give their best effort and the company will sail along in smooth seas. The truth is that when a manager adopts this philoso- phy, people often relax. They take off early. They “shoot the breeze” more and work a little less. George Cloutier, founder of American Management Services, is realistic about this. “The concept that if you love your employees they’ll per- form is on the edge of insanity,” he says. “Fear is the best motivator.” Employees should realize that in today’s competitive envi- ronment, they have to bring their A-game to work each and every day. And managers need to closely monitor them to make sure that’s the case. Instilling in employees a fear that if they shirk, they’ll lose their jobs, is one way to accomplish that monitoring. Without fear, people would do as they wish, and that rarely includes working hard if they feel they don’t have to. Like it or not, that’s the cold, hard truth about employee motivation. Sources: K. Pattison, “Fire Your Relatives. Scare Your Employees. And Stop Whining,” The New York Times (February 11, 2010), p. B8; L. Mignone, “How to Build an Army of Happy, Busy Worker Bees,” Fortune (May 23, 2011), downloaded May 25, 2011, from www.fortune.com ; TTI Performance Systems, “Provide a Climate for Motivation,” downloaded May 25, 2011, from www.nielsongroup.com/ ; and J. Wood, “Stories, Not Data, At Heart of Human Motivation,” Vancouver Sun (May 20, 2011), downloaded May 25, 2011, from www.vancouversun.com/ . www.fortune.com www.nielsongroup.com/ www.vancouversun.com/ 230 CHAPTER 7 Motivation Concepts 6 What are the similarities and differences between reinforcement theory and goal-setting theory? 7 How is organizational justice a refinement of equity theory? 8 What are the key tenets of expectancy theory? 9 What are some contemporary theories of motivation and how do they compare to one another? 1 What are the three key elements of motivation? 2 What are some early theories of motivation? How appli- cable are they today? 3 How do the predictions of self-determination theory apply to intrinsic and extrinsic rewards? 4 What are the implications of employee engagement for management? 5 What are the similarities and differences between goal- setting theory and management by objectives? QUESTIONS FOR REVIEW Purpose This exercise will help you learn how to write tangible, verifiable, measurable, and relevant goals that might evolve from an MBO program. Time Approximately 20 to 30 minutes. Instructions 1. Break into groups of three to five. 2. Spend a few minutes discussing your class instructor’s job. What does he or she do? What defines good performance? What behaviors lead to good performance? 3. Each group is to develop a list of five goals that, although not established participatively with your instructor, you believe might be developed in an MBO program at your college. Try to select goals that seem most critical to the effective performance of your instructor’s job. 4. Each group will select a leader who will share the group’s goals with the entire class. For each group’s goals, class discussion should focus on the goals’ (a) specificity, (b) ease of measurement, (c) importance, and (d) motivational properties. EXPERIENTIAL EXERCISE Goal-Setting Task As you know, college is an expensive proposition. Students, parents, donors, and the government invest millions of dollars every year. Thus, there may be an incumbent responsibility on students to ensure they are learning. However, consider the following results from a recent study of time use by more than 3,000 undergraduates: ETHICAL DILEMMA The Big Easy? 9% 9% 24% 51% 7% Percent Time per Week Spent Attending classes and labs Studying Working, volunteering, fraternities/sororities, clubs Sleeping Socializing, recreation, other Undergraduate Use of Time per Week Questions 1. One article commented that college students are “frittering away their time at an astonishing rate.” Do you agree this is what the data show? Why or why not? 2. Do you think students have an ethical responsibility to spend more time studying? Why or why not? 3. One study suggested that full-time students in 1961 studied an average of 40 hours per week, compared to 27 hours now. Does this apparent trend concern you? Do you think that, as some experts have claimed, our economic competitiveness would increase if college students studied more? Sources: M. Burns, “What Happened to Academic Rigor?” Miller-McCune (March 8, 2011), pp. 47–49; and  R. Arum, Academically Adrift: Limited Learning on College Campuses (Chicago: University of Chicago Press, 2011). Case Incident 2 231 CASE INCIDENT 2 Bullying Bosses After a long weekend, Kara stared at her computer with a sick feeling in her stomach: her boss had added her as a friend on Facebook. Kara did not feel particularly close to her boss, nor did she like the idea of mixing her social life with her work. Still, it was her boss. Kara reluctantly ac- cepted her boss as a Facebook friend. Little did she know her troubles were only beginning. Kara’s boss soon began using her online information to manipulate her work life. It began with inappropri- ate innuendos regarding Facebook photos. Eventually, Kara’s boss manipulated her work hours, confronted her both on and off Facebook, and repeatedly called Kara’s cell phone questioning her whereabouts. “My boss was a gossiping, domineering, contriving megalomaniac, and her behavior dramatically intensified when she used Facebook to pry,” Kara said. Eventually, Kara was forced to quit. “I feel like I got my freedom back and can breathe again,” she said. Although many individuals recall bullies from elementary school days, some are realizing bullies can ex- ist in the workplace, too. In a recent poll, 37 percent of em- ployees report being victims of a bullying boss. And these bullies don’t pick on just the weakest in the group; any subordinate may fall prey. As Kara found, bullying is not limited to male bosses: 40 percent of bullies are women, and women are their targets 70 percent of the time. How does bullying affect employee motivation and be- havior? Surprisingly, though victims may feel less motivated CASE INCIDENT 1 It’s Not Fair! Few topics in the business press have grabbed more headlines recently than highly lucrative annual bonuses for top management. Critics bemoan the multimillion- dollar compensation packages offered in the financial services industry in particular, following the dire consequences of the meltdown of this sector a few short years ago. How is executive compensation determined by compensation committees? Some researchers suggest that principles from equity theory (making comparisons to ref- erent others) might explain variations in executive pay. To set what is considered a “fair” level of pay for top executives, members of the board find out how much executives with similar levels of experience in similar firms (similar inputs) are being paid and attempt to adjust compensation (out- comes) to be equitable. In other words, top executives in large oil firms are paid similarly to top executives in other large oil firms, top executives in small hospitals are paid similarly to top executives in other small hospitals. In many cases, simply changing the referent others can change the salary range considered acceptable. According to one view of justice theory, this should be perceived as equitable, although executives may encourage boards to consider spe- cific referent others who are especially well-paid. Critics of executive compensation change the debate by focusing on the ratio of executive compensation to that of the company’s lowest-paid employees. Researcher Cary Cooper notes, “In business, it is important to reward success and not simply status.” Cooper believes all employees should share the company’s good fortune in profitable periods. He has recommended that CEO com- pensation be capped at 20 times the salary of the lowest- paid employee. In fact, the average S&P 500 CEO is paid 263 times what the lowest-paid laborer makes. This is eight times more than the ratio from the 1950s, which might serve as another reference point for determining what is considered “fair.” Questions 1. How does the executive compensation issue relate to equity theory? Who do you think should be the referent others in these equity judgments? What are the relevant inputs for top executives? 2. Can you think of procedural justice implications related to the ways pay policies for top executives have been instituted? Do these pay-making decisions follow the procedural justice principles outlined in the chapter? 3. Do you think the government has a legitimate role in controlling executive compensation? How might we use distributive and procedural justice theories to inform this debate? 4. Are there any positive motivational consequences of tying compensation pay closely to firm performance? Sources: J. Bizjak, M. Lemmon, and T. Nguyen, “Are All CEOs Above Average? An Empirical Analysis of Compensation Peer Groups and Pay Design,” Journal of Financial Economics 100, no. 3 (2011), pp. 538–555; C. Cooper, “We’re All in This Together,” Director 64 (February 2011), p. 27; and R. Foroohar, “Stuffing Their Pockets: For CEOs, A Lucrative Recession” Newsweek (September 13, 2010), www.newsweek.com . www.newsweek.com 232 CHAPTER 7 Motivation Concepts he or she has been annoying, or lazy, [or] did something to earn it,” she says. Questions 1. How does workplace bullying violate the rules of organizational justice? 2. What aspects of motivation might workplace bullying reduce? For example, are there likely to be effects on an employee’s self-efficacy? If so, what might those effects be? Do you think bullying would motivate you to retaliate? 3. If you were a victim of workplace bullying, what steps would you take to try to reduce its occurrence? What strategies would be most effective? Least effective? What would you do if one of your colleagues were a victim? 4. What factors do you believe contribute to workplace bullying? Are bullies a product of the situation, or do they have flawed personalities? What situations and what personality factors might contribute to the presence of bullies? to go to work every day, they continue performing their required job duties. However, some are less motivated to perform extra-role or citizenship behaviors. Helping oth- ers, speaking positively about the organization, and going beyond the call of duty are reduced as a result of bullying. According to Dr. Bennett Tepper, fear may be the reason many workers continue to perform. And not all individu- als reduce their citizenship behaviors. Some continue to engage in extra-role behaviors to make themselves look better than their colleagues. Other victims of bullying may be motivated to actively retaliate against their bullying su- pervisor, or engage in acts of workplace withdrawal. What should you do if your boss is bullying you? Don’t necessarily expect help from co-workers. As Emelise Aleandri, an actress and producer from New York who left her job after being bullied, stated, “Some people were afraid to do anything. But others didn’t mind what was happening at all, because they wanted my job.” Moreover, according to Dr. Michelle Duffy of the University of Kentucky, co-workers often blame victims of bullying in or- der to resolve their own guilt. “They do this by wondering whether maybe the person deserved the treatment, that ENDNOTES 1. See, for example, G. P. Latham and C. C. Pinder, “Work Motivation Theory and Research at the Dawn of the Twenty- First Century,” Annual Review of Psychology 56 (2005), pp. 485–516; and C. Pinder, Work Motivation in Organizational Behavior, 2nd ed. (London, UK: Psychology Press, 2008). 2. R. Wagner and J. K. Harter, 12: The Elements of Great Managing (Washington, DC: Gallup Press, 2006). 3. “The 2008 Wasting Time at Work Survey Reveals a Record Number of People Waste Time at Work,” Salary.com (2008), www.salary.com . 4. See, for instance, Pinder, Work Motivation in Organizational Behavior . 5. A. Maslow, Motivation and Personality (New York: Harper & Row, 1954). 6. G. Hofstede, “Motivation, Leadership, and Organization: Do American Theories Apply Abroad?” Organizational Dynamics (Summer 1980), p. 55. 7. See, for example, E. E. Lawler III and J. L. Suttle, “A Causal Correlation Test of the Need Hierarchy Concept,” Organizational Behavior and Human Performance 7 , no. 2 (1972), pp. 265–287; D. T. Hall and K. E. 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Tests of Competing Explanations of the Supervisor Abuse and Employee Deviance Relationship Through Perceptions of Distributive Justice,” Journal of Applied Psychology 95, (2010), pp. 1009–1031. www.salary.com Endnotes 233 22. M. Burgess, M. E. Enzle, and R. Schmaltz, “Defeating the Potentially Deleterious Effects of Externally Imposed Deadlines: Practitioners’ Rules-of-Thumb,” Personality and Social Psychology Bulletin 30, no. 7 (2004), pp. 868–877. 23. K. M. Sheldon, A. J. Elliot, and R. M. Ryan, “Self-Concordance and Subjective Well-being in Four Cultures,” Journal of Cross- Cultural Psychology 35, no. 2 (2004), pp. 209–223. 24. J. E. Bono and T. A. Judge, “Self-Concordance at Work: Toward Understanding the Motivational Effects of Transformational Leaders,” Academy of Management Journal 46, no. 5 (2003), pp. 554–571. 25. J. P. Meyer, T. E. Becker, and C. Vandenberghe, “Employee Commitment and Motivation: A Conceptual Analysis and Integrative Model,” Journal of Applied Psychology 89, no. 6 (2004), pp. 991–1007. 26. W. A. Kahn, “Psychological Conditions of Personal Engagement and Disengagement at Work,” Academy of Management Journal 33, no. 4 (1990), pp. 692–724. 27. www.gallup.com/consulting/52/Employee-Engagement. aspx 28. J. K. Harter, F. L. Schmidt, and T. L. Hayes, “Business- Unit-Level Relationship Between Employee Satisfaction, Employee Engagement, and Business Outcomes: A Meta-Analysis,” Journal of Applied Psychology 87, no. 2 (2002), pp. 268–279. 29. M. S. Christian, A. S. Garza, and J. E. Slaughter, “Work Engagement: A Quantitative Review and Test of Its Relations with Task and Contextual Performance,” Personnel Psychology 64, no. 1 (2011), pp. 89–136. 30. W. B. Schaufeli, A. B. Bakker, and W. van Rhenen, “How Changes in Job Demands and Resources Predict Burnout, Work Engagement, and Sickness Absenteeism,” Journal of Organizational Behavior 30, no. 7 (2009), pp. 893–917; E. R. Crawford, J. A. LePine, and B. L. Rich, “Linking Job Demands and Resources to Employee Engagement and Burnout: A Theoretical Extension and Meta-Analytic Test,” Journal of Applied Psychology 95, no. 5 (2010), pp. 834–848; and D. Xanthopoulou, A. B. Bakker, E. Demerouti, and W. B. Schaufeli, “Reciprocal Relationships Between job Resources, Personal Resources, and Work Engagement,” Journal of Vocational Behavior 74, no. 3 (2009), pp. 235–244. 31. B. L. Rich, J. A. LePine, and E. R. Crawford, “Job Engagement: Antecedents and Effects on Job Performance,” Academy of Management Journal 53, no. 3 (2010), pp. 617–635. 32. M. Tims, A. B. Bakker, and D. Xanthopoulou, “Do Transformational Leaders Enhance Their Followers’ Daily Work Engagement?” Leadership Quarterly 22, no. 1 (2011), pp. 121–131; and F. O. Walumbwa, P. Wang, H. Wang, J. Schaubroeck, and B. J. Avolio, “Psychological Processes Linking Authentic Leadership to Follower Behaviors,” Leadership Quarterly 21, no. 5 (2010), pp. 901–914. 33. D. A. Newman and D. A. Harrison, “Been There, Bottled That: Are State and Behavioral Work Engagement New and Useful Construct ‘Wines?’” Industrial and Organizational Psychology 1, no. 1 (2008), pp. 31–35; A. J. Wefald and R. G. Downey, “Job Engagement in Organizations: Fad, Fashion, or Folderol,” Journal of Organizational Behavior 30, no. 1 (2009), pp. 141–145. 34. See, for example, Rich, LePine, and Crawford, “Job Engagement: Antecedents and Effects on Job Performance;” and J. Whittaker, “An Inquiry into the Continuing Relevance of Herzberg’s Motivation Theory,” Engineering Management Journal 8 (1996), pp. 15–20. 13. D. C. McClelland, The Achieving Society (New York: Van Nostrand Reinhold, 1961); J. W. Atkinson and J. O. Raynor, Motivation and Achievement (Washington, DC: Winston, 1974); D. C. McClelland, Power: The Inner Experience (New York: Irvington, 1975); and M. J. Stahl, Managerial and Technical Motivation: Assessing Needs for Achievement, Power, and Affiliation (New York: Praeger, 1986). 14. D. C. McClelland and D. G. Winter, Motivating Economic Achievement (New York: The Free Press, 1969); and J. B. Miner, N. R. Smith, and J. S. Bracker, “Role of Entrepreneurial Task Motivation in the Growth of Technologically Innovative Firms: Interpretations from Follow-up Data,” Journal of Applied Psychology 79 , no. 4 (1994), pp. 627–630. 15. McClelland, Power; D. C. McClelland and D. H. Burnham, “Power Is the Great Motivator,” Harvard Business Review (March–April 1976), pp. 100–110; and R. E. Boyatzis, “The Need for Close Relationships and the Manager’s Job,” in D. A. Kolb, I. M. Rubin, and J. M. 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Greenberg, “Cognitive Reevaluation of Outcomes in Response to Underpayment Inequity,” Academy of Management Journal, March 1989, pp. 174–184. and G. P. Latham, “An Exploratory Field Experiment on the Effect of Subconscious and Conscious Goals on Employee Performance,” Organizational Behavior and Human Decision Processes 109, no. 1 (2009), pp. 9–17. 52. “KEYGroup Survey Finds Nearly Half of All Employees Have No Set Performance Goals,” IPMA-HR Bulletin (March 10, 2006), p. 1; S. Hamm, “SAP Dangles a Big, Fat Carrot,” BusinessWeek (May 22, 2006), pp. 67–68; and “P&G CEO Wields High Expectations but No Whip,” USA Today (February 19, 2007), p. 3B. 53. See, for instance, S. J. Carroll and H. L. Tosi, Management by Objectives: Applications and Research (New York: Macmillan, 1973); and R. Rodgers and J. E. Hunter, “Impact of Management by Objectives on Organizational Productivity,” Journal of Applied Psychology 76 , no. 2 (1991), pp. 322–336. 54. See, for instance, T. H. Poister and G. Streib, “MBO in Municipal Government: Variations on a Traditional Management Tool,” Public Administration Review (January/ February 1995), pp. 48–56; C. Garvey, “Goalsharing Scores,” HRMagazine (April 2000), pp. 99–106; E. Lindberg and T. L. Wilson, “Management by Objectives: The Swedish Experience in Upper Secondary Schools,” Journal of Educational Administration 49, no. 1 (2011), pp. 62–75; and A. C. Spaulding, L. D. Gamm, and J. M. Griffith, “Studer Unplugged: Identifying Underlying Managerial Concepts,” Hospital Topics 88, no. 1 (2010), pp. 1–9. 55. See, for instance, R. Rodgers, J. E. Hunter, and D. L. Rogers, “Influence of Top Management Commitment on Management Program Success,” Journal of Applied Psychology 78 , no. 1 (1993), pp. 151–155; M. Tanikawa, “Fujitsu Decides to Backtrack on Performance-Based Pay,” New York Times (March 22, 2001), p. W1; and W. F. Roth, “Is Management by Objectives Obsolete?” Global Business and Organizational Excellence 28 (May/June 2009), pp. 36–43. 56. A. Bandura, Self-Efficacy: The Exercise of Control (New York: Freeman, 1997). 57. A. D. Stajkovic and F. Luthans, “Self-Efficacy and Work- Related Performance: A Meta-Analysis,” Psychological Bulletin 124 , no. 2 (1998), pp. 240–261; and A. Bandura, “Cultivate Self-Efficacy for Personal and Organizational Effectiveness,” in E. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 120–136. 58. M. Salanova, S. Llorens, and W. B. Schaufeli, “Yes I Can, I Feel Good, and I Just Do It! On Gain Cycles and Spirals of Efficacy Beliefs, Affect, and Engagement,” Applied Psychology 60, no. 2 (2011), pp. 255–285. 59. P. Tierney and S. M. Farmer, “Creative Self-Efficacy Development and Creative Performance Over Time,” Journal of Applied Psychology 96, no. 2 (2011), pp. 277–293. 60. A. Bandura and D. Cervone, “Differential Engagement in Self-Reactive Influences in Cognitively-Based Motivation,” Organizational Behavior and Human Decision Processes 38 , no. 1 (1986), pp. 92–113. 61. Bandura, Self-Efficacy. 62. C. L. Holladay and M. A. Quiñones, “Practice Variability and Transfer of Training: The Role of Self-Efficacy Generality,” Journal of Applied Psychology 88, no. 6 (2003), pp. 1094–1103. 236 CHAPTER 7 Motivation Concepts Experiential Processing in Third-Party Reactions to Workplace Mistreatment,” Journal of Applied Psychology 95, no. 5 (2010), pp. 944–952. 88. G. S. Leventhal, “What Should Be Done with Equity Theory? New Approaches to the Study of Fairness in Social Relationships,” in K. Gergen, M. Greenberg, and R. Willis (eds.), Social Exchange: Advances in Theory and Research (New York: Plenum, 1980), pp. 27–55. 89. J. C. Shaw, E. Wild, and J. A. Colquitt, “To Justify or Excuse? A Meta-Analytic Review of the Effects of Explanations,” Journal of Applied Psychology 88, no. 3 (2003), pp. 444–458. 90. D. P. Skarlicki and R. Folger, “Retaliation in the Workplace: The Roles of Distributive, Procedural, and Interactional Justice,” Journal of Applied Psychology 82, no. 3 (1997), pp.  434–443; and D. A. Jones, “Getting Even with One’s Supervisor and One’s Organization: Relationships Among Types of Injustice, Desires for Revenge, and Counterproductive Work Behavior,” Journal of Organizational Behavior 30, no. 4 (2009), pp. 525–542. 91. R. Cropanzano, C. A. Prehar, and P. Y. Chen, “Using Social Exchange Theory to Distinguish Procedural from Interactional Justice,” Group & Organization Management 27, no. 3 (2002), pp. 324–351; and S. G. Roch and L. R. Shanock, “Organizational Justice in an Exchange Framework: Clarifying Organizational Justice Dimensions,” Journal of Management 32 , no. 2 (2006), pp. 299–322. 92. Colquitt, Conlon, Wesson, Porter, and Ng, “Justice at the Millennium,” pp. 425–445. 93. J. K. Giacobbe-Miller, D. J. Miller, and V. I. Victorov, “A Comparison of Russian and U.S. Pay Allocation Decisions, Distributive Justice Judgments, and Productivity Under Different Payment Conditions,” Personnel Psychology 51 , no. 1 (1998), pp. 137–163. 94. M. C. Bolino and W. H. Turnley, “Old Faces, New Places: Equity Theory in Cross-Cultural Contexts,” Journal of Organizational Behavior 29, no. 1 (2008), pp. 29–50. 95. B. A. Scott, J. A. Colquitt, and E. L. Paddock, “An Actor- Focused Model of Justice Rule Adherence and Violation: The Role of Managerial Motives and Discretion,” Journal of Applied Psychology 94, no. 3 (2009), pp. 756–769. 96. L. J. Barlcay and D. P. Skarlicki, “Healing the Wounds of Organizational Injustice: Examining the Benefits of Expressive Writing,” Journal of Applied Psychology 94, no. 2 (2009), pp. 511–523. 97. R. Fischer and P. B. Smith, “Reward Allocation and Culture: A Meta-Analysis,” Journal of Cross-Cultural Psychology 34, no. 3 (2003), pp. 251–268. 98. F. F. T. Chiang and T. Birtch, “The Transferability  of Management Practices: Examining Cross-National Differences in Reward Preferences,” Human Relations 60, no. 9 (2007), pp.  1293–1330; A. E. Lind, T. R. Tyler, and  Y.  J. Huo, “Procedural Context and Culture: Variation in the Antecedents of Procedural Justice Judgments,” Journal of Personality and Social Psychology 73, no. 4 (1997), pp. 767– 780; M. J. Gelfand, M. Erez, and Z. Aycan, “Cross-Cultural Organizational Behavior,” Annual Review of Psychology 58, (2007), pp. 479–514. 99. V. H. Vroom, Work and Motivation (New York: Wiley, 1964). 80. P. S. Goodman and A. Friedman, “An Examination of Adams’ Theory of Inequity,” Administrative Science Quarterly 16 , no. 3 (1971), pp. 271–288; R. P. Vecchio, “An Individual- Differences Interpretation of the Conflicting Predictions Generated by Equity Theory and Expectancy Theory,” Journal of Applied Psychology 66, no. 4 (1981), pp. 470–481; R. T. Mowday, “Equity Theory Predictions of Behavior in Organizations,” in R. Steers, L. W. Porter, and G. Bigley (eds.), Motivation and Work Behavior, 6th ed. (New York: McGraw-Hill, 1996), pp. 111–131; R. W. Griffeth and S.  Gaertner, “A Role for Equity Theory in the Turnover Process: An Empirical Test,” Journal of Applied Social Psychology 31 , no. 5 (2001), pp. 1017–1037; and L. K. Scheer, N. Kumar, and J.-B. E. M. Steenkamp, “Reactions to Perceived Inequity in U.S. and Dutch Interorganizational Relationships,” Academy of Management 46, no. 3 (2003), pp. 303–316. 81. See, for example, R. C. Huseman, J. D. Hatfield, and E. W. Miles, “A New Perspective on Equity Theory: The Equity Sensitivity Construct,” Academy of Management Journal 12 , no. 2 (1987), pp. 222–234; K. S. Sauley and A. G. Bedeian, “Equity Sensitivity: Construction of a Measure and Examination of Its Psychometric Properties,” Journal of Management 26, no. 5 (2000), pp. 885–910; and J. A. Colquitt, “Does the Justice of One Interact with the Justice of Many? Reactions to Procedural Justice in Teams,” Journal of Applied Psychology 89, no. 4 (2004), pp. 633–646. 82. J. Greenberg and S. Ornstein, “High Status Job Title as Compensation for Underpayment: A Test of Equity Theory,” Journal of Applied Psychology 68 , no. 2 (1983), pp. 285–297; and J. Greenberg, “Equity and Workplace Status: A Field Experiment,” Journal of Applied Psychology 73, no. 4 (1988), pp. 606–613. 83. See, for instance, J. A. Colquitt, D. E. Conlon, M. J. Wesson, C. O. L. H. Porter, and K. Y. Ng, “Justice at the Millennium: A Meta-Analytic Review of the 25 Years of Organizational Justice Research,” Journal of Applied Psychology 86 , no. 3 (2001), pp. 425–445; T. Simons and Q. Roberson, “Why Managers Should Care About Fairness: The Effects of Aggregate Justice Perceptions on Organizational Outcomes,” Journal of Applied Psychology 88 , no. 3 (2003), pp. 432–443; and B. C. Holtz and C. M. Harold, “Fair Today, Fair Tomorrow? A Longitudinal Investigation of Overall Justice Perceptions,” Journal of Applied Psychology 94, no. 5 (2009), pp. 1185–1199. 84. K. Leung, K. Tong, and S. S. Ho, “Effects of Interactional Justice on Egocentric Bias in Resource Allocation Decisions,” Journal of Applied Psychology 89, no. 3 (2004), pp. 405–415; and L. Francis-Gladney, N. R. Manger, and R. B. Welker, “Does Outcome Favorability Affect Procedural Fairness as a Result of Self-Serving Attributions,” Journal of Applied Social Psychology 40, no. 1 (2010), pp. 182–194. 85. “Americans Feel They Pay Fair Share of Taxes, Says Poll,” NaturalNews.com , May 2, 2005, www.naturalnews .com/007297.html . 86. See, for example, R. Cropanzano, J. H. Stein, and T. Nadisic, Social Justice and the Experience of Emotion (New York: Routledge/Taylor and Francis Group, 2011). 87. D. P. Skarlicki and D. E. Rupp, “Dual Processing and Organizational Justice: The Role of Rational Versus www.naturalnews.com/007297.html www.naturalnews.com/007297.html Endnotes 237 103. R. J. House, H. J. Shapiro, and M. A. Wahba, “Expectancy Theory as a Predictor of Work Behavior and Attitudes: A  Re-evaluation of Empirical Evidence,” Decision Sciences 5 , no. 3 (1974), pp. 481–506. 104. For other examples of models that seek to integrate motiva- tion theories, see H. J. Klein, “An Integrated Control Theory Model of Work Motivation,” Academy of Management Review 14 , no. 2 (1989), pp. 150–172; E. A. Locke, “The Motivation Sequence, the Motivation Hub, and the Motivation Core,” Organizational Behavior and Human Decision Processes 50 , no. 2 (1991), pp. 288–299; and T. R. Mitchell, “Matching Motivational Strategies with Organizational Contexts,” pp. 60–62. 105. This section is based on F. J. Landy and W. S. Becker, “Motivation Theory Reconsidered,” in L. L. Cummings and B. M. Staw (eds.), Research in Organizational Behavior, vol. 9 (Greenwich, CT: JAI Press, 1987), pp. 24–35. 100. For criticism, see H. G. Heneman III and D. P. Schwab, “Evaluation of Research on Expectancy Theory Prediction of Employee Performance,” Psychological Bulletin 78, no. 1 (1972), pp. 1–9; T. R. Mitchell, “Expectancy Models of Job Satisfaction, Occupational Preference and Effort: A Theoretical, Methodological and Empirical Appraisal,” Psychological Bulletin 81 , no. 12 (1974), pp. 1053–1077; and W. Van Eerde and H. Thierry, “Vroom’s Expectancy Models and Work-Related Criteria: A Meta-Analysis,” Journal of Applied Psychology 81 , no. 5 (1996), pp. 575–586. For sup- port, see L. W. Porter and E. E. Lawler III, Managerial Attitudes and Performance (Homewood, IL: Irwin, 1968); and J. J. Donovan, “Work Motivation,” in N. Anderson et al. (eds.), Handbook of Industrial, Work & Organizational Psychology , vol. 2 (Thousand Oaks, CA: Sage, 2001), pp. 56–59. 101. Vroom refers to these three variables as expectancy, instru- mentality, and valence, respectively. 102. J. Nocera, “The Anguish of Being an Analyst,” The New York Times (March 4, 2006), pp. B1, B12. MOTIVATION MINUS THE MOOLAH 238 W hen Nancy Jackson hired a new full-time salesperson for a com- pany she co-owns, Architectural Systems, she was caught off guard by protests from her 19 employees. “I couldn’t believe their reactions,” she says. The employees had seen their work hours reduced or their pay trimmed. Why was she hiring someone new amid the retrenchments? “There’s been a lot of emotional hand-holding here that we’ve never had to do before,” Jackson says. Christopher Mills, co-owner of Prime Debt Services, a debt management firm in Dallas, has found it helpful to meet with employees one-on-one more often. “I found the more I listened, the better they pepped up,” he says. Mills even has taken to cooking them a breakfast of waffles, bacon, and coffee every Wednesday. Beyond expressing support and appreciation for their efforts, some em- ployers are being more creative in their approaches to motivation. Elise Lelong, owner of a New York consulting firm, decided to upgrade her em- ployees’ job titles. “It doesn’t cost anything and it makes them feel good,” Lelong says. “You’ve got to think outside the money box when it comes to motivating your employees in this economic environment.” Lelong took other steps too, including giving her employees increased chances to work remotely and with flexible hours. Atlassian, an Australian software company, motivated its employees by allowing them to devote 20 percent of their time to any software idea they liked. When pay raises aren’t possible, sometimes even smaller monetary awards can make a difference. Though Intuit human resource manager Jennifer Lepird spent several weeks working long hours on a big one-time project, she still pulled several “all nighters” toward the end. When the proj- ect was finished, what was her reward? The acquisitions team leader sent her a gift certificate worth several hundred dollars. Jennifer was thrilled. “The fact that somebody took the time to recognize the effort,” she said, “made the long hours just melt away.” Eric Mosley, founder and CEO of Boston-based Globoforce, is a big fan of this approach. “Even higher earners can appreciate a small award if it is unexpected,” he said. “Even billionaires appreciate a Christmas sweater from their mom.” Sources: S. E. Needleman, “Business Owners Try to Motivate Employees,” The Wall Street Journal (January 14, 2010), p. B5; P. D. Broughton, “More Than a Paycheck,” The Wall Street Journal (February 2, 2010), p. A17; and T. Demos, “Motivate Without Spending Millions,” Fortune (April 12, 2010), pp. 37–38. LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Describe the job characteristics model and evaluate the way it motivates by changing the work environment. 2 Compare and contrast the main ways jobs can be redesigned. 3 Identify three alternative work arrangements and show how they might motivate employees. 4 Give examples of employee involvement measures and show how they can motivate employees. 5 Demonstrate how the different types of variable- pay programs can increase employee motivation. 6 Show how flexible benefits turn benefits into motivators. 7 Identify the motivational benefits of intrinsic rewards. MyManagementLab Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com. www.mymanagementlab.com Motivation: From Concepts to Applications 8 Money is better than poverty, if only for financial reasons. —Woody Allen 239 Ph o to : Fa ct o ry w o rk e r re ce iv in g c e rt if ic a te . So ur ce : C o rb is /G lo w I m a g e s 239 240 CHAPTER 8 Motivation: From Concepts to Applications T hough pay is one central means of motivation we consider in this chapter—what we call extrinsic motivation—it’s not the only one. The other is in-trinsic. The following self-assessment will provide some information about how intrinsically motivating your job might be. In Chapter 7 , we focused on motivation theories. In this chapter, we start applying motivation concepts to practices such as employee involvement and skill-based pay. Why? Because it’s one thing to know specific theories; it’s quite another to see how, as a manager, you can use them. S A L SELF-ASSESSMENT LIBRARY What’s My Job’S Motivating Potential? In the Self-Assessment Library (available on CD or online), take assessment I.C.9 (What’s My Job’s Motivating Potential?) and answer the following questions. If you currently do not have a job, answer the questions for your most recent job. 1. How did you score relative to your classmates? 2. Did your score surprise you? Why or why not? 3. How might your results affect your career path? Increasingly, research on motivation focuses on approaches that link motiva- tional concepts to changes in the way work is structured. Research in job design suggests the way the elements in a job are organized can increase or decrease effort and also suggests what those elements are. We’ll first review the job characteristics model and then discuss some ways jobs can be redesigned. Finally, we’ll explore alternative work arrangements. The Job Characteristics Model Developed by J. Richard Hackman and Greg Oldham, the job characteristics model (JCM) says we can describe any job in terms of five core job dimensions: 1 1. Skill variety is the degree to which a job requires a variety of different activi- ties so the worker can use a number of different skills and talent. The work of a garage owner-operator who does electrical repairs, rebuilds engines, does bodywork, and interacts with customers scores high on skill variety. The job of a bodyshop worker who sprays paint 8 hours a day scores low on this dimension. 2. Task identity is the degree to which a job requires completion of a whole and identifiable piece of work. A cabinetmaker who designs a piece of fur- niture, selects the wood, builds the object, and finishes it to perfection has a job that scores high on task identity. A job scoring low on this dimension is operating a factory lathe solely to make table legs. 3. Task significance is the degree to which a job affects the lives or work of other people. The job of a nurse handling the diverse needs of patients in a hospital intensive care unit scores high on task significance; sweeping floors in a hospital scores low. 4. Autonomy is the degree to which a job provides the worker freedom, in- dependence, and discretion in scheduling work and determining the pro- cedures in carrying it out. A salesperson who schedules his or her own 1 Describe the job character- istics model and evaluate the way it motivates by changing the work environment. Motivating by Job Design: The Job Characteristics Model Motivating by Job Design: The Job Characteristics Model 241 work each day and decides on the most effective sales approach for each customer without supervision has a highly autonomous job. A salesperson who is given a set of leads each day and is required to follow a standardized sales script with each potential customer has a job low on autonomy. 5. Feedback is the degree to which carrying out work activities generates direct and clear information about your own performance. A job with high feedback is assembling iPads and testing them to see whether they operate properly. A factory worker who assembles iPads but then routes them to a quality-control inspector for testing and adjustments receives low feedback from his or her activities. Exhibit 8-1 presents the job characteristics model (JCM). Note how the first three dimensions—skill variety, task identity, and task significance—combine to create meaningful work the incumbent will view as important, valuable, and worthwhile. Note, too, that jobs with high autonomy give incumbents a feeling of personal responsibility for the results and that, if a job provides feedback, employees will know how effectively they are performing. From a motivational standpoint, the JCM proposes that individuals obtain internal rewards when they learn (knowledge of results) that they personally (experienced responsibility) skill variety The degree to which a job requires a variety of different activities. job design The way the elements in a job are organized. job characteristics model (JCM) A model that proposes that any job can be described in terms of five core job dimensions: skill variety, task identity, task significance, autonomy, and feedback. task significance The degree to which a job has a substantial impact on the lives or work of other people. feedback The degree to which carrying out the work activities required by a job results in the individual obtaining direct and clear information about the effectiveness of his or her performance. task identity The degree to which a job requires completion of a whole and identifiable piece of work. autonomy The degree to which a job provides substantial freedom and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out. The Job Characteristics Model Exhibit 8-1 Personal and work outcomes Skill variety Task identity Task significance Experienced meaningfulness of the work High internal work motivation Autonomy Experienced responsibility for outcomes of the work High-quality work performance High satisfaction with the work Feedback Knowledge of the actual results of the work activities Low absenteeism and turnover Skill i t Core job dimensions E i d Critical psychological states Employee growth- need strength Source: Adaptation of Job Characteristics Model, pp. 78–80 from J. Richard Hackman & Greg R. Oldham, Work Redesign , 1st Edition, © 1980. Adapted by permission of Pearson Education, Inc., Upper Saddle River, NJ. 242 CHAPTER 8 Motivation: From Concepts to Applications have performed well on a task they care about (experienced meaningfulness). 2 The more these three psychological states are present, the greater will be em- ployees’ motivation, performance, and satisfaction, and the lower their absen- teeism and likelihood of leaving. As Exhibit 8-1 also shows, individuals with a high growth need are more likely to experience the critical psychological states when their jobs are enriched—and respond to them more positively—than are their counterparts with low growth need. We can combine the core dimensions into a single predictive index, called the motivating potential score (MPS) , and calculated as follows: To be high on motivating potential, jobs must be high on at least one of the three factors that lead to experienced meaningfulness and high on both au- tonomy and feedback. If jobs score high on motivating potential, the model predicts motivation, performance, and satisfaction will improve and absence and turnover will be reduced. Much evidence supports the JCM concept that the presence of a set of job characteristics—variety, identity, significance, autonomy, and feedback—does generate higher and more satisfying job performance. 3 But apparently we can better calculate motivating potential by simply adding the characteristics rather than using the formula. 4 Think about your job. Do you have the oppor- tunity to work on different tasks, or is your day pretty routine? Are you able to work independently, or do you constantly have a supervisor or co-worker looking over your shoulder? What do you think your answers to these ques- tions say about your job’s motivating potential? Revisit your answers to the self-assessment at the beginning of this chapter, and then calculate your MPS from the job characteristics model. You might try computing your MPS score two ways: using the traditional MPS formula, or simply adding the dimen- sions. Then compare. A few studies have tested the job characteristics model in different cultures, but the results aren’t very consistent. One study suggested that when employees are “other oriented” (concerned with the welfare of others at work), the rela- tionship between intrinsic job characteristics and job satisfaction was weaker. The fact that the job characteristics model is relatively individualistic (consider- ing the relationship between the employee and his or her work) suggests job enrichment strategies may not have the same effects in collectivistic cultures as in individualistic cultures (such as the United States). 5 However, another study suggested the degree to which jobs had intrinsic job characteristics pre- dicted job satisfaction and job involvement equally well for U.S., Japanese, and Hungarian employees. 6 How Can Jobs Be Redesigned? “Every day was the same thing,” Frank Greer said. “Stand on that assembly line. Wait for an instrument panel to be moved into place. Unlock the mechanism and drop the panel into the Jeep Liberty as it moved by on the line. Then I plugged in the harnessing wires. I repeated that for eight hours a day. I don’t care that they were paying me twenty-four dollars an hour. I was going crazy. I did it for almost a year and a half. Finally, I just said to my wife that this isn’t going to be the way I’m going to spend the rest of my life. My brain was turning to JELL-O on that Jeep assembly line. So I quit. Now I work in a print shop and I make less than fifteen dollars an hour. But let me tell you, the work I do is really interesting. The job changes all the time, I’m continually learning new things, and the work really challenges me! I look forward every morning to going to work again.” 2 Compare and contrast the main ways jobs can be redesigned. Motivating by Job Design: The Job Characteristics Model 243 motivating potential score (MPS) A predictive index that suggests the motivating potential in a job. job rotation The periodic shifting of an employee from one task to another. A nything can be measured. The question is whether it can be measured well. As for CEO pay, it seems it can’t be measured well, or at least in a way experts agree upon. There is nearly as much disagreement among compensation experts about how to measure CEO pay as about whether CEOs are paid too much. You may have read that the Dodd- Frank Act of 2010 included “say on pay” rules, whereby shareholders have a vote on executive compensa- tion. But what pay? There is often a big difference between expected pay (bonus targets and value of options at the time granted) and realized pay (bonuses actually received and realized value of options). Eli Lilly announced the pay of its CEO John Lechleiter as $15.9 mil- lion, up 10 percent from the year be- fore. However, independent experts calculated his pay as $20.9 million, a 45 percent increase over the prior year. Occidental Petroleum CEO Ray Irani’s expected pay was $58.3 million. His realized pay was $222.6 million. Says one expert, even if the pay for two CEOs is reported to be the same, “you can pretty much bet they are not the same.” Why is it so difficult to get an ac- curate read on CEO pay? A big part of the answer is that, for some time, a CEO’s pay has been tied to the com- pany’s financial performance, and an organization’s finances are quite com- plex. CEO pay might be based on any number of important financial indica- tors: stock appreciation, profitability, market share, earnings per share, and equity per share. Many CEOs are granted stocks at a current price, pro- viding an incentive to make the stock price grow. The main principal at play here is to align the CEO’s interests with the company’s interests, so the CEO’s motivation is in line with the company’s best interests. Another complicating factor is time: the value of CEO incentives often de- pends on measures, like stock price, that are time-sensitive. The worth of a stock option thus depends on when that option is exercised. Timing is ev- erything. When Apple granted CEO Steve Jobs 7.5 million stock options, someone falsified records so the stock was priced low, as if at an earlier time than when the options were actually granted. This “backdating” allowed Jobs to sell his options at a greater profit when he cashed them in. Because this type of compensation is complicated, so are the motivational dynamics involved. CEOs have an incen- tive to “manage to the metric”—such as by making decisions that maximize short-term stock price (and thus in- crease the value of stock options) at the expense of the long-term interests of the company. Not all CEOs do this, of course, but the incentive is often there. As one expert concluded, “Assess- ing CEO compensation is a bit of a black art.” Sources: S. Thurm, “For CEO Pay, A Single Number Never Tells the Whole Story,” The Wall Street Journal (March 6, 2010), p. A2; B. McClure, “A Guide To CEO Compensation,” San Francisco Chronicle (May 2, 2011), downloaded May 25, 2011, from www.investopedia.com/ ; and R. Gopalan, T. Milbourn, F. Song, and A. V. Thakor, “The Optimal Duration of Executive Compensation: Theory and Evidence,” Working paper, April 15, 2011, Washington University in St. Louis, http:// apps.olin.wustl.edu/faculty/milbourn/ duration_ver_apr15 . Myth or Science? “CEO Pay Can’t Be Measured” The repetitive tasks in Frank Greer’s job at the Jeep plant provided little variety, autonomy, or motivation. In contrast, his job in the print shop is chal- lenging and stimulating. Let’s look at some of the ways to put JCM into practice to make jobs more motivating. Job Rotation If employees suffer from overroutinization of their work, one alternative is job rotation , or the periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level (also called cross-training ). At Singapore Airlines, a ticket agent may take on the duties of a baggage handler. Extensive job rotation is among the reasons Singa- pore Airlines is rated one of the best airlines in the world and a highly desirable place to work. Many manufacturing firms have adopted job rotation as a means www.investopedia.com/ http://apps.olin.wustl.edu/faculty/milbourn/duration_ver_apr15 http://apps.olin.wustl.edu/faculty/milbourn/duration_ver_apr15 http://apps.olin.wustl.edu/faculty/milbourn/duration_ver_apr15 244 CHAPTER 8 Motivation: From Concepts to Applications of increasing flexibility and avoiding layoffs. 7 Managers at Apex Precision Tech- nologies, a custom-machine shop in Indiana, train workers on all the company’s equipment so they can move around as needed in response to incoming orders. Although job rotation has often been conceptualized as an activity for assembly line and manufacturing employees, many organizations use job rotation for new managers to help them get a picture of the whole business as well. 8 The strengths of job rotation are that it reduces boredom, increases motiva- tion, and helps employees better understand how their work contributes to the organization. An indirect benefit is that employees with a wider range of skills give management more flexibility in scheduling work, adapting to changes, and fill- ing vacancies. 9 International evidence from Italy, Britain, and Turkey does show that job rotation is associated with higher levels of organizational performance in manufacturing settings. 10 However, job rotation has drawbacks. Training costs increase, and moving a worker into a new position reduces productivity just when efficiency at the prior job is creating organizational economies. Job rotation also creates disruptions when members of the work group have to adjust to the new employee. And supervisors may also have to spend more time answering ques- tions and monitoring the work of recently rotated employees. Job Enrichment Job enrichment expands jobs by increasing the degree to which the worker controls the planning, execution, and evaluation of the work. An enriched job organizes tasks to allow the worker to do a complete activity, in- creases the employee’s freedom and independence, increases responsibility, and provides feedback so individuals can assess and correct their own performance. 11 How does management enrich an employee’s job? Exhibit 8-2 offers sug- gested guidelines based on the job characteristics model. Combining tasks puts fractionalized tasks back together to form a new and larger module of work. Forming natural work units makes an employee’s tasks create an identifiable and meaningful whole. Establishing client relationships increases the direct relation- ships between workers and their clients (clients can be internal as well as out- side the organization). Expanding jobs vertically gives employees responsibilities and control formerly reserved for management. Opening feedback channels lets employees know how well they are doing and whether their performance is im- proving, deteriorating, or remaining constant. Guidelines for Enriching a Job Exhibit 8-2 Combine tasks Skill variety Task identity Task significance Autonomy Feedback Form natural work units Establish client relationships Expand jobs vertically Open feedback channels Suggested Action Core Job Dimensions Source: “Guidelines for Enriching a Job” Source: J. R. Hackman and J. L. Suttle (eds.), Improving Life at Work (Glenview, IL: Scott Foresman, 1977), p. 138. Reprinted by permission of Richard Hackman and J. Lloyd Suttle. Motivating by Job Design: The Job Characteristics Model 245 Some newer versions of job enrichment concentrate specifically on improv- ing the meaningfulness of work. One method is to relate employee experiences to customer outcomes, by providing employees with stories from customers who benefited from the company’s products or services. The medical device manufacturer Medtronic invites people to describe how Medtronic products have improved, or even saved, their lives and shares these stories with employ- ees during annual meetings, providing a powerful reminder of the impact of their work. Researchers recently found that when university fund-raisers briefly interacted with the undergraduates who would receive the scholarship money they raised, they persisted 42 percent longer, and raised nearly twice as much money, as those who didn’t interact with potential recipients. 12 Another method for improving the meaningfulness of work is providing em- ployees with mutual assistance programs. 13 Employees who can help each other directly through their work come to see themselves, and the organizations for which they work, in more positive, pro-social terms. This, in turn, can increase employee affective commitment. Many organizations provide job enrichment through cross-training to learn new skills, and through job rotation to perform new tasks in another position. Employees typically work with managers to set job enrichment goals, identify desired competencies, and find appropriate placement. For example, an employee who usually works in handling client records might receive cross-training to learn about the organization’s purchasing and ac- counting systems. Then an accounting employee might learn about client data processes. These two employees could then rotate through one anoth- er’s jobs, allowing them to cover for one another and prepare for possible future promotions. The evidence on job enrichment shows it reduces absenteeism and turn- over costs and increases satisfaction, but not all programs are equally effective. 14 A review of 83 organizational interventions designed to improve performance management showed that frequent, specific feedback related to solving prob- lems was linked to consistently higher performance, but infrequent feedback that focused more on past problems than future solutions was much less effec- tive. 15 Some recent evidence suggests job enrichment works best when it com- pensates for poor feedback and reward systems. 16 Work design may also not affect everyone in the same way. One recent study showed employees with a higher preference for challenging work experienced larger reductions in stress following job redesign than individuals who did not prefer challenging work. 17 Alternative Work Arrangements Another approach to motivation is to alter work arrangements with flextime, job sharing, or telecommuting. These are likely to be especially important for a diverse workforce of dual-earner couples, single parents, and employees caring for a sick or aging relative. Flextime Susan Ross is the classic “morning person.” She rises at 5:00 a.m. sharp each day, full of energy. However, as she puts it, “I’m usually ready for bed right after the 7:00 p.m. news.” job enrichment The vertical expansion of jobs, which increases the degree to which the worker controls the planning, execution, and evaluation of the work. 3 Identify three alternative work arrangements and show how they might motivate employees. 246 CHAPTER 8 Motivation: From Concepts to Applications Different Views of the Motivating Effect of RewardsOB Poll 0 4020 60 908070503010 Company culture 47% Percent indicating attribute as important contributor to employee loyalty and motivation Employees Employers 55% Work-life programs 53% 36% Retirement benefits 67% 43% Health benefits 74% 59% Salary 82% 67% Sources: Survey of 1,503 employers and 1,305 full-time employees. MetLife, www.metlife.com ; and “Loyalty Drivers,” Workforce Management (October 2010), p. 18. Susan’s work schedule as a claims processor at The Hartford Financial Services Group is flexible. Her office opens at 6:00 a.m. and closes at 7:00 p.m. It’s up to her how she schedules her 8-hour day within this 13-hour period. Because Susan is a morning person and also has a 7-year-old son who gets out of school at 3:00 p.m. every day, she opts to work from 6:00 a.m. to 3:00 p.m. “My work hours are perfect. I’m at the job when I’m mentally most alert, and I can be home to take care of my son after he gets out of school.” Susan’s schedule is an example of flextime , short for “flexible work time.” Employees must work a specific number of hours per week but are free to vary their hours of work within certain limits. As in Exhibit 8-3 , each day consists of a common core, usually 6 hours, with a flexibility band sur- rounding it. The core may be 9:00 a.m. to 3:00 p.m., with the office actually opening at 6:00 a.m. and closing at 6:00 p.m. All employees are required to be at their jobs during the common core period, but they may accumulate their other 2 hours before, after, or before and after that. Some flextime programs allow employees to accumulate extra hours and turn them into a free day off each month. Flextime has become extremely popular; according to the Bureau of Labor Statistics, nearly 26 percent of working women with children have flex- ible work schedules, compared to just 14 percent in 1991. 18 And this is not just a U.S. phenomenon. In Germany, for instance, 29 percent of businesses offer flextime, and such practices are becoming more widespread in Japan as well. 19 Claimed benefits include reduced absenteeism, increased productivity, reduced overtime expenses, reduced hostility toward management, reduced traffic congestion around work sites, elimination of tardiness, and increased au- tonomy and responsibility for employees—any of which may increase employee job satisfaction. 20 But what’s flextime’s actual record? Most of the evidence stacks up favorably. Flextime tends to reduce absen- teeism and frequently improves worker productivity, 21 probably for several reasons. Employees can schedule their work hours to align with personal www.metlife.com Motivating by Job Design: The Job Characteristics Model 247 Possible Flextime Staff Schedules Exhibit 8-3 Schedule 1 Percent Time: 100% � 40 hours per week Core Hours: 9:00 A.M.–5:00 P.M., Monday through Friday (1 hour lunch) Work Start Time: Between 8:00 A.M. and 9:00 A.M. Work End Time: Between 5:00 P.M. and 6:00 P.M. Schedule 2 Percent Time: 100% � 40 hours per week Work Hours: 8:00 A.M.–6:30 P.M., Monday through Thursday (1/2 hour lunch) Friday off Work Start Time: 8:00 A.M. Work End Time: 6:30 P.M. Schedule 3 Percent Time: 90% � 36 hours per week Work Hours: 8:30 A.M.–5:00 P.M., Monday through Thursday (1/2 hour lunch) 8:00 A.M.–Noon Friday (no lunch) Work Start Time: 8:30 A.M. (Monday–Thursday); 8:00 A.M. (Friday) Work End Time: 5:00 P.M. (Monday–Thursday); Noon (Friday) Schedule 4 Percent Time: 80% � 32 hours per week 8:00 A.M.–6:00 P.M., Monday through Wednesday (1/2 hour lunch) Work Hours: 8:00 A.M.–11:30 A.M. Thursday (no lunch) Friday off Work Start Time: Between 8:00 A.M. and 9:00 A.M. Work End Time: Between 5:00 P.M. and 6:00 P.M. flextime Flexible work hours. job sharing An arrangement that allows two or more individuals to split a traditional 40-hour-a-week job. demands, reducing tardiness and absences, and they can work when they are most productive. Flextime can also help employees balance work and family lives; it is a popular criterion for judging how “family friendly” a workplace is. Flextime’s major drawback is that it’s not applicable to every job or every worker. It works well with clerical tasks for which an employee’s interaction with people outside his or her department is limited. It is not a viable option for receptionists, sales personnel in retail stores, or people whose service jobs require them to be at their workstations at predetermined times. It also appears that people who have a stronger desire to separate their work and family lives are less prone to take advantage of opportunities for flextime. 22 Overall, employers need to consider the appropriateness of both the work and the workers before implementing flextime schedules. Job Sharing Job sharing allows two or more individuals to split a traditional 40-hour-a-week job. One might perform the job from 8:00 a.m. to noon and the other from 1:00 p.m. to 5:00 p.m., or the two could work full but alternate 248 CHAPTER 8 Motivation: From Concepts to Applications days. For example, top Ford engineers Julie Levine and Julie Rocco engage in a job-sharing program that allows both of them to spend time with their families while working on the time-intensive job of redesigning the Explorer crossover. Typically, one of the pair will work late afternoons and evenings while the other works mornings. They both agree that the program has worked well, although making such a relationship work requires a great deal of time and preparation. 23 Approximately 19 percent of large organizations now offer job sharing. 24 Reasons it is not more widely adopted are likely the difficulty of finding compat- ible partners to share a job and the historically negative perceptions of individu- als not completely committed to their job and employer. Job sharing allows an organization to draw on the talents of more than one individual in a given job. A bank manager who oversees two job sharers describes it as an opportunity to get two heads but “pay for one.” 25 It also opens the opportunity to acquire skilled workers—for instance, women with young children and retirees—who might not be available on a full-time basis. 26 Many Japanese firms are increasingly considering job sharing—but for a very differ- ent reason. 27 Because Japanese executives are extremely reluctant to fire peo- ple, job sharing is seen as a potentially humanitarian means of avoiding layoffs due to overstaffing. From the employee’s perspective, job sharing increases flexibility and can increase motivation and satisfaction when a 40-hour-a-week job is just not prac- tical. But the major drawback is finding compatible pairs of employees who can successfully coordinate the intricacies of one job. 28 Telecommuting It might be close to the ideal job for many people. No commuting, flexible hours, freedom to dress as you please, and few or no inter- ruptions from colleagues. It’s called telecommuting , and it refers to working at home at least 2 days a week on a computer linked to the employer’s office. 29 (A closely related term—the virtual office —describes working from home on a relatively permanent basis.) Accounting firm Ernst & Young has created a supportive culture of flexibility that allows employees to control where, when, and how their work gets accomplished. The company encourages employees to utilize flexible work hours to meet their personal and professional goals while still providing the high- est quality of service to customers. Employees value their flexible work options that include shorter work- weeks, working from home, and varying start and finish times of their work days. Giving employees free- dom in scheduling their work helps Ernst & Young attract and retain a satisfied, motivated, and loyal work force. In this photo, Ernst & Young employees work on the pro- cess of tabulating ballots for the Golden Globe Awards. So ur ce : A P Ph ot o/ Re ed S ax on Motivating by Job Design: The Job Characteristics Model 249 The U.S. Department of the Census estimated there had been a 25 per- cent increase in self-employed home-based workers from 1999 to 2005, and a 20 percent increase in employed workers who work exclusively from home. 30 One recent survey of more than 5,000 HR professionals found that 35 percent of organizations allowed employees to telecommute at least part of the time, and 21 percent allowed employees to telecommute full-time. 31 Well-known organizations that actively encourage telecommuting include AT&T, IBM, American Express, Sun Microsystems, and a number of U.S. government agencies. 32 What kinds of jobs lend themselves to telecommuting? There are three categories: routine information-handling tasks, mobile activities, and professional and other knowledge-related tasks. 33 Writers, attorneys, analysts, and employ- ees who spend the majority of their time on computers or the telephone— such as telemarketers, customer-service representatives, reservation agents, and product-support specialists—are natural candidates. As telecommuters, they can access information on their computers at home as easily as in the company’s office. The potential pluses of telecommuting include a larger labor pool from which to select, higher productivity, less turnover, improved morale, and reduced office-space costs. A positive relationship exists between telecommut- ing and supervisor performance ratings, but any relationship between telecom- muting and potentially lower turnover intentions has not been substantiated in research to date. 34 The major downside for management is less direct supervision of employees. In today’s team-focused workplace, telecommuting may make it more difficult to coordinate teamwork and can reduce knowledge transfer in organizations. 35 From the employee’s standpoint, telecommuting can offer a considerable increase in flexibility and job satisfaction—but not without costs. 36 For employees with a high social need, telecommuting can increase feelings of isolation and reduce job satisfaction. And all telecommut- ers are vulnerable to the “out of sight, out of mind” effect. 37 Employees who aren’t at their desks, who miss meetings, and who don’t share in day-to-day informal workplace interactions may be at a disadvantage when it comes to raises and promotions. The Social and Physical Context of Work Robin and Chris both graduated from college a couple years ago with degrees in elementary education and became first-grade teachers in different school districts. Robin immediately confronted a number of obstacles: several long- term employees were hostile to her hiring, there was tension between admin- istrators and teachers, and students had little interest in learning. Chris had a colleague who was excited to work with a new graduate, students who were excited about academics, and a highly supportive principal. Not surprisingly, at the end of the first year, Chris had been a considerably more effective teacher than Robin. The job characteristics model shows most employees are more motivated and satisfied when their intrinsic work tasks are engaging. However, having the most interesting workplace characteristics in the world may not always lead to satisfaction if you feel isolated from your co-workers, and having good social re- lationships can make even the most boring and onerous tasks more fulfilling. telecommuting Working from home at least two days a week on a computer that is linked to the employer’s office. 250 CHAPTER 8 Motivation: From Concepts to Applications Research demonstrates that social aspects and work context are as important as other job design features. 38 Policies such as job rotation, worker empowerment, and employee participation have positive effects on productivity, at least partially because they encourage more communication and a positive social environment. Some social characteristics that improve job performance include interde- pendence, social support, and interactions with other people outside work. Social interactions are strongly related to positive moods and give employees more opportunities to clarify their work role and how well they are performing. Social support gives employees greater opportunities to obtain assistance with their work. Constructive social relationships can bring about a positive feed- back loop as employees assist one another in a “virtuous circle.” The work context is also likely to affect employee satisfaction. Hot, loud, and dangerous work is less satisfying than work conducted in climate-controlled, relatively quiet, and safe environments. This is probably why most people would rather work in a coffee shop than a metalworking foundry. Physical demands make people physically uncomfortable, which is likely to show up in lower levels of job satisfaction. To assess why an employee is not performing to his or her best level, see whether the work environment is supportive. Does the employee have adequate tools, equipment, materials, and supplies? Does the employee have favorable working conditions, helpful co-workers, supportive work rules and procedures, sufficient information to make job-related decisions, and adequate time to do a good job? If not, performance will suffer. FedEx provides two services: the physical transportation and distri- bution of packages and the infor- mation systems that identify and track the location of packages at any time. Jobs involved in physically transporting packages, such as the employee shown here serving a customer at a FedEx office, are not suitable candidates for telecom- muting. But in operating one of the world’s largest computer and telecommunications networks for recording and tracking shipments, FedEx provides many computer- based jobs for telecommuters who help the firm process more than 20 million transactions daily. Employee involvement is a participative process that uses employees’ input to increase their commitment to the organization’s success. The logic is that if we engage workers in decisions that affect them and increase their autonomy Employee Involvement So ur ce : R us se ll G or do n / D an ita D el im on t.c om “ D an ita D el im on t P ho to gr ap hy ”/ N ew sc om Employee Involvement 251 and control over their work lives, they will become more motivated, more committed to the organization, more productive, and more satisfied with their jobs. 39 Employee involvement programs differ among countries. 40 A study of four countries, including the United States and India, confirmed the importance of modifying practices to reflect national culture. 41 While U.S. employees readily accepted employee involvement programs, managers in India who tried to em- power their employees were rated low by those employees. These reactions are consistent with India’s high power–distance culture, which accepts and expects differences in authority. Similarly, Chinese workers who were very accepting of traditional Chinese values showed few benefits from participative decision mak- ing, but workers who were less traditional were more satisfied and had higher performance ratings under participative management. 42 Examples of Employee Involvement Programs Let’s look at two major forms of employee involvement—participative manage- ment and representative participation—in more detail. Participative Management Common to all participative management pro- grams is joint decision making, in which subordinates share a significant degree of decision-making power with their immediate superiors. Participative man- agement has, at times, been promoted as a panacea for poor morale and low productivity. But for it to work, employees must be engaged in issues relevant to their interests so they’ll be motivated, they must have the competence and knowledge to make a useful contribution, and trust and confidence must exist among all parties. 43 Studies of the participation–performance relationship have yielded mixed findings. 44 Organizations that institute participative management do have higher stock returns, lower turnover rates, and higher estimated labor pro- ductivity, although these effects are typically not large. 45 A careful review of research at the individual level shows participation typically has only a mod- est influence on employee productivity, motivation, and job satisfaction. Of course, this doesn’t mean participative management can’t be beneficial under the right conditions. However, it is not a sure means for improving performance. Representative Participation Almost every country in western Europe re- quires companies to practice representative participation , called “the most widely legislated form of employee involvement around the world.” 46 Its goal is to redistribute power within an organization, putting labor on a more equal footing with the interests of management and stockholders by letting workers be represented by a small group of employees who actually participate. The two most common forms are works councils and board representa- tives. 47 Works councils are groups of nominated or elected employees who must be consulted when management makes decisions about employees. Board rep- resentatives are employees who sit on a company’s board of directors and rep- resent employees’ interests. employee involvement A participative process that uses the input of employees and is intended to increase employee commitment to an organization’s success. representative participation A system in which workers participate in organizational decision making through a small group of representative employees. participative management A process in which subordinates share a significant degree of decision-making power with their immediate superiors. Empowerment is a corporate value at Wegmans Food Markets Inc., a regional supermarket chain that involves its employees in making decisions that affect their work and please their customers. This family- run company empowers employees, such as the chef shown here at a café within a Wegmans store, to make on-the-spot decisions without consulting their immediate super- visors. For example, if a customer wants a product that Wegmans doesn’t stock, any employee can initiate the process of procuring the item for the customer. Wegmans believes that empowering employ- ees leads to higher job satisfaction and productivity. 4 Give examples of employee involvement measures and show how they can motivate employees. So ur ce : A P Ph ot o/ Ja cq ue ly n M ar tin 252 CHAPTER 8 Motivation: From Concepts to Applications The influence of representative participation on working employees seems to be minimal. 48 Works councils are dominated by management and have little impact on employees or the organization. While participation might in- crease the motivation and satisfaction of employee representatives, there is little evidence this trickles down to the employees they represent. Overall, “the greatest value of representative participation is symbolic. If one is interested in changing employee attitudes or in improving organizational performance, representative participation would be a poor choice.” 49 Linking Employee Involvement Programs and Motivation Theories Employee involvement draws on a number of the motivation theories we discussed in Chapter 7 . Theory Y is consistent with participative management and Theory X with the more traditional autocratic style of managing people. In terms of two-factor theory, employee involvement programs could provide intrinsic motivation by increasing opportunities for growth, responsibility, and involvement in the work itself. The opportunity to make and implement decisions—and then see them work out—can help satisfy an employee’s needs for responsibility, achievement, recognition, growth, and enhanced self-esteem. And extensive employee involvement programs clearly have the potential to increase employee intrinsic motivation in work tasks. As we saw in Chapter 3 , pay is not a primary factor driving job satisfaction. However, it does motivate people, and companies often underestimate its im- portance in keeping top talent. A 2006 study found that while 45 percent of employers thought pay was a key factor in losing top talent, 71 percent of top performers called it a top reason. 50 Given that pay is so important, will the organization lead, match, or lag the market in pay? How will individual contributions be recognized? In this section, we consider (1) what to pay employees (decided by establishing a pay struc- ture), (2) how to pay individual employees (decided through variable pay plans and skill-based pay plans), (3) what benefits and choices to offer (such as flex- ible benefits), and (4) how to construct employee recognition programs. What to Pay: Establishing a Pay Structure There are many ways to pay employees. The process of initially setting pay levels entails balancing internal equity —the worth of the job to the organization (usu- ally established through a technical process called job evaluation)—and exter- nal equity —the external competitiveness of an organization’s pay relative to pay elsewhere in its industry (usually established through pay surveys). Obviously, the best pay system pays what the job is worth (internal equity) while also paying competitively relative to the labor market. Some organizations prefer to pay above the market, while some may lag the market because they can’t afford to pay market rates, or they are willing to bear the costs of paying below market (namely, higher turnover as people are lured to better-paying jobs). Walmart, for example, pays less than its competitors and often outsources jobs overseas. Chinese workers in Shenzhen earn $120 a month (that’s $1,440 per year) to make stereos for Walmart. Of the 6,000 factories that 5 Demonstrate how the different types of variable- pay programs can increase employee motivation. Using Rewards to Motivate Employees Using Rewards to Motivate Employees 253 are worldwide suppliers to Walmart, 80 percent are located in China. In fact, one-eighth of all Chinese exports to the United States go to Walmart. 51 Pay more, and you may get better-qualified, more highly motivated employ- ees who will stay with the organization longer. A study covering 126 large orga- nizations found employees who believed they were receiving a competitive pay level had higher morale and were more productive, and customers were more satisfied as well. 52 But pay is often the highest single operating cost for an orga- nization, which means paying too much can make the organization’s products or services too expensive. It’s a strategic decision an organization must make, with clear trade-offs. How to Pay: Rewarding Individual Employees Through Variable-Pay Programs “Why should I put any extra effort into this job?” asked Anne Garcia, a fourth- grade elementary schoolteacher in Denver, Colorado. “I can excel or I can do the bare minimum. It makes no difference. I get paid the same. Why do any- thing above the minimum to get by?” Comments like Anne’s have been voiced by schoolteachers for decades because pay increases were tied to seniority. Recently, however, a number of states have revamped their compensation sys- tems to motivate people like Anne by tying teacher pay levels to results in the classroom in various ways, and other states are considering such programs. 53 A number of organizations are moving away from paying solely on credentials or length of service. Piece-rate plans, merit-based pay, bonuses, profit sharing, gainshar- ing, and employee stock ownership plans are all forms of a variable-pay program , which bases a portion of an employee’s pay on some individual and/or organiza- tional measure of performance. Earnings therefore fluctuate up and down. 54 variable-pay program A pay plan that bases a portion of an employee’s pay on some individual and/or organizational measure of performance. First grade teacher Kim Hemmis at Will Rogers Elementary School in Houston, Texas, is eligible to receive a bonus when her students make progress on state and national achievement tests. The city’s school board adopted a merit pay “Teacher Performance Plan” that rewards teachers who work hard and whose students show academic improvement. The plan motivates teachers by basing part of their pay on performance rather than only on seniority or degrees. The move toward rewarding teachers with bonuses for individual performance follows the widespread adoption of variable-pay plans in many busi- nesses and government agencies. So ur ce : A P Ph ot o/ D av id J . P hi lli p 254 CHAPTER 8 Motivation: From Concepts to Applications Variable-pay plans have long been used to compensate salespeople and executives. Some estimates suggest more than 70 percent of U.S. companies have some form of variable-pay plan, up from only about 5 percent in 1970. 55 Moreover, recent research shows that 26 percent of U.S. companies have either increased or plan to increase the proportion of variable pay in employee pay programs, and another 40 percent have already recently increased the propor- tion of variable pay. 56 Unfortunately, most employees still don’t see a strong connection between pay and performance. Only 29 percent say their perfor- mance is rewarded when they do a good job. 57 The fluctuation in variable pay is what makes these programs attractive to management. It turns part of an organization’s fixed labor costs into a variable cost, thus reducing expenses when performance declines. When the U.S. econ- omy encountered a recession in 2001 and 2008, companies with variable pay were able to reduce their labor costs much faster than others. 58 When pay is tied to performance, the employee’s earnings also recognize contribution rather than being a form of entitlement. Over time, low performers’ pay stagnates, while high performers enjoy pay increases commensurate with their contributions. Let’s examine the different types of variable-pay programs in more detail. Piece-Rate Pay The piece-rate pay plan has long been popular as a means of compensating production workers with a fixed sum for each unit of production completed. A pure piece-rate plan provides no base salary and pays the em- ployee only for what he or she produces. Ballpark workers selling peanuts and soda are frequently paid this way. If they sell 40 bags of peanuts at $1 each, their take is $40. The harder they work and the more peanuts they sell, the more they earn. The limitation of these plans is that they’re not feasible for many jobs. Surgeons earn significant salaries regardless of their patients’ outcomes. Would it be better to pay them only if their patients fully recover? It seems unlikely that most would accept such a deal, and it might cause unanticipated consequences as well (such as surgeons avoiding patients with complicated or terminal conditions). So, although incentives are motivating and relevant for some jobs, it is unrealistic to think they can constitute the only piece of some employees’ pay. Merit-Based Pay A merit-based pay plan pays for individual performance based on performance appraisal ratings. A main advantage is that people thought to be high performers can get bigger raises. If designed correctly, merit-based plans let individuals perceive a strong relationship between their performance and their rewards. 59 Most large organizations have merit pay plans, especially for salaried em- ployees. IBM increases employees’ base salary based on annual performance evaluations. Since the 1990s, when the economy stumbled badly, an increasing number of Japanese companies have abandoned seniority-based pay in favor of merit-based pay. Koichi Yanashita of Takeda Chemical Industries, commented, “The merit-based salary system is an important means to achieve goals set by the company’s top management, not just a way to change wages.” 60 To motivate and retain the best, more companies are increasing the dif- ferential between top and bottom performers. The consulting firm Hewitt Associates found that in 2006, employers gave their best performers roughly 10 percent raises, compared to 3.6 percent for average performers and 1.3 per- cent for below-average performers. These differences have increased over time. Martyn Fisher of Imperial Chemical in the United Kingdom said his company widened the merit pay gap between top and average performers because “as much as we would regret our average performers leaving, we regret more an above-target performer leaving.” 61 Using Rewards to Motivate Employees 255 Despite their intuitive appeal, merit pay plans have several limitations. One is that they are typically based on an annual performance appraisal and thus are only as valid as the performance ratings. Another limitation is that the pay-raise pool fluctuates on economic or other conditions that have little to do with in- dividual performance. One year, a colleague at a top university who performed very well in teaching and research was given a pay raise of $300. Why? Because the pay-raise pool was very small. Yet that is hardly pay-for-performance. Finally, unions typically resist merit pay plans. Relatively few teachers are covered by merit pay for this reason. Instead, seniority-based pay, where all employees get the same raises, predominates. Bonuses An annual bonus is a significant component of total compensation for many jobs. Among Fortune 100 CEOs, the bonus (mean of $1.01 million) generally exceeds the base salary (mean of $863,000). But bonus plans increas- ingly include lower-ranking employees; many companies now routinely reward production employees with bonuses in the thousands of dollars when profits improve. The incentive effects of performance bonuses should be higher than those of merit pay because, rather than paying for performance years ago (that was rolled into base pay), bonuses reward recent performance. When times are bad, firms can cut bonuses to reduce compensation costs. Steel company Nucor, for example, guarantees employees only about $10 per hour, but bo- nuses can be substantial. In 2006, the average Nucor worker made roughly $91,000. When the recession hit, bonuses were cut dramatically: in 2009, total pay had dropped 40 percent. 62 This example also highlights the downside of bonuses: employees’ pay is more vulnerable to cuts. This is problematic when bonuses are a large percentage of merit-based pay plan A pay plan based on performance appraisal ratings. bonus A pay plan that rewards employees for recent performance rather than historical performance. Walmart is an organization that includes hourly workers in the com- pany’s bonus plan. In this photo, a Walmart manager distributes bonus checks to store employees. The bonus amount for employees depends on their full- or part-time status and on the amount of profit individual stores earn each year. Hourly workers also have the poten- tial to receive additional quarterly bonuses based on their store’s per- formance. Employees who go above and beyond in helping customers are also eligible for customer sat- isfaction bonuses. Bonuses give Walmart employees an incentive to increase sales and improve customer service. So ur ce : s 7 0 /Z U M A P re ss /N ew sc om piece-rate pay plan A pay plan in which workers are paid a fixed sum for each unit of production completed. 256 CHAPTER 8 Motivation: From Concepts to Applications total pay or when employees take bonuses for granted. “People have begun to live as if bonuses were not bonuses at all but part of their expected annual income,” said Jay Lorsch, a Harvard Business School professor. KeySpan Corp., a 9,700-employee utility company in New York, tried to combine yearly bonuses with a smaller merit-pay raise. Elaine Weinstein, KeySpan’s senior vice president of HR, credits the plan with changing the culture from “entitlement to meritocracy.” 63 Skill-Based Pay Skill-based pay (also called competency-based or knowledge-based pay ) is an alternative to job-based pay that bases pay levels on how many skills employees have or how many jobs they can do. 64 For employers, the lure of skill-based pay plans is increased flexibility of the workforce: staffing is easier when employee skills are interchangeable. Skill-based pay also facilitates communication across the organization because people gain a better under- standing of each other’s jobs. One study found that across 214 different orga- nizations, skill-based pay was related to higher levels of workforce flexibility, positive attitudes, membership behaviors, and productivity. 65 Another study found that over 5 years, a skill-based pay plan was associated with higher levels of individual skill change and skill maintenance. 66 These results suggest that skill-based pay plans are effective in achieving their stated goals. What about the downsides? People can “top out”—that is, they can learn all the skills the program calls for them to learn. This can frustrate employ- ees after they’ve been challenged by an environment of learning, growth, and continual pay raises. IDS Financial Services 67 found itself paying people more even though there was little immediate use for their new skills. IDS eventually dropped its skill-based pay plan for one that equally balances individual con- tribution and gains in work-team productivity. Finally, skill-based plans don’t address level of performance but only whether someone can perform the skill. Perhaps reflecting these weaknesses, one study of 97 U.S. companies using skill-based pay plans found that 39 percent had switched to a more traditional market-based pay plan 7 years later. 68 Profit-Sharing Plans A profit-sharing plan distributes compensation based on some established formula designed around a company’s profitability. Compen- sation can be direct cash outlays or, particularly for top managers, allocations of stock options. When you read about executives like Oracle’s Larry Ellison earn- ing $75.33 million in pay, it almost all (88.8 percent in Ellison’s case) comes from cashing in stock options previously granted based on company profit performance. Not all profit-sharing plans are so grand in scale. Jacob Luke, age 13, started his own lawn-mowing business after getting a mower from his uncle. Jacob employs his brother, Isaiah, and friend, Marcel Monroe, and pays them each 25 percent of the profits he makes on each yard. Profit-sharing plans at the organizational level appear to have positive impacts on employee atti- tudes; employees report a greater feeling of psychological ownership. 69 Gainsharing Gainsharing 70 is a formula-based group incentive plan that uses improvements in group productivity from one period to another to determine the total amount of money allocated. Its popularity seems narrowly focused among large manufacturing companies, although some health care organiza- tions have experimented with it as a cost-saving mechanism. Gainsharing differs from profit sharing in tying rewards to productivity gains rather than profits, so employees can receive incentive awards even when the organization isn’t profitable. Because the benefits accrue to groups of workers, high performers pressure weaker ones to work harder, improving performance for the group as a whole. 71 Using Rewards to Motivate Employees 257 Employee Stock Ownership Plans An employee stock ownership plan (ESOP) is a company-established benefit plan in which employees acquire stock, often at below-market prices, as part of their benefits. Companies as varied as Pub- lix Supermarkets and W. L. Gore & Associates are now more than 50 percent employee-owned. 72 But most of the 10,000 or so ESOPs in the United States are in small, privately held companies. 73 Research on ESOPs indicates they increase employee satisfaction and inno- vation. 74 But their impact on performance is less clear. ESOPs have the poten- tial to increase employee job satisfaction and work motivation, but employees need to psychologically experience ownership. 75 That is, in addition to their financial stake in the company, they need to be kept regularly informed of the status of the business and have the opportunity to influence it in order to sig- nificantly improve the organization’s performance. 76 ESOP plans for top management can reduce unethical behavior. CEOs are more likely to manipulate firm earnings reports to make themselves look good in the short run when they don’t have an ownership share, even though this manipulation will eventually lead to lower stock prices. However, when CEOs own a large amount of stock, they report earnings accurately because they don’t want the negative consequences of declining stock prices. 77 Evaluation of Variable Pay Do variable-pay programs increase motivation and productivity? Studies generally support the idea that organizations with profit- sharing plans have higher levels of profitability than those without them. 78 Profit-sharing plans have also been linked to higher levels of employee affec- tive commitment, especially in small organizations. 79 Similarly, gainsharing has been found to improve productivity in a majority of cases and often has a positive impact on employee attitudes. 80 Another study found that whereas piece-rate pay-for-performance plans stimulated higher levels of productivity, this positive affect was not observed for risk-averse employees. Thus, economist Ed Lazear seems generally right when he says, “Workers respond to prices just as economic theory predicts. Claims by sociologists and others that monetizing incentives may actually reduce output are unambiguously refuted by the data.” But that doesn’t mean everyone responds positively to variable-pay plans. 81 You’d probably think individual pay systems such as merit pay or pay-for- performance work better in individualistic cultures such as the United States or that group-based rewards such as gainsharing or profit sharing work better in collectivistic cultures. Unfortunately, there isn’t much research on the is- sue. One recent study did suggest that employee beliefs about the fairness of a group incentive plan were more predictive of pay satisfaction in the United States than in Hong Kong. One interpretation is that U.S. employees are more critical in appraising a group pay plan, and therefore, it’s more critical that the plan be communicated clearly and administered fairly. 82 Flexible Benefits: Developing a Benefits Package Todd Evans is married and has three young children; his wife is at home full- time. His Citigroup colleague Allison Murphy is married too, but her husband has a high-paying job with the federal government, and they have no children. profit-sharing plan An organization- wide program that distributes compensation based on some established formula designed around a company’s profitability. employee stock ownership plan (ESOP) A company-established benefits plan in which employees acquire stock, often at below-market prices, as part of their benefits. gainsharing A formula-based group incentive plan. 6 Show how flexible benefits turn benefits into motivators. skill-based pay A pay plan that sets pay levels on the basis of how many skills employees have or how many jobs they can do. 258 CHAPTER 8 Motivation: From Concepts to Applications Todd is concerned about having a good medical plan and enough life insur- ance to support his family in case it’s needed. In contrast, Allison’s husband already has her medical needs covered on his plan, and life insurance is a low priority. Allison is more interested in extra vacation time and long-term finan- cial benefits such as a tax-deferred savings plan. A standardized benefits package would be unlikely to meet the needs of Todd and Allison well. Citigroup could, however, cover both sets of needs with flexible benefits. Consistent with expectancy theory’s thesis that organizational rewards should be linked to each individual employee’s goals, flexible benefits individ- ualize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation. These plans replace the “one-benefit-plan-fits-all” programs designed for a male with a wife and two children at home that dominated organizations for more than 50 years. 83 Fewer than 10 percent of employees now fit this image: about 25 percent are single, and one-third are part of two-income families with no children. Flexible ben- efits can accommodate differences in employee needs based on age, marital status, spouses’ benefit status, and number and age of dependents. The three most popular types of benefits plans are modular plans, core-plus options, and flexible spending accounts. 84 Modular plans are predesigned pack- ages or modules of benefits, each of which meets the needs of a specific group of employees. A module designed for single employees with no dependents might include only essential benefits. Another, designed for single parents, might have additional life insurance, disability insurance, and expanded health coverage. Core- plus plans consist of a core of essential benefits and a menulike selection of others M anagers often find themselves needing to take multiple per- spectives at the same time, and sometimes they are motivated by rewards to take actions that are unethi- cal. Financial auditors, actuaries, and accountants have a legal responsibility to accurately report on clients’ records, but they might also be tempted to pre- sent an overly positive picture to please a client and secure commissions for future work. Leading up to the financial collapse of 2008, credit rating agencies gave AAA ratings to collateralized mort- gage securities that were of dubious value, possibly because they were paid by the very companies they were sup- posed to regulate. It’s sometimes tough to recog- nize conflicts of interest when they occur. Max Bazerman from Harvard University and his colleagues have been exploring the psychological processes that lead to “motivated blindness”—a tendency to only see what you want to see. For example, a car salesperson motivated by a com- mission to sell as much as possible might subconsciously overlook evi- dence that a customer won’t be able to afford payments. A pharmaceutical researcher might fudge data from clini- cal trials in hopes of securing a bonus for bringing a new drug to market. In cases like these, financial rewards may amplify conflicts of interest. What helps minimize conflicts of interest? The most important step is to beware of motivated blindness and be honest about where conflicts exist. Be aware of biases that might creep into your perceptions when money is at stake. Another possibil- ity is to provide explicit rewards for behaviors like producing critical re- ports or detecting problems with or- ganizational systems, especially if the responsible party has a motivation to obtain a positive result. Sources: S. Gunz and S. van der Laan, “Actuaries, Conflicts of Interest and Professional Independence: The Case of James Hardie Industries Limited,” Journal of Business Ethics 98, no. 4 (2011), pp. 583–596; M. H. Bazerman and A. E. Tenbrunsel, “Ethical Breakdowns,” Harvard Business Review (April 2011), pp. 58–65; and D. A. Moore, L. Tanlu, and M. H. Bazerman, “Conflict of Interest and the Intrusion of Bias,” Judgment and Decision Making 5, no. 1 (2010), pp. 37–53. An Ethical Choice Identifying Conflicts of Interest Using Rewards to Motivate Employees 259 flexible benefits A benefits plan that allows each employee to put together a benefits package individually tailored to his or her own needs and situation. from which employees can select. Typically, each employee is given “benefit cred- its,” which allow the purchase of additional benefits that uniquely meet his or her needs. Flexible spending plans allow employees to set aside pretax dollars up to the dollar amount offered in the plan to pay for particular benefits, such as health care and dental premiums. Flexible spending accounts can increase take-home pay be- cause employees don’t pay taxes on the dollars they spend from these accounts. Today, almost all major corporations in the United States offer flexible ben- efits. And they’re becoming the norm in other countries, too. A recent survey of 211 Canadian organizations found that 60 percent offer flexible benefits, up from 41 percent in 2005. 85 And a similar survey of firms in the United Kingdom found that nearly all major organizations were offering flexible benefits pro- grams, with options ranging from private supplemental medical insurance to holiday trading, discounted bus travel, and childcare vouchers. 86 Intrinsic Rewards: Employee Recognition Programs Laura Schendell makes only $8.50 per hour working at her fast-food job in Pensacola, Florida, and the job isn’t very challenging or interesting. Yet Laura talks enthusiastically about the job, her boss, and the company that employs her. “What I like is the fact that Guy [her supervisor] appreciates the effort I make. He compliments me regularly in front of the other people on my shift, and I’ve been chosen Employee of the Month twice in the past six months. Did you see my picture on that plaque on the wall?” Organizations are increasingly recognizing what Laura knows: important work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the form of employee recognition programs and extrinsic in the form of compensa- tion systems. In this section, we deal with ways in which managers can reward and motivate employee performance. Employee recognition programs range from a spontaneous and private thank-you to widely publicized formal programs in which specific types of be- havior are encouraged and the procedures for attaining recognition are clearly identified. Some research suggests financial incentives may be more motivating in the short term, but in the long run it’s nonfinancial incentives. 87 A few years ago, 1,500 employees were surveyed in a variety of work settings to find out what they considered the most powerful workplace motivator. Their response? Recognition, recognition, and more recognition. As illustrated in Exhibit 8-4 , Phoenix Inn, a West Coast chain of small hotels, encourages em- ployees to smile by letting customers identify this desirable behavior and then recognizing winning employees with rewards and publicity. An obvious advantage of recognition programs is that they are inexpen- sive, since praise is free! 88 As companies and government organizations face tighter budgets, nonfinancial incentives become more attractive. Everett Clinic in Washington State uses a combination of local and centralized initiatives to encourage managers to recognize employees. 89 Employees and managers give “Hero Grams” and “Caught in the Act” cards to colleagues for exceptional ac- complishments at work. Part of the incentive is simply to receive recognition, but there are also drawings for prizes based on the number of cards a per- son receives. Managers are trained to use the programs frequently and effec- tively to reward good performance. Multinational corporations like Symantec 7 Identify the motivational benefits of intrinsic rewards. Employees of software developer Oracle Corporation, shown here in the company’s cafeteria, receive a basic benefits package and may also choose coverage levels and addi- tional benefits that meet their spe- cific individual needs and the needs of their dependents. The OracleFlex plan gives employees flex credits they can use to purchase benefits so they can control the amount they spend for each benefit option. Employees with remaining credits may direct them to taxable income or to their 401(k) savings, health care reimbursement, or dependent care reimbursement accounts. So u rc e : O w e n B re w e r / Sa cr a m e n to B e e / N e w sc o m 260 CHAPTER 8 Motivation: From Concepts to Applications Exhibit 8-4 I n previous chapters, we discussed differences between cultures in terms of the level of individualism or collectivism. Do these differences extend to motivation? Most research suggests they do, and differences between self-oriented and collectiv- istic cultures will affect behavior in meaningful ways. Psychologists have consistently demonstrated differences in the ways personal or group-based achievements are valued. In cultures that emphasize collective orientation, people strive to achieve goals that benefit the whole group and find processes that isolate individual performance and achieve- ment. People from these cultures ad- mire “team players” and those who help and support one another. Cultures that emphasize individual orientation are marked by striving to achieve per- sonal goals and a lack of attention to what benefits the group as a whole. People from these cultures are more likely to admire “star performers” and those who accomplish their ends inde- pendently. These differences in individual or relational motivation might even affect the type of practices found in organizations and the ways that people behave. Some authors pro- pose that human resource systems can influence whether individualistic or collectivistic motivation is stron- ger. Collective bargaining structures and group-based decision making are more prevalent in collectivistic coun- tries, whereas more individualistic societies like the United States are noted for individual performance rat- ing and individual rewards. Thus, man- agement systems might well support or even enhance the individualistic or collectivistic nature of a culture. Sources: C. K. W. De Dreu and A. Nauta, “Self-Interest and Other-Orientation in Organizational Behavior: Implications for Job Performance, Prosocial Behavior, and Personal Initiative,” Journal of Applied Psychology 94, no. 4 (2009), pp. 913–926; J. S. Gore, S. E. Cross, and C. Kanagawa, “Acting in Our Interests: Relational Self- Construal and Goal Motivation Across Cultures,” Motivation and Emotion 33, no. 1 (2009), pp. 75–87; and K. W. Mossholder, H. A. Richardson, and R. P. Settoon, “Human Resource Systems and Helping in Organiza- tions: A Relational Perspective,” Academy of Management Review 36, no. 1 (2011), pp. 33–52. glOBalization! Motivated by Individual Goals or Relational Goals? Summary and Implications for Managers 261 MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Corporation have also increased their use of recognition programs. Centralized programs across multiple offices in different countries can help ensure that all employees, regardless of where they work, can be recognized for their contribution to the work environment. 90 Another study found that recognition programs are common in both Canadian and Australian firms as well. 91 Despite the increased popularity of employee recognition programs, crit- ics argue they are highly susceptible to political manipulation by management. When applied to jobs for which performance factors are relatively objective, such as sales, recognition programs are likely to be perceived by employees as fair. However, in most jobs, the criteria for good performance aren’t self- evident, which allows managers to manipulate the system and recognize their favorites. Abuse can undermine the value of recognition programs and demor- alize employees. Summary and Implications for Managers Although it’s always dangerous to synthesize a large number of complex ideas, the following suggestions summarize what we know about motivating employ- ees in organizations. ● Recognize individual differences. Managers should be sensitive to individ- ual differences. For example, employees from Asian cultures prefer not to be singled out as special because it makes them uncomfortable. Spend the time necessary to understand what’s important to each employee. This allows you to individualize goals, level of involvement, and rewards to align with individual needs. Design jobs to align with individual needs and maximize their motivation potential. ● Use goals and feedback. Employees should have firm, specific goals, and they should get feedback on how well they are faring in pursuit of those goals. ● Allow employees to participate in decisions that affect them. Employees can contribute to setting work goals, choosing their own benefits pack- ages, and solving productivity and quality problems. Participation can increase employee productivity, commitment to work goals, motivation, and job satisfaction. ● Link rewards to performance. Rewards should be contingent on perfor- mance, and employees must perceive the link between the two. Regardless of how strong the relationship is, if individuals perceive it to be weak, the results will be low performance, a decrease in job satisfaction, and an increase in turnover and absenteeism. ● Check the system for equity. Employees should perceive that experi- ence, skills, abilities, effort, and other obvious inputs explain differences in performance and hence in pay, job assignments, and other obvious rewards. www.mymanagementlab.com 262 CHAPTER 8 Motivation: From Concepts to Applications “If Money Doesn’t Make You Happy, You Aren’t Spending It Right” POINT COUNTERPOINT M oney doesn’t do much to improve happiness after existence needs (food, clothing, and shelter) are met. Why worry about what aspects of spending money make us happy when money doesn’t appear to matter much at all? Research should instead be directed toward understanding why such a powerful motivator is such a pitiful satisfier. What should motivate us? We know social relationships are important to happiness and well-being. Keeping in touch with friends, spending meaningful time with family, building positive and supportive relationships at work—those are what really matter, and none of them have a thing to do with making money. Activity also contributes to happiness—not only physical activity like exercise, but being proactive too. When people reflect back on their lives, they are much more likely to regret actions they never took, as opposed to the ones they did. Money is not evil. We need it to acquire the basic elements of survival. But after those basic needs are met, we should realize our pursuit of money to make us happy is a fallacy. We can recall an inexpensive camping trip as fondly as a stay at a five-star hotel. Thus, we should take jobs that have interesting and meaningful work, not those that command the highest wages. In managing others, we should create a culture that motivates by building relationships, giving others autonomy and input, and pursing work people see as important and challenging. A s was noted in Chapter 3 , some research suggests the relationship between pay and happiness isn’t very strong. But pay can be a powerful motivator. It’s simply that sometimes we’re motivated to pursue things that have a limited ability to make us happy. However, the story doesn’t end there. New research suggests it’s what we want to do with money that is most important. Specifically, spending money on experiences makes us happier than spending it on possessions. That is, vacations, entertainment, and sports make people happier. Extra money spent on material objects—clothes, jewelry, cars, furniture— did not make these people happier. One study found that $30,000 spent on leisure over several seasons had as positive an effect on life satisfaction as did get- ting married. One of the reasons spending on experiences is money well spent is that experiences build relationships, and evidence reliably shows that relationships make people happier. Other research shows that people tend to look back on experiences sentimentally (you tend to forget that dirty hotel room in Prague and instead remember fondly the Charles Bridge at night); they don’t attach this same sentimentality when thinking about their possessions. One researcher has even calibrated that, in terms of the happiness produced by spending money on something, experiences beat possessions three-to-one. Thus, it’s OK to be motivated by money. Just pay attention to how you spend what you earn. Source: S. Rosenbloom, “But Will It Make You Happy?” The New York Times (August 8, 2010), pp. B1, B4; J. Axelrod, “Want to Be Happy? Don’t Just Sit There,” CBS News (March 3, 2011), downloaded May 10, 2011, from www.cbsnews.com/ ; and J. Quoidbach, E. W. Dunn, K. V. Petrides, and M. Mikolajczak, “Money Giveth, Money Taketh Away: The Dual Effect of Wealth on Happiness,” Psychological Science , in press. www.cbsnews.com/ Experiential Exercise 263 1 What is the job characteristics model? How does it motivate employees? 2 What are the three major ways that jobs can be redesigned? In your view, in what situations would one of the methods be favored over the others? 3 What are the three alternative work arrangements of flextime, job sharing, and telecommuting? What are the advantages and disadvantages of each? 4 What are employee involvement programs? How might they increase employee motivation? 5 What is variable pay? What are the variable-pay programs that are used to motivate employees? What are their advantages and disadvantages? 6 How can flexible benefits motivate employees? 7 What are the motivational benefits of intrinsic rewards? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE Assessing Employee Motivation and Satisfaction Using the Job Characteristics Model Purpose This exercise will help you examine outcomes of the job characteristics model for different professions. Time Approximately 30 to 45 minutes. Background Data were collected on 6,930 employees in 56 different organizations in the United States, using the Job Diagnostic Survey. The following table contains data on the five core job dimensions of the job characteristics model for several professions. Also included are growth-needs strength, internal motivation, and pay satisfaction for each profes- sion. The values are averages based on a 7-point scale. Instructions 1. Break into groups of three to five. 2. Calculate the MPS score for each of the professions and compare them. Discuss whether you think these scores accurately reflect your perceptions of the motivating potential of these professions. 3. Graph the relationship between each profession’s core job dimensions and its corresponding value for internal motivation and for pay satisfaction, using the core job dimensions as independent variables. What conclusions can you draw about motivation and satisfaction of employees in these professions? Job Characteristics Averages for Six Professions   Profession Variable Professional/ Technical Managerial Sales Service Clerical Machine Trades Skill variety 5.4 5.6 4.8 5.0 4.0 5.1 Task identity 5.1 4.7 4.4 4.7 4.7 4.9 Task significance 5.6 5.8 5.5 5.7 5.3 5.6 Autonomy 5.4 5.4 4.8 5.0 4.5 4.9 Feedback 5.1 5.2 5.4 5.1 4.6 4.9 Growth-needs strength 5.6 5.3 5.7 5.4 5.0 4.8 Internal motivation 5.8 5.8 5.7 5.7 5.4 5.6 Pay satisfaction 4.4 4.6 4.2 4.1 4.0 4.2 Source: Adaptation of Job Characteristics Model, pp. 78–80 from J. Richard Hackman & Greg R. Oldham, Work Redesign , 1st Edition, © 1980. Adapted by permission of Pearson Education, Inc., Upper Saddle River, NJ . 264 CHAPTER 8 Motivation: From Concepts to Applications ETHICAL DILEMMA Spitting Mad How would you like to be spat at? The answer to that question is pretty obvious, but what may surprise you is that spit is an occupational hazard of New York City bus drivers. The outcomes of these incidents are even more interesting. In a typical 1-year period, roughly 80 New York City bus drivers are spat upon by disgruntled passengers. These spitting incidents (no other injury was involved) gen- erate an average of 64 days off work—the equivalent of 3 months’ pay. In 2009, one spat-upon driver took 191 days of paid leave. The union representing the bus drivers said the leave was justified because being spat upon “is a physi- cally and psychologically traumatic experience.” The causes of passenger spitting are varied, ranging from the MetroCard not working to perceived delays in schedules. Driver Raul Morales was spat upon by a passenger irate over the fare. After the incident, Morales stopped at a nearby McDonald’s, cleaned himself off, then finished his shift. “I just kept on going,” he says. As any watcher of the TV series World’s Toughest Jobs knows, there is a lot of dangerous work out there, and bus drivers face their own hazards. Some bus drivers have been assaulted by passengers, including one New York City bus driver who was stabbed to death by a passenger in 2008. Nancy Shevell, chair of the New York City transit author- ity, questions whether the time off is justified by the injury. “You have to wonder if you can go home and shower off, take a nap, take off the rest of the day and maybe the next day,” she said. “When it gets strung out over months, you start to wonder.” Questions 1. Do you think bus drivers should be able to take time off in return for being spit at? If so, how long do you think they should have? 2. People react differently to stressful situations. One of the flight attendants on US Airways Flight 1549 that Captain Chesley “Sully” Sullenberger landed on the Hudson River has not been able to go back to work 3 years after the incident. Yet her two fellow flight attendants have. How do you judge ethical responsibilities and develop policy in situations where different people react differently? 3. What ethical responsibility does New York City’s Transit Authority have toward its bus drivers? Sources: M. M. Grynbaum, “When Angry Passengers Spit, Bus Drivers Take Months Off,” The New York Times (May 25, 2010), pp. A1, A20; and V. Bishop and H. Hoel, “The Customer Is Always Right?” Journal of Consumer Culture 8, no. 3 (2008), pp. 341–367. CASE INCIDENT 1 Multitasking: A Good Use of Your Time? Multitasking—doing two or more things at once, or rap- idly switching from one task to another—is a characteristic of the Millennial generation. One recent study revealed that during a typical week, 81 percent of young people re- port “media multitasking” at least some of the time. Multitasking nicely illustrates our point that motivation is not just effort but also the way you direct your efforts. However, is the direction of efforts in multitasking effi- cient or inefficient? Many people who multitask say it makes them more efficient: “Why not do two things at once if I can accom- plish about as much as if I only did one thing?” they ask. Research, however, suggests multitasking is inefficient, that it actually takes longer to do two things at once than to do one thing first and then turn to the other. David Meyer, a University of Michigan psychologist who has studied multi- tasking, argues, “You wind up needing to use the same sorts of mental and physical resources for performing each of the tasks. You’re having to switch back and forth between the two tasks as opposed to really doing them simultaneously.” Multitasking appears to result in adverse outcomes beyond inefficiency. Another study found multitask- ers absorb material more superficially; they notice more things in their environment but are able to learn mate- rial less deeply. “It’s not that they can’t focus,” says one researcher. “It’s that they focus on everything. They hear everything—even things they would normally be able to block out—because they are now so used to attending to many things at once.” Others note that multitasking can damage productivity and social relationships as individuals devote less concentrated time and attention to the tasks they are working on and conversations they are having. This scattered attention is especially damaging for tasks that require deep insight or creativity. Questions 1. One expert who has studied multitasking calls it “a big illusion,” arguing that multitaskers think they are more motivated and productive even when they aren’t. Do you consider yourself a multitasker? If Case Incident 2 265 so, does this case make you reconsider whether multitasking makes you more motivated or productive? 2. The effects of multitasking have been found to be more negative when the tasks are complex. Why do you think this is the case? 3. You might think multitasking makes you happy. While there is less research on this topic, some evidence suggests multitaskers feel more stress in their work. Multitaskers “feel a constant low-level panic.” Do you agree? Why or why not? 4. One expert recommends we “recreate boundaries” by training ourselves, while doing something, not to look at other devices like cell phone or television for increasing periods of time. Do you think you could do that? For how long? Sources: R. A. Clay, “Mini-Multitaskers,” Monitor on Psychology 40, no. 2 (2009), pp. 38–40; D. Crenshaw, The Myth of Multitasking: How “Doing It All” Gets Nothing Done (San Francisco: Jossey Bass, 2008), and A. Tugend, “Multitasking Can Make You Lose . . . Um . . . Focus,” The New York Times (October 25, 2008), p. B7. Sources: Based on N. Fleming, “The Bonus Myth” New Scientist 210 (2011), pp. 40–43; D. Woodward, “Perking Up the Workplace,” Director (February 2011), pp. 33–34; and G. G. Scott, “How to Create a Motivating Environment,” Nonprofit World 28 (September/October 2010), p. 9. CASE INCIDENT 2 Bonuses Can Backfire It might seem obvious that people will be motivated by bonuses, but many scholars question this premise. Alfie Kohn has long suggested that workers are “punished by rewards” and urges that organizations avoid tying rewards to performance because of the negative consequences that can result. As an alternative to rewards, some experts recommend that managers foster a positive, upbeat work environment in hopes that enthusiasm will translate into motivation. Although rewards can be motivating, they can reduce employees’ intrinsic interest in the tasks they are doing. Along these lines, Mark Lepper of Stanford University found that children rewarded for drawing with felt-tip pens no longer wished to use the pens at all when rewards were removed, whereas children who were not rewarded for using the pens were eager to use them. Similar ex- periments in which children completed puzzles have also shown that increasing rewards can decrease interest in the rewarded task. Some have questioned the extent to which these results generalize to working adults, but concern about rewards diminishing intrinsic motivation persists. Rewards can also lead to misbehavior by workers. Psychologist Edward Deci notes, “Once you start making people’s rewards dependent on outcomes rather than be- haviors, the evidence is people will take the shortest route to those outcomes.” Consider factory workers paid purely based on the number of units they produce. Because only quantity is rewarded, workers may neglect qual- ity. Executives rewarded strictly on the basis of quarterly stock price will tend to ignore the long-term profitability and survival of the firm; they might even engage in ille- gal or unethical behavior to increase their compensation. A review of research on pay-for-performance in medicine found that doctors who were rewarded for treatment out- comes were reluctant to take on the most serious cases, where success was less likely. Although there might be some problems with providing incentives, the great majority of research cited in this and the previous chapter shows that individuals given rewards for behavior will be more likely to engage in the rewarded behaviors. It is also unlikely that individuals engaged in very boring, repetitive tasks will lose their intrinsic motiva- tion if the task is rewarded, because they never had any intrinsic motivation to begin with. The real issue for man- agers is finding an appropriate way to reward behaviors so desired behavior is increased while less-desired behavior is reduced. QUESTIONS 1. Do you think that, as a manager, you would use bonuses regularly? Why or why not? 2. Can you think of a time in your own life when being evaluated and rewarded on a specific goal lead you to engage in negative or unproductive behavior? 3. Do you think providing group bonuses instead of individual bonuses would be more effective or less effective? Why or why not? 4. How would you design a bonus/reward program to avoid the problems mentioned in this case? 266 CHAPTER 8 Motivation: From Concepts to Applications ENDNOTES 1. J. R. Hackman and G. R. Oldham, “Motivation Through the Design of Work: Test of a Theory,” Organizational Behavior and Human Performance 16, no. 2 (1976), pp. 250–279; and J. R. Hackman and G. R. Oldham, Work Redesign (Reading, MA: Addison-Wesley, 1980). 2. J. R. Hackman, “Work Design,” in J. R. Hackman and J. L. Suttle (eds.), Improving Life at Work (Santa Monica, CA: Goodyear, 1977), p. 129. 3. See B. T. Loher, R. A. Noe, N. L. Moeller, and M. P. Fitzgerald, “A Meta-Analysis of the Relation of Job Characteristics to Job Satisfaction,” Journal of Applied Psychology 70 , no. 2 (1985), pp. 280–289; S. J. Zaccaro and E. F. Stone, “Incremental Validity of an Empirically Based Measure of Job Characteristics,” Journal of Applied Psychology 73 , no. 2 (1988), pp. 245–252; J. R. Rentsch and R. P. Steel, “Testing the Durability of Job Characteristics as Predictors of Absenteeism over a Six-Year Period,” Personnel Psychology 51 , no. 2 (1998), pp. 165–190; S. J. Behson, E. R. Eddy, and S. J. Lorenzet, “The Importance of the Critical Psychological States in the Job Characteristics Model: A Meta-Analytic and Structural Equations Modeling Examination,” Current Research in Social Psychology 51 , no. 12 (2000), pp. 170–189; and S. E. Humphrey, J. D. Nahrgang, and F. P. Morgeson, “Integrating Motivational, Social, and Contextual Work Design Features: A Meta-Analytic Summary and Theoretical Extension of the Work Design Literature,” Journal of Applied Psychology 92, no. 5 (2007), pp. 1332–1356. 4. T. A. Judge, S. K. Parker, A. E. Colbert, D. Heller, and R. Ilies, “Job Satisfaction: A Cross-Cultural Review,” in N. Anderson, D. S. Ones (eds.), Handbook of Industrial, Work and Organizational Psychology, vol. 2 (Thousand Oaks, CA: Sage Publications, 2002), pp. 25–52. 5. B. M. Meglino and A. M. Korsgaard, “The Role of Other Orientation in Reactions to Job Characteristics,” Journal of Management 33 , no. 1 (2007), pp. 57–83. 6. M. F. Peterson and S. A. Ruiz-Quintanilla, “Cultural Socialization as a Source of Intrinsic Work Motivation,” Group & Organization Management 28 , no. 2 (2003), pp. 188–216. 7. C. Ansberry, “In the New Workplace, Jobs Morph to Suit Rapid Pace of Change,” The Wall Street Journal (March 22, 2002), p. A1. 8. T. Silver, “Rotate Your Way to Higher Value,” Baseline (March/April 2010), p. 12; and J. J. Salopek, “Coca- Cola Division Refreshes Its Talent with Diversity Push on Campus,” Workforce Management Online (March 2011), www. workforce.com . 9. J. Ortega, “Job Rotation as a Learning Mechanism,” Management Science 47 , no. 10 (2001), pp. 1361–1370. 10. A. Christini and D. Pozzoli, “Workplace Practices and Firm Performance in Manufacturing: A Comparative Study of Italy and Britain,” International Journal of Manpower 31, no. 7 (2010), pp. 818–842; K. Kaymaz, “The Effects of Job Rotation Practices on Motivation: A Research on Managers in the Automotive Organizations,” Business and Economics Research Journal 1, no. 3 (2010), pp. 69–86. 11. Hackman and Oldham, Work Redesign. 12. A. M. Grant, E. M. Campbell, G. Chen, K. Cottone, D. Lapedis, and K. Lee, “Impact and the Art of Motivation Maintenance: The Effects of Contact with Beneficiaries on Persistence Behavior,” Organizational Behavior and Human Decision Processes 103, no. 1 (2007), pp. 53–67. 13. A. M. Grant, J. E. Dutton, and B. D. Rosso, “Giving Com- mitment: Employee Support Programs and the Prosocial Sensemaking Process,” Academy of Management Journal 51, no. 5 (2008), pp. 898–918. 14. See, for example, R. W. Griffin, “Effects of Work Redesign on Employee Perceptions, Attitudes, and Behaviors: A Long- Term Investigation,” Academy of Management Journal 34, no. 2 (1991), pp. 425–435; and M. Subramony, “A Meta-Analytic Investigation of the Relationship between HRM Bundles and Firm Performance,” Human Resource Management 48, no. 5 (2009), pp. 745–768. 15. R. D. Pritchard, M. M. Harrell, D. DiazGrandos, and M. J. Guzman, “The Productivity Measurement and Enhancement System: A Meta-Analysis,” Journal of Applied Psychology 93, no. 3 (2008), pp. 540–567. 16. F. P. Morgeson, M. D. Johnson, M. A. Campion, G. J. Medsker, and T. V. Mumford, “Understanding Reactions to Job Redesign: A Quasi-Experimental Investigation of the Moderating Effects of Organizational Contact on Perceptions of Performance Behavior,” Personnel Psychology 59, no. 2 (2006), pp. 333–363. 17. F. W. Bond, P. E. Flaxman, and D. Bunce, “The Influence of Psychological Flexibility on Work Redesign: Mediated Moderation of a Work Reorganization Intervention,” Journal of Applied Psychology 93, no. 3 (2008), pp. 645–654. 18. Cited in K. Palmer, “The New Mommy Track,” U.S. News and World Report (September 3, 2007), pp. 40–45. 19. Cited in “Flextime Gains in Popularity in Germany,” Manpower Argus (September 2000), p. 4; and Y. Yanadori and T. Kato, “Work and Family Practices in Japanese Firms: Their Scope, Nature, and Impact on Employee Turnover,” International Journal of Human Resource Management 20, no. 2 (2009), pp. 439–456. 20. 20 S. Westcott, “Beyond Flextime: Trashing the Workweek,” Inc. (August 2008), p. 30. 21. See, for example, D. A. Ralston and M. F. Flanagan, “The Effect of Flextime on Absenteeism and Turnover for Male and Female Employees,” Journal of Vocational Behavior 26 , no. 2 (1985), pp. 206–217; B. B. Baltes, T. E. Briggs, J. W. Huff, J. A. Wright, and G. A. Neuman, “Flexible and Compressed Workweek Schedules: A Meta-Analysis of Their Effects on Work-Related Criteria,” Journal of Applied Psychology 84, no. 4 (1999), pp. 496–513; K. M. Shockley, and T. D. Allen, “When Flexibility Helps: Another Look at the Availability of Flexible Work Arrangements and Work–Family Conflict,” Journal of Vocational Behavior 71, no. 3 (2007), pp. 479–493; J. G. Grzywacz, D. S. Carlson, and S. Shulkin, “Schedule Flexibility and Stress: Linking Formal Flexible Arrangements and Perceived Flexibility to Employee Health.” Community, Work, and Family 11, no. 2 (2008), pp. 199–214; and L. A. McNall, A. D. Masuda, and J. M. Nicklin “Flexible Work Arrangements, Job Satisfaction, and Turnover Intentions: The Mediating Role of Work-to-Family Enrichment,” Journal of Psychology 144, no. 1 (2010), pp. 61–81. 22. K. M. Shockley and T. D. Allen, “Investigating the Missing Link in Flexible Work Arrangement Utilization: An Individual Difference Perspective,” Journal of Vocational Behavior 76, no. 1 (2010), pp. 131–142. www.workforce.com www.workforce.com Endnotes 267 23. J. LaReau, “Ford’s 2 Julies Share Devotion—and Job,” Automotive News (October 25, 2010), p. 4. 24. Society for Human Resource Management, 2008 Employee Benefits (Alexandria, VA: Author, 2008). 25. S. Shellenbarger, “Two People, One Job: It Can Really Work,” The Wall Street Journal (December 7, 1994), p. B1. 26. “Job-Sharing: Widely Offered, Little Used,” Training (November 1994), p. 12. 27. C. Dawson, “Japan: Work-Sharing Will Prolong the Pain,” BusinessWeek (December 24, 2001), p. 46. 28. Shellenbarger, “Two People, One Job,” p. B1. 29. See, for example, E. J. Hill, M. Ferris, and V. Martinson, “Does It Matter Where You Work? A Comparison of How Three Work Venues (Traditional Office, Virtual Office, and Home Office) Influence Aspects of Work and Personal/Family Life,” Journal of Vocational Behavior 63, no. 2 (2003), pp. 220–241; B. Williamson, “Managing Virtual Workers,” Bloomberg Businessweek (July 16, 2009), www.businessweek.com , and B. A. Lautsch and E. E. Kossek, “Managing a Blended Workforce: Telecommuters and Non-Telecommuters,” Organizational Dynamics 40, no. 1 (2010), pp. 10–17. 30. J. Tozzi, “Home-Based Businesses Increasing,” Bloomberg Businessweek (January 25, 2010), www.businessweek.com . 31. Society for Human Resource Management, 2008 Employee Benefits . 32. See, for instance, M. Conlin, “The Easiest Commute of All,” BusinessWeek (December 12, 2005), p. 78; S. Shellenbarger, “Telework Is on the Rise, but It Isn’t Just Done from Home Anymore,” The Wall Street Journal (January 23, 2001), p. B1; and E. O’Keefe, “Teleworking Grows But Still a Rarity,” The Washington Post (February 22, 2011), p. B3. 33. Conlin, “The Easiest Commute of All.” 34. E. E. Kossek, B. A. Lautsch, S. C. Eaton, “Telecommuting, Control, and Boundary Management: Correlates of Policy Use and Practice, Job Control, and Work-Family Effectiveness,” Journal of Vocational Behavior 68, no. 2 (2006), pp. 347–367. 35. J. M. Stanton and J. L. Barnes-Farrell, “Effects of Electronic Performance Monitoring on Personal Control, Task Satisfaction, and Task Performance,” Journal of Applied Psychology 81 , no. 6 (1996), pp. 738–745; and L. Taskin and F. Bridoux, “Telework: A Challenge to Knowledge Transfer in Organizations,” International Journal of Human Resource Management 21, no. 13 (2010), pp. 2503–2520. 36. See, for example, P. Brotherton, “For Teleworkers, Less Is Definitely More,” T�D 65 (March 2011), p. 29; and M. Virick, N. DaSilva, and K. Arrington, “Moderators of the Curvilinear Relation Between Extent of Telecommuting and Job and Life Satisfaction: The Role of Performance Outcome Orientation and Worker Type,” Human Relations 63, no. 1 (2010), pp. 137–154. 37. J. Welch and S. Welch, “The Importance of Being There,” BusinessWeek (April 16, 2007), p. 92; Z. I. Barsness, K. A. Diekmann, and M. L. Seidel, “Motivation and Opportunity: The Role of Remote Work, Demographic Dissimilarity, and Social Network Centrality in Impression Management,” Academy of Management Journal 48, no. 3 (2005), pp. 401–419. 38. F. P. Morgeson and S. E. Humphrey, “The Work Design Questionnaire (WDQ): Developing and Validating a Comprehensive Measure for Assessing Job Design and the Nature of Work,” Journal of Applied Psychology 91, no. 6 (2006), pp. 1321–1339; S. E. Humphrey, J. D. Nahrgang, and F. P. Morgeson, “Integrating Motivational, Social, and Contextual Work Design Features: A Meta-Analytic Summary and Theoretical Extension of the Work Design Literature,” Journal of Applied Psychology 92, no. 5 (2007), pp. 1332–1356; and R. Takeuchi, D. P. Lepak, H. Wang, and K. Takeuchi, “An Empirical Examination of the Mechanisms Mediating Between High-Performance Work Systems and the Performance of Japanese Organizations,” Journal of Applied Psychology 92, no. 4 (2007), pp. 1069–1083. 39. See, for example, the increasing body of literature on empowerment, such as D. P. Ashmos, D. Duchon, R. R. McDaniel Jr., and J. W. Huonker, “What a Mess! Participation as a Simple Managerial Rule to ‘Complexify’ Organizations,” Journal of Management Studies 39 , no. 2 (2002), pp. 189–206; S. E. Seibert, S. R. Silver, and W. A. Randolph, “Taking Empowerment to the Next Level: A Multiple-Level Model of Empowerment, Performance, and Satisfaction,” Academy of Management Journal 47, no. 3 (2004), pp. 332–349; M. M. Butts, R. J. Vandenberg, D. M. DeJoy, B. S. Schaffer, and M. G. Wilson, “Individual Reactions to High Involvement Work Processes: Investigating the Role of Empowerment and Perceived Organizational Support,” Journal of Occupational Health Psychology 14, no. 2 (2009), pp. 122–136; R. Park, E. Applebaum, and D. Kruse, “Employee Involvement and Group Incentives in Manufacturing Companies: A Multi- Level Analysis,” Human Resource Management Journal 20, no. 3 (2010), pp. 227–243; and D. C. Jones, P. Kalmi, and A. Kauhanen, “How Does Employee Involvement Stack Up? The Effects of Human Resource Management Policies in a Retail Firm,” Industrial Relations 49, no. 1 (2010), pp. 1–21. 40. See, for instance, A. Sagie and Z. Aycan, “A Cross-Cultural Analysis of Participative Decision-Making in Organizations,” Human Relations 56 , no. 4 (2003), pp. 453–473; and J. Brockner, “Unpacking Country Effects: On the Need to Operationalize the Psychological Determinants of Cross- National Differences,” in R. M. Kramer and B. M. Staw (eds.), Research in Organizational Behavior, vol. 25 (Oxford, UK: Elsevier, 2003), pp. 336–340. 41. C. Robert, T. M. Probst, J. J. Martocchio, R. Drasgow, and J. J. Lawler, “Empowerment and Continuous Improvement in the United States, Mexico, Poland, and India: Predicting Fit on the Basis of the Dimensions of Power Distance and Individualism,” Journal of Applied Psychology 85 , no. 5 (2000), pp. 643–658. 42. Z. X. Chen and S. Aryee, “Delegation and Employee Work Outcomes: An Examination of the Cultural Context of Mediating Processes in China,” Academy of Management Journal 50, no. 1 (2007), pp. 226–238. 43. F. Heller, E. Pusic, G. Strauss, and B. Wilpert, Organizational Participation: Myth and Reality (Oxford, UK: Oxford University Press, 1998). 44. See, for instance, K. L. Miller and P. R. Monge, “Participation, Satisfaction, and Productivity: A Meta-Analytic Review,” Academy of Management Journal (December 1986), pp. 727–753; J. A. Wagner III, “Participation’s Effects on Performance and Satisfaction: A Reconsideration of Research Evidence,” Academy of Management Review 19 , no. 2 (1994), pp. 312–330; C. Doucouliagos, “Worker Participation and Productivity in www.businessweek.com www.businessweek.com 268 CHAPTER 8 Motivation: From Concepts to Applications Labor-Managed and Participatory Capitalist Firms: A Meta- Analysis,” Industrial and Labor Relations Review 49 , no. 1 (1995), pp. 58–77; J. A. Wagner III, C. R. Leana, E. A. Locke, and D. M. Schweiger, “Cognitive and Motivational Frameworks in U.S. Research on Participation: A Meta-Analysis of Primary Effects,” Journal of Organizational Behavior 18, no. 1 (1997), pp. 49–65; A. Pendleton and A. Robinson, “Employee Stock Ownership, Involvement, and Productivity: An Interaction- Based Approach,” Industrial and Labor Relations Review 64, no. 1 (2010), pp. 3–29. 45. D. K. Datta, J. P. Guthrie, and P. M. Wright, “Human Resource Management and Labor Productivity: Does Industry Matter? Academy of Management Journal 48, no. 1 (2005), pp. 135–145; C. M. Riordan, R. J. Vandenberg, and H. A. Richardson, “Employee Involvement Climate and Organizational Effectiveness.” Human Resource Management 44, no. 4 (2005), pp. 471–488; and J. Kim, J. P. MacDuffie, and F. K. Pil, “Employee Voice and Organizational Performance: Team Versus Representative Influence,” Human Relations 63 , no. 3 (2010), pp. 371-394. 46. Cotton, Employee Involvement, p. 114. 47. See, for example, M. Gilman and P. Marginson, “Negotiating European Works Council: Contours of Constrained Choice,” Industrial Relations Journal 33 , no. 1 (2002), pp. 36–51; J. T. Addison and C. R. Belfield, “What Do We Know About the New European Works Council? Some Preliminary Evidence from Britain,” Scottish Journal of Political Economy 49 , no. 4 (2002), pp. 418–444; and B. Keller, “The European Company Statute: Employee Involvement—and Beyond,” Industrial Relations Journal 33 , no. 5 (2002), pp. 424–445. 48. Cotton, Employee Involvement, pp. 129–130, 139–140. 49. Ibid., p. 140. 50. E. White, “Opportunity Knocks, and It Pays a Lot Better,” The Wall Street Journal (November 13, 2006), p. B3. 51. P. S. Goodman and P. P. Pan, “Chinese Workers Pay for Wal- Mart’s Low Prices,” Washington Post (February 8, 2004), p. A1. 52. M. Sabramony, N. Krause, J. Norton, and G. N. Burns “The Relationship Between Human Resource Investments and Organizational Performance: A Firm-Level Examination of Equilibrium Theory,” Journal of Applied Psychology 93, no. 4 (2008), pp. 778–788. 53. See, for example, B. Martinez, “Teacher Bonuses Emerge in Newark,” The Wall Street Journal , (April 21, 2011), p. A.15; and D. Weber, “Seminole Teachers to Get Bonuses Instead of Raises,” Orlando Sentinel (January 19, 2011), www .orlandosentinel.com . 54. Based on J. R. Schuster and P. K. Zingheim, “The New Variable Pay: Key Design Issues,” Compensation & Benefits Review (March–April 1993), p. 28; K. S. 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Ledford Jr., “Paying for the Skills, Knowledge, and Competencies of Knowledge Workers,” Compensation & Benefits Review, (July–August 1995), pp. 55–62; B. Murray and B. Gerhart, “An Empirical Analysis of a Skill-Based Pay Program and Plant Performance Outcomes,” Academy of Management Journal 41 , no. 1 (1998), pp. 68–78; J. R. Thompson and C. W. LeHew, “Skill-Based Pay as an Organizational Innovation,” Review of Public Personnel Administration 20 , no. 1 (2000), pp. 20–40; and J. D. Shaw, N. Gupta, A. Mitra, and G. E. Ledford, Jr., “Success and Survival of Skill-Based Pay Plans,” Journal of Management 31 , no. 1 (2005), pp. 28–49. 65. A. Mitra, N. Gupta, and J. D. Shaw, “A Comparative Examination of Traditional and Skill-Based Pay Plans,” Journal of Managerial Psychology 26, no. 4 (2011), pp. 278–296. 66. E. C. Dierdorff and E. A. Surface, “If You Pay for Skills, Will They Learn? Skill Change and Maintenance under a Skill- Based Pay System,” Journal of Management 34, no.4 (2008), pp. 721–743. 67. “Tensions of a New Pay Plan,” The New York Times (May 17, 1992), p. F5. 68. F. Giancola, “Skill-based Pay—Issues for Consideration,” Benefits and Compensation Digest 44, no. 5 (2007), pp. 1–15. 69. N. Chi and T. Han, “Exploring the Linkages Between Formal Ownership and Psychological Ownership for the Organization: The Mediating Role of Organizational Justice,” Journal of Occupational and Organizational Psychology 81, no. 4 (2008), pp. 691–711. 70. See, for instance, D. O. Kim, “Determinants of the Survival of Gainsharing Programs,” Industrial & Labor Relations Review 53 , no. 1 (1999), pp. 21–42; “Why Gainsharing Works Even Better Today Than in the Past,” HR Focus (April 2000), pp. 3–5; L. R. Gomez-Mejia, T. M. Welbourne, and R. M. Wiseman, “The Role of Risk Sharing and Risk Taking Under Gainsharing,” Academy of Management Review 25 , no. 3 (2000), www.businessweek.com www.orlandosentinel.com www.orlandosentinel.com Endnotes 269 pp. 492–507; M. Reynolds, “A Cost-Reduction Strategy That May Be Back,” Healthcare Financial Management (January 2002), pp. 58–64; and M. R. Dixon, L. J. Hayes, and J. Stack, “Changing Conceptions of Employee Compensation,” Journal of Organizational Behavior Management 23, no. 2–3 (2003), pp. 95–116; I. M. Leitman, R. Levin, M. J. Lipp, L. Sivaprasad, C. J. Karalakulasingam, D. S. Bernard, P. Friedmann, and D. J. Shulkin, “Quality and Financial Outcomes from Gainsharing for Inpatient Admissions: A Three-Year Experience,” Journal of Hospital Medicine 5, no. 9 (2010), pp. 501–517. 71. T. M. Welbourne and C. J. Ferrante, “To Monitor or Not to Monitor: A Study of Individual Outcomes from Monitoring One’s Peers under Gainsharing and Merit Pay,” Group & Organization Management 33, no. 2 (2008), pp. 139–162. 72. National Center for Employee Ownership, The Employee Ownership 100 (July 2003), www.nceo.org . 73. Cited in K. Frieswick, “ESOPs: Split Personality,” CFO (July 7, 2003), p. 1. 74. A. A. Buchko, “The Effects of Employee Ownership on Employee Attitudes: A Test of Three Theoretical Perspectives,” Work and Occupations 19, no. 1 (1992), 59–78; and R. P. Garrett, “Does Employee Ownership Increase Innovation?” New England Journal of Entrepreneurship 13, no. 2, (2010), pp. 37–46. 75. D. McCarthy, E. Reeves, and T. Turner, “Can Employee Share-Ownership Improve Employee Attitudes and Behaviour?” Employee Relations 32, no. 4 (2010), pp. 382–395. 76. A. Pendleton and A. 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Cole and D. H. Flint, “Perceptions of Distributive and Procedural Justice in Employee Benefits: Flexible Versus Traditional Benefit Plans,” Journal of Managerial Psychology 19, no. 1 (2004), pp. 19–40. 84. D. A. DeCenzo and S. P. Robbins, Fundamentals of Human Resource Management, 10th ed. (New York: Wiley, 2009). 85. P. Stephens, “Flex Plans Gain in Popularity,” CA Magazine (January/February 2010), p. 10. 86. D. Lovewell, “Flexible Benefits: Benefits on Offer,” Employee Benefits (March 2010), p. S15. 87. S. E. Markham, K. D. Scott, and G. H. McKee, “Recognizing Good Attendance: A Longitudinal, Quasi-Experimental Field Study,” Personnel Psychology 55 , no. 3 (2002), p. 641; and S. J. Peterson and F. Luthans, “The Impact of Financial and Nonfinancial Incentives on Business Unit Outcomes over Time,” Journal of Applied Psychology 91, no. 1 (2006), pp. 156–165. 88. A. D. Stajkovic and F. Luthans, “Differential Effects of Incentive Motivators on Work Performance,” Academy of Management Journal 4 , no. 3 (2001), p. 587. See also F. Luthans and A. D. Stajkovic, “Provide Recognition for Performance Improvement,” in E. A. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 166–180. 89. L. Shepherd, “Special Report on Rewards and Recognition: Getting Personal,” Workforce Management (September 2010), pp. 24–29. 90. L. Shepherd, “On Recognition, Multinationals Think Globally,” Workforce Management (September 2010), p. 26. 91. R. J. Long and J. L. Shields, “From Pay to Praise? Non-Case Employee Recognition in Canadian and Australian Firms,” International Journal of Human Resource Management 21, no. 8 (2010), pp. 1145–1172. www.nceo.org TO THE CLICKERS GO THE SPOILS 270 A bility to function well in groups” is often near the top of employer lists of desired skills in new hires. New evidence suggests that being popular or able to “click” with colleagues is more important than we have realized. Take Heather Moseley. When Heather started her job as an accounting associate, her cubicle was right outside the office of one of her organization’s top managers, Kelly McVickers. McVickers mostly kept to herself, but that didn’t deter Heather. Over the next few months, Heather struck up a friend- ship with Kelly and found out they both admired Stevie Wonder. “I do an accountant’s job, which is really administrative,” said Heather. “Because of my relationship with Kelly, I now get invited to events, meetings, and conferences that I’d have no business going to as an accountant.” Even though she is above Heather in the organization, Kelly finds her friendship with Heather pays benefits, too. “Knowing Heather, I find out what’s on people’s minds,” Kelly said. “As supervisor this is crucial information.” What Heather did was find a way to click with Kelly. Research has emerged that shows other “clickers” have experiences similar to Heather’s: they advance further and more quickly in their careers. That is the nature of groups—some people seem to have a natural ability to do well in groups, and they benefit as a result. One study of health care administrators had employees list co-workers in terms of how popular they thought their co-workers were. Popularity of each worker was measured by summing how often each person was mentioned. Interestingly, not only did popular employees receive more help from their co-workers, they were also subject to less uncivil behaviors at work. What do you have to do to be a “clicker” and be popular with others in a group? To some degree, it’s personality. Those who are agreeable, have high core self-evaluations, and are self-monitors just click more readily in groups. Geographically, clickers also tend to be centrally located. One study of dorm locations found that each dorm room down from the center of the hall decreased popularity by 50 percent. If you can’t change your personality or your office, you might be able to do something else. Harvard researchers found that when someone asks others questions requiring more intimate self-revelation, respondents later feel closer to the person who asked the question. So, without becoming too personal, try to deepen conversations with others. Move beyond, “What did you do this weekend?” LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Define group and distinguish the different types of groups. 2 Identify the five stages of group development. 3 Show how role requirements change in different situations. 4 Demonstrate how norms and status exert influence on an individual’s behavior. 5 Show how group size affects group performance. 6 Contrast the benefits and disadvantages of cohesive groups. 7 Understand the implications of diversity for group effectiveness. 8 Contrast the strengths and weaknesses of group decision making. 9 Compare the effectiveness of interacting, brainstorming, nominal, and electronic meeting groups. MyManagementLab Access a host of interactive learning aids at to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com . “ www.mymanagementlab.com Foundations of Group Behavior 9 Madness is the exception in individuals but the rule in groups. —Friedrich Nietzsche 271P h o to : St o ck p h o to . So u rc e : D a n ie l la fl o r/ is to ck p h o to .c o m . 271 272 CHAPTER 9 Foundations of Group Behavior Being popular in groups and “clicking” with others seems to be as important at work as in school. The more things change, the more they stay the same. Sources: O. Brafman and R. Brafman, “To the Vulnerable Go the Spoils,” Bloomberg Businessweek (June 20, 2010), pp. 71–73; and B. A. Scott and T. A. Judge, “The Popularity Contest at Work: Who Wins, Why, and What Do They Receive?” Journal of Applied Psychology 94, no. 1 (2009), pp. 20–33. S A L SELF-ASSESSMENT LIBRARY Do I Have a Negative Attitude Toward Working in Groups? In the Self-Assessment Library (available on CD or online), take assessment IV.E.1 (Do I Have a Negative Attitude Toward Working in Groups?) and answer the following questions. 1. Are you surprised by your results? If yes, why? If not, why not? 2. Do you think it is important to always have a positive attitude toward working in groups? Why or why not? We define a group as two or more individuals, interacting and interdependent, who have come together to achieve particular objectives. Groups can be either formal or informal. By a formal group , we mean one defined by the organiza- tion’s structure, with designated work assignments establishing tasks. In formal groups, the behaviors team members should engage in are stipulated by and directed toward organizational goals. The six members of an airline flight crew are a formal group. In contrast, an informal group is neither formally struc- tured nor organizationally determined. Informal groups are natural formations in the work environment that appear in response to the need for social contact. Three employees from different departments who regularly have lunch or cof- fee together are an informal group. These types of interactions among indi- viduals, though informal, deeply affect their behavior and performance. Why Do People Form Groups? Why do people form groups, and why do they feel so strongly about them? Consider the celebrations that follow a sports team’s winning a national champi- onship. Fans have staked their own self-image on the performance of someone else. The winner’s supporters are elated, and sales of team-related shirts, jackets, and hats declaring support for the team skyrocket. Fans of the losing team feel dejected, even embarrassed. Our tendency to take personal pride or offense for the accomplishments of a group is the territory of social identity theory . 1 Define group and distinguish the different types of groups. Defining and Classifying Groups G roups have their place—and their pitfalls. Before we discuss them, examine your own attitude toward working in groups. Take the follow-ing self-assessment and answer the accompanying questions. The objectives of this chapter and Chapter 10 are to introduce you to basic group concepts, provide you with a foundation for understanding how groups work, and show you how to create effective teams. Let’s begin by defining group and explaining why people join groups. Defining and Classifying Groups 273 group Two or more individuals, interacting and interdependent, who have come together to achieve particular objectives. informal group A group that is neither formally structured nor organizationally determined; such a group appears in response to the need for social contact. ingroup favoritism Perspective in which we see members of our ingroup as better than other people, and people not in our group as all the same. social identity theory Perspective that considers when and why individuals consider themselves members of groups. The employees of the Swedish transportation company Scania shown here exercising at a sports complex comprise an informal group. At different company locations, Scania offers employ- ees free access to sports facilities during working hours. The company puts a high priority on employee health and offers employees many opportunities to reinforce an active lifestyle. The informal groups that participate in sports and exercise activities are neither formally structured nor organizationally determined. However, informal groups like these can fulfill employee desires for social interaction at work. Social identity theory proposes that people have emotional reactions to the failure or success of their group because their self-esteem gets tied into the group’s performance. 1 When your group does well, you bask in reflected glory, and your own self-esteem rises. When your group does poorly, you might feel bad about yourself, or you might even reject that part of your identity, like “fair weather fans.” Social identities also help people reduce uncertainty about who they are and what they should do. 2 People develop a lot of identities through the course of their lives. You might define yourself in terms of the organization you work for, the city you live in, your profession, your religious background, your ethnicity, or your gender. A U.S. expatriate working in Rome might be very aware of being from the United States but won’t give this national identity a second thought when transferring from Tulsa to Tucson. 3 Social identities help us understand who we are and where we fit in with other people, but they can have a negative side as well. Ingroup favoritism means we see members of our ingroup as better than other people, and people not in our group as all the same. This obviously paves the way for stereotyping. When do people develop a social identity? Several characteristics make a social identity important to a person: ● Similarity. Not surprisingly, people who have the same values or char- acteristics as other members of their organization have higher levels of group identification. 4 Demographic similarity can also lead to stronger formal group A designated work group defined by an organization’s structure. So ur ce : S or en a nd er ss on /A fp /G et ty /N ew sc om . 274 CHAPTER 9 Foundations of Group Behavior identification for new hires, while those who are demographically different may have a hard time identifying with the group as a whole. 5 ● Distinctiveness. People are more likely to notice identities that show how they are different from other groups. Respondents in one study identified more strongly with those in their work group with whom they shared uncommon or rare demographic characteristics. 6 For example, veterinarians who work in veterinary medicine (where every- one is a veterinarian) identify with their organization, and veterinarians in nonveterinary medicine fields such as animal research or food inspection (where being a veterinarian is a more distinctive characteristic) identify with their profession. 7 ● Status. Because people use identities to define themselves and increase self- esteem, it makes sense that they are most interested in linking themselves to high-status groups. Graduates of prestigious universities will go out of their way to emphasize their links to their alma maters and are also more likely to make donations. 8 People are likely to not identify with a low-status organiza- tion and will be more likely to quit in order to leave that identity behind. 9 ● Uncertainty reduction. Membership in a group also helps some people understand who they are and how they fit into the world. 10 One study showed how the creation of a spin-off company created questions about how employees should develop a unique identity that corresponded more closely to what the division was becoming. 11 Managers worked to define and communicate an idealized identity for the new organization when it became clear employees were confused. Social identities help Bal Seal Engineering employees interact with co-workers. The company’s Spanish-speaking employees gather at the home of a co-worker to participate in an English-as- a- second-language program. Bal Seal, which buys the training materials for the program, reports that it has improved the company’s communi- cations, cooperation among fellow workers, and customer service. As social identity theory proposes, program graduates identify with the high performance of a winning team. As a result, graduates who ruled out the option of going back to school are motivated to continue their education by enrolling in GED, community college, and citizenship classes. Groups generally pass through a predictable sequence in their evolution. Although not all groups follow this five-stage model, 12 it is a useful framework for understanding group development. In this section, we describe the five- stage model and an alternative for temporary groups with deadlines. 2 Identify the five stages of group development. Stages of Group Development So ur ce : O 4 4 /Z um a Pr es s/ N ew sc om . Stages of Group Development 275 five-stage group-development model The five distinct stages groups go through: forming, storming, norming, performing, and adjourning. storming stage The second stage in group development, characterized by intragroup conflict. performing stage The fourth stage in group development, during which the group is fully functional. The Five-Stage Model As shown in Exhibit 9-1 , the five-stage group-development model character- izes groups as proceeding through the distinct stages of forming, storming, norming, performing, and adjourning. 13 The first stage, forming stage , is characterized by a great deal of uncertainty about the group’s purpose, structure, and leadership. Members “test the wa- ters” to determine what types of behaviors are acceptable. This stage is com- plete when members have begun to think of themselves as part of a group. The storming stage is one of intragroup conflict. Members accept the existence of the group but resist the constraints it imposes on individuality. There is conflict over who will control the group. When this stage is complete, there will be a relatively clear hierarchy of leadership within the group. In the third stage, close relationships develop and the group demonstrates cohesiveness. There is now a strong sense of group identity and camaraderie. This norming stage is complete when the group structure solidifies and the group has assimilated a common set of expectations of what defines correct member behavior. The fourth stage is performing . The structure at this point is fully functional and accepted. Group energy has moved from getting to know and understand each other to performing the task at hand. For permanent work groups, performing is the last stage in development. However, for temporary committees, teams, task forces, and similar groups that have a limited task to perform, the adjourning stage is for wrapping up activities and preparing to disband. Some group members are upbeat, basking in the group’s accomplishments. Others may be depressed over the loss of camarade- rie and friendships gained during the work group’s life. Many interpreters of the five-stage model have assumed a group becomes more effective as it progresses through the first four stages. Although this may be generally true, what makes a group effective is actually more complex. 14 First, groups proceed through the stages of group development at different rates. Those with a strong sense of purpose and strategy rapidly achieve high performance and improve over time, whereas those with less sense of purpose actually see their performance worsen over time. Similarly, groups that begin with a positive social focus appear to achieve the “performing” stage more forming stage The first stage in group development, characterized by much uncertainty. norming stage The third stage in group development, characterized by close relationships and cohesiveness. adjourning stage The final stage in group development for temporary groups, characterized by concern with wrapping up activities rather than task performance. Stages of Group Development Exhibit 9-1 276 CHAPTER 9 Foundations of Group Behavior rapidly. Nor do groups always proceed clearly from one stage to the next. Storming and performing can occur simultaneously, and groups can even regress to previous stages. An Alternative Model for Temporary Groups with Deadlines Temporary groups with deadlines don’t seem to follow the usual five-stage model. Studies indicate they have their own unique sequencing of actions (or inaction): (1) their first meeting sets the group’s direction, (2) this first phase of group activity is one of inertia, (3) a transition takes place exactly when the group has used up half its allotted time, (4) this transition initiates major changes, (5) a second phase of inertia follows the transition, and (6) the group’s last meeting is characterized by markedly accelerated activity. 15 This pattern, called the punctuated-equilibrium model , is shown in Exhibit 9-2 . The first meeting sets the group’s direction, and then a framework of behavioral patterns and assumptions through which the group will approach its project emerges, sometimes in the first few seconds of the group’s existence. Once set, the group’s direction is solidified and is unlikely to be reexamined throughout the first half of its life. This is a period of inertia—the group tends to stand still or become locked into a fixed course of action even if it gains new insights that challenge initial patterns and assumptions. One of the most interesting discoveries 16 was that each group experi- enced its transition precisely halfway between its first meeting and its official deadline—whether members spent an hour on their project or 6 months. The midpoint appears to work like an alarm clock, heightening members’ awareness that their time is limited and they need to get moving. This transition ends phase 1 and is characterized by a concentrated burst of changes, dropping of old patterns, and adoption of new perspectives. The transition sets a revised direction for phase 2, a new equilibrium or period of inertia in which the group executes plans created during the transition period. The group’s last meeting is characterized by a final burst of activity to finish its work. In summary, the punctuated-equilibrium model characterizes groups as exhibiting long periods of inertia interspersed with brief revolu- tionary changes triggered primarily by members’ awareness of time and dead- lines. Keep in mind, however, that this model doesn’t apply to all groups. It’s essentially limited to temporary task groups working under a time-constrained completion deadline. 17 The Punctuated-Equilibrium Model Exhibit 9-2 A First Meeting Phase 1 Completion Phase 2 Transition (High) (Low) (A+B)/2 Time Pe rf or m an ce B Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 277 punctuated-equilibrium model A set of phases that temporary groups go through that involves transitions between inertia and activity. role A set of expected behavior patterns attributed to someone occupying a given position in a social unit. Work groups are not unorganized mobs; they have properties that shape members’ behavior and help explain and predict individual behavior within the group as well as the performance of the group itself. Some of these properties are roles, norms, status, size, cohesiveness, and diversity. Group Property 1: Roles Shakespeare said, “All the world’s a stage, and all the men and women merely players.” Using the same metaphor, all group members are actors, each playing a role . By this term, we mean a set of expected behavior patterns at- tributed to someone occupying a given position in a social unit. Our under- standing of role behavior would be dramatically simplified if each of us could choose one role and play it regularly and consistently. Instead, we are required to play a number of diverse roles, both on and off our jobs. As we’ll see, one of the tasks in understanding behavior is grasping the role a person is cur- rently playing. Bill Patterson is a plant manager with EMM Industries, a large electrical equipment manufacturer in Phoenix. He fulfills a number of roles—EMM employee, member of middle management, electrical engineer, and primary company spokesperson in the community. Off the job, Bill Patterson finds himself in still more roles: husband, father, Catholic, tennis player, member of the Thunderbird Country Club, and president of his homeowners’ associa- tion. Many of these roles are compatible; some create conflicts. How does Bill’s religious commitment influence his managerial decisions regarding layoffs, expense account padding, and provision of accurate information to govern- ment agencies? A recent offer of promotion requires Bill to relocate, yet his family wants to stay in Phoenix. Can the role demands of his job be reconciled with the demands of his husband and father roles? Like Bill Patterson, we are all required to play a number of roles, and our behavior varies with each. So different groups impose different role require- ments on individuals. Role Perception Our view of how we’re supposed to act in a given situation is a role perception . We get role perceptions from stimuli all around us—for example, friends, books, films, television, as when we form an impression of the work of doctors from watching Grey’s Anatomy. Of course, the primary reason apprenticeship programs exist in many trades and professions is to allow beginners to watch an expert so they can learn to act as they should. Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 3 Show how role requirements change in different situations. role perception An individual’s view of how he or she is supposed to act in a given situation. 278 CHAPTER 9 Foundations of Group Behavior Role Expectations Role expectations are the way others believe you should act in a given context. The role of a U.S. federal judge is viewed as having propriety and dignity, while a football coach is seen as aggressive, dynamic, and inspiring to his players. In the workplace, we look at role expectations through the perspective of the psychological contract : an unwritten agreement that exists between employ- ees and employer. This agreement sets out mutual expectations: what manage- ment expects from workers and vice versa. 18 Management is expected to treat employees justly, provide acceptable working conditions, clearly communicate what is a fair day’s work, and give feedback on how well an employee is doing. Employees are expected to respond by demonstrating a good attitude, following directions, and showing loyalty to the organization. What happens if management is derelict in keeping its part of the bargain? We can expect negative effects on employee performance and satisfaction. One study among restaurant managers found that psychological contact viola- tions were related to greater intentions to quit the job, while another study of a variety of different industries found they were associated with lower levels of productivity, higher levels of theft, and greater work withdrawal. 19 Role Conflict When compliance with one role requirement may make it difficult to comply with another, the result is role conflict . 20 At the extreme, two or more role expectations are mutually contradictory. Bill Patterson had to deal with role conflicts, such as his attempt to reconcile the expectations placed on him as a husband and father with those placed on him as an executive with EMM Industries. Bill’s wife and children want to remain in Phoenix, while EMM expects its employees to be responsive to the company’s needs and requirements. Although it might be in Bill’s financial and career interests to accept a relocation, the conflict comes down to choosing Green Bay Packers football player Donald Driver plays a variety of roles. As a wide receiver for the Packers, his principal role is to catch passes from the quarterback and then run the ball downfield. Driver is also a husband, father, author of a children’s books series, the host of a statewide TV show in Wisconsin called Inside the Huddle, and a volunteer for Children’s Hospital of Wisconsin and Goodwill Industries. Along with his wife, he created the Donald Driver Foundation that offers assistance to ill children with unmanageable hospital bills and provides housing for the homeless. Each of these positions imposes different role requirements on Driver. This photo shows him diving for a first down in his role as a wide receiver. So ur ce : D av id M ai al et ti/ M ct /N ew sc om . Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 279 between family and career role expectations. Indeed, a great deal of research demonstrates that conflict between the work and family roles is one of the most significant sources of stress for most employees. 21 Most employees are simultaneously in occupations, work groups, divisions, and demographic groups, and these different identities can come into conflict when the expectations of one clash with the expectations of another. 22 During mergers and acquisitions, employees can be torn between their identities as members of their original organization and of the new parent company. 23 Organizations structured around multinational operations also have been shown to lead to dual identification, with employees distinguishing between the local division and the international organization. 24 Zimbardo’s Prison Experiment One of the most illuminating role and identity experiments was done a number of years ago by Stanford University psychologist Philip Zimbardo and his associates. 25 They created a “prison” in the basement of the Stanford psychology building; hired at $15 a day two dozen emotionally stable, physically healthy, law-abiding students who scored “normal average” on extensive personality tests; randomly assigned them the role of either “guard” or “prisoner”; and established some basic rules. It took the “prisoners” little time to accept the authority positions of the “guards” or for the mock guards to adjust to their new authority roles. Consistent with social identity theory, the guards came to see the prisoners as a negative outgroup, and their comments to researchers showed they had developed ste- reotypes about the “typical” prisoner personality type. After the guards crushed a rebellion attempt on the second day, the prisoners became increasingly pas- sive. Whatever the guards “dished out,” the prisoners took. The prisoners actu- ally began to believe and act as if they were inferior and powerless, as the guards constantly reminded them. And every guard, at some time during the simula- tion, engaged in abusive, authoritative behavior. One said, “I was surprised at myself. . . . I made them call each other names and clean the toilets out with their bare hands. I practically considered the prisoners cattle, and I kept think- ing: ‘I have to watch out for them in case they try something.’ ” Surprisingly, during the entire experiment—even after days of abuse—not one prisoner said, “Stop this. I’m a student like you. This is just an experiment!” The simulation actually proved too successful in demonstrating how quickly individuals learn new roles. The researchers had to stop it after only 6 days because of the participants’ pathological reactions. And remember, these were individuals chosen precisely for their normalcy and emotional stability. What can we conclude from this prison simulation? Like the rest of us, the participants had learned stereotyped conceptions of guard and prisoner roles from the mass media and their own personal experiences in power and powerlessness relationships gained at home (parent–child), in school (teacher–student), and in other situations. This background allowed them easily and rapidly to assume roles very different from their inherent person- a lities and, with no prior personality pathology or training in the parts they were playing, execute extreme forms of behavior consistent with those roles. A follow-up reality television show conducted by the BBC that used a lower- fidelity simulated prison setting provides some insights into these results. 26 The psychological contract An unwritten agreement that sets out what management expects from an employee and vice versa. role conflict A situation in which an individual is confronted by divergent role expectations. role expectations How others believe a person should act in a given situation. 280 CHAPTER 9 Foundations of Group Behavior results were dramatically different from those of the Stanford experiment. The “guards” were far more careful in their behavior and limited the aggressive treat- ment of “prisoners.” They often described their concerns about how their actions might be perceived. In short, they did not fully take on their roles, possibly because they knew their behavior was being observed by millions of viewers. As shared iden- tity increased among “prisoners,” they provided higher levels of social support to one another, and an egalitarian system developed between them and the guards. Philip Zimbardo has contended that the BBC study is not a replication of his study for several reasons, but he acknowledges the results demonstrate how both guards and prisoners act differently when closely monitored. These results suggest abuse of roles can be limited when people are made conscious of their behavior. 4 Demonstrate how norms and status exert influence on an individual’s behavior. S A L SELF-ASSESSMENT LIBRARY Do I Trust Others? In the Self-Assessment Library (available on CD or online), take assessment II.B.3 (Do I Trust Others?). You can also check out assessment II.B.4 (Do Others See Me as Trusting?). Group Property 2: Norms Did you ever notice that golfers don’t speak while their partners are putting on the green or that employees don’t criticize their bosses in public? Why not? The answer is norms. All groups have established norms —acceptable standards of behavior shared by their members that express what they ought and ought not to do under certain circumstances. When agreed to and accepted by the group, norms influ- ence members’ behavior with a minimum of external controls. Different groups, communities, and societies have different norms, but they all have them. 27 Norms can cover virtually any aspect of group behavior. 28 Probably the most com- mon is a performance norm, providing explicit cues about how hard members should work, what the level of output should be, how to get the job done, what level of tardi- ness is appropriate, and the like. These norms are extremely powerful and are capa- ble of significantly modifying a performance prediction based solely on ability and level of personal motivation. Other norms include appearance norms (dress codes, unspoken rules about when to look busy), social arrangement norms (with whom to eat lunch, whether to form friendships on and off the job), and resource allocation norms (assignment of difficult jobs, distribution of resources like pay or equipment). The Hawthorne Studies Full-scale appreciation of the influence of norms on worker behavior did not occur until the early 1930s, following studies under- taken between 1924 and 1932 at the Western Electric Company’s Hawthorne Works in Chicago. 29 The Hawthorne researchers began by examining the relationship between the physical environment and productivity. As they increased the light level for the experimental group of workers, output rose for that unit and the control group. But to their surprise, as they dropped the light level in the experimental group, productivity continued to increase in both groups. In fact, productivity in the experimental group decreased only when the light intensity had been reduced to that of moonlight. As a follow-up, the researchers began a second set of experiments at Western Electric. A small group of women assembling telephone relays was isolated from the main work group so their behavior could be more carefully observed. Observations covering a multiyear period found this small group’s Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 281 output increased steadily. The number of personal and out-sick absences was approximately one-third that recorded by women in the regular production department. It became evident this group’s performance was significantly influenced by its status as “special.” The members thought being in the experi- mental group was fun, that they were in an elite group, and that management showed concern about their interests by engaging in such experimentation. In essence, workers in both the illumination and assembly-test-room experiments were really reacting to the increased attention they received. A third study, in the bank wiring observation room, was introduced to study the effect of a sophisticated wage incentive plan. The most important finding was that employees did not individually maximize their outputs. Rather, their output became controlled by a group norm that determined what was a proper day’s work. Interviews determined the group was operating well below its capability and was leveling output to protect itself. Members were afraid that if they significantly increased their output, the unit incentive rate would be cut, the expected daily output would be increased, layoffs might occur, or slower workers would be reprimanded. So the group established its idea of a fair output—neither too much nor too little. Members helped each other ensure their reports were nearly level. The norms the group established included a number of “don’ts.” Don’t be a rate-buster, turning out too much work. Don’t be a chiseler, turning out too little work. Don’t squeal on any of your peers. How did the group enforce these norms? The methods included sarcasm, name-calling, ridicule, and even punches to the upper arm of any member who violated the group’s norms. Members also ostracized individuals whose behavior was against the group’s interest. norms Acceptable standards of behavior within a group that are shared by the group’s members. From the Hawthorne Studies, researchers gained valuable insights into how individual behavior is influenced by group norms. They observed that a group of workers determined the level of fair output and established norms for individual work rates that conformed to the output. To enforce the group norms, workers used sarcasm, ridicule, and even physical force to influence individual behaviors that were not acceptable to the group. Researchers also learned that money was less a factor in deter- mining worker output than were group standards, sentiments, and security. So ur ce : H aw th or ne W or ks F ac to ry o f M or to n C ol le ge . 282 CHAPTER 9 Foundations of Group Behavior Conformity As a member of a group, you desire acceptance by the group. Thus you are susceptible to conforming to the group’s norms. Considerable evidence suggests that groups can place strong pressures on individual members to change their attitudes and behaviors to conform to the group’s standard. 30 There are numerous reasons for conformity, with recent research highlighting the importance of a desire to form accurate perceptions of reality based on group consensus, to develop meaningful social relationships with others, and to maintain a favorable self-concept. The impact that group pressures for conformity can have on an individ- ual member’s judgment was demonstrated in now-classic studies by Solomon Asch. 31 Asch made up groups of seven or eight people who were asked to compare two cards held by the experimenter. One card had one line, and the other had three lines of varying length, one of which was identical to the line on the one-line card, as Exhibit 9-3 shows. The difference in line length was quite obvious; in fact, under ordinary conditions, subjects made fewer than 1 percent errors in announcing aloud which of the three lines matched the single line. But what happens if members of the group begin giving incorrect answers? Will pressure to conform cause an unsuspecting subject (USS) to alter an answer? Asch arranged the group so only the USS was unaware the experiment was rigged. The seating was prearranged so the USS was one of the last to announce a decision. The experiment began with several sets of matching exercises. All the subjects gave the right answers. On the third set, however, the first subject gave an obviously wrong answer—for example, saying “C” in Exhibit 9-3 . The next subject gave the same wrong answer, and so did the others. Now the dilemma confronting the USS was this: publicly state a perception that differs from the announced position of the others in the group, or give an incorrect answer in order to agree with the others. The results over many experiments and trials showed 75 percent of subjects gave at least one answer that conformed—that they knew was wrong but was consistent with the replies of other group members—and the average con- former gave wrong answers 37 percent of the time. What meaning can we draw from these results? They suggest group norms press us toward conformity. We desire to be one of the group and therefore avoid being visibly different. This research was conducted more than 50 years ago. Has time altered the conclusions’ validity? And should we consider them generalizable across cul- tures? Evidence indicates levels of conformity have steadily declined since Asch’s studies in the early 1950s, and his findings are culture-bound. 32 Conformity to social norms is higher in collectivist cultures, but it is still a powerful force in groups in individualistic countries. Examples of Cards Used in Asch’s Study Exhibit 9-3 X A B C Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 283 reference groups Important groups to which individuals belong or hope to belong and with whose norms individuals are likely to conform. deviant workplace behavior Voluntary behavior that violates significant organizational norms and, in so doing, threatens the well-being of the organization or its members. Also called antisocial behavior or workplace incivility. Typology of Deviant Workplace Behavior Exhibit 9-4 Category Examples Production Leaving early Intentionally working slowly Wasting resources Property Sabotage Lying about hours worked Stealing from the organization Political Showing favoritism Gossiping and spreading rumors Blaming co-workers Personal aggression Sexual harassment Verbal abuse Stealing from co-workers Source: Based on S. L. Robinson and R. J. Bennett, “A Typology of Deviant Workplace Behaviors: A Multidimensional Scaling Study,” Academy of Management Journal, April 1995, p. 565. Copyright 1995 by Academy of Management (NY); S. H. Appelbaum, G. D. Iaconi and A. Matousek, “Positive and Negative Deviant Workplace Behaviors: Causes, Impacts, and Solutions,” Corporate Governance 7, no. 5 (2007), pp. 586–598; and R. W. Griffin, and A. O’Leary-Kelly, The Dark Side of Organizational Behavior. (Wiley, New York: 2004). Do individuals conform to the pressures of all the groups to which they belong? Obviously not, because people belong to many groups, and their norms vary and sometimes are contradictory. So what do people do? They conform to the important groups to which they belong or hope to belong. These important groups are reference groups , in which a person is aware of other members, defines himself or herself as a member or would like to be a member, and feels group members are significant to him or her. The implication, then, is that all groups do not impose equal conformity pressures on their members. Deviant Workplace Behavior LeBron Hunt is frustrated by a co-worker who constantly spreads malicious and unsubstantiated rumors about him. Debra Hundley is tired of a member of her work team who, when confronted with a problem, takes out his frustration by yelling and screaming at her and other members. And Mi-Cha Kim recently quit her job as a dental hygienist after being constantly sexually harassed by her employer. What do these three episodes have in common? They represent employees exposed to acts of deviant workplace behavior. 33 Deviant workplace behavior (also called antisocial behavior or workplace incivility ) is voluntary behavior that vio- lates significant organizational norms and, in doing so, threatens the well-being of the organization or its members. Exhibit 9-4 provides a typology of deviant workplace behaviors, with examples of each. Few organizations will admit to creating or condoning conditions that encourage and maintain deviant norms. Yet they exist. Employees report an increase in rudeness and disregard toward others by bosses and co-workers in recent years. And nearly half of employees who have suffered this incivility say conformity The adjustment of one’s behavior to align with the norms of the group. 284 CHAPTER 9 Foundations of Group Behavior it has led them to think about changing jobs; 12 percent actually quit because of it. 34 A study of nearly 1,500 respondents found that in addition to increasing turnover intentions, incivility at work increased reports of psychological stress and physical illness. 35 Like norms in general, individual employees’ antisocial actions are shaped by the group context within which they work. Evidence demonstrates deviant workplace behavior is likely to flourish where it’s supported by group norms. 36 Workers who socialize either at or outside work with people who are frequently absent from work are more likely to be absent themselves. 37 What this means for managers is that when deviant workplace norms surface, employee coopera- tion, commitment, and motivation are likely to suffer. What are the consequences of workplace deviance for teams? Some research suggests a chain reaction occurs in a group with high levels of dysfunctional behavior. 38 The process begins with negative behaviors like shirking, undermin- ing co-workers, or being generally uncooperative. As a result of these behaviors, the team collectively starts to have negative moods. These negative moods then result in poor coordination of effort and lower levels of group performance, especially when there is a lot of nonverbal negative communication between members. One study suggests those working in a group are more likely to lie, cheat, and steal than individuals working alone. As shown in Exhibit 9-5 , in this study, no individual working alone lied, but 22 percent of those working in groups did. They also were more likely to cheat on a task (55 percent versus 23 percent of individuals working alone) and steal (29 percent compared to 10 percent work- ing alone). 39 Groups provide a shield of anonymity, so someone who might ordi- narily be afraid of getting caught can rely on the fact that other group members had the same opportunity, creating a false sense of confidence that may result in more aggressive behavior. Thus, deviant behavior depends on the accepted norms of the group—or even whether an individual is part of a group. 40 Groups and Deviant Behavior Exhibit 9-5 Stealing Cheating Lying 22 0 23 29 10 55 In a group Alone 0% 10% 20% 30% 40% 50% 60% In Source: From “Lying, Cheating, Stealing: It Happens More in Groups” by A. Erez, H. Elms and E. Fong, paper presented at the European Business Ethics Network Annual Conference, Budapest, August 30, 2003. Reprinted by permission of the author. Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 285 Group Property 3: Status Status Status —a socially defined position or rank given to groups or group members by others—permeates every society. Even the smallest group will develop roles, rights, and rituals to differentiate its members. Status is a significant motivator and has major behavioral consequences when individuals perceive a disparity between what they believe their status is and what others perceive it to be. What Determines Status? According to status characteristics theory , status tends to derive from one of three sources: 41 1. The power a person wields over others. Because they likely control the group’s resources, people who control the outcomes tend to be perceived as high status. 2. A person’s ability to contribute to a group’s goals. People whose contributions are critical to the group’s success tend to have high status. Some thought NBA star Kobe Bryant had more say over player decisions than his coaches (though not as much as Bryant wanted!). 3. An individual’s personal characteristics. Someone whose personal characteristics are positively valued by the group (good looks, intelligence, money, or a friendly personality) typically has higher status than someone with fewer valued attributes. Status and Norms Status has some interesting effects on the power of norms and pressures to conform. High-status individuals are often given more freedom to deviate from norms than are other group members. 42 Physicians ac- tively resist administrative decisions made by lower-ranking insurance company status A socially defined position or rank given to groups or group members by others. status characteristics theory A theory that states that differences in status characteristics create status hierarchies within groups. Earning a brown apron as a winner in Starbucks’ Ambassador Cup com- petitions is a symbol of high status. The company holds Ambassador Cup contests throughout the world, with some contests regional and others countrywide, to determine which employees are the best coffee experts, or “ambassadors.” The competitions involve making coffee drinks, identifying coffees in blind taste tests, and testing contes- tants’ knowledge about Starbucks and different aspects of the coffee industry such as growing regions, roasting, purchasing, and fair trade practices. Winning a brown apron signifies achieving the highest level of coffee knowledge. This photo shows coffee ambassadors who won brown aprons during a competition at Starbucks’ headquarters. So ur ce : E ri ka S ch ul tz /M C T/ N ew sc om . 286 CHAPTER 9 Foundations of Group Behavior employees. 43 High-status people are also better able to resist conformity pres- sures than their lower-status peers. An individual who is highly valued by a group but doesn’t need or care about the group’s social rewards is particularly able to disregard conformity norms. 44 These findings explain why many star athletes, celebrities, top-performing salespeople, and outstanding academics seem oblivious to appearance and social norms that constrain their peers. As high-status individuals, they’re given a wider range of discretion as long as their activities aren’t severely detrimental to group goal achievement. 45 Status and Group Interaction High-status people tend to be more assertive group members. 46 They speak out more often, criticize more, state more commands, and interrupt others more often. But status differences actually inhibit diversity of ideas and creativity in groups, because lower-status mem- bers tend to participate less actively in group discussions. When they possess expertise and insights that could aid the group, failure to fully utilize them reduces the group’s overall performance. Status Inequity It is important for group members to believe the status hierarchy is equitable. Perceived inequity creates disequilibrium, which inspires various types of corrective behavior. Hierarchical groups can lead to resentment among those at the lower end of the status continuum. Large differences in status within groups are also associated with poorer individual performance, lower health, and higher intentions to leave the group. 47 The concept of equity we presented in Chapter 6 applies to status. People expect rewards to be proportionate to costs incurred. If Dana and Anne are the two finalists for the head nurse position in a hospital, and Dana clearly has more seniority and better preparation, Anne will view the selection of Dana as equitable. However, if Anne is chosen because she is the daughter-in-law of the hospital director, Dana will believe an injustice has been committed. Groups generally agree within themselves on status criteria; hence, there is usually high concurrence in group rankings of individuals. Managers who occupy central positions in their social networks are typically seen as higher in status by their subordinates, and this position translates into greater influence over the group’s functioning. 48 However, individuals can find themselves in conflicts when they move between groups whose status criteria are different, or when they join groups whose members have heterogeneous backgrounds. Business executives may use personal income or the growth rate of their companies as determinants of status. Government bureaucrats may use the size of their budgets, and blue-collar workers years of seniority. When groups are heterogeneous or when heterogeneous groups must be interdependent, status differences may initiate conflict as the group attempts to reconcile the differing hierarchies. As we’ll see in Chapter 10 , this can be a problem when manage- ment creates teams of employees from varied functions. Do cultural differences affect status and the criteria that create it? The answer is a resounding “yes.” 49 The French are highly status conscious. Latin Americans and Asians derive status from family position and formal roles in organizations. In the United States and Australia, status is more often conferred for accomplishments. 50 Group Property 4: Size Does the size of a group affect the group’s overall behavior? Yes, but the effect depends on what dependent variables we look at. Smaller groups are faster at completing tasks than larger ones, and individuals perform better in smaller 5 Show how group size affects group performance. Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 287 groups. 51 However, in problem solving, large groups consistently get better marks than their smaller counterparts. 52 Translating these results into specific numbers is a bit more hazardous, but groups with a dozen or more members are good for gaining diverse input. So if the goal is fact-finding, larger groups should be more effective. Smaller groups of about seven members are better at doing something productive with that input. One of the most important findings about the size of a group concerns social loafing , the tendency for individuals to expend less effort when working collectively than alone. 53 It directly challenges the assumption that the produc- tivity of the group as a whole should at least equal the sum of the productivity of the individuals in it. Does team spirit spur individual effort and enhance the group’s overall pro- ductivity? In the late 1920s, German psychologist Max Ringelmann compared the results of individual and group performance on a rope-pulling task. 54 He expected that three people pulling together should exert three times as much pull on the rope as one person, and eight people eight times as much. But one person pulling on a rope alone exerted an average of 63 kilograms of force. In groups of three, the per-person force dropped to 53 kilograms. And in groups of eight, it fell to only 31 kilograms per person. Replications of Ringelmann’s research with similar tasks have generally sup- ported his findings. 55 Group performance increases with group size, but the addition of new members has diminishing returns on productivity. So more may be better in that total productivity of a group of four is greater than that of three, but the individual productivity of each member declines. What causes social loafing? It may be a belief that others in the group are not carrying their fair share. If you see others as lazy or inept, you can reestab- lish equity by reducing your effort. Another explanation is the dispersion of re- sponsibility. Because group results cannot be attributed to any single person, the relationship between an individual’s input and the group’s output is clouded. Individuals may then be tempted to become free riders and coast on the group’s efforts. The implications for OB are significant. When managers use collective work situations to enhance morale and teamwork, they must also be able to iden- tify individual efforts. Otherwise, they must weigh the potential losses in produc- tivity from using groups against the possible gains in worker satisfaction. 56 Social loafing appears to have a Western bias. It’s consistent with individu- alistic cultures, such as the United States and Canada, that are dominated by self-interest. It is not consistent with collective societies, in which individuals are motivated by in-group goals. In studies comparing U.S. employees with employ- ees from the People’s Republic of China and Israel (both collectivist societies), the Chinese and Israelis showed no propensity to engage in social loafing and actually performed better in a group than alone. There are several ways to prevent social loafing: (1) Set group goals, so the group has a common purpose to strive toward; (2) increase intergroup competition, which again focuses on the shared outcome; (3) engage in peer evaluation so each person evaluates each other person’s contribution; (4) select members who have high motivation and prefer to work in groups, and (5) if possible, base group rewards in part on each member’s unique contributions. 57 Although no magic bullet will prevent social loafing in all cases, these steps should help minimize its effect. social loafing The tendency for individuals to expend less effort when working collectively than when working individually. 288 CHAPTER 9 Foundations of Group Behavior Group Property 5: Cohesiveness Groups differ in their cohesiveness —the degree to which members are attracted to each other and motivated to stay in the group. Some work groups are cohesive because the members have spent a great deal of time together, or the group’s small size facilitates high interaction, or external threats have brought members close together. Cohesiveness affects group productivity. 58 Studies consistently show that the relationship between cohesiveness and productivity depends on the group’s performance-related norms. 59 If norms for quality, output, and cooperation with outsiders, for instance, are high, a cohesive group will be more productive than will a less cohesive group. But if cohesiveness is high and performance norms are low, productivity will be low. If cohesiveness is low and performance norms are high, productivity increases, but less than in the high-cohesiveness/ high-norms situation. When cohesiveness and performance-related norms are both low, productivity tends to fall into the low-to-moderate range. These conclusions are summarized in Exhibit 9-6 . What can you do to encourage group cohesiveness? (1) Make the group smaller, (2) encourage agreement with group goals, (3) increase the time members spend together, (4) increase the group’s status and the perceived difficulty of attaining membership, (5) stimulate competition with other groups, (6) give rewards to the group rather than to individual members, and (7) physically isolate the group. 60 Group Property 6: Diversity The final property of groups we consider is diversity in the group’s member- ship, the degree to which members of the group are similar to, or different from, one another. A great deal of research is being done on how diversity influences group performance. Some looks at cultural diversity and some at racial, gender, and other differences. Overall, studies identify both benefits and costs from group diversity. Diversity appears to increase group conflict, especially in the early stages of a group’s tenure, which often lowers group morale and raises dropout rates. One study compared groups that were culturally diverse (composed of people from different countries) and homogeneous (composed of people from the 6 Contrast the benefits and disadvantages of cohesive groups. Social loafing is the tendency for individuals to put forth less of an effort when working in a group than when working alone. Studies indicate that the employees shown here producing Spice handsets at a factory in China do not show any propensity to engage in social loaf- ing. In collectivist societies such as China and Israel, employees actually prefer working in a group and are motivated by in-group goals. But in individualistic societies such as the United States and Canada that are dominated by self-interest, social loafing is more likely. So ur ce : S tr /S tr in ge r/ G et ty Im ag es . Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity 289 same country). On a wilderness survival exercise (not unlike the Experiential Exercise at the end of this chapter), the groups performed equally well, but the diverse groups were less satisfied with their groups, were less cohesive, and had more conflict. 61 Another study examined the effect of differences in ten- ure on the performance of 67 engineering research and development groups. 62 When most people had roughly the same level of tenure, performance was high, but as tenure diversity increased, performance dropped off. There was an important qualifier: higher levels of tenure diversity were not related to lower performance for groups when there were effective team-oriented human resources practices. Teams in which members’ values or opinions differ tend cohesiveness The degree to which group members are attracted to each other and are motivated to stay in the group. diversity The extent to which members of a group are similar to, or different from, one another. Working with Others Is Often IrritatingOB Poll Grumpy or moody group members Slow computers Small talk/ gossip in office Use of office jargon-speak Group members talking loudly on phone What causes annoyance and stress when working in groups? 40 35 30 25 20 15 10 5 0 37% 36% 19% 18% 18% National sample of 1,836 adults working in an office in the United Kingdom. Source: “The Office--An Annoying Workplace,” Opinium Research LLP (February 24, 2010), downloaded May 26, 2011 from http://news. opinium.co.uk . Reprinted with permission from The Gallup Organization. Relationship Between Group Cohesiveness, Performance Norms, and Productivity Exhibit 9-6 High productivity High High Low Cohesiveness P e rf o rm a n ce N o rm s w Low productivity LowLow Moderate productivity Moderate to low productivity http://news.opinium.co.uk http://news.opinium.co.uk 290 CHAPTER 9 Foundations of Group Behavior to experience more conflict, but leaders who can get the group to focus on the task at hand and encourage group learning are able to reduce these conflicts and enhance discussion of group issues. 63 It seems diversity can be bad for per- formance even in creative teams, but appropriate organizational support and leadership might offset these problems. However, culturally and demographically diverse groups may perform better over time—if they can get over their initial conflicts. Why might this be so? Surface-level diversity—in observable characteristics such as national origin, race, and gender—alerts people to possible deep-level diversity—in underlying attitudes, values, and opinions. One researcher argues, “The mere presence of diversity you can see, such as a person’s race or gender, actually cues a team that there’s likely to be differences of opinion.” 64 Although those differences can lead to conflict, they also provide an opportunity to solve problems in unique ways. One study of jury behavior found diverse juries more likely to deliberate lon- ger, share more information, and make fewer factual errors when discussing evi- dence. Two studies of MBA student groups found surface-level diversity led to greater openness even without deep-level diversity. Here, surface-level diversity may subconsciously cue team members to be more open-minded in their views. 65 The impact of diversity on groups is mixed. It is difficult to be in a diverse group in the short term. However, if members can weather their differences, over time diversity may help them be more open-minded and creative and to do better. But even positive effects are unlikely to be especially strong. As one review stated, “The business case (in terms of demonstrable financial results) for diversity remains hard to support based on the extant research.” 66 The belief—characterized by juries—that two heads are better than one has long been accepted as a basic component of the U.S. legal system and those of many other countries. Today, many decisions in organizations are made by groups, teams, or committees. 67 Groups versus the Individual Decision-making groups may be widely used in organizations, but are group decisions preferable to those made by an individual alone? The answer depends on a number of factors. Let’s begin by looking at the strengths and weaknesses of group decision making. 68 Strengths of Group Decision Making Groups generate more complete informa- tion and knowledge. By aggregating the resources of several individuals, groups bring more input as well as heterogeneity into the decision process. They offer increased diversity of views. This opens up the opportunity to consider more approaches and alternatives. Finally, groups lead to increased acceptance of a solu- tion. Group members who participated in making a decision are more likely to enthusiastically support and encourage others to accept it. Weaknesses of Group Decision Making Group decisions are time consuming because groups typically take more time to reach a solution. There are conformity pressures. The desire by group members to be accepted and considered an asset to the group can squash any overt disagreement. Group discussion can be dominated 7 Understand the implications of diversity for group effectiveness. Group Decision Making Group Decision Making 291 by one or a few members. If they’re low- and medium-ability members, the group’s overall effectiveness will suffer. Finally, group decisions suffer from ambiguous re- sponsibility. In an individual decision, it’s clear who is accountable for the final outcome. In a group decision, the responsibility of any single member is diluted. Effectiveness and Efficiency Whether groups are more effective than individ- uals depends on how you define effectiveness. Group decisions are generally more accurate than the decisions of the average individual in a group, but less accurate than the judgments of the most accurate. 69 In terms of speed, individu- als are superior. If creativity is important, groups tend to be more effective. And if effectiveness means the degree of acceptance the final solution achieves, the nod again goes to the group. 70 But we cannot consider effectiveness without also assessing efficiency. With few exceptions, group decision making consumes more work hours than an indi- vidual tackling the same problem alone. The exceptions tend to be the instances in which, to achieve comparable quantities of diverse input, the single decision maker must spend a great deal of time reviewing files and talking to other people. In deciding whether to use groups, then, managers must assess whether increases in effectiveness are more than enough to offset the reductions in efficiency. Summary In summary, groups are an excellent vehicle for performing many steps in the decision-making process and offer both breadth and depth of input for information gathering. If group members have diverse backgrounds, the alternatives generated should be more extensive and the analysis more critical. A s more organizations become global entities, the need for work groups that can col- laborate across national boundaries grows. Advances in technology that have accompanied globalization lead us to a new type of working relation- ship: global virtual teams . These are groups of individuals working together across national boundaries through electronic communication media. Engineers in Germany might commu- nicate with production teams in China to produce components for assembly and marketing by team members in Canada. Although some global teams occasionally meet in person, geo- graphically dispersed managers often must collaborate virtually. Virtual global teams have certain liabilities. Traditional teams offer mul- tiple opportunities to work closely with colleagues and develop close personal relationships that can facilitate perfor- mance. To be effective, virtual teams need to facilitate these relationships despite numerous barriers. It’s easy to misinterpret messages without cues like facial expression and tone of voice. These problems can be even more pronounced among individuals with different cultural backgrounds. So how can virtual global teams be more effective? Alcoa found it was im- portant to develop regular meeting rou- tines to facilitate collaboration. Groups were also encouraged to review the progress of their own and other teams to identify “best practices” that worked in a variety of situations. Not surprisingly, higher levels of communi- cation and cohesion among members of global virtual teams are associated with shared performance goals, which in turn lead to higher performance. More surprisingly, leaders’ efforts to build personal, inspirational relation- ships can help even teams that don’t meet face to face. Although global virtual teams face many challenges, companies that implement them effectively can real- ize tremendous rewards through the diverse knowledge they gain. Sources: Based on A. Joshi, M. B. Lazarova, and H. Liao, “Getting Everyone on Board: The Role of Inspirational Leadership in Geographically Dispersed Teams,” Organization Science 20, no. 1 (2009), pp. 240–252; J. Cordery, C. Soo, B. Kirkman, B. Rosen, and J. Mathieu, “Leading Parallel Global Virtual Teams: Lessons from Alcoa,” Organizational Dynamics 38, no. 3 (2009), pp. 204–216; and R. L. Algesheimer, U. M. Dholakia, and C. Gurau, “Virtual Team Performance in a Highly Competitive Environment,” Group and Organization Management 36, no. 2 (2011), pp. 161–190. glOBalization! Forming International Teams in a Virtual World 292 CHAPTER 9 Foundations of Group Behavior When the final solution is agreed on, there are more people in a group decision to support and implement it. These pluses, however, can be more than offset by the time consumed by group decisions, the internal conflicts they create, and the pressures they generate toward conformity. In some cases, therefore, we can expect individuals to make better decisions than groups. Groupthink and Groupshift Two by-products of group decision making have the potential to affect a group’s ability to appraise alternatives objectively and arrive at high-quality solutions. The first, called groupthink , relates to norms. It describes situations in which group pressures for conformity deter the group from critically appraising un- usual, minority, or unpopular views. Groupthink is a disease that attacks many groups and can dramatically hinder their performance. The second phenom- enon is groupshift , which describes the way group members tend to exaggerate the initial positions they hold when discussing a given set of alternatives and arriving at a solution. In some situations, caution dominates and there is a con- servative shift, while in other situations groups tend toward a risky shift. Let’s look at each phenomenon in detail. Groupthink Have you ever felt like speaking up in a meeting, a classroom, or an informal group but decided against it? One reason may have been shyness. Or you may have been a victim of groupthink, which occurs when the norm for T his statement is true. But first let’s review what in-group bias means. When they form groups, members characteristically exhibit an ingroup bias —they tend to favor members of their group regardless of whether they deserve it. Race, gen- der, and nationality are commonly investigated causes of ingroup bias. However, nearly any identity can acti- vate ingroup bias, even when individu- als are randomly assigned to groups and given a group identity (“lions,” “bears,” and so on). Ingroup bias happens because when group identity is salient to people— which it often is—they tend to sim- plify; they see themselves as more similar to other group members, and less similar to outgroup members, than is really the case. Recent research suggests that Asians exhibit less ingroup bias than Americans. One study asked Chinese students at Peking University and U.S. students at University of California– Berkeley to describe the degree to which a set of 16 favorable–unfavorable characteristics (intelligent/foolish, loyal/undependable) described the family member they were closest to. Chinese students described their clos- est family members significantly less favorably than did the U.S. students. In another study, when Chinese and Americans were asked to evaluate cultural stereotypes of Chinese and Americans in general (intelligent, hard-working, leaderlike, and so on), Americans were more likely to favor their group than were the Chinese. Why do Asians appear to demon- strate less ingroup bias? One likely explanation is that Asians score higher on dialecticism —the tendency to be more comfortable with contradiction (yin and yang), change (nothing is per- manent), and holism (everything has both good and bad). As one Chinese student noted, “If you ask me about Chinese politics, the culture, the peo- ple, I can go on for hours talking about everything that’s negative. But I still love that place.” This tendency may help Asians see both the good and bad sides of their own ingroups. Sources: C. Ma-Kellams, J. Spencer- Rodgers, and K. Peng, “I Am Against Us? Unpacking Cultural Differences in Ingroup Favoritism Via Dialecticism,” Personality and Social Psychology Bulletin 37, no. 1 (2011), pp. 15–27; A. E. Giannakakis and I. Fritsche, “Social Identities, Group Norms, and Threat: On the Malleability of Ingroup Bias,” Personality and Social Psychology Bulletin 37, no. 1 (2011), pp. 82–93; and T. E. DiDonato, J. Ullrich, and J. I. Krueger, “Social Perception as Induction and Inference: An Integrative Model of Intergroup Differentiation, Ingroup Favoritism, and Differential Accuracy,” Journal of Personality and Social Psychology 100, no. 1 (2011), pp. 66–83. Myth or Science? “Asians Have Less Ingroup Bias Than Americans” Group Decision Making 293 consensus overrides the realistic appraisal of alternative courses and the full expres- sion of deviant, minority, or unpopular views. The individual’s mental efficiency, reality testing, and moral judgment deteriorate as a result of group pressures. 71 We have all seen the symptoms of groupthink: 1. Group members rationalize any resistance to the assumptions they’ve made. No matter how strongly the evidence may contradict their basic assump- tions, they behave so as to reinforce them. 2. Members apply direct pressures on those who momentarily express doubts about any of the group’s shared views, or who question the validity of argu- ments supporting the alternative favored by the majority. 3. Members who have doubts or differing points of view seek to avoid deviat- ing from what appears to be group consensus by keeping silent about mis- givings and even minimizing to themselves the importance of their doubts. 4. There is an illusion of unanimity. If someone doesn’t speak, it’s assumed he or she is in full accord. Abstention becomes a “yes” vote. 72 Groupthink appears closely aligned with the conclusions Solomon Asch drew in his experiments with a lone dissenter. Individuals who hold a position different from that of the dominant majority are under pressure to suppress, withhold, or modify their true feelings and beliefs. As members of a group, we find it more pleasant to be in agreement—to be a positive part of the group— than to be a disruptive force, even if disruption is necessary to improve the effectiveness of the group’s decisions. Groups that are more focused on perfor- mance than on learning are especially likely to fall victim to groupthink and to suppress the opinions of those who do not agree with the majority. 73 Does groupthink attack all groups? No. It seems to occur most often when there is a clear group identity, when members hold a positive image of their group that they want to protect, and when the group perceives a collective threat to this positive image. 74 So groupthink is not a dissenter-suppression mechanism as much as it’s a means for a group to protect its positive image. One study also showed that those influenced by groupthink were more confident about their course of action early on. 75 Groups that believe too strongly in the correctness of their course of action are more likely to suppress dissent and encourage confor- mity than are groups that are more skeptical about their course of action. What can managers do to minimize groupthink? 76 First, they can monitor group size. People grow more intimidated and hesitant as group size increases, and although there is no magic number that will eliminate groupthink, indi- viduals are likely to feel less personal responsibility when groups get larger than about 10 members. Managers should also encourage group leaders to play an impartial role. Leaders should actively seek input from all members and avoid expressing their own opinions, especially in the early stages of deliberation. In addition, managers should appoint one group member to play the role of dev- il’s advocate, overtly challenging the majority position and offering divergent perspectives. Still another suggestion is to use exercises that stimulate active discussion of diverse alternatives without threatening the group or intensifying identity protection. Have group members delay discussion of possible gains so they can first talk about the dangers or risks inherent in a decision. Requiring groupthink A phenomenon in which the norm for consensus overrides the realistic appraisal of alternative courses of action. groupshift A change between a group’s decision and an individual decision that a member within the group would make; the shift can be toward either conservatism or greater risk but it generally is toward a more extreme version of the group’s original position. 294 CHAPTER 9 Foundations of Group Behavior members to first focus on the negatives of an alternative makes the group less likely to stifle dissenting views and more likely to gain an objective evaluation. Group Shift or Group Polarization There are differences between group deci- sions and the individual decisions of group members. 77 What appears to happen in groups is that the discussion leads members toward a more extreme view of the position they already held. Conservatives become more cautious, and more aggressive types take on more risk. The group discussion tends to exaggerate the initial position of the group. We can view group polarization as a special case of groupthink. The group’s decision reflects the dominant decision-making norm that develops during dis- cussion. Whether the shift in the group’s decision is toward greater caution or more risk depends on the dominant pre-discussion norm. The shift toward polarization has generated several explanations. 78 It’s been argued, for instance, that discussion makes the members more comfortable with each other and, thus, more willing to express extreme versions of their original positions. Another argument is that the group diffuses responsibility. Group decisions free any single member from accountability for the group’s final choice, so a more extreme position can be taken. It’s also likely that people take on extreme positions because they want to demonstrate how different they are from the outgroup. 79 People on the fringes of political or social movements take on ever-more extreme positions just to prove they are really committed to the cause, whereas those who are more cautious tend to take exceptionally moderate positions to demonstrate how reasonable they are. So how should you use the findings on groupshift? Recognize that group decisions exaggerate the initial position of the individual members, that the shift has been shown more often to be toward greater risk, and that which way a group will shift is a function of the members’ pre-discussion inclinations. W e’ve all experienced peer pressure, and it can be hard to behave differently from your friends and co-workers. As more work in organizations is performed in groups and teams, the possibilities and pitfalls of such pressure have become an increasingly important ethical issue for managers. Peer pressure can be a positive force in some ways. If one member of a group or team is not performing to full potential, pressure from co- workers can encourage better perfor- mance. A team with a norm toward behaving ethically might even use peer pressure directly to minimize negative behavior. Peer pressure can increase all sorts of ethical behavior ranging from donating to charity to working for the Salvation Army. However, as the chapter has shown, peer pressure can also be more de- structive. It can create a feeling of exclu- sion in those who do not go along with group norms and can be very stressful and hurtful for those who don’t see eye-to-eye with the rest of the group. Peer pressure itself might become an unethical practice that unduly influ- ences workers’ behavior and thoughts. So should you use group peer pres- sure? It depends on what type and why. If you are using peer pressure to encourage individuals to work toward team goals and behave consistently with organizational values, it can enhance ethical performance. But it should em- phasize acceptance and rewarding of positive behavior, rather than rejection and exclusion, as a means of getting ev- eryone to behave consistently in a group. Sources: Based on: A. Verghese, “The Healing Power of Peer Pressure,” Newsweek (March 14, 2011), www .newsweek.com ; T. Rosenberg, Join the Club: How Peer Pressure Can Transform the World (New York: W. W. Norton & Company, 2011); and J. Meer, “Brother, Can You Spare a Dime? Peer Pressure in Charitable Solicitation,” Journal of Public Economics 95, no. 7–8 (2011), pp. 926–941. An Ethical Choice Should You Use Group Peer Pressure? www.newsweek.com www.newsweek.com Group Decision Making 295 We now turn to the techniques by which groups make decisions. These reduce some of the dysfunctional aspects of group decision making. Group Decision-Making Techniques The most common form of group decision making takes place in interacting groups . Members meet face to face and rely on both verbal and nonverbal interaction to communicate. But as our discussion of groupthink demonstrated, in- teracting groups often censor themselves and pressure individual members toward conformity of opinion. Brainstorming, the nominal group technique, and elec- tronic meetings can reduce problems inherent in the traditional interacting group. Brainstorming can overcome the pressures for conformity that dampen creativity 80 by encouraging any and all alternatives while withholding criticism. In a typical brainstorming session, a half-dozen to a dozen people sit around a table. The group leader states the problem in a clear manner so all participants understand. Members then freewheel as many alternatives as they can in a given length of time. To encourage members to “think the unusual,” no criticism is allowed, even of the most bizarre suggestions, and all ideas are recorded for later discussion and analysis. Brainstorming may indeed generate ideas—but not in a very efficient man- ner. Research consistently shows individuals working alone generate more ideas than a group in a brainstorming session. One reason for this is “production blocking.” When people are generating ideas in a group, many are talking at once, which blocks the thought process and eventually impedes the sharing of ideas. 81 The following two techniques go further than brainstorming by helping groups arrive at a preferred solution. 82 The nominal group technique restricts discussion or interpersonal commu- nication during the decision-making process, hence the term nominal. Group members are all physically present, as in a traditional committee meeting, but they operate independently. Specifically, a problem is presented and then the group takes the following steps: 1. Before any discussion takes place, each member independently writes down ideas on the problem. 2. After this silent period, each member presents one idea to the group. No discussion takes place until all ideas have been presented and recorded. 3. The group discusses the ideas for clarity and evaluates them. 4. Each group member silently and independently rank-orders the ideas. The idea with the highest aggregate ranking determines the final decision. The chief advantage of the nominal group technique is that it permits a group to meet formally but does not restrict independent thinking, as does an interacting group. Research generally shows nominal groups outperform brain- storming groups. 83 The most recent approach to group decision making blends the nominal group technique with sophisticated computer technology. 84 It’s called a computer- assisted group, or an electronic meeting . Once the required technology is in interacting groups Typical groups in which members interact with each other face to face. nominal group technique A group decision-making method in which individual members meet face to face to pool their judgments in a systematic but independent fashion. electronic meeting A meeting in which members interact on computers, allowing for anonymity of comments and aggregation of votes. 8 Contrast the strengths and weaknesses of group decision making. brainstorming An idea-generation process that specifically encourages any and all alternatives while withholding any criticism of those alternatives. 296 CHAPTER 9 Foundations of Group Behavior place, the concept is simple. Up to 50 people sit around a horseshoe-shaped table, empty except for a series of networked laptops. Issues are presented to them, and they type their responses into their computers. These individ- ual but anonymous comments, as well as aggregate votes, are displayed on a projection screen. This technique also allows people to be brutally honest without penalty. And it’s fast because chitchat is eliminated, discussions don’t digress, and many participants can “talk” at once without stepping on one another’s toes. Early evidence, however, suggests electronic meetings don’t achieve most of their proposed benefits. They actually lead to decreased group effectiveness, require more time to complete tasks, and result in reduced mem- ber satisfaction compared with face-to-face groups. 85 Nevertheless, current en- thusiasm for computer-mediated communications suggests this technology is here to stay and is likely to increase in popularity in the future. Each of the four group-decision techniques has its own set of strengths and weaknesses. The choice depends on what criteria you want to emphasize and the cost–benefit trade-off. As Exhibit 9-7 indicates, an interacting group is good for achieving commitment to a solution, brainstorming develops group cohesiveness, the nominal group technique is an inexpensive means for generating a large number of ideas, and electronic meetings minimize social pressures and conflicts. Evaluating Group Effectiveness Exhibit 9-7 Type of Group Effectiveness Criteria Interacting Brainstorming Nominal Electronic Number and quality of ideas Low Moderate High High Social pressure High Low Moderate Low Money costs Low Low Low High Speed Moderate Moderate Moderate Moderate Task orientation Low High High High Potential for interpersonal conflict High Low Moderate Low Commitment to solution High Not applicable Moderate Moderate Development of group cohesiveness High High Moderate Low MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Several implications can be drawn from our discussion of groups. The next chapter will explore several of these in greater depth. ● Role perception and an employee’s performance evaluation are positively related. 86 The degree of congruence between the employee’s and the boss’s perception of the employee’s job influences the degree to which the boss will judge that employee effective. An employee whose role perception fulfills the boss’s role expectations will receive a higher performance evaluation. Summary and Implications for Managers 9 Compare the effectiveness of interacting, brainstorming, nominal, and electronic meeting groups. www.mymanagementlab.com Questions for Review 297 ● Norms control behavior by establishing standards of right and wrong. The norms of a given group can help explain members’ behaviors for managers. When norms support high output, managers can expect mark- edly higher individual performance than when they aim to restrict out- put. Norms that support antisocial behavior increase the likelihood that individuals will engage in deviant workplace activities. ● Status inequities create frustration and can adversely influence produc- tivity and willingness to remain with an organization. Incongruence is likely to reduce motivation and motivate a search for ways to bring about fairness (say, by taking another job). Because lower-status people tend to participate less in group discussions, groups with high status differences are likely to inhibit input from lower-status members and reduce their potential. ● The impact of size on a group’s performance depends on the type of task. Larger groups are more effective at fact-finding activities, smaller groups at action-taking tasks. Our knowledge of social loafing suggests that man- agers using larger groups should also provide measures of individual performance. ● Cohesiveness can influence a group’s level of productivity or not, depend- ing on the group’s performance-related norms. ● Diversity appears to have a mixed impact on group performance, with some studies suggesting that diversity can help performance and others suggesting it can hurt it. It appears the situation makes a difference in whether positive or negative results predominate. ● High congruence between a boss’s and an employee’s perception of the employee’s job correlates strongly with high employee satisfac- tion. 87 Role conflict is associated with job-induced tension and job dissatisfaction. 88 ● Most people prefer to communicate with others at their own status level or a higher one rather than with those below them. 89 As a result, we should expect satisfaction to be greater among employees whose job minimizes interaction with individuals lower in status than themselves. ● The group size–satisfaction relationship is what we would intuitively expect: larger groups are associated with lower satisfaction. 90 As size increases, opportunities for participation and social interaction decrease, as does the ability of members to identify with the group’s accomplish- ments. At the same time, having more members also prompts dissension, conflict, and the formation of subgroups, which all act to make the group a less pleasant entity of which to be a part. 1 Define group. What are the different types of groups? 2 What are the five stages of group development? 3 Do role requirements change in different situations? If so, how? 4 How do group norms and status influence an individual’s behavior? 5 How does group size affect group performance? 6 What are the advantages and limitations of cohesive groups? 7 What are the implications of diversity for group effectiveness? 8 What are the strengths and weaknesses of group (versus individual) decision making? 9 How effective are interacting, brainstorming, nominal, and electronic meeting groups? QUESTIONS FOR REVIEW 298 CHAPTER 9 Foundations of Group Behavior Affinity Groups Fuel Business Success POINT COUNTERPOINT E RGs may sound like a good idea with few drawbacks, but that’s not the case. They have some real problems, few of which you’ll hear about in the rah-rah press generated about them, much of it put forth by companies’ PR departments. First, there’s cost. These affinity groups can cost a lot of money. One study estimated that the budget for affinity groups was $7,203 for each 100 group members. That doesn’t even in- clude the cost of technology, facilities, and staff support (on av- erage, about 1.5 staff employees for each group). Costlier still is the time ERG members spend on their groups, coaching, train- ing, meeting, and planning events oriented around a very small slice of the company’s workforce—on average, only 8 percent of an organization’s employees. In these competitive times, that doesn’t sound like the most efficient and fair use of an organiza- tion’s resources. Then there are the legal issues. Affinity groups have been subject to significant legal action, often by excluded employees. Most employers also don’t realize that ERGs can be viewed as “sweetheart unions” by the National Labor Relations Board. “The National Labor Relations Act controls collective actions between employers and employees whether a union is present or not,” says one employment law expert. Most companies re- sist unions trying to organize their employees. Why do they form them by their own hand? Organizations should do everything they can to encourage all employees to feel they are included and heard. Networking is a wonderful way to do that. But organizations that endorse, establish, and fund segmented groups that exclude some em- ployees are asking for trouble. The best way to fight feelings of isolation is by drawing employees in and giving them a voice. It’s not by slicing the organizations into groups, including some and excluding others. E mployee resource groups (ERGs), also known as affinity groups, have become part of nearly all large organiza- tions’ cultures. ERGs are voluntary networking groups that provide forums for employees to gather socially and share ideas outside their particular business units. Many ERGs are organized around surface characteristics such as gender, age, disability, sexual orientation, race, and ethnic background. However, they can be formed around any issue. The rationale for ERGs is obvious. Large organizations often are very decentralized, leading many employees to feel discon- nected and isolated. That’s especially true for employees who are or feel different. So large companies such as Best Buy, Ford, Intuit, Prudential, Wells Fargo, Johnson & Johnson, and Macy’s have found that their ERGs lead to greater feelings of inclusiveness. When employees of a large organization realize they’re hardly alone, ERGs are a great way to foster commit- ment by joining employees to others in the organization, often in a way that’s independent of their work unit. Why not tie employ- ees to one another in as many ways as possible? Finally, many ERGs solve organizational problems in unique ways. Cisco’s Asian Affinity Network played a key role in forging a bond between Cisco and Shui On Group, the largest publicly traded real estate company in China, by proposing that Cisco hold a business development event during a Silicon Valley visit by Shui On Group’s founder and chairman. Many thought the decline in the economy and the growth of social networking sites would spell the end for ERGs. However, it seems the opposite is true. ERGs are growing. When a com- pany like Northrop Grumman has 125,000 employees spread across 25 countries and all 50 states, it needs a way to join them together. That’s exactly what ERGs do best. ERGs make great business sense. Ford executive Rosalind Cox says of Ford’s ERGs: “At the end of the day, we want to build a diverse and inclusive culture that drives business results.” Sources: R. R. Hastings, “Employee Resource Groups Drive Business Results,” HR Magazine (February 15, 2011), downloaded June 10, 2011, from www.shrm.org/ ; R. R. Hastings, “Employee Resource Groups Can Create Labor Issues, ” HR Magazine (June 25, 2009), downloaded June 10, 2011, from www.shrm.org/ ; and “Affinity and Networking Groups,” The New York Times , downloaded June 11, 2011 from www.nytimes.com/ . www.shrm.org/ www.shrm.org/ www.nytimes.com/ Experiential Exercise 299 EXPERIENTIAL EXERCISE Wilderness Survival You are a member of a hiking party. After reaching base camp on the first day, you decide to take a quick sunset hike by yourself. After a few exhilarating miles, you decide to return to camp. On your way back, you realize you are lost. You have shouted for help, to no avail. It is now dark. And getting cold. Your Task Without communicating with anyone else in your group, read the following scenarios and choose the best answer. Keep track of your answers on a sheet of paper. You have 10 minutes to answer the 10 questions. 1. The first thing you decide to do is to build a fire. However, you have no matches, so you use the bow- and-drill method. What is the bow-and-drill method? a. A dry, soft stick is rubbed between the hands against a board of supple green wood. b. A soft green stick is rubbed between the hands against a hardwood board. c. A straight stick of wood is quickly rubbed back and forth against a dead tree. d. Two sticks (one being the bow, the other the drill) are struck to create a spark. 2. It occurs to you that you can also use the fire as a distress signal. How do you form the international distress signal with fire? a. 2 fires b. 4 fires in a square c. 4 fires in a cross d. 3 fires in a line 3. You are very thirsty. You go to a nearby stream and collect some water in the small metal cup you have in your backpack. How long should you boil the water? a. 15 minutes b. A few seconds c. 1 hour d. It depends on the altitude. 4. You are very hungry, so you decide to eat what appear to be edible berries. When performing the universal edibility test, what should you do? a. Do not eat for 2 hours before the test. b. If the plant stings your lip, confirm the sting by holding it under your tongue for 15 minutes. c. If nothing bad has happened 2 hours after diges- tion, eat half a cup of the plant and wait again. d. Separate the plant into its basic components and eat each component, one at a time. 5. Next, you decide to build a shelter for the evening. In selecting a site, what do you not have to consider? a. It must contain material to make the type of shelter you need. b. It must be free of insects, reptiles, and poisonous plants. c. It must be large enough and level enough for you to lie down comfortably. d. It must be on a hill so you can signal rescuers and keep an eye on your surroundings. 6. In the shelter that you built, you notice a spider. You heard from a fellow hiker that black widow spiders populate the area. How do you identify a black widow spider? a. Its head and abdomen are black; its thorax is red. b. It is attracted to light. c. It runs away from light. d. It is a dark spider with a red or orange marking on the female’s abdomen. 7. After getting some sleep, you notice that the night sky has cleared, so you decide to try to find your way back to base camp. You believe you should travel north and can use the North Star for navigation. How do you locate the North Star? a. Hold your right hand up as far as you can and look between your index and middle fingers. b. Find Sirius and look 60 degrees above it and to the right. c. Look for the Big Dipper and follow the line created by its cup end. d. Follow the line of Orion’s belt. 8. You come across a fast-moving stream. What is the best way to cross it? a. Find a spot downstream from a sandbar, where the water will be calmer. b. Build a bridge. c. Find a rocky area, as the water will be shallow and you will have hand- and footholds. d. Find a level stretch where it breaks into a few channels. 9. After walking for about an hour, you feel several spiders in your clothes. You don’t feel any pain, but you know some spider bites are painless. Which of these spider bites is painless? a. Black widow b. Brown recluse c. Wolf spider d. Harvestman (daddy longlegs) 10. You decide to eat some insects. Which insects should you avoid? a. Adults that sting or bite b. Caterpillars and insects that have a pungent odor c. Hairy or brightly colored ones d. All the above Group Task Break into groups of five or six people. Now imagine that your whole group is lost. Answer each question as a group, employing a consensus approach to reach each 300 CHAPTER 9 Foundations of Group Behavior decision. Once the group comes to an agreement, write down the decision on the same sheet of paper that you used for your individual answers. You will have approxi- mately 20 minutes for the group task. Scoring Your Answers Your instructor will provide you with the correct answers, which are based on expert judgments in these situations. Once you have received the answers, calculate (A) your individual score; (B) your group’s score; (C) the average individual score in the group; and (D) the best individual score in the group. Write these down and consult with your group to ensure that these scores are accurate. A. Your individual score ______________ B. Your group’s score ______________ C. Average individual score in group ______________ D. Best individual score in group ______________ Discussion Questions 1. How did your group (B) perform relative to yourself (A)? 2. How did your group (B) perform relative to the average individual score in the group (C)? 3. How did your group (B) perform relative to the best individual score in the group (D)? 4. Compare your results with those of other groups. Did some groups do a better job of outperforming individuals than others? 5. What do these results tell you about the effectiveness of group decision making? 6. What can groups do to make group decision making more effective? ETHICAL DILEMMA Is Social Loafing Shirking? As you now know, social loafing is one disadvantage of working in groups. Regardless of the type of task—from games of Tug of War to working on a group projects— research suggests that when working in a group, most indi- viduals contribute less than if they were working on their own. We might call those who do social loafing “shirkers” because they are not living up to their responsibilities as group members. Most of us have experienced social loafing, or shirking, in groups. And we may even admit to times when we shirked ourselves. We discussed earlier in this chapter some ways of discouraging social loafing, such as limiting group size, holding individuals responsible for their contributions, set- ting group goals, and providing “hybrid” incentives that re- ward both individual and group performance. While these tactics may be effective, in our experience many students simply work around shirkers. “We just did it ourselves—it was easier that way,” says one group member. Questions 1. If group members end up “working around” shirkers, do you think this information should be communicated to the instructor so that each indi- vidual’s contribution to the project is judged more fairly? If so, does the group have an ethical respon- sibility to communicate this to the shirking group member? 2. Do you think social loafing is always shirking (failing to live up to one’s responsibilities)? Is social loafing always unethical? Why or why not? 3. Social loafing has been found to be higher in Western, more individualist, nations than in other countries. Do you think this means we should tolerate shirking on the part of U.S. students and workers to a greater degree than if it occurred with someone from Asia? CASE INCIDENT 1 Negative Aspects of Collaboration? Throughout this chapter we’ve discussed ways that groups can perform well or perform poorly, which leaves an over- riding question: are the negative aspects of collaboration so severe that we should avoid making decisions and work- ing in groups? Groups and teams need more time to process multiple piece of information and coordinate what they know. Daniel Kaheman and colleagues also warn that when committees and groups make recommendations, they’ve often “fallen in love” with a particular idea and are no longer thinking ration ally. These problems of heuristics and biases (introduced ear- lier in the book) can be magnified when a group of people are making a decision collectively. Look no further than the U.S. Congress in recent years to see instances in which a group decision-making process might lead to a worse out- come than if one consistent course of action were pursued. Case Incident 2 301 Sources: M. T. Hansen, “When Internal Collaboration Is Bad for Your Company,” Harvard Business Review (April 2009), pp. 82–88; D. Kahneman, D. Lovallo, and O. Sibony, “Before You Make that Big Decision,” Harvard Business Review (June 2011), pp. 50–60; and E. Klein, “Washington’s Suicide Pact” Newsweek (March 21, 2011), www.newsweek.com . CASE INCIDENT 2 Herd Behavior and the Housing Bubble (and Collapse) It is sometimes easy to forget that humans are not unlike other animals. Economist John Maynard Keynes recog- nized this when he commented, “Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits—a spontane- ous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.” Such “animal spirits” are particularly dangerous at the collective level. One animal’s decision to charge over a cliff is a tragedy for the animal, but it may also lead the entire herd over the cliff. You may be wondering how this is applicable to orga- nizational behavior. Consider the recent housing bubble and its subsequent and enduring collapse, or the dot-com implosion of the turn of the century. As housing prices rose ever higher, people discounted risk. Homeowners and investors rushed to buy properties because everyone else was doing it. Banks rushed to provide loans with little due diligence because, well, everyone else was doing it. “Banks didn’t want to get left behind. Everybody lowered their underwriting standards, no matter who they are,” said Regions Bank executive Michael Menk. “As bankers that’s who we are; we follow the herd.” Similar problems led to a run up in prices for internet-based companies during the early twenty-first century, and some wonder whether the current valuations of social networking sites are following a similar trend of overpricing. Yale Economist Robert Shiller called this “herd behav- ior” and cited research showing people often rely heavily on the behavior of groups in formulating decisions about what they should do. A recent study in behavioral finance confirmed herd behavior in investment decisions and showed that analysts were especially likely to follow other analysts’ behavior when they had private information that was less accurate or reliable. Questions 1. Some research suggests herd behavior increases as the size of the group increases. Why do you think this might be the case? 2. One researcher argues that “pack behavior” comes about because it has benefits. What is the upside of such behavior? 3. Shiller argues that herd behavior can go both ways: It explains the housing bubble, but it also explains the bust. As he notes, “Rational individuals become ex- cessively pessimistic as they see others bidding down home prices to abnormally low levels.” Do you agree with Shiller? 4. How might organizations combat the problems re- sulting from herd behavior? So what can managers do to minimize these biases? The problems of coordination and collaboration suggest that we should invoke group decision making only when it ap- pears that pooling information will lead to better decisions than individual decision making. Experts advise that de- cision makers receiving advice from teams should always ask whether the team’s recommendations contain any self- interested biases. It’s also important to see whether the team has developed an emotional attachment to one course of action or has succumbed to groupthink. Finally, run down a checklist of the heuristics and biases we’ve de- scribed earlier in the book to see whether the group might be prone to making these decision errors. Questions 1. Think about a time when you’ve been in a group that had to make a collective decision that didn’t turn out well. Can you identify any specific decision-making errors the team made? 2. In the situation you encountered, can you think of any strategies that would have helped make the group decision-making process more efficient and accurate? 3. Can you think of a type of decision that is probably better made by an individual than a group? What types of decisions need to be made by groups? Sources: Based on R. J. Shiller, “How a Bubble Stayed Under the Radar,” The New York Times (March 2, 2008), p. BU6; W. Hobson, “Reversal of Fortune,” Panama City News Herald (March 22, 2009), www.newsherald.com ; P. Leoni, “Pack Behavior,” Journal of Mathematical Psychology 52, no. 6 (2008), pp. 348–351; and J. Reiczigel, Z. Lang, L. Rózsa, and B. Tóthmérész, “Measures of Sociality: Two Different Views of Group Size,” Animal Behaviour 75, no. 2 (2008), pp. 715–721. www.newsweek.com www.newsherald.com 302 CHAPTER 9 Foundations of Group Behavior ENDNOTES 1. B. E. Ashforth and F. Mael, “Social Identity Theory and the Organization,” Academy of Management Review 14, no. 1 (1989), pp. 20–39; and M. A. Hogg and D. J. Terry, “Social Identity and Self-Categorization Processes in Organizational Contexts,” Academy of Management Review 25, no. 1 (2000), pp. 121–140. 2. M. A. Hogg and B. A. Mullin, “Joining Groups to Reduce Uncertainty: Subjective Uncertainty Reduction and Group Identification,” in D. Abrams and M. A. Hogg (eds.), Social Identity and Social Cognition (Maiden MA: Blackwell, 1999), pp. 249–279. 3. O. Yakushko, M. M. Davidson, and E. N. Williams, “Identity Salience Model: A Paradigm for Integrating Multiple Identities in Clinical Practice.” Psychotherapy 46, no. 2 (2009), pp. 180-192; and S. M. Toh and A. S. Denisi, “Host Country Nationals as Socializing Agents: A Social Identity Approach,” Journal of Organizational Behavior 28, no. 3 (2007), pp. 281–301. 4. D. M. Cable and D. S. DeRue, “The Convergent and Discriminant Validity of Subjective Fit Perceptions,” Journal of Applied Psychology 87, no. 5 (2002), pp. 875–884; E. George and P. Chattopadhyay, “One Foot in Each Camp: The Dual Identification of Contract Workers,” Administrative Science Quarterly 50, no. 1 (2005), pp. 68–99; and D. M. Cable and J. R. Edwards, “Complementary and Supplementary Fit: A Theoretical and Empirical Integration,” Journal of Applied Psychology 89, no. 5 (2004), pp. 822–834. 5. P. F. McKay and D. R. 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Ashforth, “Alumni and Their Alma Mater: A Partial Test of the Reformulated Model of Organizational Identification,” Journal of Organizational Behavior 13, no. 2 (1992), pp. 103–123. 9. K. Mignonac, O. Herrbach, and S. Guerrero, “The Interactive Effects of Perceived External Prestige and Need for Organizational Identification on Turnover Intentions,” Journal of Vocational Behavior 69, no. 3 (2006), pp. 477–493; A. Carmeli, and A. Shteigman, “Top Management Team Behavioral Integration in Small-Sized Firms: A Social Identity Perspective,” Group Dynamics 14, no. 4 (2010), pp. 318–331. 10. M. Hogg and D. Abrams, “Towards A Single-Process Uncertainty-Reduction Model of Social Motivation in Groups,” In M. Hogg and D. Abrams (eds.), Group Motivation: Social Psychological Perspectives (New York: Harvester- Wheatsheaf, 1993), pp. 173–190. 11. D. A. Gioia, K. N. Price, A. L. Hamilton, and J. B. Thomas, “Change Reference to Forging An Identity: An Insider-Outsider Study of Processes Involved in the Formation of Organizational Identity.” Administrative Science Quarterly 55, no. 1 (2010), pp. 1–46. 12. J. F. McGrew, J. G. Bilotta, and J. M. Deeney, “Software Team Formation and Decay: Extending the Standard Model for Small Groups,” Small Group Research 30, no. 2 (1999), pp. 209–234. 13. B. W. Tuckman, “Developmental Sequences in Small Groups,” Psychological Bulletin, June 1965, pp. 384–399; B. W. Tuckman and M. C. Jensen, “Stages of Small-Group Development Revisited,” Group and Organizational Studies, December 1977, pp. 419–427; M. F. Maples, “Group Development: Extending Tuckman’s Theory,” Journal for Specialists in Group Work (Fall 1988), pp. 17–23; and K. Vroman and J. Kovacich, “Computer-Mediated Interdisciplinary Teams: Theory and Reality,” Journal of Interprofessional Care 16, no. 2 (2002), pp. 159–170. 14. J. E. Mathieu and T. L. 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Duck, “Punctuated Equilibrium and Linear Progression: Toward a New Understanding of Group Development,” Academy of Management Journal (February 2003), pp. 106–117. 16. Gersick, “Time and Transition in Work Teams”; and Gersick, “Marking Time.” 17. A. Seers and S. Woodruff, “Temporal Pacing in Task Forces: Group Development or Deadline Pressure?” Journal of Management 23, no. 2 (1997), pp. 169–187. 18. See D. M. Rousseau, Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements (Thousand Oaks, CA: Sage, 1995); E. W. Morrison and S. L. Robinson, “When Employees Feel Betrayed: A Model of How Psychological Contract Violation Develops,” Academy of Management Review (April 1997), pp. 226–256; L. Sels, M. Janssens, and I. Van den Brande, “Assessing the Nature of Psychological Contracts: A Validation of Six Dimensions,” Journal of Organizational Behavior (June 2004), pp. 461–488; and C. Hui, C. Lee, and D. M. Rousseau, “Psychological Contract and Organizational Citizenship Behavior in China: Investigating Generalizability and Instrumentality,” Journal of Applied Psychology (April 2004), pp. 311–321. 19. M. D. Collins, “The Effect of Psychological Contract Fulfillment on Manager Turnover Intentions and Its Role As a Mediator in a Casual, Limited-Service Restaurant Environment,” International Journal of Hospitality Management 29, no. 4 (2010), pp. 736–742; J. M. Jensen, R. A. Opland, and A. M. Ryan, “Psychological Contracts and Counterproductive Work Behaviors: Employee Responses to Transactional and Endnotes 303 Relational Breach,” Journal of Business and Psychology 25, no. 4 (2010), pp. 555–568. 20. See M. F. Peterson et al., “Role Conflict, Ambiguity, and Overload: A 21-Nation Study,” Academy of Management Journal (April 1995), pp. 429–452; and I. H. Settles, R. M. Sellers, and A. Damas Jr., “One Role or Two? The Function of Psychological Separation in Role Conflict,” Journal of Applied Psychology (June 2002), pp. 574–582. 21. See, for example, F. T. Amstad, L L. Meier, U. Fasel, A. Elfering, and N. K. Semmer, “A Meta-Analysis of Work- Family Conflict and Various Outcomes with a Special Emphasis on Cross-Domain Versus Matching-Domain Relations,” Journal of Occupational Health Psychology 16, no. 2 (2011), pp. 151–169. 22. M. A. Hogg and D. J. Terry, “Social Identity and Self- Categorization Processes in Organizational Contexts,” Academy of Management Review 25, no. 1 (2000), pp. 121–140. 23. D. Vora and T. Kostova. “A Model of Dual Organizational Identification in the Context of the Multinational Enterprise,” Journal of Organizational Behavior 28 (2007), pp. 327–350. 24. C. Reade, “Dual Identification in Multinational Corporations: Local Managers and Their Psychological Attachment to the Subsidiary Versus the Global Organization,” International Journal of Human Resource Management, 12, no. 3 (2001), pp. 405–424. 25. P. G. Zimbardo, C. Haney, W. C. Banks, and D. Jaffe, “The Mind Is a Formidable Jailer: A Pirandellian Prison,” The New York Times (April 8, 1973), pp. 38–60; and C. Haney and P. G. Zimbardo, “Social Roles and Role-Playing: Observations from the Stanford Prison Study,” Behavioral and Social Science Teacher (January 1973), pp. 25–45. 26. S. A. Haslam and S. Reicher, “Stressing the Group: Social Identity and the Unfolding Dynamics of Responses to Stress,” Journal of Applied Psychology 91, no. 5 (2006), pp. 1037–1052; S. Reicher and S. A. Haslam, “Rethinking the Psychology of Tyranny: The BBC Prison Study,” British Journal of Social Psychology 45, no. 1 (2006), pp. 1–40; and P. G. Zimbardo, “On Rethinking the Psychology of Tyranny: The BBC Prison Study,” British Journal of Social Psychology 45, no. 1 (2006), pp. 47–53. 27. For a review of the research on group norms, see J. R. Hackman, “Group Influences on Individuals in Organizations,” in M. D. Dunnette and L. M. Hough (eds.), Handbook of Industrial & Organizational Psychology, 2nd ed., vol. 3 (Palo Alto, CA: Consulting Psychologists Press, 1992), pp. 235–250. For a more recent discussion, see M. G. Ehrhart and S. E. Naumann, “Organizational Citizenship Behavior in Work Groups: A Group Norms Approach,” Journal of Applied Psychology (December 2004), pp. 960–974. 28. Adapted from P. S. Goodman, E. Ravlin, and M. Schminke, “Understanding Groups in Organizations,” in L. L. Cummings and B. M. Staw (eds.), Research in Organizational Behavior, vol. 9 (Greenwich, CT: JAI Press, 1987), p. 159. 29. E. Mayo, The Human Problems of an Industrial Civilization (New York: Macmillan, 1933); and F. J. Roethlisberger and W. J. Dickson, Management and the Worker (Cambridge, MA: Harvard University Press, 1939). 30. C. A. Kiesler and S. B. Kiesler, Conformity (Reading, MA: Addison-Wesley, 1969); R. B. Cialdini and N. J. Goldstein, “Social Influence: Compliance and Conformity,” Annual Review of Psychology 55 (2004), pp. 591–621. 31. S. E. Asch, “Effects of Group Pressure upon the Modification and Distortion of Judgments,” in H. Guetzkow (ed.), Groups, Leadership and Men (Pittsburgh: Carnegie Press, 1951), pp. 177–190; and S. E. Asch, “Studies of Independence and Conformity: A Minority of One Against a Unanimous Majority,” Psychological Monographs: General and Applied 70, no. 9 (1956), pp. 1–70. 32. R. Bond and P. B. Smith, “Culture and Conformity: A Meta- Analysis of Studies Using Asch’s (1952, 1956) Line Judgment Task,” Psychological Bulletin (January 1996), pp. 111–137. 33. See S. L. Robinson and A. M. O’Leary-Kelly, “Monkey See, Monkey Do: The Influence of Work Groups on the Antisocial Behavior of Employees,” Academy of Management Journal (December 1998), pp. 658–672; R. J. Bennett and S. L. Robinson, “The Past, Present, and Future of Workplace Deviance,” in J. Greenberg (ed.), Organizational Behavior: The State of the Science, 2nd ed. (Mahwah, NJ: Erlbaum, 2003), pp. 237–271; and C. M. Berry, D. S. Ones, and P. R. Sackett, “Interpersonal Deviance, Organizational Deviance, and Their Common Correlates: A Review and Meta-Analysis,” Journal of Applied Psychology 92, no. 2 (2007), pp. 410–424. 34. C. M. Pearson, L. M. Andersson, and C. L. Porath, “Assessing and Attacking Workplace Civility,” Organizational Dynamics 29, no. 2 (2000), p. 130; see also C. Pearson, L. M. Andersson, and C. L. Porath, “Workplace Incivility,” in S. Fox and P. E. Spector (eds.), Counterproductive Work Behavior: Investigations of Actors and Targets (Washington, DC: American Psychological Association, 2005), pp. 177–200. 35. S. Lim, L. M. Cortina, V. J. Magley, “Personal and Workgroup Incivility: Impact on Work and Health Outcomes,” Journal of Applied Psychology 93, no. 1 (2008), pp. 95–107. 36. Robinson and O’Leary-Kelly, “Monkey See, Monkey Do”; and T. M. Glomb and H. Liao, “Interpersonal Aggression in Workgroups: Social Influence, Reciprocal, and Individual Effects,” Academy of Management Journal 46 (2003), pp. 486–496. 37. P. Bamberger and M. Biron, “Group Norms and Excessive Absenteeism: The Role of Peer Referent Others,” Organizational Behavior and Human Decision Processes 103, no. 2 (2007), pp. 179–196; and A. Väänänen, N. Tordera, M. Kivimäki, A. Kouvonen, J. Pentti, A. Linna, and J. Vahtera, “The Role of Work Group in Individual Sickness Absence Behavior,” Journal of Health & Human Behavior 49, no. 4 (2008), pp. 452–467. 38. M. S. Cole, F. Walter, and H. Bruch, “Affective Mechanisms Linking Dysfunctional Behavior to Performance in Work Teams: A Moderated Mediation Study,” Journal of Applied Psychology 93, no. 5 (2008), pp. 945–958. 39. A. Erez, H. Elms, and E. Fong, “Lying, Cheating, Stealing: It Happens More in Groups,” paper presented at the European Business Ethics Network Annual Conference, Budapest, Hungary, August 30, 2003. 40. S. L. Robinson and M. S. Kraatz, “Constructing the Reality of Normative Behavior: The Use of Neutralization Strategies by Organizational Deviants,” in R. W. Griffin and A. O’Leary-Kelly (eds.), Dysfunctional Behavior in Organizations: Violent and Deviant Behavior (Greenwich, CT: JAI Press, 1998), pp. 203–220. 41. See J. Berger, M. H. Fisek, R. Z. Norman, and M. Zelditch, Status Characteristics and Social Interaction: An Expected States Approach (New York: Elsevier, 1977). 42. Cited in Hackman, “Group Influences on Individuals in Organizations,” p. 236. 304 CHAPTER 9 Foundations of Group Behavior 43. R. R. Callister and J. A. Wall Jr., “Conflict Across Organizational Boundaries: Managed Care Organizations Versus Health Care Providers,” Journal of Applied Psychology 86, no. 4 (2001), pp. 754–763; and P. Chattopadhyay, W. H. Glick, and G. P. Huber, “Organizational Actions in Response to Threats and Opportunities,” Academy of Management Journal 44, no. 5 (2001), pp. 937–955. 44. P. F. Hewlin, “Wearing the Cloak: Antecedents and Consequences of Creating Facades of Conformity,” Journal of Applied Psychology 94, no. 3 (2009), pp. 727–741. 45. J. A. Wiggins, F. Dill, and R. D. Schwartz, “On ‘Status- Liability,’” Sociometry (April–May 1965), pp. 197–209. 46. See J. M. Levine and R. L. Moreland, “Progress in Small Group Research,” in J. T. Spence, J. M. Darley, and D. J. Foss (eds.), Annual Review of Psychology, vol. 41 (Palo Alto, CA: Annual Reviews, 1990), pp. 585–634; S. D. Silver, B. P. Cohen, and J. H. Crutchfield, “Status Differentiation and Information Exchange in Face-to-Face and Computer- Mediated Idea Generation,” Social Psychology Quarterly (1994), pp. 108–123; and J. M. Twenge, “Changes in Women’s Assertiveness in Response to Status and Roles: A Cross- Temporal Meta-Analysis, 1931–1993,” Journal of Personality and Social Psychology (July 2001), pp. 133–145. 47. A. M. Christie and J. Barling, “Beyond Status: Relating Status Inequality to Performance and Health in Teams,” Journal of Applied Psychology 95, no. 5 (2010), pp. 920–934; and L. H. Nishii and D. M. Mayer, “Do Inclusive Leaders Help to Reduce Turnover in Diverse Groups? The Moderating Role of Leader- Member Exchange in the Diversity to Turnover Relationship,” Journal of Applied Psychology 94, no. 6 (2009), pp. 1412–1426. 48. V. Venkataramani, S. G. Green, and D. J. Schleicher, “Well- Connected Leaders: The Impact of Leaders’ Social Network Ties on LMX and Members’ Work Attitudes,” Journal of Applied Psychology 95, no. 6 (2010), pp. 1071–1084. 49. See G. Hofstede, Cultures and Organizations: Software of the Mind (New York: McGraw-Hill, 1991). 50. This section is based on P. R. Harris and R. T. Moran, Managing Cultural Differences, 5th ed. (Houston: Gulf Publishing, 1999). 51. G. H. Seijts and G. P. Latham, “The Effects of Goal Setting and Group Size on Performance in a Social Dilemma,” Canadian Journal of Behavioural Science 32, no. 2 (2000), pp. 104–116. 52. M. E. Shaw, Group Dynamics: The Psychology of Small Group Behavior, 3rd ed. (New York: McGraw-Hill, 1981). 53. See, for instance, D. R. Comer, “A Model of Social Loafing in Real Work Groups,” Human Relations (June 1995), pp. 647–667; S. M. Murphy, S. J. Wayne, R. C. Liden, and B. Erdogan, “Understanding Social Loafing: The Role of Justice Perceptions and Exchange Relationships,” Human Relations (January 2003), pp. 61–84; and R. C. Liden, S. J. Wayne, R. A. Jaworski, and N. Bennett, “Social Loafing: A Field Investigation,” Journal of Management (April 2004), pp. 285–304. 54. W. Moede, “Die Richtlinien der Leistungs-Psychologie,” Industrielle Psychotechnik 4 (1927), pp. 193–207. See also D. A. Kravitz and B. Martin, “Ringelmann Rediscovered: The Original Article,” Journal of Personality and Social Psychology (May 1986), pp. 936–941. 55. See, for example, J. A. Shepperd, “Productivity Loss in Performance Groups: A Motivation Analysis,” Psychological Bulletin (January 1993), pp. 67–81; and S. J. Karau and K. D. Williams, “Social Loafing: A Meta-Analytic Review and Theoretical Integration,” Journal of Personality and Social Psychology (October 1993), pp. 681–706. 56. S. G. Harkins and K. Szymanski, “Social Loafing and Group Evaluation,” Journal of Personality and Social Psychology (December 1989), pp. 934–941. 57. A. Gunnthorsdottir and A. Rapoport, “Embedding Social Dilemmas in Intergroup Competition Reduces Free-Riding,” Organizational Behavior and Human Decision Processes 101 (2006), pp. 184–199; and E. M. Stark, J. D. Shaw, and M. K. Duffy, “Preference for Group Work, Winning Orientation, and Social Loafing Behavior in Groups,” Group and Organization Management 32, no. 6 (2007), pp. 699–723. 58. B. Mullen and C. Cooper, “The Relation Between Group Cohesiveness and Performance: An Integration,” Psychological Bulletin (March 1994), pp. 210–227; P. M. Podsakoff, S. B. MacKenzie, and M. Ahearne, “Moderating Effects of Goal Acceptance on the Relationship Between Group Cohesiveness and Productivity,” Journal of Applied Psychology (December 1997), pp. 974–983; and D. J. Beal, R. R. Cohen, M. J. Burke, and C. L. McLendon, “Cohesion and Performance in Groups: A Meta-Analytic Clarification of Construct Relations,” Journal of Applied Psychology (December 2003), pp. 989–1004. 59. Ibid. 60. Based on J. L. Gibson, J. M. Ivancevich, and J. H. Donnelly Jr., Organizations, 8th ed. (Burr Ridge, IL: Irwin, 1994), p. 323. 61. D. S. Staples and L. Zhao, “The Effects of Cultural Diversity in Virtual Teams Versus Face-to-Face Teams,” Group Decision and Negotiation (July 2006), pp. 389–406. 62. N. Chi, Y. Huang, and S. Lin, “A Double-Edged Sword? Exploring the Curvilinear Relationship Between Organizational Tenure Diversity and Team Innovation: The Moderating Role of Team-Oriented HR Practices,” Group and Organization Management 34, no. 6 (2009), pp. 698–726. 63. K. J. Klein, A. P. Knight, J. C. Ziegert, B. C. Lim, and J. L. Saltz, “When Team Members’ Values Differ: The Moderating Role of Team Leadership,” Organizational Behavior and Human Decision Processes 114, no. 1 (2011), pp. 25–36; and G. Park and R. P. DeShon, “A Multilevel Model of Minority Opinion Expression and Team Decision-Making Effectiveness,” Journal of Applied Psychology 95, no. 5 (2010), pp. 824–833. 64. M. Rigoglioso, “Diverse Backgrounds and Personalities Can Strengthen Groups,” Standford Knowledgebase , (August 15, 2006), http://www.stanford.edu/group/knowledgebase/ 65. K. W. Phillips and D. L. Loyd, “When Surface and Deep-Level Diversity Collide: The Effects on Dissenting Group Members,” Organizational Behavior and Human Decision Processes 99 (2006), pp. 143–160; and S. R. Sommers, “On Racial Diversity and Group Decision Making: Identifying Multiple Effects of Racial Composition on Jury Deliberations,” Journal of Personality and Social Psychology (April 2006), pp. 597–612. 66. E. Mannix and M. A. Neale, “What Differences Make a Difference? The Promise and Reality of Diverse Teams in Organizations,” Psychological Science in the Public Interest (October 2005), pp. 31–55. 67. N. Foote, E. Matson, L. Weiss, and E. Wenger, “Leveraging Group Knowledge for High-Performance Decision-Making,” Organizational Dynamics 31, no. 2 (2002), pp. 280–295. 68. See N. R. F. Maier, “Assets and Liabilities in Group Problem Solving: The Need for an Integrative Function,” Psychological http://www.stanford.edu/group/knowledgebase/ Endnotes 305 Review (April 1967), pp. 239–249; G. W. Hill, “Group Versus Individual Performance: Are N �1 Heads Better Than One?” Psychological Bulletin (May 1982), pp. 517–539; M. D. Johnson and J. R. Hollenbeck, “Collective Wisdom as an Oxymoron: Team- Based Structures as Impediments to Learning,” in J. Langan-Fox, C. L. Cooper, and R. J. Klimoski (eds), Research Companion to the Dysfunctional Workplace: Management Challenges and Symptoms (Northampton, MA: Edward Elgar Publishing, 2007), pp. 319–331; and R. F. Martell and M. R. Borg, “A Comparison of the Behavioral Rating Accuracy of Groups and Individuals,” Journal of Applied Psychology (February 1993), pp. 43–50. 69. D. Gigone and R. Hastie, “Proper Analysis of the Accuracy of Group Judgments,” Psychological Bulletin (January 1997), pp. 149–167; and B. L. Bonner, S. D. Sillito, and M. R. Baumann, “Collective Estimation: Accuracy, Expertise, and Extroversion as Sources of Intra-Group Influence,” Organizational Behavior and Human Decision Processes 103 (2007), pp. 121–133. 70. See, for example, W. C. Swap and Associates, Group Decision Making (Newbury Park, CA: Sage, 1984). 71. I. L. Janis, Groupthink (Boston: Houghton Mifflin, 1982); W. Park, “A Review of Research on Groupthink,” Journal of Behavioral Decision Making (July 1990), pp. 229–245; J. N. Choi and M. U. Kim, “The Organizational Application of Groupthink and Its Limits in Organizations,” Journal of Applied Psychology (April 1999), pp. 297–306; and W. W. Park, “A Comprehensive Empirical Investigation of the Relationships Among Variables of the Groupthink Model,” Journal of Organizational Behavior (December 2000), pp. 873–887. 72. Janis, Groupthink . 73. G. Park and R. P. DeShon, “A Multilevel Model of Minority Opinion Expression and Team Decision-Making Effectiveness,” Journal of Applied Psychology 95, no. 5 (2010), pp. 824–833. 74. M. E. Turner and A. R. Pratkanis, “Mitigating Groupthink by Stimulating Constructive Conflict,” in C. De Dreu and E. Van de Vliert (eds.), Using Conflict in Organizations (London: Sage, 1997), pp. 53–71. 75. J. A. Goncalo, E. Polman, and C. Maslach, “Can Confidence Come Too Soon? Collective Efficacy, Conflict, and Group Performance over Time,” Organizational Behavior and Human Decision Processes 113, no. 1 (2010), pp. 13–24. 76. See N. R. F. Maier, Principles of Human Relations (New York: Wiley, 1952); I. L. Janis, Groupthink: Psychological Studies of Policy Decisions and Fiascoes, 2nd ed. (Boston: Houghton Mifflin, 1982); N. Richardson Ahlfinger and J. K. Esser, “Testing the Groupthink Model: Effects of Promotional Leadership and Conformity Predisposition,” Social Behavior & Personality 29, no. 1 (2001), pp. 31–41; and S. Schultz-Hardt, F. C. Brodbeck, A. Mojzisch, R. Kerschreiter, and D. Frey, “Group Decision Making in Hidden Profile Situations: Dissent as a Facilitator for Decision Quality,” Journal of Personality and Social Psychology 91, no. 6 (2006), pp. 1080–1093. 77. See D. J. Isenberg, “Group Polarization: A Critical Review and Meta-Analysis,” Journal of Personality and Social Psychology (December 1986), pp. 1141–1151; J. L. Hale and F. J. Boster, “Comparing Effect Coded Models of Choice Shifts,” Communication Research Reports (April 1988), pp. 180–186; and P. W. Paese, M. Bieser, and M. E. Tubbs, “Framing Effects and Choice Shifts in Group Decision Making,” Organizational Behavior and Human Decision Processes (October 1993), pp. 149–165. 78. R. D. Clark III, “Group-Induced Shift Toward Risk: A Critical Appraisal,” Psychological Bulletin (October 1971), pp. 251–270; M. Brauer and C. M. Judd, “Group Polarization and Repeated Attitude Expression: A New Take on an Old Topic,” European Review of Social Psychology 7, (1996), pp. 173–207; and M. P. Brady and S. Y. Wu, “The Aggregation of Preferences in Groups: Identity, Responsibility, and Polarization,” Journal of Economic Psychology 31, no. 6 (2010), pp. 950–963. 79. Z. Krizan and R. S. Baron, “Group Polarization and Choice- Dilemmas: How Important Is Self-Categorization?” European Journal of Social Psychology 37, no. 1 (2007), pp. 191–201. 80. A. F. Osborn, Applied Imagination: Principles and Procedures of Creative Thinking, 3rd ed. (New York: Scribner, 1963). See also R. P. McGlynn, D. McGurk, V. S. Effland, N. L. Johll, and D. J. Harding, “Brainstorming and Task Performance in Groups Constrained by Evidence,” Organizational Behavior and Human Decision Processes (January 2004), pp. 75–87; and R. C. Litchfield, “Brainstorming Reconsidered: A Goal-Based View,” Academy of Management Review 33, no. 3 (2008), pp. 649–668. 81. N. L. Kerr and R. S. Tindale, “Group Performance and Decision-Making,” Annual Review of Psychology 55 (2004), pp. 623–655. 82. See A. L. Delbecq, A. H. Van deVen, and D. H. Gustafson, Group Techniques for Program Planning: A Guide to Nominal and Delphi Processes (Glenview, IL: Scott Foresman, 1975); and P. B. Paulus and H.-C. Yang, “Idea Generation in Groups: A Basis for Creativity in Organizations,” Organizational Behavior and Human Decision Processing (May 2000), pp. 76–87. 83. C. Faure, “Beyond Brainstorming: Effects of Different Group Procedures on Selection of Ideas and Satisfaction with the Process,” Journal of Creative Behavior 38 (2004), pp. 13–34. 84. See, for instance, A. B. Hollingshead and J. E. McGrath, “Computer-Assisted Groups: A Critical Review of the Empirical Research,” in R. A. Guzzo and E. Salas (eds.), Team Effectiveness and Decision Making in Organizations (San Francisco: Jossey-Bass, 1995), pp. 46–78. 85. B. B. Baltes, M. W. Dickson, M. P. Sherman, C. C. Bauer, and J. LaGanke, “Computer-Mediated Communication and Group Decision Making: A Meta-Analysis,” Organizational Behavior and Human Decision Processes (January 2002), pp. 156–179. 86. T. P. Verney, “Role Perception Congruence, Performance, and Satisfaction,” in D. J. Vredenburgh and R. S. Schuler (eds.), Effective Management: Research and Application, Proceedings of the 20th Annual Eastern Academy of Management, Pittsburgh, PA (May 1983), pp. 24–27. 87. Ibid. 88. A. G. Bedeian and A. A. Armenakis, “A Path-Analytic Study of the Consequences of Role Conflict and Ambiguity,” Academy of Management Journal (June 1981), pp. 417–424; and P. L. Perrewe, K. L. Zellars, G. R. Ferris, A. M. Rossi, C. J. Kacmar, and D. A. Ralston, “Neutralizing Job Stressors: Political Skill as an Antidote to the Dysfunctional Consequences of Role Conflict,” Academy of Management Journal (February 2004), pp. 141–152. 89. Shaw, Group Dynamics . 90. B. Mullen, C. Symons, L. Hu, and E. Salas, “Group Size, Leadership Behavior, and Subordinate Satisfaction,” Journal of General Psychology (April 1989), pp. 155–170. KILLING BIN LADEN 306 T he decision by the U.S. government on May 1, 2011, to send SEAL Team Six to hunt and capture or kill Osama bin Laden was, by all accounts, not an easy one. Appreciating the team dynamics of this decision helps us understand how teams make key decisions. The decision of a government to deploy military force to capture or kill is obviously among the most serious, and often controversial, decisions leaders and teams can make. Keep in mind that our focus here is not on the merits of the decision, but on how the decision was made. In 2010, U.S. intelligence identified and located a man whom captured al Qaeda operatives had named as Osama bin Laden’s courier. After spend- ing months tracking him and analyzing the compound in Pakistan, Central Intelligence Agency (CIA) analysts were convinced there was a “strong pos- sibility” that bin Laden was also hiding there. At that point, Navy SEAL teams began training to take the compound. But no one knew for sure whether bin Laden was actually there. The mission carried considerable risk. The members of the administra- tion’s national security team brought up past failed missions: the U.S. Army battle in Mogadishu, Somalia (depicted in the movie, Black Hawk Down ), and the attempted rescue of U.S. hostages in Iran. “There wasn’t a meeting when someone didn’t mention ‘Black Hawk Down,’ ” said one team member. The United States might be sending troops into hostile territory with no proof that the target of their efforts was even there. The president later said mili- tary commanders put the odds of a successful mission at 55–45. Over the next 2 months, the administration’s national security team met at least six times. Some members were against the operation, pending more de- finitive proof that bin Laden was actually there. None came. After a final meet- ing between the president and his national security team at 2 P.M. on Sunday, May 1, the 40 elite SEAL Team Six commandos departed in four helicopters from an undisclosed location in Afghanistan, the eastern border of which is about 120 miles west of bin Laden’s compound. A White House photo shows Obama and his national security team anxiously watching as the mission played out on the situation room monitor. Obama is tieless and grim-faced, his eyes fixed on the screen. Hillary Clinton, holding a hand to her mouth, and Robert Gates, his arms folded across his chest, gaze at the same point. After the “minutes passed like days,” the team received confirmation that the mis- sion was over. “Geronimo”—the code name given bin Laden—was dead. That many members of the decision-making team were willing to voice their reservations probably aided the decision-making process. President Obama later told 60 Minutes: “The fact that there were some who voiced doubts about this approach was invaluable, because it meant the plan was LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Analyze the growing popularity of teams in organizations. 2 Contrast groups and teams. 3 Compare and contrast four types of teams. 4 Identify the characteristics of effective teams. 5 Show how organizations can create team players. 6 Decide when to use individuals instead of teams. 7 Show how our understanding of teams differs in a global context. MyManagementLab Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com . www.mymanagementlab.com Understanding Work Teams 10 We’re going to turn this team around 360 degrees. —Jason Kidd 307Ph ot o: O ffi ci al W hi te H ou se p ho to gr ap h sh ow s U .S . P re si de nt B ar ac k O ba m a, V ic e Pr es id en t J oe B id en , U S Se cr et ar y of D ef en se R ob er t G at es a nd U S Se cr et ar y of S ta te H ill ar y C lin to n as th ey r ec ei ve a n up da te o n th e m is si on a ga in st O sa m a bi n La de n. S ou rc e: P et e So uz a/ A FP /G et ty Im ag es /N ew sc om . 307 308 CHAPTER 10 Understanding Work Teams sharper, it meant that we had thought through all of our options, it meant that when I finally did make the decision, I was making it based on the very best information.” Sources: A. Kruglanski, “Obama’s Choice and the Social Psychology of Group Decision Making,” Huffington Post (May 12, 2011), downloaded June 1, 2011, from www.huffingtonpost.com/ ; B. Steiden, “Bin Laden Dead,” The Atlanta Journal-Constitution (May 3, 2011), downloaded June 2, 2011, from www.ajc.com/ ; and M. Mazzetti, H. Cooper, and P. Baker, “Behind the Hunt for Bin Laden,” The New York Times (May 2, 2011), downloaded June 2, 2011, from www.nytimes.com/ . T eams are increasingly the primary means for organizing work in contem-porary business firms. In fact, there are few more damaging insults than “not a team player.” Do you think you’re a team player? Take the following self-assessment to find out. S A L SELF-ASSESSMENT LIBRARY How Good Am I at Building and Leading a Team? In the Self-Assessment Library (available on CD or online), take assessment II.B.6 (How Good Am I at Building and Leading a Team?) and answer the following questions. 1. Did you score as high as you thought you would? Why or why not? 2. Do you think you can improve your score? If so, how? If not, why not? 3. Do you think there is such a thing as team players? If yes, what are their behaviors? Decades ago, when companies such as W. L. Gore, Volvo, and General Foods in- troduced teams into their production processes, it made news because no one else was doing it. Today, it’s just the opposite. The organization that doesn’t use teams has become newsworthy. Teams are everywhere. How do we explain the current popularity of teams? As organizations have restructured themselves to compete more effectively and efficiently, they have turned to teams as a better way to use employee talents. Teams are more flex- ible and responsive to changing events than traditional departments or other forms of permanent groupings. They can quickly assemble, deploy, refocus, and disband. But don’t overlook the motivational properties of teams. Consistent with our discussion in Chapter 7 of employee involvement as a motivator, teams facilitate employee participation in operating decisions. So another explana- tion for their popularity is that they are an effective means for management to democratize organizations and increase employee motivation. The fact that organizations have turned to teams doesn’t necessarily mean they’re always effective. Decision makers, as humans, can be swayed by fads and herd mentality. Are teams truly effective? What conditions affect their potential? How do members work together? These are some of the questions we’ll answer in this chapter. 1 Analyze the growing popularity of teams in organizations. Why Have Teams Become So Popular? www.huffingtonpost.com/ www.ajc.com/ www.nytimes.com/ Differences Between Groups and Teams 309 Differences Between Groups and Teams Groups and teams are not the same thing. In this section, we define and clarify the difference between work groups and work teams. 1 In Chapter 9 , we defined a group as two or more individuals, interacting and interdependent, who have come together to achieve particular objectives. A work group is a group that interacts primarily to share information and make decisions to help each member perform within his or her area of responsibility. Work groups have no need or opportunity to engage in collective work that requires joint effort. So their performance is merely the summation of each group member’s individual contribution. There is no positive synergy that would create an overall level of performance greater than the sum of the inputs. A work team , on the other hand, generates positive synergy through coor- dinated effort. The individual efforts result in a level of performance greater than the sum of those individual inputs. Exhibit 10-1 highlights the differences between work groups and work teams. These definitions help clarify why so many organizations have recently restructured work processes around teams. Management is looking for positive synergy that will allow the organizations to increase performance. The extensive use of teams creates the potential for an organization to gener- ate greater outputs with no increase in inputs. Notice, however, that we said potential. There is nothing inherently magical that ensures the achievement of positive synergy in the creation of teams. Merely calling a group a team doesn’t automatically improve its performance. As we show later in this chapter, effec- tive teams have certain common characteristics. If management hopes to gain increases in organizational performance through the use of teams, its teams must possess these. 2 Contrast groups and teams. work group A group that interacts primarily to share information and to make decisions to help each group member perform within his or her area of responsibility. work team A group whose individual efforts result in performance that is greater than the sum of the individual inputs. Comparing Work Groups and Work Teams Exhibit 10-1 Share information Neutral (sometimes negative) Individual Random and varied Goal Synergy Accountability Skills Work Groups Work Teams Collective performance Positive Individual and mutual Complementary 310 CHAPTER 10 Understanding Work Teams Teams can make products, provide services, negotiate deals, coordinate projects, offer advice, and make decisions. 2 In this section, we describe the four most common types of teams in an organization: problem-solving teams, self- managed work teams, cross-functional teams , and virtual teams (see Exhibit 10-2 ). Problem-Solving Teams In the past, teams were typically composed of 5 to 12 hourly employees from the same department who met for a few hours each week to discuss ways of im- proving quality, efficiency, and the work environment. 3 These problem-solving teams rarely have the authority to unilaterally implement any of their sugges- tions. Merrill Lynch created a problem-solving team to figure out ways to re- duce the number of days it took to open a new cash management account. 4 By suggesting cutting the number of steps from 46 to 36, the team reduced the average number of days from 15 to 8. Self-Managed Work Teams Problem-solving teams only make recommendations. Some organizations have gone further and created teams that not only solve problems but implement solutions and take responsibility for outcomes. Self-managed work teams are groups of employees (typically 10 to 15 in number) who perform highly related or interdependent jobs and take on many of the responsibilities of their former supervisors. 5 Typically, these tasks are planning and scheduling work, assigning tasks to members, making operating decisions, taking action on problems, and working with suppliers and custom- ers. Fully self-managed work teams even select their own members and evaluate each other’s performance. Supervisory positions take on decreased importance and are sometimes even eliminated. But research on the effectiveness of self-managed work teams has not been uniformly positive. 6 Self-managed teams do not typically manage conflicts well. When disputes arise, members stop cooperating and power struggles ensue, which leads to lower group performance. 7 Moreover, although individuals on these teams report higher levels of job satisfaction than other individuals, they also sometimes have higher absenteeism and turnover rates. One large-scale study of labor productivity in British establishments found that although using teams in general does improve labor productivity, no evidence supported the 3 Compare and contrast four types of teams. Types of Teams Four Types of Teams Exhibit 10-2 ? Problem-solving Self-managed Cross-functional Virtual Technology Types of Teams 311 claim that self-managed teams performed better than traditional teams with less decision-making authority. 8 Cross-Functional Teams Starbucks created a team of individuals from production, global PR, global com- munications, and U.S. marketing to develop its Via brand of instant coffee. The team’s suggestions resulted in a product that would be cost-effective to produce and distribute and that was marketed through a tightly integrated, multifaceted strategy. 9 This example illustrates the use of cross-functional teams , made up of employees from about the same hierarchical level but different work areas, who come together to accomplish a task. Many organizations have used horizontal, boundary-spanning groups for decades. In the 1960s, IBM created a large task force of employees from across departments to develop its highly successful System 360. Today cross-functional teams are so widely used it is hard to imagine a major organizational under- taking without one. All the major automobile manufacturers—Toyota, Honda, Nissan, BMW, GM, Ford, and Chrysler—currently use this form of team to coor- dinate complex projects. Cisco relies on specific cross-functional teams to iden- tify and capitalize on new trends in several areas of the software market. The teams are the equivalent of social-networking groups that collaborate in real time to identify new business opportunities in the field and then implement them from the bottom up. 10 Sprig Toys, Inc. uses cross-functional teamwork in creating toys that are made of recycled products to keep the planet healthy and kids off the couch. The Sprig Dream Team includes toy designers and toy industry-specific expertise in the areas of product design, patent development, supply chain strategy, market research, vendor sourcing, merchandising, branding, packag- ing, and marketing. Team members are dedicated to Sprig’s mission of creating fun toys that encourage active play for kids and are battery- free, eco-friendly, and paint-free. Shown here with some Sprig toys are chief executive Craig Storey (standing, left) and the firm’s co-founders. problem-solving teams Groups of 5 to 12 employees from the same department who meet for a few hours each week to discuss ways of improving quality, efficiency, and the work environment. self-managed work teams Groups of 10 to 15 people who take on responsibilities of their former supervisors. cross-functional teams Employees from about the same hierarchical level, but from different work areas, who come together to accomplish a task. So u rc e : A P P h o to /T h e C o lo ra d o a n , V . R ic h a rd H a ro . 312 CHAPTER 10 Understanding Work Teams Cross-functional teams are an effective means of allowing people from di- verse areas within or even between organizations to exchange information, de- velop new ideas, solve problems, and coordinate complex projects. Of course, cross-functional teams are no picnic to manage. Their early stages of develop- ment are often long, as members learn to work with diversity and complexity. It takes time to build trust and teamwork, especially among people from different backgrounds with different experiences and perspectives. Virtual Teams The teams described in the preceding section do their work face to face. Virtual teams use computer technology to unite physically dispersed members and achieve a common goal. 11 They collaborate online—using communication links such as wide-area networks, videoconferencing, or e-mail—whether they’re a room away or continents apart. Virtual teams are so pervasive, and technology has advanced so far, that it’s probably a bit of a misnomer to call them “virtual.” Nearly all teams today do at least some of their work remotely. Despite their ubiquity, virtual teams face special challenges. They may suf- fer because there is less social rapport and direct interaction among members. Evidence from 94 studies entailing more than 5,000 groups found that virtual teams are better at sharing unique information (information held by individual members but not the entire group), but they tend to share less information overall. 12 As a result, low levels of virtuality in teams results in higher levels of information sharing, but high levels of virtuality hinder it. For virtual teams to be effective, management should ensure that (1) trust is established among members (one inflammatory remark in an e-mail can severely undermine team trust), (2) team progress is monitored closely (so the team doesn’t lose sight of its goals and no team member “disappears”), and (3) the efforts and products of the team are publicized throughout the organization (so the team does not become invisible). 13 Many have tried to identify factors related to team effectiveness. 14 However, some studies have organized what was once a “veritable laundry list of char- acteristics” 15 into a relatively focused model. 16 Exhibit 10-3 summarizes what we currently know about what makes teams effective. As you’ll see, it builds on many of the group concepts introduced in Chapter 9 . The following discussion is based on the model in Exhibit 10-3 . Keep in mind two points. First, teams differ in form and structure. The model attempts to generalize across all varieties of teams, but avoid rigidly applying its predic- tions to all teams. 17 Use it as a guide. Second, the model assumes teamwork is preferable to individual work. Creating “effective” teams when individuals can do the job better is like perfectly solving the wrong problem. We can organize the key components of effective teams into three general categories. First are the resources and other contextual influences that make teams effective. The second relates to the team’s composition. Finally, process vari- ables are events within the team that influence effectiveness. What does team effectiveness mean in this model? Typically, it has included objective measures of the team’s productivity, managers’ ratings of the team’s performance, and aggregate measures of member satisfaction. 4 Identify the characteristics of effective teams. Creating Effective Teams Creating Effective Teams 313 Context: What Factors Determine Whether Teams Are Successful The four contextual factors most significantly related to team performance are adequate resources, effective leadership, a climate of trust, and a performance evaluation and reward system that reflects team contributions. Adequate Resources Teams are part of a larger organization system; every work team relies on resources outside the group to sustain it. A scarcity of re- sources directly reduces the ability of a team to perform its job effectively and achieve its goals. As one study concluded, after looking at 13 factors related to group performance, “perhaps one of the most important characteristics of an effective work group is the support the group receives from the organization.” 18 This support includes timely information, proper equipment, adequate staffing, encouragement, and administrative assistance. Leadership and Structure Teams can’t function if they can’t agree on who is to do what and ensure all members share the workload. Agreeing on the specifics of work and how they fit together to integrate individual skills requires leader- ship and structure, either from management or from the team members them- selves. It’s true in self-managed teams that team members absorb many of the virtual teams Teams that use computer technology to tie together physically dispersed members in order to achieve a common goal. Team Effectiveness Model Exhibit 10-3 Process • Common purpose • Specific goals • Team efficacy • Conflict levels • Social loafing Composition • Abilities of members • Personality • Allocating roles • Diversity • Size of teams • Member flexibility • Member preferences Context • Adequate resources • Leadership and structure • Climate of trust • Performance evaluation and reward systems Team effectiveness 314 CHAPTER 10 Understanding Work Teams duties typically assumed by managers. However, a manager’s job then becomes managing outside (rather than inside) the team. Leadership is especially important in multiteam systems , in which different teams coordinate their efforts to produce a desired outcome. Here, leaders need to empower teams by delegating responsibility to them, and they play the role of facilitator, making sure the teams work together rather than against one another. 19 Teams that establish shared leadership by effectively delegating it are more effective than teams with a traditional single-leader structure. 20 Climate of Trust Members of effective teams trust each other. They also ex- hibit trust in their leaders. 21 Interpersonal trust among team members facili- tates cooperation, reduces the need to monitor each others’ behavior, and bonds members around the belief that others on the team won’t take advantage of them. Team members are more likely to take risks and expose vulnerabilities when they believe they can trust others on their team. And, as we will discuss in Chapter 12 , trust is the foundation of leadership. It allows a team to accept and commit to its leader’s goals and decisions. Performance Evaluation and Reward Systems How do you get team members to be both individually and jointly accountable? Individual performance evalu- ations and incentives may interfere with the development of high-performance teams. So, in addition to evaluating and rewarding employees for their indi- vidual contributions, management should modify the traditional, individually oriented evaluation and reward system to reflect team performance and focus on hybrid systems that recognize individual members for their exceptional A s you might suspect, researchers have paid a great deal of atten- tion to the differences between individualists and collectivists in terms of team orientation. As we learned from Chapter 5 on personality and values, people from collectivist societies—like those found in much of East Asia, Latin America, and Africa—are generally more prone to look toward group goals as important and to emphasize collab- orative processes. Individualist cultures like the United States, Canada, and the UK, on the other hand, emphasize indi- vidual achievement and performance. Individualist cultures may have greater difficulty implementing team- based work processes for a variety of reasons. Collectivists appear more sensitive to the moods of their co- workers, so the motivation and posi- tive mood of one group member is likely to spill over to increase motiva- tion and positive moods in others. Collectivist teams also already have a strong predisposition to work together as a group, so there’s less need for increased teamwork. Other research suggests that collectively oriented teams are better able to pool resources and correct one another’s errors than are individually oriented teams. What’s the lesson for managers? Managers in individualist cultures may need to work harder to increase team cohesiveness. One way to do this is to give teams more challenging assign- ments and provide them with more independence. Alternatively, manag- ers may find it useful to promote a col- lectivist orientation for team processes even when working with groups of individualists. Sources: Based on R. Ilies, D. T. Wagner, and F. P. Morgeson, “Explaining Affective Linkages in Teams: Individual Differences in Susceptibility to Contagion and Individualism-Collectivism,” Journal of Applied Psychology 92, no. 4 (2007), pp. 1140–1148; E. C. Dierdorff, S. T. Bell, and J. A. Belohlav, “The Power of ‘We’: Effects of Psychological Collectivism on Team Performance Over Time,” Journal of Applied Psychology 96, no. 2 (2011), pp. 247–262; and J. E. Driskell, E. Salas, and S. Hughes, “Collective Orientation and Team Performance: Development of an Individual Differences Measure,” Human Factors 52, no. 2 (2010), pp. 316–328. glOBalization! Group Cohesiveness across Cultures Creating Effective Teams 315 contributions and reward the entire group for positive outcomes. 22 Group- based appraisals, profit sharing, gainsharing, small-group incentives, and other system modifications can reinforce team effort and commitment. Team Composition The team composition category includes variables that relate to how teams should be staffed—the ability and personality of team members, allocation of roles and diversity, size of the team, and members’ preference for teamwork. Abilities of Members Part of a team’s performance depends on the knowledge, skills, and abilities of its individual members. 23 It’s true we occasionally read about an athletic team of mediocre players who, because of excellent coaching, determination, and precision teamwork, beat a far more talented group. But such cases make the news precisely because they are unusual. A team’s per- formance is not merely the summation of its individual members’ abilities. However, these abilities set limits on what members can do and how effectively they will perform on a team. Research reveals some insights into team composition and performance. First, when the task entails considerable thought (solving a complex problem multiteam systems Systems in which different teams need to coordinate their efforts to produce a desired outcome. M any teams in geographically dispersed organizations have turned to electronic media to improve communication across loca- tions. However, there may be an equally strong ethical argument for using global virtual teams: it may be a more environ- mentally responsible choice than hav- ing team members travel internationally when they need to communicate. A very large proportion of airline, rail, and car transport is for business purposes and contributes greatly to global carbon dioxide emissions. When teams are able to meet virtually rather than face- to-face, they dramatically reduce the amount of energy consumed. In a globally connected world, what sorts of actions might you take to minimize your organization’s environ- mental impact from business travel? Several tips might help to get you started thinking about ways that global virtual teams can be harnessed for greater sustainability: 1. Encourage all team members to think about whether a face-to-face meeting is really necessary, and to try to utilize alternative com- munication methods whenever possible. 2. Communicate as much information as possible through virtual means, including e-mail, telephone calls, and teleconferencing. 3. When traveling to team meetings, choose the most environmentally responsible methods possible, such as flying in coach rather than business class. Also, check the en- vironmental profile of hotels prior to booking rooms. 4. Make the business case for sustainable business travel alterna- tives. Most experts agree that tele- conferencing and environmentally responsible travel arrangements not only help the environment but are more cost-effective as well. Sources: P. Tilstone, “Cut Carbon… and Bills,” Director (May 2009), p. 54; and L. C. Latimer, “6 Strategies for Sustainable Business Travel,” Greenbiz (February 11, 2011), www.greenbiz.com . An Ethical Choice Using Global Virtual Teams as an Environmental Choice www.greenbiz.com 316 CHAPTER 10 Understanding Work Teams such as reengineering an assembly line), high-ability teams—composed of mostly intelligent members—do better than lower-ability teams, especially when the workload is distributed evenly. That way, team performance does not depend on the weakest link. High-ability teams are also more adaptable to changing situations; they can more effectively apply existing knowledge to new problems. Finally, the ability of the team’s leader also matters. Smart team leaders help less-intelligent team members when they struggle with a task. But a less intel- ligent leader can neutralize the effect of a high-ability team. 24 Personality of Members We demonstrated in Chapter 5 that personality signif- icantly influences individual employee behavior. Many of the dimensions identi- fied in the Big Five personality model are also relevant to team effectiveness; a review of the literature identified three. 25 Specifically, teams that rate higher on mean levels of conscientiousness and openness to experience tend to perform better, and the minimum level of team member agreeableness also matters: teams did worse when they had one or more highly disagreeable members. Per- haps one bad apple can spoil the whole bunch! Research has also provided us with a good idea about why these person- ality traits are important to teams. Conscientious people are good at backing up other team members, and they’re also good at sensing when their support is truly needed. One study found that specific behavioral tendencies such as personal organization, cognitive structuring, achievement orientation, and en- durance were all related to higher levels of team performance. 26 Open team members communicate better with one another and throw out more ideas, which makes teams composed of open people more creative and innovative. 27 Suppose an organization needs to create 20 teams of 4 people each and has 40 highly conscientious people and 40 who score low on conscientious- ness. Would the organization be better off (1) forming 10 teams of highly conscientious people and 10 teams of members low on conscientiousness, or British Chief Inspector of Nuclear Installations Mike Weightman is the leader of an 18-member global team created by the International Atomic Energy Commission to study the Fukushima nuclear power station accident triggered by the 2011 earthquake in Japan. This high-ability team with mem- bers from 12 countries includes experts with experience across a wide range of nuclear specialties. Team members apply their tech- nical expertise, problem-solving and decision-making skills, and interpersonal skills to their mission of identifying lessons learned from the accident that can help improve nuclear safety around the world. In this photo, Weightman (left) shakes hands with the Fukushima plant chief after the team inspected the crippled nuclear power plant. So u rc e : H O /A FP /G e tt y Im a g e s/ N e w sc o m . Team Adviser Creator Promoter Assessor Organizer Producer Controller Maintainer Linker Fights external battles In iti at es c re at iv e id ea s Cha mpio ns id eas after they ’re i nitia ted Offers insightful analysis of options Provides structure Ex am ine s d eta ils an d e nfo rce s r ule s Pr ov id es d ir ec tio n an d fo llo w -th ro ug h C oordinates and integrates Encourages the search for more information Creating Effective Teams 317 (2) “seeding” each team with 2 people who scored high and 2 who scored low on conscientiousness? Perhaps surprisingly, evidence suggests option 1 is the best choice; performance across the teams will be higher if the organization forms 10 highly conscientious teams and 10 teams low in conscientiousness. 28 Allocation of Roles Teams have different needs, and members should be se- lected to ensure all the various roles are filled. A study of 778 major league base- ball teams over a 21-year period highlights the importance of assigning roles appropriately. 29 As you might expect, teams with more experienced and skilled members performed better. However, the experience and skill of those in core roles who handle more of the workflow of the team, and who are central to all work processes (in this case, pitchers and catchers), were especially vital. In other words, put your most able, experienced, and conscientious workers in the most central roles in a team. We can identify nine potential team roles (see Exhibit 10-4 ). Successful work teams have selected people to play all these roles based on their skills and pref- erences. 30 (On many teams, individuals will play multiple roles.) To increase the likelihood the team members will work well together, managers need to understand the individual strengths each person can bring to a team, select members with their strengths in mind, and allocate work assignments that fit with members’ preferred styles. Diversity of Members In Chapter 9 , we discussed research on the effect of diversity on groups. How does team diversity affect team performance? The de- gree to which members of a work unit (group, team, or department) share a common demographic attribute, such as age, sex, race, educational level, or Key Roles of Teams Exhibit 10-4 318 CHAPTER 10 Understanding Work Teams length of service in the organization, is the subject of organizational demogra- phy . Organizational demography suggests that attributes such as age or the date of joining should help us predict turnover. The logic goes like this: turnover will be greater among those with dissimilar experiences because communication is more difficult and conflict is more likely. Increased conflict makes membership less attractive, so employees are more likely to quit. Similarly, the losers in a power struggle are more apt to leave voluntarily or be forced out. 31 Many of us hold the optimistic view that diversity should be a good thing— diverse teams should benefit from differing perspectives. Two meta-analytic reviews of the research literature show, however, that demographic diversity is essentially unrelated to team performance overall, while a third actually suggests that race and gender diversity are negatively related to team perfor- mance. 32 One qualifier is that gender and ethnic diversity have more negative effects in occupations dominated by white or male employees, but in more de- mographically balanced occupations, diversity is less of a problem. Diversity in function, education, and expertise are positively related to group performance, but these effects are quite small and depend on the situation. Proper leadership can also improve the performance of diverse teams. 33 When leaders provide an inspirational common goal for members with varying types of education and knowledge, teams are very creative. When leaders don’t provide such goals, diverse teams fail to take advantage of their unique skills and are actually less creative than teams with homogeneous skills. Even teams with diverse values can perform effectively, however, if leaders provide a focus on work tasks rather than leading based on personal relationships. We have discussed research on team diversity in race or gender. But what about diversity created by national differences? Like the earlier research, evi- dence here indicates these elements of diversity interfere with team processes, at least in the short term. 34 Cultural diversity does seem to be an asset for tasks that call for a variety of viewpoints. But culturally heterogeneous teams have more difficulty learning to work with each other and solving problems. The good news is that these difficulties seem to dissipate with time. Although newly formed culturally diverse teams underperform newly formed culturally homo- geneous teams, the differences disappear after about 3 months. 35 Fortunately, some team performance-enhancing strategies seem to work well in many cul- tures. One study found that teams in the European Union made up of mem- bers from collectivist and individualist countries benefited equally from having group goals. 36 Size of Teams Most experts agree, keeping teams small is a key to improving group effectiveness. 37 Generally speaking, the most effective teams have five to nine members. And experts suggest using the smallest number of people who can do the task. Unfortunately, managers often err by making teams too large. It may require only four or five members to develop diversity of views and skills, while coordination problems can increase exponentially as team members are added. When teams have excess members, cohesiveness and mutual account- ability decline, social loafing increases, and more people communicate less. Members of large teams have trouble coordinating with one another, especially under time pressure. If a natural working unit is larger and you want a team ef- fort, consider breaking the group into subteams. 38 Member Preferences Not every employee is a team player. Given the option, many employees will select themselves out of team participation. When people who prefer to work alone are required to team up, there is a direct threat to the team’s morale and to individual member satisfaction. 39 This result suggests Creating Effective Teams 319 that, when selecting team members, managers should consider individual pref- erences along with abilities, personalities, and skills. High-performing teams are likely to be composed of people who prefer working as part of a group. Team Processes The final category related to team effectiveness is process variables such as member commitment to a common purpose, establishment of specific team goals, team efficacy, a managed level of conflict, and minimized social loafing. These will be especially important in larger teams and in teams that are highly interdependent. 40 Why are processes important to team effectiveness? Let’s return to the topic of social loafing. We found that 1 � 1 � 1 doesn’t necessarily add up to 3. When each member’s contribution is not clearly visible, individuals tend to decrease their effort. Social loafing, in other words, illustrates a process loss from using teams. But teams should create outputs greater than the sum of their inputs, as when a diverse group develops creative alternatives. Exhibit 10-5 illustrates how group processes can have an impact on a group’s actual effectiveness. 41 Teams are often used in research laboratories because they can draw on the diverse skills of various individuals to produce more meaningful research than researchers working independently—that is, they produce positive synergy, and their process gains exceed their process losses. Common Plan and Purpose Effective teams begin by analyzing the team’s mission, developing goals to achieve that mission, and creating strategies for organizational demography The degree to which members of a work unit share a common demographic attribute, such as age, sex, race, educational level, or length of service in an organization, and the impact of this attribute on turnover. Members of Wells Fargo’s eth- nography teams are diversified in function and expertise. Working in the bank’s strategic account- management group, team members possess a variety of banking experi- ences and skills in treasury manage- ment, investments, credit cards, and relationship management. The teams visit clients to interview their key managers and observe how employees perform various finan- cial workflows such as payroll and accounts payable. From these stud- ies, the ethnography teams help clients improve their work processes and use of technology. Wells Fargo benefits by gaining a deeper under- standing of customer needs and improving customer responsiveness. So u rc e : C in d y C h a rl e s / P h o to E d it 320 CHAPTER 10 Understanding Work Teams achieving the goals. Teams that consistently perform better have established a clear sense of what needs to be done and how. 42 Members of successful teams put a tremendous amount of time and ef- fort into discussing, shaping, and agreeing on a purpose that belongs to them both collectively and individually. This common purpose, when accepted by the team, becomes what celestial navigation is to a ship captain: it provides di- rection and guidance under any and all conditions. Like a ship following the wrong course, teams that don’t have good planning skills are doomed; perfectly executing the wrong plan is a lost cause. 43 Teams should also agree on whether their goal is to learn about and master a task or simply to perform the task; evi- dence suggest that different perspectives on learning versus performance goals lead to lower levels of team performance overall. 44 It appears that these differ- ences in goal orientation have their effects by reducing discussion and sharing T his statement is false as a general rule. However, there are situa- tions when teams perform their best when their leader is angry. If you have ever seen an episode of one of celebrity chef Gordon Ramsay’s reality television shows (Hell’s Kitchen , The F Word , Kitchen Nightmares )— where Ramsay regularly terrorizes cu- linary teams with outbursts, threats, and intimidation—you have seen how angry leaders motivate. But does this approach really get results? Many of us would be skeptical. A harsh, tem- peramental approach to leading teams would seem to be reliably counterpro- ductive. Who would want to work for such a leader? As it turns out, the angry team leader may, in fact, have his or her place. A recent study found that whereas teams filled with relatively agreeable members were the most motivated and performed the best when their leader showed happiness, teams filled with relatively disagree- able members were the most moti- vated and did best when their leader expressed anger. Why do disagreeable teams do their best when their leader is angry? If you recall our discussion of agree- ableness in Chapter 5 , disagreeable individuals are more direct, more ar- gumentative, and less conflict-averse than their more agreeable counter- parts. Disagreeable teams may react better to an angry leader because the leader is speaking a language the team can understand, or the disagreeable team members may be less sensitive to inconsiderate behavior (of which the display of anger is a prime example). Asked to reflect on his angry ap- proach to leading teams, Ramsay said, “When there’s no adrenaline flying high and there’s very little pres- sure created, you don’t get results.” For some types of teams (those filled with team members as disagreeable as their leader), it appears he is right. Tough love seems to work best with tough teams. Sources: G. A. Van Kleef, A. C. Homan, B. Beersma, and D. van Knippenberg, “On Angry Leaders and Agreeable Followers: How Leaders’ Emotions and Followers’ Personalities Shape Motivation and Team Performance,” Psychological Science 21, no. 12 (2010), pp. 1827–1834; G. A. Van Kleef, A. C. Homan, B. Beersma, D. van Knippenberg, B. van Knippenberg, and F. Damen, “Searing Sentiment or Cold Calculation? The Effects of Leader Emotional Displays on Team Performance Depend on Follower Epistemic Motivation,” Academy of Management Journal 52, no. 3 (2009), pp. 562–580; and S. Lyall, “The Terrible-Tempered Star Chef of London,” The New York Times (February 23, 2005), downloaded June 3, 2011, from http://select.nytimes.com/ . Myth or Science? “Teams Work Best Under Angry Leaders” Effects of Group Processes Exhibit 10-5 Potential group effectiveness + =–Process gains Process losses Actual group effectiveness http://select.nytimes.com/ Creating Effective Teams 321 of information. In sum, having all employees on a team strive for the same type of goal is important. Effective teams also show reflexivity , meaning they reflect on and adjust their master plan when necessary. A team has to have a good plan, but it also has to be willing and able to adapt when conditions call for it. 45 Interestingly, some evidence does suggest that teams high in reflexivity are better able to adapt to conflicting plans and goals among team members. 46 Specific Goals Successful teams translate their common purpose into specific, measurable, and realistic performance goals. Specific goals facilitate clear com- munication. They also help teams maintain their focus on getting results. Consistent with the research on individual goals, team goals should also be challenging. Difficult but achievable goals raise team performance on those criteria for which they’re set. So, for instance, goals for quantity tend to raise quantity, goals for accuracy raise accuracy, and so on. 47 Team Efficacy Effective teams have confidence in themselves; they believe they can succeed. We call this team efficacy . 48 Teams that have been successful raise their beliefs about future success, which, in turn, motivates them to work harder. What can management do to increase team efficacy? Two options are helping the team achieve small successes that build confidence and providing training to improve members’ technical and interpersonal skills. The greater the abilities of team members, the more likely the team will develop confidence and the ability to deliver on that confidence. Mental Models Effective teams share accurate mental models —organized mental representations of the key elements within a team’s environment that team members share. 49 If team members have the wrong mental models, which is particularly likely with teams under acute stress, their performance suffers. 50 Team members of NASCAR race car driver Danica Patrick’s pit crew shown here work toward the com- mon goal of winning the race. Providing direction, momentum, and commitment, the pit crew’s plan is to function at top speed with no errors in checking the car, fixing parts, changing tires, and pumping gas. Each member of the pit crew has a specific job and a clear sense of what needs to be done. And each member continu- ously fine-tunes his job to shave time off the pit stops, which are so important because they may win or lose a race. reflexivity A team characteristic of reflecting on and adjusting the master plan when necessary. mental models Team members’ knowledge and beliefs about how the work gets done by the team. So u rc e : B ra n d o n W a d e /M C T /N e w sc o m . 322 CHAPTER 10 Understanding Work Teams In the Iraq War, for instance, many military leaders said they underestimated the power of the insurgency and the infighting among Iraqi religious sects. The similarity of team members’ mental models matters, too. If team members have different ideas about how to do things, the team will fight over methods rather than focus on what needs to be done. 51 One review of 65 independent stud- ies of team cognition found that teams with shared mental models engaged in more frequent interactions with one another, were more motivated, had more positive attitudes toward their work, and had higher levels of objectively rated performance. 52 Conflict Levels Conflict on a team isn’t necessarily bad. As we discuss in Chapter 15 , conflict has a complex relationship with team performance. Relationship conflicts—those based on interpersonal incompatibilities, ten- sion, and animosity toward others—are almost always dysfunctional. How- ever, when teams are performing nonroutine activities, disagreements about task content (called task conflicts ) stimulate discussion, promote critical as- sessment of problems and options, and can lead to better team decisions. A study conducted in China found that moderate levels of task conflict during the initial phases of team performance were positively related to team cre- ativity, but both very low and very high levels of task conflict were negatively related to team performance. 53 In other words, both too much and too little disagreement about how a team should initially perform a creative task can inhibit performance. The way conflicts are resolved can also make the difference between effec- tive and ineffective teams. A study of ongoing comments made by 37 autono- mous work groups showed that effective teams resolved conflicts by explicitly discussing the issues, whereas ineffective teams had conflicts focused more on personalities and the way things were said. 54 Social Loafing As we noted earlier, individuals can engage in social loafing and coast on the group’s effort because their particular contributions can’t be identified. Effective teams undermine this tendency by making members indi- vidually and jointly accountable for the team’s purpose, goals, and approach. 55 Therefore, members should be clear on what they are individually responsible for and what they are jointly responsible for on the team. S A L SELF-ASSESSMENT LIBRARY What Is My Team Efficacy? In the Self-Assessment Library (available on CD or online), take assessment IV.E.2 (What Is My Team Efficacy?). We’ve made a strong case for the value and growing popularity of teams. But many people are not inherently team players, and many organizations have historically nurtured individual accomplishments. Finally, teams fit well in countries that score high on collectivism. But what if an organization wants 5 Show how organizations can create team players. Turning Individuals into Team Players Turning Individuals into Team Players 323 to introduce teams into a work population of individuals born and raised in an individualistic society? A veteran employee of a large company, who had done well working in an individualistic company in an individualist country, described the experience of joining a team: “I’m learning my lesson. I just had my first negative performance appraisal in 20 years.” 56 So what can organizations do to enhance team effectiveness—to turn indi- vidual contributors into team members? Here are options for managers trying to turn individuals into team players. Selecting: Hiring Team Players Some people already possess the interpersonal skills to be effective team play- ers. When hiring team members, be sure candidates can fulfill their team roles as well as technical requirements. 57 When faced with job candidates who lack team skills, managers have three options. First, don’t hire them. If you have to hire them, assign them to tasks or positions that don’t require teamwork. If that is not feasible, the candidates can undergo training to make them into team players. In established organizations that decide to redesign jobs around teams, some employees will resist being team players and may be untrainable. Unfortunately, they typically become ca- sualties of the team approach. Creating teams often means resisting the urge to hire the best talent no matter what. The Los Angeles Galaxy professional soccer team paid enor- mously for British star David Beckham’s talents, seemingly without considering whether he was a team player. 58 The result was low levels of coordination and cooperation with the team. Personal traits also appear to make some people better candidates for working in diverse teams. Teams made up of members who like to work through difficult mental puzzles also seem more effective and capitalizing on the multiple points of view that arise from diversity in age and education. 59 Different Views on the Importance of TeamworkOB Poll Employers Employees Percent indicating teamwork as high priority skill in workplace 80 70 60 50 40 30 20 10 0 79% 58% Source: Based on “New Study Sheds Light on Chicago’s Employment Landscape,” PR Newswire (May 4, 2011). Reprinted with permission from The Gallup Organization. 324 CHAPTER 10 Understanding Work Teams Training: Creating Team Players Training specialists conduct exercises that allow employees to experience the satisfaction teamwork can provide. Workshops help employees improve their problem-solving, communication, negotiation, conflict-management, and coaching skills. L’Oréal, for example, found that successful sales teams required much more than being staffed with high-ability salespeople: management had to focus much of its efforts on team building. “What we didn’t account for was that many members of our top team in sales had been promoted because they had excellent technical and executional skills,” said L’Oréal’s senior VP of sales, David Waldock. As a result of the focus on team training, Waldock says, “We are no longer a team just on paper, working independently. We have a real group dynamic now, and it’s a good one.” 60 Employees also learn the five- stage group development model described in Chapter 9 . Developing an effec- tive team doesn’t happen overnight—it takes time. Rewarding: Providing Incentives to Be a Good Team Player An organization’s reward system must be reworked to encourage cooperative efforts rather than competitive ones. 61 Hallmark Cards Inc. added to its basic individual-incentive system an annual bonus based on achievement of team goals. Whole Foods directs most of its performance-based rewards toward team performance. As a result, teams select new members carefully so they will con- tribute to team effectiveness (and thus team bonuses). 62 It is usually best to set a cooperative tone as soon as possible in the life of a team. As we already noted, teams that switch from a competitive to a cooperative system do not im- mediately share information, and they still tend to make rushed, poor-quality decisions. 63 Apparently, the low trust typical of the competitive group will not be readily replaced by high trust with a quick change in reward systems. These problems are not seen in teams that have consistently cooperative systems. Promotions, pay raises, and other forms of recognition should be given to individuals who work effectively as team members by training new colleagues, sharing information, helping resolve team conflicts, and mastering needed new skills. This doesn’t mean individual contributions should be ignored; rather, they should be balanced with selfless contributions to the team. Finally, don’t forget the intrinsic rewards, such as camaraderie, that employ- ees can receive from teamwork. It’s exciting and satisfying to be part of a suc- cessful team. The opportunity for personal development of self and teammates can be a very satisfying and rewarding experience. Employees of Cigna, a global health services corporation, learn how to become team players by partici- pating in WhirlyBall competitions. Organizations like Cigna use the team sport as a team-building exer- cise in which two teams maneuver WhirlyBugs on a court while using scoops to toss a ball back and forth among team members in trying to score a goal. WhirlyBall is one of many team-building activities that employees participate in to build their teamwork skills and experi- ence the satisfaction that teamwork can provide. Teamwork takes more time and often more resources than individual work. Teams have increased communication demands, conflicts to manage, and meetings to run. So, the benefits of using teams have to exceed the costs, and that’s not always the case. 64 Before you rush to implement teams, carefully as- sess whether the work requires or will benefit from a collective effort. How do you know whether the work of your group would be better done in teams? You can apply three tests. 65 First, can the work be done better by more than one person? A good indicator is the complexity of the work and the need 6 Decide when to use indi- viduals instead of teams. Beware! Teams Aren’t Always the Answer So u rc e : Je ss ic a H il l/ A P I m a g e s . MyManagementLab For an interactive application of this topic, check out this chapter’s simulation activity at www.mymanagementlab.com. www.mymanagementlab.com Summary and Implications for Managers 325 for different perspectives. Simple tasks that don’t require diverse input are probably better left to individuals. Second, does the work create a common pur- pose or set of goals for the people in the group that is more than the aggregate of individual goals? Many service departments of new-vehicle dealers have intro- duced teams that link customer-service people, mechanics, parts specialists, and sales representatives. Such teams can better manage collective responsibility for ensuring customer needs are properly met. The final test is to determine whether the members of the group are inter- dependent. Using teams makes sense when there is interdependence among tasks—the success of the whole depends on the success of each one, and the suc- cess of each one depends on the success of the others. Soccer, for instance, is an obvious team sport. Success requires a great deal of coordination between interde- pendent players. Conversely, except possibly for relays, swim teams are not really teams. They’re groups of individuals performing individually, whose total per- formance is merely the aggregate summation of their individual performances. 7 Show how our understand- ing of teams differs in a global context. MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Summary and Implications for Managers Few trends have influenced jobs as much as the massive movement to introduce teams into the workplace. The shift from working alone to working on teams requires employees to cooperate with others, share information, confront dif- ferences, and sublimate personal interests for the greater good of the team. ● Effective teams have common characteristics. They have adequate re- sources, effective leadership, a climate of trust, and a performance evalu- ation and reward system that reflects team contributions. These teams have individuals with technical expertise as well as problem-solving, decision-making, and interpersonal skills and the right traits, especially conscientiousness and openness. ● Effective teams also tend to be small—with fewer than 10 people, prefer- ably of diverse backgrounds. They have members who fill role demands and who prefer to be part of a group. And the work that members do pro- vides freedom and autonomy, the opportunity to use different skills and talents, the ability to complete a whole and identifiable task or product, and work that has a substantial impact on others. ● Finally, effective teams have members who believe in the team’s capa- bilities and are committed to a common plan and purpose, an accurate shared mental model of what is to be accomplished, specific team goals, a manageable level of conflict, and a minimal degree of social loafing. ● Because individualistic organizations and societies attract and reward individual accomplishments, it can be difficult to create team players in these environments. To make the conversion, management should try to select individuals who have the interpersonal skills to be effective team players, provide training to develop teamwork skills, and reward individu- als for cooperative efforts. www.mymanagementlab.com 326 CHAPTER 10 Understanding Work Teams We Can Learn Much About Work Teams from Studying Sports Teams POINT COUNTERPOINT S usie Wee’s story is a nice one, but that fact that she found her athletic experience helpful doesn’t prove much, because that experience may be specific to Susie Wee. A lot of mischief is created in our understanding of organizational behavior when folks try to over-generalize from their past experience. There certainly is no shortage of athletes and coaches hawking books they propose have organizational implications. In fact, such books are a veritable cottage industry for current and former NFL coaches. Tony Dungy can tell you how to be a “mentor leader” of your team. Rex Ryan can tell you how to use passion and humor to lead teams. Even Bill Walsh (who died in 2007) has a 2010 team leadership book whose theme is “the score takes care of itself.” Vince Lombardi (who died in 1970) seems to have a book on team leadership published every year. In all these books, the coaches spend a lot of time discussing how their approach is relevant in the business world. These are all good coaches, some of them are great coaches, but there is little reason to believe athletic teams function like work teams. How many coaches go on to successful careers in organiza- tions outside the athletic context? In fact, some in-depth reporting on the 2010 U.S. Winter Olympic Team, which won more medals in Vancouver than have ever been won by a U.S. team, demonstrate it was not really a team. The hockey team didn’t have much to do with the figure skating team, which didn’t have much interaction with the curl- ing team. However, even within the teams organized by sport, there often was no team effort in any real sense of the word. Speedskater Shani Davis, winner of a gold and a silver medal, neither lived nor practiced with the team. He didn’t even allow his biography to be posted on the team’s Web site. Skier Lindsey Vonn, snowboarder Shaun White, and many others were simi- larly and rather defiantly “on their own.” There are not many organizations in which a member of a team could get by with that kind of behavior. It often happens, and in fact may be the norm, in sports teams where winning is the only thing that matters. That is one of many differences be- tween sports teams and work teams. I n nearly every nation on earth, sports teams are looked upon as examples of teamwork and collective achievement. We celebrate when our favorite teams win and commiserate with others when they lose. Individual sports like golf or singles tennis can be enjoyable to play and, depending on your taste, to watch, but nothing compares to the exhilaration of seeing teams—whether it is football (soccer or American football), basketball, or baseball—band together and succeed. Of course, it only stands to reason that we seek to draw leadership lessons from these teams. After all, they won at the highest levels of competition, and sometimes they can provide a unique window into team dynamics because their actions are so visible. There is nothing wrong in seeing what we can learn from these teams in terms of making our teams at work more ef- fective. We learn from examples, and if the examples are good ones, the learning is good, too. Interestingly, some research suggests that, more than those in other cultures, U.S. individuals tend to use team metaphors rather than references to family, the military, or other institu- tions. Hewlett-Packard’s Susie Wee writes: Every so often someone asks me what I learned in grad school that helped me in the working world. I can say that many of my most important learnings from school came from playing team sports. My school had a women’s club ice hockey team that I played on for 10 years (as an undergrad and grad student). Over these 10 years, my role on the team evolved from a benchwarmer . . . to a player . . . to a captain . . . back to a player . . . and to an assistant coach. Many of my everyday experiences with the team turned into learnings that stayed with me and help me at work. A perhaps more subtle learning comes from how you make yourself a part of the team when you are the “worst skilled” player or a bench warmer. You can still make important contributions by having a great attitude, [and] by working hard to improve your skills. This directly carries over to the working world, as no matter what your skill or experience level, you can always find a way to make an important contribution to your team. My advice to people? Students—get involved in a team sport! Workers—treat your career like a team sport! Source: G. B. Gibson and D. M. McDaniel, “Moving Beyond Conventional Wisdom: Advancements in Cross-Cultural Theories of Leadership, Conflict, and Teams,” Perspectives on Psychological Science 5, no. 4 (2010), pp. 450–462; K. Thomas, “U.S. Olympic Glory, From Stars Hardly on Team,” The New York Times (February 28, 2010), pp. 1, 4; and S. Schomer, “HP’s Susie Wee and the “Wall of Touch,” Fast Company (May 1, 2010), downloaded June 3, 2011, from www. fastcompany.com/ . www.fastcompany.com/ Ethical Dilemma 327 1 How do you explain the growing popularity of teams in organizations? 2 What is the difference between a group and a team? 3 What are the four types of teams? 4 What conditions or context factors determine whether teams are effective? 5 How can organizations create team players? 6 When is work performed by individuals preferred over work performed by teams? 7 What are three ways in which our understanding of teams differs in a global context? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE FIXED VERSUS VARIABLE FLIGHT CREWS Break into teams of five. Assume that you’ve been hired by AJet, a startup airline based in St. Louis. Your team has been formed to consider the pros and cons of using vari- able flight crews and to arrive at a recommendation on whether to follow this industry practice at AJet. Variable flight crews are crews formed when pilots, co-pilots, and flight attendants typically bid for schedules on specific planes (for instance, Boeing 737s, 757s, or 767s) based on seniority. Then they’re given a monthly schedule made up of 1- to 4-day trips. Thus, any given flight crew on a plane is rarely together for more than a few days at a time. A complicated system is required to complete the schedules. Because of this system, it’s not unusual for a senior pilot at a large airline to fly with a different co-pilot on every trip during any given month. And a pilot and co-pilot who work together for 3 days in January may never work together again the rest of the year. (In contrast, a fixed flight crew consists of the same group of pilots and attendants who fly together for a pe- riod of time.) In considering whether to use variable flight crews, your team is to answer the following questions: 1. What are the primary advantages of variable flight crews? 2. If you were to recommend some version of fixed flight crews, drawing from the material in this chap- ter, on what criteria would you assign AJet crews? When your team has considered the advantages and dis- advantages of variable flight crews and answered these questions, be prepared to present to the class your recom- mendations and justification. ETHICAL DILEMMA Unethical Teams We often think of unethical behavior as individual behav- ior. However, in many cases, unethical behavior is a team effort. The Enron, Adelphia, and WorldCom corporate scandals were brewed by members of the top management teams in these organizations. The BP oil disaster impli- cated several teams that failed to ensure construction and safety guidelines were followed. Do these examples show that team unethical behavior is limited to top management teams, or can it also occur with “ordinary” work teams? A study of 126 three-member teams of undergraduates suggests that unethical team behavior can occur beyond top management teams. In this study, teams were given a problem on which to work, with the following instructions: You are assigned a team project in one of your finance courses. Your team waits until the last minute to being working. To save time, a friend suggests using an old proj- ect out of his fraternity files. Does your team go along with this plan? How many of the teams decided to cheat? About 37 per- cent decided to use the old project. Because this exercise was hypothetical, the authors also studied team cheating in another way—by allowing teams to self-grade a “decoy” assignment (an aspect of their as- signment that did not in reality exist) that counted as 2 percent of their course grade. How many teams cheated here? About one in four. This study found that team cheating was greater when a team was composed of utilitarian members (those who think the ends justify the means). However, utilitarian at- titudes were more likely to translate into team cheating when team members felt interpersonally “safe”—when they felt there was little risk within the team of being at- tacked or ridiculed for propositions or arguments they made. The upshot? It appears that in the right circumstances, all types of teams are capable of behaving unethically. 328 CHAPTER 10 Understanding Work Teams By holding individual team members accountable, and by providing a climate of “voice” where dissenting team members feel free to speak up, managers can discourage team unethical behavior. Questions 1. Do you know for certain that you would have refused to agree to the unethical behavior in the experiment? 2. Do you think the team nature of the decision makes it more likely or less likely that individuals will choose to behave unethically? 3. In this study, all team members were required to sign a response form indicating they agreed with the deci- sion. Do you think the results would change if con- sensus or a signature was not required? Sources: M. J. Pearsall and A. P. J. Ellis, “Thick as Thieves: The Effects of Ethical Orientation and Psychological Safety on Unethical Team Behavior,” Journal of Applied Psychology 96, no. 2 (2011), pp. 401–411; and D. W. White and E. Lean, “The Impact of Perceived Leader Integrity on Subordinates in a Work Team Environment,” Journal of Business Ethics 81, no. 4 (2008), pp. 765–778. CASE INCIDENT 1 Why Don’t Teams Work Like They’re Supposed to? Despite years of promises that teamwork will serve as a cure-all for the problems of business, many managers have found that even teams with highly motivated, skilled, and committed members can fail to achieve the expected re- sults. Professor Richard Hackman from Harvard University has been studying teams for years and believes that more often than not, failing to establish the groundwork for ef- fective team performance leads teams to be less effective than if the leader simply divided up tasks and had each individual work on his or her assigned part. As Hackman notes, “I have no question that a team can generate magic. But don’t count on it.” What are the main factors Hackman has identified that lead to effective teams? Teams should be kept small and have consistent membership to minimize the types of co- ordination tasks that take up valuable time. Too often, organizations set up project-based teams and then recon- figure them, without considering the stages of group de- velopment that might have to occur before the team can achieve full performance. Supports need to be in place, like group-based rewards and clearly defined group re- sponsibilities. Surprisingly, in his study of 120 senior management teams, Hackman found fewer than 10 percent of members agreed about who was even on the team! Successful teams also have assertive, courageous lead- ers who can invoke authority even when the team resists direction. Similar lessons were derived from the failure of Ghana Airways, a state-run organization that experienced frequent changes in top management that were disruptive to establishing a consistent leadership team. As a result of excessive turbulence and lack of strategic vision, the 40-year-old air carrier that was once an emblem for the country went bankrupt. Do these weaknesses mean teams are never the answer to a business problem? Obviously, it is often necessary to bring together and coordinate individuals with a diverse set of skills and abilities to solve a problem. It would be impossible for all the management tasks of a complex or- ganization like Ghana Airways to be done by disconnected individuals. And often there is more work to be done in a compressed time period than any one individual can pos- sibly accomplish. In these cases, it is wise to consider how to best heed the advice provided above and ensure your team isn’t less than the sum of its parts. Questions 1. What do you think of the elements of successful teamwork Hackman has identified? Do you believe these elements are necessary for effective team performance? 2. Can you think of other conditions necessary for teams to be effective? 3. Imagine you’ve been asked to assemble and lead a team of high-potential new hires to work on the de- velopment of an international marketing campaign. What specific steps might you take early in the team’s life to ensure that the new team is able to avoid some of the problems Hackman identified? Is there any way to break down the overall group goal into subtasks so individual accountability can be enhanced? Sources: D. Coutu, “Why Teams Don’t Work” Harvard Business Review (May 2009), pp. 99–105; G. Gregory, “Why All-Star Teams Fail,” Lab Manager Magazine (January 11, 2011), www.labmanager.com ; and J. Amankwah-Amoah and Y. A. Debrah, “The Protracted Collapse of Ghana Airways: Lessons in Organizational Failure,” Group and Organization Management 35, no. 5 (2010), pp. 636–665. www.labmanager.com Endnotes 329 Sources: Based on C. Hymowitz, “IBM Combines Volunteer Service, Teamwork to Cultivate Emerging Markets,” The Wall Street Journal (August 4, 2008), p. B6; S. Gupta, “Mine the Potential of Multicultural Teams,” HR Magazine (October 2008), pp. 79–84; and H. Aguinis and K. Kraiger, “Benefits of Training and Development for Individuals and Teams, Organizations, and Society,” Annual Review of Psychology 60, no. 1 (2009), pp. 451–474. CASE INCIDENT 2 Multicultural Multinational Teams at IBM When many people think of a traditional, established company, they think of IBM. IBM has been famous for its written and unwritten rules—such as its no-layoff policy, its focus on individual promotions and achievement, the expectation of lifetime service at the company, and its re- quirement of suits and white shirts at work. The firm was one of the mainstays of the “man in a gray flannel suit” corporate culture in the United States. Times have certainly changed. IBM has clients in 170 countries and now does two-thirds of its business outside the United States. As a result, it has overturned virtually all aspects of its old cul- ture. One relatively new focus is on teamwork. While IBM uses work teams extensively, like almost all large organiza- tions, the way it does so is unique. To foster appreciation of a variety of cultures and open up emerging markets, IBM sends hundreds of its employ- ees to month-long volunteer project teams in regions of the world where most big companies don’t do business. Al Chakra, a software development manager located in Raleigh, North Carolina, was sent to join GreenForest, a furniture manufacturing team in Timisoara, Romania. With Chakra were IBM employees from five other coun- tries. Together, the team helped GreenForest become more computer-savvy to increase its business. In return for the IBM team’s assistance, GreenForest was charged nothing. This is hardly altruism at work. IBM firmly believes these multicultural, multinational teams are good invest- ments. First, they help lay the groundwork for uncovering business in emerging economies, many of which might be expected to enjoy greater future growth than mature markets. Stanley Litow, the IBM VP who oversees the program, also thinks it helps IBMers develop multicul- tural team skills and an appreciation of local markets. He notes, “We want to build a leadership cadre that learns about these places and also learns to exchange their di- verse backgrounds and skills.” Among the countries where IBM has sent its multicultural teams are Turkey, Tanzania, Vietnam, Ghana, and the Philippines. As for Chakra, he was thrilled to be selected for the team. “I felt like I won the lottery,” he said. He advised GreenForest on how to become a paperless company in 3 years and recommended computer systems to boost pro- ductivity and increase exports to western Europe. Another team member, Bronwyn Grantham, an Australian who works at IBM in London, advised GreenForest about sales strategies. Describing her team experience, Grantham said, “I’ve never worked so closely with a team of IBMers from such a wide range of comp- etencies.” Questions 1. If you calculate the person-hours devoted to IBM’s team projects, they amount to more than 180,000 hours of management time each year. Do you think this is a wise investment of IBM’s human resources? Why or why not? 2. Why do you think IBM’s culture changed from for- mal, stable, and individualistic to informal, imperma- nent, and team-oriented? 3. Would you like to work on one of IBM’s multicul- tural, multinational project teams? Why or why not? 4. Multicultural project teams often face problems with communication, expectations, and values. How do you think some of these challenges can be overcome? ENDNOTES 1. This section is based on J. R. Katzenbach and D. K. Smith, The Wisdom of Teams (Cambridge, MA: Harvard University Press, 1993), pp. 21, 45, 85; and D. C. Kinlaw, Developing Superior Work Teams (Lexington, MA: Lexington Books, 1991), pp. 3–21. 2. J. Mathieu, M. T. Maynard, T. Rapp, and L. Gilson, “Team Effectiveness 1997–2007: A Review of Recent Advancements and a Glimpse into the Future,” Journal of Management 34, no. 3 (2008), pp. 410–476. 3. J. H. Shonk, Team-Based Organizations (Homewood, IL: Business One Irwin, 1992); and M. A. Verespej, “When Workers Get New Roles,” IndustryWeek (February 3, 1992), p. 11. 4. G. Bodinson and R. Bunch, “AQP’s National Team Excellence Award: Its Purpose, Value and Process,” The Journal for Quality and Participation (Spring 2003), pp. 37–42. 330 CHAPTER 10 Understanding Work Teams pp. 239–290; L. Thompson, Making the Team (Upper Saddle River, NJ: Prentice Hall, 2000), pp. 18–33; and J. R. Hackman, Leading Teams: Setting the Stage for Great Performance (Boston: Harvard Business School Press, 2002). 17. See G. L. Stewart and M. R. Barrick, “Team Structure and Performance: Assessing the Mediating Role of Intrateam Process and the Moderating Role of Task Type,” Academy of Management Journal (April 2000), pp. 135–148. 18. Hyatt and Ruddy, “An Examination of the Relationship Between Work Group Characteristics and Performance,” p. 577. 19. P. Balkundi and D. A. Harrison, “Ties, Leaders, and Time in Teams: Strong Inference About Network Structure’s Effects on Team Viability and Performance,” Academy of Management Journal 49, no. 1 (2006), pp. 49–68; G. Chen, B. L. Kirkman, R. Kanfer, D. Allen, and B. Rosen, “A Multilevel Study of Leadership, Empowerment, and Performance in Teams,” Journal of Applied Psychology 92, no. 2 (2007), pp. 331–346; L. A. DeChurch and M. A. Marks, “Leadership in Multiteam Systems,” Journal of Applied Psychology 91, no. 2 (2006), pp. 311–329; A. Srivastava, K. M. Bartol, and E. A. Locke, “Empowering Leadership in Management Teams: Effects on Knowledge Sharing, Efficacy, and Performance,” Academy of Management Journal 49, no. 6 (2006), pp. 1239–1251; and J. E. Mathieu, K. K. Gilson, and T. M. Ruddy, “Empowerment and Team Effectiveness: An Empirical Test of an Integrated Model,” Journal of Applied Psychology 91, no. 1 (2006), pp. 97–108. 20. J. B. Carson, P. E. Tesluk, and J. A. Marrone, “Shared Leadership in Teams: An Investigation of Antecedent Conditions and Performance,” Academy of Management Journal 50, no. 5 (2007), pp. 1217–1234. 21. K. T. Dirks, “Trust in Leadership and Team Performance: Evidence from NCAA Basketball,” Journal of Applied Psychology (December 2000), pp. 1004–1012; M. Williams, “In Whom We Trust: Group Membership as an Affective Context for Trust Development,” Academy of Management Review (July 2001), pp. 377–396; and J. Schaubroeck, S. S. K. Lam, and A. C. Peng, “Cognition-Based and Affect- Based Trust as Mediators of Leader Behavior Influences on Team Performance,” Journal of Applied Psychology, Online First Publication (February 7, 2011), doi: 10.1037/ a0022625. 22. See F. Aime, C. J. Meyer, and S. E. Humphrey, “Legitimacy of Team Rewards: Analyzing Legitimacy as a Condition for the Effectiveness of Team Incentive Designs,” Journal of Business Research 63, no. 1 (2010), pp. 60–66; and P. A. Bamberger and R. Levi, “Team-Based Reward Allocation Structures and the Helping Behaviors of Outcome-Interdependent Team Members,” Journal of Managerial Psychology 24, no. 4 (2009), pp. 300–327; and M. J. Pearsall, M. S. Christian, and A. P. J. Ellis, “Motivating Interdependent Teams: Individual Rewards, Shared Rewards, or Something in Between?” Journal of Applied Psychology 95, no. 1 (2010), pp. 183–191. 23. R. R. Hirschfeld, M. H. Jordan, H. S. Feild, W. F. Giles, and A. A. Armenakis, “Becoming Team Players: Team Members’ Mastery of Teamwork Knowledge as a Predictor of Team Task Proficiency and Observed Teamwork Effectiveness,” 5. See, for example, A. Erez, J. A. LePine, and H. Elms, “Effects of Rotated Leadership and Peer Evaluation on the Functioning and Effectiveness of Self-Managed Teams: A Quasi-experiment,” Personnel Psychology (Winter 2002), pp. 929–948. 6. See, for instance, C. W. Langfred, “Too Much of a Good Thing? Negative Effects of High Trust and Individual Autonomy in Self-Managing Teams,” Academy of Management Journal (June 2004), pp. 385–399. 7. C. W. Langfred, “The Downside of Self-Management: A Longitudinal Study of the Effects of Conflict on Trust, Autonomy, and Task Interdependence in Self-Managing Teams,” Academy of Management Journal 50, no. 4 (2007), pp. 885–900. 8. J. Devaro, “The Effects of Self-Managed and Closely Managed Teams on Labor Productivity and Product Quality: An Empirical Analysis of a Cross-Section of Establishments,” Industrial Relations 47, no. 4 (2008), pp. 659–698. 9. A. Shah, “Starbucks Strives for Instant Gratification with Via Launch,” PRWeek (December 2009), p. 15. 10. B. Freyer and T. A. Stewart, “Cisco Sees the Future,” Harvard Business Review (November 2008), pp. 73–79. 11. See, for example, L. L. Martins, L. L. Gilson, and M. T. Maynard, “Virtual Teams: What Do We Know and Where Do We Go from Here?” Journal of Management (November 2004), pp. 805–835; and B. Leonard, “Managing Virtual Teams,” HRMagazine (June 2011), pp. 39–42. 12. J. R. Mesmer-Magnus, L. A. DeChurch, M. Jimenez- Rodriguez, J. Wildman, and M. Shuffler, “A Meta-Analytic Investigation of Virtuality and Information Sharing in Teams,” Organizational Behavior and Human Decision Processes 115, no. 2 (2011), pp. 214–225. 13. A. Malhotra, A. Majchrzak, and B. Rosen, “Leading Virtual Teams,” Academy of Management Perspectives (February 2007), pp. 60–70; and J. M. Wilson, S. S. Straus, and B. McEvily, “All in Due Time: The Development of Trust in Computer- Mediated and Face-to-Face Teams,” Organizational Behavior and Human Decision Processes 19 (2006), pp. 16–33. 14. See, for instance, J. R. Hackman, “The Design of Work Teams,” in J. W. Lorsch (ed.), Handbook of Organizational Behavior (Upper Saddle River, NJ: Prentice Hall, 1987), pp. 315–342; and M. A. Campion, G. J. Medsker, and C. A. Higgs, “Relations Between Work Group Characteristics and Effectiveness: Implications for Designing Effective Work Groups,” Personnel Psychology (Winter 1993), pp. 823–850. 15. D. E. Hyatt and T. M. Ruddy, “An Examination of the Relationship Between Work Group Characteristics and Performance: Once More into the Breech,” Personnel Psychology (Autumn 1997), p. 555. 16. This model is based on M. A. Campion, E. M. Papper, and G. J. Medsker, “Relations Between Work Team Characteristics and Effectiveness: A Replication and Extension,” Personnel Psychology (Summer 1996), pp. 429–452; Hyatt and Ruddy, “An Examination of the Relationship Between Work Group Characteristics and Performance,” pp. 553–585; S. G. Cohen and D. E. Bailey, “What Makes Teams Work: Group Effectiveness Research from the Shop Floor to the Executive Suite,” Journal of Management 23, no. 3 (1997), Endnotes 331 Journal of Applied Psychology 91, no. 2 (2006), pp. 467–474; and K. R. Randall, C. J. Resick, and L. A. DeChurch, “Building Team Adaptive Capacity: The Roles of Sensegiving and Team Composition,” Journal of Applied Psychology 96, no. 3 (2011), pp. 525–540. 24. H. Moon, J. R. Hollenbeck, and S. E. Humphrey, “Asymmetric Adaptability: Dynamic Team Structures as One-Way Streets,” Academy of Management Journal 47, no. 5 (October 2004), pp. 681–695; A. P. J. Ellis, J. R. Hollenbeck, and D. R. Ilgen, “Team Learning: Collectively Connecting the Dots,” Journal of Applied Psychology 88, no. 5 (October 2003), pp. 821–835; C. L. Jackson and J. A. LePine, “Peer Responses to a Team’s Weakest Link: A Test and Extension of LePine and Van Dyne’s Model,” Journal of Applied Psychology 88, no. 3 (June 2003), pp. 459–475; and J. A. LePine, “Team Adaptation and Postchange Performance: Effects of Team Composition in Terms of Members’ Cognitive Ability and Personality,” Journal of Applied Psychology 88, no. 1 (February 2003), pp. 27–39. 25. S. T. Bell, “Deep-Level Composition Variables as Predictors of Team Performance: A Meta-Analysis,” Journal of Applied Psychology 92, no. 3 (2007), pp. 595–615; and M. R. Barrick, G. L. Stewart, M. J. Neubert, and M. K. Mount, “Relating Member Ability and Personality to Work-Team Processes and Team Effectiveness,” Journal of Applied Psychology (June 1998), pp. 377–391. 26. T. A. O’Neill and N. J. Allen, “Personality and the Prediction of Team Performance,” European Journal of Personality 25, no. 1 (2011), pp. 31–42. 27. Ellis, Hollenbeck, and Ilgen, “Team Learning”; C. O. L. H. Porter, J. R. Hollenbeck, and D. R. Ilgen, “Backing Up Behaviors in Teams: The Role of Personality and Legitimacy of Need,” Journal of Applied Psychology 88, no. 3 (June 2003), pp. 391–403; A. Colquitt, J. R. Hollenbeck, and D. R. Ilgen, “Computer-Assisted Communication and Team Decision- Making Performance: The Moderating Effect of Openness to Experience,” Journal of Applied Psychology 87, no. 2 (April 2002), pp. 402–410; J. A. LePine, J. R. Hollenbeck, D. R. Ilgen, and J. Hedlund, “The Effects of Individual Differences on the Performance of Hierarchical Decision Making Teams: Much More Than G,” Journal of Applied Psychology 82 (1997), pp. 803–811; Jackson and LePine, “Peer Responses to a Team’s Weakest Link”; and LePine, “Team Adaptation and Postchange Performance.” 28. Barrick, Stewart, Neubert, and Mount, “Relating Member Ability and Personality to Work-Team Processes and Team Effectiveness,” p. 388; and S. E. Humphrey, J. R. Hollenbeck, C. J. Meyer, and D. R. Ilgen, “Trait Configurations in Self- Managed Teams: A Conceptual Examination of the Use of Seeding for Maximizing and Minimizing Trait Variance in Teams,” Journal of Applied Psychology 92, no. 3 (2007), pp. 885–892. 29. S. E. Humphrey, F. P. Morgeson, and M. J. Mannor, “Developing a Theory of the Strategic Core of Teams: A Role Composition Model of Team Performance,” Journal of Applied Psychology 94, no. 1 (2009), pp. 48–61. 30. C. Margerison and D. McCann, Team Management: Practical New Approaches (London: Mercury Books, 1990). 31. K. Y. Williams and C. A. O’Reilly III, “Demography and Diversity in Organizations: A Review of 40 Years of Research,” in B. M. Staw and L. L. Cummings (eds.), Research in Organizational Behavior, vol. 20, (Stamford, CT: Jai Press, 1998) pp. 77–140; and A. Joshi, “The Influence of Organizational Demography on the External Networking Behavior of Teams,” Academy of Management Review (July 2006), pp. 583–595. 32. A. Joshi and H. Roh, “The Role of Context in Work Team Diversity Research: A Meta-Analytic Review,” Academy of Management Journal 52, no. 3 (2009), pp. 599–-627; S. K. Horwitz and I. B. Horwitz, “The Effects of Team Diversity on Team Outcomes: A Meta-Analytic Review of Team Demography,” Journal of Management 33, no. 6 (2007), pp. 987–1015; and S. T. Bell, A. J. Villado, M. A. Lukasik, L. Belau, and A. L. Briggs, “Getting Specific about Demographic Diversity Variable and Team Performance Relationships: A Meta-Analysis,” Journal of Management 37, no. 3 (2011), pp. 709–743. 33. S. J. Shin and J. Zhou, “When Is Educational Specialization Heterogeneity Related to Creativity in Research and Development Teams? Transformational Leadership as a Moderator,” Journal of Applied Psychology 92, no. 6 (2007), pp. 1709–1721; and K. J. Klein, A. P. Knight, J. C. Ziegert, B. C. Lim, and J. L. Saltz, “When Team Members’ Values Differ: The Moderating Role of Team Leadership,” Organizational Behavior and Human Decision Processes 114, no. 1 (2011), pp. 25–36. 34. W. E. Watson, K. Kumar, and L. K. Michaelsen, “Cultural Diversity’s Impact on Interaction Process and Performance: Comparing Homogeneous and Diverse Task Groups,” Academy of Management Journal (June 1993), pp. 590–602; P. C. Earley and E. Mosakowski, “Creating Hybrid Team Cultures: An Empirical Test of Transnational Team Functioning,” Academy of Management Journal (February 2000), pp. 26–49; and S. Mohammed and L. C. Angell, “Surface- and Deep-Level Diversity in Workgroups: Examining the Moderating Effects of Team Orientation and Team Process on Relationship Conflict,” Journal of Organizational Behavior (December 2004), pp. 1015–1039. 35. Watson, Kumar, and Michaelsen, “Cultural Diversity’s Impact on Interaction Process and Performance.” 36. D. F. Crown, “The use of Group and Groupcentric Individual Goals for Culturally Heterogeneous and Homogeneous Task Groups: An Assessment of European Work Teams,” Small Group Research 38, no. 4 (2007), pp. 489–508. 37. D. Coutu, “Why Teams Don’t Work” Harvard Business Review (May 2009), pp. 99–105. The evidence in this section is described in Thompson, Making the Team , pp. 65–67. See also L. A. Curral, R. H. Forrester, and J. F. Dawson, “It’s What You Do and the Way That You Do It: Team Task, Team Size, and Innovation-Related Group Processes,” European Journal of Work & Organizational Psychology 10, no. 2 (June 2001), pp. 187–204; R. C. Liden, S. J. Wayne, and R. A. Jaworski, “Social Loafing: A Field Investigation,” Journal of Management 30, no. 2 (2004), pp. 285–304; and J. A. Wagner, “Studies of Individualism–Collectivism: Effects on Cooperation in Groups,” Academy of Management Journal 38, no. 1 (February 1995), pp. 152–172. 38. “Is Your Team Too Big? Too Small? What’s the Right Number? Knowledge@Wharton (June 14, 2006), pp. 1–5. 332 CHAPTER 10 Understanding Work Teams 39. Hyatt and Ruddy, “An Examination of the Relationship Between Work Group Characteristics and Performance”; J. D. Shaw, M. K. Duffy, and E. M. Stark, “Interdependence and Preference for Group Work: Main and Congruence Effects on the Satisfaction and Performance of Group Members,” Journal of Management 26, no. 2 (2000), pp. 259–279; and S. A. Kiffin-Peterson and J. L. Cordery, “Trust, Individualism, and Job Characteristics of Employee Preference for Teamwork,” International Journal of Human Resource Management (February 2003), pp. 93–116. 40. J. A. LePine, R. F. Piccolo, C. L. Jackson, J. E. Mathieu, and J. R. Saul, “A Meta-Analysis of Teamwork Processes: Tests of a Multidimensional Model and Relationships with Team Effectiveness Criteria,” Personnel Psychology 61 (2008), pp. 273–307. 41. I. D. Steiner, Group Processes and Productivity (New York: Academic Press, 1972). 42. J. A. LePine, R. F. Piccolo, C. L. Jackson, J. E. Mathieu, and J. R. Saul, “A Meta-Analysis of Teamwork Processes: Tests of a Multidimensional Model and Relationships with Team Effectiveness Criteria”; and J. E. Mathieu and T. L. Rapp, “Laying the Foundation for Successful Team Performance Trajectories: The Roles of Team Charters and Performance Strategies,” Journal of Applied Psychology 94, no. 1 (2009), pp. 90–103. 43. J. E. Mathieu and W. Schulze, “The Influence of Team Knowledge and Formal Plans on Episodic Team Process— Performance Relationships,” Academy of Management Journal 49, no. 3 (2006), pp. 605–619. 44. A. N. Pieterse, D. van Knippenberg, and W. P. van Ginkel, “Diversity in Goal Orientation, Team Reflexivity, and Team Performance,” Organizational Behavior and Human Decision Processes 114, no. 2 (2011), pp. 153–164. 45. A. Gurtner, F. Tschan, N. K. Semmer, and C. Nagele, “Getting Groups to Develop Good Strategies: Effects of Reflexivity Interventions on Team Process, Team Performance, and Shared Mental Models,” Organizational Behavior and Human Decision Processes 102 (2007), pp. 127–142; M. C. Schippers, D. N. Den Hartog, and P. L. Koopman, “Reflexivity in Teams: A Measure and Correlates,” Applied Psychology: An International Review 56, no. 2 (2007), pp. 189–211; and C. S. Burke, K. C. Stagl, E. Salas, L. Pierce, and D. Kendall, “Understanding Team Adaptation: A Conceptual Analysis and Model,” Journal of Applied Psychology 91, no. 6 (2006), pp. 1189–1207. 46. A. N. Pieterse, D. van Knippenberg, and W. P. van Ginkel, “Diversity in Goal Orientation, Team Reflexivity, and Team Performance,” Organizational Behavior and Human Decision Processes 114, no. 2 (2011), pp. 153–164. 47. E. Weldon and L. R. Weingart, “Group Goals and Group Performance,” British Journal of Social Psychology (Spring 1993), pp. 307–334. See also R. P. DeShon, S. W. J. Kozlowski, A. M. Schmidt, K. R. Milner, and D. Wiechmann, “A Multiple-Goal, Multilevel Model of Feedback Effects on the Regulation of Individual and Team Performance,” Journal of Applied Psychology (December 2004), pp. 1035–1056. 48. K. Tasa, S. Taggar, and G. H. Seijts, “The Development of Collective Efficacy in Teams: A Multilevel and Longitudinal Perspective,” Journal of Applied Psychology 92, no. 1 (2007), pp. 17–27; D. I. Jung and J. J. Sosik, “Group Potency and Collective Efficacy: Examining Their Predictive Validity, Level of Analysis, and Effects of Performance Feedback on Future Group Performance,” Group & Organization Management (September 2003), pp. 366–391; and R. R. Hirschfeld and J. B. Bernerth, “Mental Efficacy and Physical Efficacy at the Team Level: Inputs and Outcomes Among Newly Formed Action Teams,” Journal of Applied Psychology 93, no. 6 (2008), pp. 1429–1437. 49. S. Mohammed, L. Ferzandi, and K. Hamilton, “Metaphor No More: A 15-Year Review of the Team Mental Model Construct,” Journal of Management 36, no. 4 (2010), pp. 876–910. 50. A. P. J. Ellis, “System Breakdown: The Role of Mental Models and Transactive Memory on the Relationships Between Acute Stress and Team Performance,” Academy of Management Journal 49, no. 3 (2006), pp. 576–589. 51. S. W. J. Kozlowski and D. R. Ilgen, “Enhancing the Effectiveness of Work Groups and Teams,” Psychological Science in the Public Interest (December 2006), pp. 77–124; and B. D. Edwards, E. A. Day, W. Arthur Jr., and S. T. Bell, “Relationships Among Team Ability Composition, Team Mental Models, and Team Performance,” Journal of Applied Psychology 91, no. 3 (2006), pp. 727–736. 52. L. A. DeChurch and J. R. Mesmer-Magnus, “The Cognitive Underpinnings of Effective Teamwork: A Meta-Analysis,” Journal of Applied Psychology 95, no. 1 (2010), pp. 32–53. 53. J. Farh, C. Lee, and C.I.C. Farh, “Task Conflict and Team Creativity: A Question of How Much and When,” Journal of Applied Psychology 95, no. 6 (2010), pp. 1173–1180. 54. K. J. Behfar, R. S. Peterson, E. A. Mannix, and W. M. K. Trochim, “The Critical Role of Conflict Resolution in Teams: A Close Look at the Links Between Conflict Type, Conflict Management Strategies, and Team Outcomes,” Journal of Applied Psychology 93, no. 1 (2008), pp. 170–188. 55. K. H. Price, D. A. Harrison, and J. H. Gavin, “Withholding Inputs in Team Contexts: Member Composition, Interaction Processes, Evaluation Structure, and Social Loafing,” Journal of Applied Psychology 91, no. 6 (2006), pp. 1375–1384. 56. See, for instance, B. L. Kirkman and D. L. Shapiro, “The Impact of Cultural Values on Employee Resistance to Teams: Toward a Model of Globalized Self-Managing Work Team Effectiveness,” Academy of Management Review, July 1997, pp. 730–757; and B. L. Kirkman, C. B. Gibson, and D. L. Shapiro, “‘Exporting’ Teams: Enhancing the Implementation and Effectiveness of Work Teams in Global Affiliates,” Organizational Dynamics 30, no. 1 (2001), pp. 12–29. 57. G. Hertel, U. Konradt, and K. Voss, “Competencies for Virtual Teamwork: Development and Validation of a Web- Based Selection Tool for Members of Distributed Teams,” European Journal of Work and Organizational Psychology 15, no. 4 (2006), pp. 477–504. 58. I. Galarcep, “Beckham Loan Makes No Sense for the Galaxy,” ESPNsoccernet (October 24, 2008), soccernet.espn.go.com . 59. E. Kearney, D. Gebert, and S. C. Voelpel, “When and How Diversity Benefits Teams: The Importance of Team Members’ Need for Cognition,” Academy of Management Journal 52, no. 3 (2009), pp. 581–598. Endnotes 333 60. H. M. Guttman, “The New High-Performance Player,” The Hollywood Reporter (October 27, 2008), www .hollywoodreporter.com . 61. J. S. DeMatteo, L. T. Eby, and E. Sundstrom, “Team-Based Rewards: Current Empirical Evidence and Directions for Future Research,” in B. M. Staw and L. L. Cummings (eds.), Research in Organizational Behavior, vol. 20, (Stamford CT: JAI Press), pp. 141–183 (1998). 62. T. Erickson and L. Gratton, “What It Means to Work Here,” BusinessWeek (January 10, 2008), www.businessweek.com . 63. M. D. Johnson, J. R. Hollenbeck, S. E. Humphrey, D. R. Ilgen, D. Jundt, and C. J. Meyer, “Cutthroat Cooperation: Asymmetrical Adaptation to Changes in Team Reward Structures,” Academy of Management Journal 49, no. 1 (2006), pp. 103–119. 64. C. E. Naquin and R. O. Tynan, “The Team Halo Effect: Why Teams Are Not Blamed for Their Failures,” Journal of Applied Psychology, April 2003, pp. 332–340. 65. A. B. Drexler and R. Forrester, “Teamwork—Not Necessarily the Answer,” HRMagazine (January 1998), pp. 55–58. www.hollywoodreporter.com www.hollywoodreporter.com www.businessweek.com GOLDMAN RULES 334 L arge organizations have policies governing many aspects of employee behavior, including e-mail communication. But few have e-mail rules more elaborate than Goldman Sachs. Goldman is one of the oldest, largest, and most respected U.S. invest- ment banks. While some of its competitors either went bankrupt during the recent subprime mortgage meltdown (Lehman Brothers, Bear Stearns) or re- quired massive government assistance (especially Citigroup, Bank of America, JPMorgan Chase, and Wells Fargo), Goldman fared better. It did take $10 billion from the government’s Troubled Asset Relief Program (TARP), but it paid the money back (with 23 percent interest) before any other investment bank. What makes Goldman great? One factor surely is management. BusinessWeek ranked Goldman sixth on its 2010 list of best places to start a career. One review commented, “MBAs perennially rank Goldman Sachs as one of the most desired places to work, and it’s foremost among financial services firms. Once in the door, people still love the firm.” But do they love its e-mail policies? Goldman’s e-mail manual, ominously titled United States Policies for the Preparation, Supervision, Distribution and Retention of Written and Electronic Communications , is so intricate that it has two rules for the uses of “and.” Some of the more interesting e-mail rules are: ● “The level of detail or explanation necessary to make a communica- tion clear, accurate, and understandable will depend, in part, on the breadth and sophistication of the intended audience . . . the lack of financial sophistication of the recipient will often warrant a more de- tailed presentation.” ● “All sales correspondence from or to employees working from home offices must be routed through regional offices for purposes of review, approval, distribution, and retention.” ● “Each individual’s correspondence must be sampled no less often than annually.” As elaborate as Goldman’s rules are, they didn’t keep the company out of hot water when it came to light that Goldman was recommending clients make mortgage investments while the company itself was betting against— “shorting”—those very same mortgage obligations. Several e-mails were particularly damning, calling the strategy “The Big Short.” Another e-mail string showed that while being instructed to “be aggressive distributing these things” (positive mortgage positions), a Goldman manager wrote to his girlfriend, “That business is dead, and the poor little subprime borrowers will not last long.” LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Identify the main functions of communication. 2 Describe the communi cation process and distinguish between formal and informal communication. 3 Contrast downward, up ward, and lateral communication, and provide examples of each. 4 Contrast oral, written, and nonverbal communication. 5 Analyze the advantages and challenges of electronic communication. 6 Show how channel richness underlies the choice of communication channel. 7 Differentiate between automatic and controlled processing of persuasive messages. 8 Identify common barriers to effective communication. 9 Show how to overcome the potential problems in cross- cultural communication. MyManagementLab Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com . www.mymanagementlab.com Communication 11 Constantly talking isn’t necessarily communicating. —Joel in Eternal Sunshine of the Spotless Mind 335 Ph ot o: G ol dm an S ac hs b oo th , N ew Y or k St oc k Ex ch an ge . S ou rc e: A P. Ph ot o/ Ri ch ar d. D re w . 335 336 CHAPTER 11 Communication It’s unlikely these messages would be consistent with Goldman’s elaborate e-mail policies. But the firm did make some serious profit. Source: M. Abelson and C. Winter, “The Goldman Rules,” Bloomberg Businessweek (April 25, 2011), pp. 90–91; L Lavelle, “Best Places to Launch a Career,” Bloomberg Businessweek (June 2010), downloaded June 10, 2011, from http://images.businessweek.com/ ; and L. Story and S. Chan, “Goldman Cited ’Serious’ Profit on Mortgages,” The New York Times (April 25, 2010), pp. Y1, Y25. T his example illustrates the profound consequences of communication. In this chapter, we’ll analyze the power of communication and ways in which it can be more effective. One of the topics we’ll discuss is gossip. Consider the following self-assessment, and see how you score on your attitudes toward gossip at work. Poor communication is probably the most frequently cited source of inter- personal conflict. 1 Because individuals spend nearly 70 percent of their waking hours communicating—writing, reading, speaking, listening—it seems reason- able that one of the biggest inhibitors of group performance is lack of effective communication. Good communication skills are critical to career success. Polls of recruiters nearly always show communication skills among the most desired characteristics. 2 No individual, group, or organization can exist without sharing meaning among its members. It is only thus that we can convey information and ideas. Communicating, however, is more than merely imparting meaning; that mean- ing must also be understood. If one group member speaks only German and the others do not know the language, the German speaker will not be fully understood. Therefore, communication must include both the transfer and the understanding of meaning. Perfect communication, if it existed, would occur when a thought or idea was transmitted so the receiver perceived exactly the same mental picture as the sender. Though it sounds elementary, perfect communication is never achieved in practice, for reasons we shall see later in this chapter. First let’s briefly review the functions communication performs and describe the communication process. S A L SELF-ASSESSMENT LIBRARY Am I A Gossip? In the Self-Assessment Library (available on CD or online), take assessment IV.E.3 (Am I a Gossip?) and answer the following questions. 1. How did you score relative to your classmates? 2. Do you think gossiping is morally wrong? Why or why not? Functions of Communication Communication serves four major functions within a group or organization: control, motivation, emotional expression, and information. 3 Communication acts to control member behavior in several ways. Organizations have authority hierarchies and formal guidelines employees 1 Identify the main functions of communication. http://images.businessweek.com/ Functions of Communication 337 are required to follow. When employees must communicate any job-related grievance to their immediate boss, follow their job description, or comply with company policies, communication is performing a control function. Informal communication controls behavior too. When work groups tease or harass a member who produces too much (and makes the rest of the group look bad), they are informally communicating, and controlling, the mem- ber’s behavior. Communication fosters motivation by clarifying to employees what they must do, how well they are doing it, and how they can improve if perfor- mance is subpar. We saw this operating in our review of goal-setting theory in Chapter 7 . The formation of specific goals, feedback on progress toward the goals, and reward for desired behavior all stimulate motivation and require communication. Their work group is a primary source of social interaction for many employees. Communication within the group is a fundamental mechanism by which members show their satisfaction and frustrations. Communication, therefore, provides for the emotional expression of feelings and fulfillment of social needs. The final function of communication is to facilitate decision making. Communication provides the information individuals and groups need to make decisions by transmitting the data needed to identify and evaluate choices. Almost every communication interaction that takes place in a group or orga- nization performs one or more of these functions, and none of the four is more important than the others. To perform effectively, groups need to maintain some form of control over members, stimulate members to perform, allow emo- tional expression, and make decision choices. communication The transfer and understanding of meaning. Many communication interactions that take place in an organization perform the function of providing for the emotional expression of feelings and fulfillment of social needs. In this photo, Rene Brook- bank, marketing consultant and director of client relations at Cum- mins & White law firm, jokes with her co-workers during a corporate fashion event. The law firm staged a show for female lawyers and staffers as a fun way for them to view fashion trends in business attire and then treated them all to new outfits. Throughout the social event, cheerful communication among employees allowed them to express their emotions of happiness and gratitude. So u rc e : o 4 4 /Z U M A P re ss /N e w sc o m . 338 CHAPTER 11 Communication Before communication can take place it needs a purpose, a message to be conveyed between a sender and a receiver. The sender encodes the message (converts it to a symbolic form) and passes it through a medium (channel) to the receiver, who decodes it. The result is transfer of meaning from one person to another. 4 Exhibit 11-1 depicts this communication process . The key parts of this model are (1) the sender, (2) encoding, (3) the message, (4) the channel, (5) decod- ing, (6) the receiver, (7) noise, and (8) feedback. The sender initiates a message by encoding a thought. The message is the actual physical product of the sender’s encoding. When we speak, the speech is the mes- sage. When we write, the writing is the message. When we gesture, the movements of our arms and the expressions on our faces are the message. The channel is the medium through which the message travels. The sender selects it, determining whether to use a formal or informal channel. Formal channels are established by the organization and transmit messages related to the professional activities of members. They traditionally follow the authority chain within the organization. Other forms of messages, such as personal or social, follow informal channels , which are spontaneous and emerge as a response to individual choices. 5 The re- ceiver is the person(s) to whom the message is directed, who must first translate the symbols into understandable form. This step is the decoding of the message. Noise represents communication barriers that distort the clarity of the message, such as perceptual problems, information overload, semantic difficulties, or cul- tural differences. The final link in the communication process is a feedback loop. Feedback is the check on how successful we have been in transferring our messages as originally intended. It determines whether understanding has been achieved. The Communication Process 2 Describe the communication process and distinguish between formal and informal communication. The Communication Process Exhibit 11-1 Sender Encoding message Channel Noise Feedback Message received Receiver Message decoding S Message to be sent 3 Contrast downward, upward, and lateral communication, and provide examples of each. Communication can flow vertically or laterally. We further subdivide the verti- cal dimension into downward and upward directions. 6 Direction of Communication Direction of Communication 339 Downward Communication Communication that flows from one level of a group or organization to a lower level is downward communication . Group leaders and managers use it to assign goals, provide job instructions, explain policies and procedures, point out problems that need attention, and offer feedback about performance. When engaging in downward communication, managers must explain the reasons why a decision was made. One study found employees were twice as likely to be committed to changes when the reasons behind them were fully explained. Although this may seem like common sense, many managers feel they are too busy to explain things or that explanations will “open up a big can of worms.” Evidence clearly indicates, though, that explanations increase employee com- mitment and support of decisions. 7 Moreover, although managers might think that sending a message one time is enough to get through to lower-level em- ployees, most research suggests managerial communications must be repeated several times and through a variety of different media to be truly effective. 8 Another problem in downward communication is its one-way nature; gener- ally, managers inform employees but rarely solicit their advice or opinions. A study revealed that nearly two-thirds of employees say their boss rarely or never asks their advice. The study noted, “Organizations are always striving for higher employee engagement, but evidence indicates they unnecessarily create funda- mental mistakes. People need to be respected and listened to.” Companies like cell phone maker Nokia actively listen to employee’s suggestions, a practice the company thinks is especially important to innovation. 9 The best communicators explain the reasons behind their downward com- munications but also solicit communication from the employees they supervise. That leads us to the next direction: upward communication. Upward Communication Upward communication flows to a higher level in the group or organization. It’s used to provide feedback to higher-ups, inform them of progress toward goals, and relay current problems. Upward communication keeps managers aware of how employees feel about their jobs, co-workers, and the organization in gen- eral. Managers also rely on upward communication for ideas on how conditions can be improved. Given that most managers’ job responsibilities have expanded, upward communication is increasingly difficult because managers are overwhelmed and easily distracted. To engage in effective upward communication, try to reduce distractions (meet in a conference room if you can, rather than your boss’s office or cubicle), communicate in headlines not paragraphs (your goal is to get your boss’s attention, not to engage in a meandering discussion), support your headlines with actionable items (what you believe should happen), and prepare an agenda to make sure you use your boss’s attention well. 10 Lateral Communication When communication takes place among members of the same work group, members of work groups at the same level, managers at the same level, or any other horizontally equivalent workers, we describe it as lateral communication. communication process The steps between a source and a receiver that result in the transfer and understanding of meaning. formal channels Communication channels established by an organization to transmit messages related to the professional activities of members. informal channels Communication channels that are created spontaneously and that emerge as responses to individual choices. 340 CHAPTER 11 Communication Why is lateral communication needed if a group or an organization’s vertical communications are effective? Lateral communication saves time and facilitates coordination. Some lateral relationships are formally sanctioned. More often, they are informally created to short-circuit the vertical hierarchy and expedite action. So from management’s viewpoint, lateral communications can be good or bad. Because strictly adhering to the formal vertical structure for all communications can be inefficient, lateral communication occurring with management’s knowledge and support can be beneficial. But it can create dysfunctional conflicts when the formal vertical channels are breached, when members go above or around their superiors to get things done, or when bosses find actions have been taken or decisions made without their knowledge. As president of Home Depot’s southern division, Ann-Marie Campbell demonstrates the text concept of downward communica- tion when speaking with the manager and employees of a store in St. Petersburg, Florida. Serving as a member of Home Depot’s senior leadership team, Campbell oversees 100,000 workers at 640 stores in 15 states, Puerto Rico, and the Virgin Islands. During her store visits, Campbell communicates the retailer’s goals of focusing on clean warehouses, stocked shelves, and excellent customer service. Her personal, face-to-face meetings with employees give her the oppor- tunity to solicit upward communi- cation from them. Interpersonal Communication How do group members transfer meaning between and among each other? They essentially rely on oral, written, and nonverbal communication. Oral Communication The chief means of conveying messages is oral communication. Speeches, for- mal one-on-one and group discussions, and the informal rumor mill or grape- vine are popular forms of oral communication. The advantages of oral communication are speed and feedback. We can convey a verbal message and receive a response in minimal time. If the receiver is unsure of the message, rapid feedback allows the sender to quickly detect and correct it. As one professional put it, “Face-to-face communication on a consis- tent basis is still the best way to get information to and from employees.” 11 The major disadvantage of oral communication surfaces whenever a mes- sage has to pass through a number of people: the more people, the greater the potential distortion. If you’ve ever played the game “Telephone,” you know the 4 Contrast oral, written, and nonverbal communication. So u rc e : s7 0 /Z U M A P re ss /N e w sc o m . Interpersonal Communication 341 problem. Each person interprets the message in his or her own way. The mes- sage’s content, when it reaches its destination, is often very different from the original. In an organization, where decisions and other communiqués are ver- bally passed up and down the authority hierarchy, considerable opportunities arise for messages to become distorted. Written Communication Written communications include memos, letters, fax transmissions, e-mail, in- stant messaging, organizational periodicals, notices placed on bulletin boards (including electronic ones), and any other device that transmits via written words or symbols. Why would a sender choose written communication? It’s often tangible and verifiable. Both the sender and receiver have a record of the communication; and the message can be stored for an indefinite period. If there are questions about its content, the message is physically available for later reference. This feature is particularly important for complex and lengthy communications. The marketing plan for a new product, for instance, is likely to contain a num- ber of tasks spread out over several months. By putting it in writing, those who have to initiate the plan can readily refer to it over its lifespan. A final benefit of all written communication comes from the process itself. People are usually forced to think more thoroughly about what they want to convey in a written message than in a spoken one. Thus, written communications are more likely to be well thought out, logical, and clear. Of course, written messages have drawbacks. They’re time consuming. You could convey far more information to a college instructor in a 1-hour oral exam than in a 1-hour written exam. In fact, what you can say in 10 to 15 minutes might take you an hour to write. The other major disadvantage is lack of a built- in feedback mechanism. Oral communication allows the receiver to respond rapidly to what he thinks he hears. But emailing a memo or sending an instant message provides no assurance it has been received or that the recipient will interpret it as the sender intended. Nonverbal Communication Every time we deliver a verbal message, we also impart a nonverbal message. 12 Sometimes the nonverbal component may stand alone. In a singles bar, a glance, a stare, a smile, a frown, and a provocative body movement all convey meaning. No discussion of communication would thus be complete without consideration of nonverbal communication —which includes body movements, the intonations or emphasis we give to words, facial expressions, and the physi- cal distance between the sender and receiver. We could argue that every body movement has meaning, and no movement is accidental (though some are unconscious). Through body language, we say, “Help me, I’m lonely”; “Take me, I’m available”; and “Leave me alone, I’m de- pressed.” We act out our state of being with nonverbal body language. We lift one eyebrow for disbelief. We rub our noses for puzzlement. We clasp our arms to isolate ourselves or to protect ourselves. We shrug our shoulders for indiffer- ence, wink for intimacy, tap our fingers for impatience, slap our forehead for forgetfulness. 13 The two most important messages body language conveys are (1) the extent to which we like another and are interested in his or her views and (2) the perceived status between a sender and receiver. 14 We’re more likely to position ourselves closer to people we like and touch them more often. Similarly, if you feel you’re of higher status than another, you’re more likely to display body movements—such as crossed legs or a slouched seated position—that reflect a casual and relaxed manner. 15 342 CHAPTER 11 Communication Body language adds to, and often complicates, verbal communication. A body position or movement can communicate something of the emotion behind a message, but when it is linked with spoken language, it gives fuller meaning to a sender’s message. If you read the verbatim minutes of a meeting, you wouldn’t grasp the im- pact of what was said the same way as if you had been there or could see the meeting on video. Why? There is no record of nonverbal communication. The emphasis given to words or phrases is missing. Exhibit 11-2 illustrates how intonations can change the meaning of a message. Facial expressions also convey meaning. A snarling face says something different from a smile. Facial expres- sions, along with intonations, can show arrogance, aggressiveness, fear, shyness, and other characteristics. Physical distance also has meaning. What is considered proper spacing between people largely depends on cultural norms. A businesslike distance in some European countries feels intimate in many parts of North America. If someone stands closer to you than is considered appropriate, it may indicate aggressiveness or sexual interest; if farther away, it may signal disinterest or dis- pleasure with what is being said. It’s important to be alert to these nonverbal aspects of communication and look for nonverbal cues as well as the literal meaning of a sender’s words. You should particularly be aware of contradictions between the messages. Someone who frequently glances at her wristwatch is giving the message that she would pre- fer to terminate the conversation no matter what she actually says. We misinform others when we express one message verbally, such as trust, but nonverbally com- municate a contradictory message that reads, “I don’t have confidence in you.” Intonations: It’s the Way You Say It! Exhibit 11-2 Change your tone and you change your meaning: Placement of the Emphasis What It Means Why don’t I take you to dinner tonight? I was going to take someone else. Why don’t I take you to dinner tonight? Instead of the guy you were going with. Why don’t I take you to dinner tonight? I’m trying to find a reason why I shouldn’t take you. Why don’t I take you to dinner tonight? Do you have a problem with me? Why don’t I take you to dinner tonight? Instead of going on your own. Why don’t I take you to dinner tonight? Instead of lunch tomorrow. Why don’t I take you to dinner tonight? Not tomorrow night. Source: Based on M. Kiely, “when ’No’ Means ’Yes,’ ” Marketing (October 1993), pp. 7–9. Reproduced in A. Huczynski and D. Buchanan, Organizational Behavior, 4th ed. (Essex, UK: Pearson Education, 2001), p. 194. 5 Analyze the advantages and challenges of electronic communication. In this section, we move from interpersonal communication to organizational communication. Our first focus will be to describe and distinguish formal networks and the grapevine. Then we discuss technological innovations in communication. Organizational Communication Organizational Communication 343 Formal Small-Group Networks Formal organizational networks can be very complicated, including hundreds of people and a half-dozen or more hierarchical levels. To simplify our discus- sion, we’ve condensed these networks into three common small groups of five people each (see Exhibit 11-3 ): chain, wheel, and all channel. The chain rigidly follows the formal chain of command; this network approximates the communication channels you might find in a rigid three-level organization. The wheel relies on a central figure to act as the conduit for all the group’s communication; it simulates the communication network you would find on a team with a strong leader. The all-channel network permits all group members to actively communicate with each other; it’s most often characterized in practice by self-managed teams, in which all group members are free to con- tribute and no one person takes on a leadership role. As Exhibit 11-4 demonstrates, the effectiveness of each network depends on the dependent variable that concerns you. The structure of the wheel facilitates the emergence of a leader, the all-channel network is best if you desire high mem- ber satisfaction, and the chain is best if accuracy is most important. Exhibit 11-4 leads us to the conclusion that no single network will be best for all occasions. The Grapevine The informal communication network in a group or organization is called the grapevine . 16 Although the rumors and gossip transmitted through the grapevine may be informal, it’s still an important source of information. Three Common Small-Group Networks Exhibit 11-3 Chain Wheel All channel grapevine An organization’s informal communication network. Small-Group Networks and Effective CriteriaExhibit 11-4 Networks WheelCriteria Chain All Channel Speed Moderate Fast Fast Accuracy High High Moderate Emergence of a leader Moderate High None Member satisfaction Moderate Low High MyManagementLab For an interactive application of this topic, check out this chapter’s simulation activity at www.mymanagementlab.com. www.mymanagementlab.com 344 CHAPTER 11 Communication One survey found it’s where 75 percent of employees hear news first. 17 A re- cent report shows that grapevine or word-of-mouth information from peers about a company has important effects on whether job applicants join an organization. 18 One of the most famous studies of the grapevine investigated communication patterns among 67 managers in a small manufacturing firm. 19 The study asked each communication recipient how he or she first received a given piece of information and then traced it back to its source. While the grapevine was important, only 10 percent of the executives acted as liaison individuals (that is, passed the information to more than one other person). When one executive decided to resign to enter the insurance business, 81 percent of the others knew about it, but only 11 percent told someone else. This lack of spreading informa- tion through the grapevine is interesting in light of how often individuals claim to receive information that way. It’s frequently assumed rumors start because they make good gossip. This is rarely the case. Rumors emerge as a response to situations that are impor- tant to us, when there is ambiguity, and under conditions that arouse anxiety. 20 The fact that work situations frequently contain these three elements explains why rumors flourish in organizations. The secrecy and competition that typi- cally prevail in large organizations—around the appointment of new bosses, the relocation of offices, downsizing decisions, or the realignment of work assignments—encourage and sustain rumors on the grapevine. A rumor will persist until either the wants and expectations creating the uncertainty are fulfilled or the anxiety has been reduced. What can we conclude about the grapevine? Certainly it’s an important part of any group or organization communication network and is well worth understanding. It gives managers a feel for the morale of their organization, identifies issues employees consider important, and helps tap into employee anxieties. The grapevine also serves employees’ needs: small talk creates a sense of closeness and friendship among those who share information, although research suggests it often does so at the expense of those in the “out” group. 21 There is also evidence that gossip is driven largely by employee social networks that managers can study to learn more about how positive and negative information is flowing through their organization. 22 Thus, while the grapevine may not be sanctioned or controlled by the organization, it can be understood. Can managers entirely eliminate rumors? no. What they should do, however, is minimize the negative consequences of rumors by limiting their range and impact. Exhibit 11-5 offers a few practical suggestions. Suggestions for Reducing the Negative Consequences of Rumors Exhibit 11-5 1. Provide information—in the long run, the best defense against rumors is a good offense (in other words, rumors tend to thrive in the absence of formal communication). 2. Explain actions and decisions that may appear inconsistent, unfair, or secretive. 3. Refrain from shooting the messenger—rumors are a natural fact of organizational life, so respond to them calmly, rationally, and respectfully. 4. Maintain open communication channels—constantly encourage employees to come to you with concerns, suggestions, and ideas. Source: Based on L. Hirschhorn, “Managing Rumors,” in L. Hirschhorn (ed.), Cutting Back (San Francisco: Jossey-Bass, 1983), pp. 54–56. Organizational Communication 345 E xperts define gossip as “the exchange of information between two people about a third, absent person.” It’s tempting to gossip about others at work. We all want to know about what’s going on with our co- workers, even if it isn’t necessarily our concern. But there is a real possibility that gossip can change from harmless chat about other people’s lives to truly destructive words that can spread ani- mosity and anger. So is gossip necessarily bad? Not according to Joe Labianca at the University of Kentucky. He notes, “If a few people know what’s really going on, gossip becomes the means of spreading that information to everyone else. What’s more, research shows that gossip often reduces individuals’ anxiety and helps them cope with uncertainty.” How? Labianca and col- leagues have found that gossip allows people to make personal connections with co-workers and facilitates social support. Managers tend not to like gos- sip because it subverts their authority, but at the same time, it can level the playing field for those who do not other- wise have access to power. Gossip can also be a means to identify individuals who are free riders, bullies, or difficult to work with. In this way, gossip can even facilitate productive performance. Does this mean that anything goes when it comes to gossip? Hardly. There are several guidelines for keep- ing gossip a positive source of in- formation. First, don’t pass on any information without checking that it’s accurate. Second, don’t share person- ally sensitive information about some- one else that violates that person’s privacy. Finally, whenever possible, let the person you are talking about to have a chance to enter the discussion at some later point so his or her view can be explicitly taken into account. Sources: Based on G. Michelson, A. van Iterson, and K. Waddington, “Gossip in Organizations: Contexts, Consequences, and Controversies,” Group and Organization Management 35, no. 4 (2010), pp. 371–390; K. M. Kniffin and D. S. Wilson, “Evolutionary Perspectives on Workplace Gossip: Why and How Gossip Can Serve Groups,” Group and Organization Management 35, no. 2 (2010), pp. 150–176; and J. Labianca, “It’s Not ’Unprofessional’ to Gossip at Work,” Harvard Business Review (September 2010), pp. 28–29. An Ethical Choice The Ethics of Gossip at Work Electronic Communications An indispensable—and in about 71 percent of cases, the primary—medium of communication in today’s organizations is electronic. Electronic communica- tions include e-mail, text messaging, networking software, blogs, and video con- ferencing. Let’s discuss each. E-mail E-mail uses the Internet to transmit and receive computer-generated text and documents. Its growth has been spectacular, and its use is now so pervasive it’s hard to imagine life without it. E-mail messages can be quickly written, edited, and stored. They can be distributed to one person or thousands with a click of a mouse. And the cost of sending formal e-mail messages to employees is a fraction of the cost of printing, duplicating, and distributing a comparable letter or brochure. 23 E-mail is not without drawbacks. The following are some of its most signifi- cant limitations and what organizations should do to reduce or eliminate them: ● Risk of misinterpreting the message. It’s true we often misinterpret ver- bal messages, but the potential to misinterpret e-mail is even greater. One research team at New York University found we can accurately decode an e-mail’s intent and tone only 50 percent of the time, yet most of us vastly overestimate our ability to send and interpret clear messages. If you’re sending an important message, make sure you reread it for clarity. 24 ● Drawbacks for communicating negative messages. E-mail may not be the best way to communicate negative information. When Radio Shack 346 CHAPTER 11 Communication decided to lay off 400 employees, it drew an avalanche of scorn inside and outside the company by doing it via e-mail. Employees need to be careful when communicating negative messages via e-mail, too. Justen Deal, 22, wrote an e-mail critical of some strategic decisions made by his employer, pharmaceutical giant Kaiser Permanente, and questioned the financing of several information technology projects. Within hours, Deal’s com- puter was seized; he was later fired. 25 ● Time-consuming nature. An estimated 62 trillion e-mails are sent every year, of which approximately 60 percent, or 36 trillion, are non-spam messages that someone has to answer! 26 Some people, such as venture capitalist and Dallas Mavericks owner Mark Cuban, receive more than a thousand messages a day (Cuban says 10 percent are of the “I want” va- riety). Although you probably don’t receive that many, most of us have trouble keeping up with all e-mail, especially as we advance in our career. Experts suggest the following strategies: ● Don’t check e-mail in the morning. Take care of important tasks be- fore getting ensnared in e-mails. Otherwise, you may never get to those tasks. ● Check e-mail in batches. Don’t check e-mail continually throughout the day. Some experts suggest twice a day. “You wouldn’t want to do a new load of laundry every time you have a dirty pair of socks,” says one expert. ● Unsubscribe. Stop newsletters and other subscriptions you don’t re- ally need. ● Stop sending e-mail. The best way to receive lots of e-mail is to send lots of e-mail, so send less. Shorter e-mails garner shorter responses. “A well-written message can and should be as concise as possible,” says one expert. ● Declare e-mail bankruptcy. Some people, like recording artist Moby and venture capitalist Fred Wilson, become so overwhelmed by e-mail they declare “e-mail bankruptcy.” They wipe out their entire inbox and start over. Although some of these steps may not work for you, keep in mind that e-mail can be less productive than it seems: we often seem busy but get less accomplished through e-mail than we might think. 27 ● Limited expression of emotions. We tend to think of e-mail as a sort of sterile, faceless form of communication. Some researchers say the lack of visual and vocal cues means emotionally positive messages, like those including praise, will be seen as more emotionally neutral than the sender intended. 28 But as you no doubt know, e-mails are often highly emotional. E-mail tends to have a disinhibiting effect on people; without the recipient’s facial expression to temper their emotional expression, senders write things they’d never be comfortable saying in person. When others send flaming messages, remain calm and try not to respond in kind. And, as hard as it might sometimes be, try to see the flaming mes- sage from the other party’s point of view. That in itself may calm your nerves. 29 ● Privacy concerns. There are two privacy issues with e-mail. 30 First, your e-mails may be, and often are, monitored. You can’t always trust the re- cipient of your e-mail to keep it confidential, either. For these reasons, you shouldn’t write anything you wouldn’t want made public. Second, you need to exercise caution in forwarding e-mail from your company’s e-mail account to a personal or “public” e-mail account (for example, Gmail, Yahoo!, MSN). These accounts often aren’t as secure as corporate accounts, so when you forward a company e-mail to them, you may be Organizational Communication 347 violating your organization’s policy or unintentionally disclosing confi- dential data. Many employers hire vendors to sift through e-mails, using software to catch not only obvious key words (“insider trading”) but also the vague (“that thing we talked about”) or the guilt-ridden (“regret”). Another survey revealed nearly 40 percent of companies have employees whose only job is to read other employees’ e-mail. 31 Instant Messaging and Text Messaging Like e-mail, instant messaging (IM) and text messaging (TM) use electronic media. Unlike e-mail, though, IM and TM either occur in real time (IM) or use portable communication devices (TM). In just a few years, IM and TM have become pervasive. As you no doubt know from experience, IM is usually sent via computer, whereas TM is transmitted via cellphones or handheld devices such as BlackBerrys and iPhones. Despite their advantages, IM and TM aren’t going to replace e-mail. E-mail is still probably a better device for conveying long messages that must be saved. IM is preferable for one- or two-line messages that would just clutter up an e-mail inbox. On the downside, some IM and TM users find the technology intrusive and distracting. Its continual presence can make it hard for employ- ees to concentrate and stay focused. A survey of managers revealed that in 86 percent of meetings, at least some participants checked TM, and another survey revealed 20 percent of managers report having been scolded for using wireless devices during meetings. 32 Finally, because instant messages can be intercepted easily, many organizations are concerned about the security of IM and TM. 33 One other point: it’s important to not let the informality of text messag- ing (“omg! r u serious? brb”) spill over into business e-mails. Many prefer to keep business communication relatively formal. A survey of employers revealed that 58 percent rate grammar, spelling, and punctuation as “very important” in e-mail messages. 34 By making sure your professional commu- nications are, well, professional, you’ll show yourself to be mature and seri- ous. Avoid jargon and slang, use formal titles, use formal e-mail addresses for yourself (lose thatpartygirl@yahoo.com ), and take care to make your message concise and well written. None of this means, of course, that you have to give up TM or IM; you just need to maintain the differences between the way you communicate with your friends and the way you communicate professionally. Social Networking Nowhere has communication been more transformed than in the rise of social networking. You are doubtless familiar with and per- haps a user of social networking platforms such as Facebook and LinkedIn. Rather than being one huge site, Facebook, which has more than 600 million active users, is actually composed of separate networks based on schools, com- panies, or regions. Individuals older than age 25 are now its fastest-growing group of users. In a desire to maintain control over employee use of social net- working for professional purposes, many organizations have developed their own in-house social networking applications. The research and advisory firm Gartner Inc. estimates that social networking will soon replace e-mail as the primary form of business communication for 20 percent or more of business users. 35 To get the most from social networks and avoid irritating your contacts, re- serve them for high-value items only—not as an everyday or even every-week tool. Remember that a prospective employer might check your Facebook en- tries. Some entrepreneurs have developed software that mines such Web sites on behalf of companies (or individuals) that want to check up on a job applicant Malaysia’s airline AirAsia is taking advantage of the flexibility of text messaging to make it more conve- nient for travelers to book flights. AirAsia flight attendants are shown here with a mobile phone billboard during the launch of the world’s first airline booking through a short messaging service (SMS) on cell phones. The SMS makes it easier for travelers to book their seats as the service allows them to choose their flights, confirm their booking, and pay for their seats by text messag- ing from the convenience of their mobile phone wherever they are. So u rc e : Te h E n g K o o n /A P I m a g e s. 348 CHAPTER 11 Communication (or potential date). So keep in mind that what you post may be read by people other than your intended contacts. 36 Blogs A blog (Web log) is a Web site about a single person or company. Ex- perts estimate that more than 156 million blogs now exist. Millions of U.S. work- ers have blogs. And, of course, many organizations and organizational leaders have blogs that speak for the organization. Twitter is a hybrid social networking service that allows users to post “micro- blog” entries to their subscribers about any topic, including work. Many organi- zational leaders send Twitter messages (“tweets”), but they can also come from any employee about any work topic, leaving organizations with less control over the communication of important or sensitive information. Although some companies have policies governing the content of blogs and Twitter feeds, many don’t, and many posters say they have blogged or tweeted comments that could be construed as harmful to their company’s reputation. Many think their personal blogs are outside their employer’s purview, but if someone else in the company happens to read a critical or negative blog entry or post, there is nothing to keep him or her from sharing that information with others, and the employee could be dismissed as a result. One legal expert notes, “Employee bloggers mistakenly believe the First Amendment gives them the right to say whatever they want on their personal blogs. Wrong!” Also, beware of posting personal blog entries from work. More than three-quarters of employers actively monitor employees’ Web site connec- tions. In short, if you are going to have a personal blog, maintain a strict work– personal “firewall.” 37 Video Conferencing Video conferencing permits employees in an organization to have real-time meetings with people at different locations. Live audio and video images let participants see, hear, and talk with each other without being physi- cally in the same location. Peter Quirk, a program manager with EMC Corporation, uses video confer- encing to hold monthly meetings of employees at various locations and many Rising Risks of Social Networking at WorkOB Poll 2009 10% 2010 20% 2011 Percentage of organizations that have disiplined an employee for activities on Facebook, Linkedin, or Twitter 30 25 20 15 10 5 0 24% Source: Based on Studylogic poll for Starwood Hotels and Resorts/Sheraton. Sunita Williams, a NASA astronaut commander and the woman who has spent the longest time in space, used videoconferencing to speak to students and journalists at The American Center in Kolkata, India. The videoconferencing technology allowed the students and journalists to interact with Williams as she dis- cussed her experiences aboard the Space Station Atlantis. The inter- active meeting gave Williams the opportunity to answer questions about her job as a U.S. Navy experi- mental test pilot and as a helicopter pilot during the Gulf War. So u rc e : D e sh a k a ly a n C h o w d h u ry /G e tt y Im a g e s. Organizational Communication 349 other meetings as well. Doing so saves travel expenses and time. However, Quirk notes it’s especially important to stimulate questions and involve all participants in order to avoid someone who is linked in but disengaged. Sun Microsystem’s Karen Rhode agrees special efforts must be made to engage remote partici- pants, suggesting, “You can poll people, people can ask questions, you can do an engaging presentation.” 38 Managing Information We all have more information at our disposal than ever. It brings us many ben- efits, but also two important challenges: information overload and threats to information security. We consider each in turn. Dealing with Information Overload Do you find yourself bombarded with information—from e-mail, blogs, Internet surfing, IMs, cell phones, and televi- sions? You’re not alone. Basex, a company that looks at worker efficiency, found the largest part of an average worker’s day—43 percent—is spent on matters that are neither important nor urgent, such as responding to noncrucial e-mails and surfing the Web. (In fairness to e-mail, Basex also found 25 percent of an employee’s time was spent composing and responding to important e-mail.) Intel designed an 8-month experiment to see how limiting this information overload might aid productivity. One group of employees was told to limit both digital and in-person contact for 4 hours on Tuesdays, while another group fol- lowed its usual routine. The first group was more productive, and 75 percent of its members suggested the program be expanded. “It’s huge. We were expect- ing less,” remarked Nathan Zeldes, an Intel engineer who led the experiments. “When people are uninterrupted they can sit back and design chips and really think.” 39 We have already reviewed some ways of reducing the time sunk into e-mails. More generally, as the Intel study shows, it may make sense to connect to tech- nology less frequently, to, in the words of one article, “avoid letting the drum- beat of digital missives constantly shake up and reorder to-do lists.” Lynaia Lutes, an account supervisor for a small Texas company, was able to think much more strategically by taking a break from digital information each day. In the past, she said, “I basically completed an assignment” but didn’t approach it stra- tegically. By creating such breaks for yourself, you may be better able to priori- tize, think about the big picture, and thereby be more effective. 40 As information technology and immediate communication have become a more prevalent component of modern organizational life, more employees find they are never able to get offline. Some business travelers were disap- pointed when airlines began offering wireless Internet connections in flight because they could no longer use their travel time as a rare opportunity to relax without a constant barrage of organizational communications. The negative im- pacts of these communication devices can spill over into employees’ personal lives as well. Both workers and their spouses relate the use of electronic com- munication technologies outside work to higher levels of work–life conflict. 41 Employees must balance the need for constant communication with their own blog (Web log) A Web site where entries are written, and generally displayed in reverse chronological order, about news, events, and personal diary entries. Twitter A free blogging and networking service where users send and read messages known as tweets, many of which concern OB issues. information overload A condition in which information inflow exceeds an individual’s processing capacity. 350 CHAPTER 11 Communication personal need for breaks from work, or they risk burnout from being on call 24 hours a day. Threats to Information Security Security is a huge concern for nearly all or- ganizations with private or proprietary information about clients, customers, and employees. A Merrill Lynch survey of 50 executives found 52 percent rated leaks of company information as their number-one information security con- cern, topping viruses and hackers. Most companies actively monitor employee Internet use and e-mail records, and some even use video surveillance and re- cord phone conversations. Necessary though they may be, such practices can seem invasive to employees. An organization can relieve employee concerns by engaging them in the creation of information-security policies and giving them some control over how their personal information is used. 42 Choice of Communication Channel Why do people choose one channel of communication over another—say, a phone call instead of a face-to-face talk? A model of media richness helps explain channel selection among managers. 43 Channels differ in their capacity to convey information. Some are rich in that they can (1) handle multiple cues simultaneously, (2) facilitate rapid feedback, and (3) be very personal. Others are lean in that they score low on these factors. As Exhibit 11-6 illustrates, face-to-face conversation scores highest in channel richness because it transmits the most information per communica- tion episode—multiple information cues (words, postures, facial expressions, gestures, intonations), immediate feedback (both verbal and nonverbal), and 6 Show how channel richness underlies the choice of com- munication channel. Information Richness and Communication Channels Exhibit 11-6 Formal reports, bulletins Low channel richness High channel richness Prerecorded speeches Online discussion groups, groupware Live speeches Video conferences Memos, letters Electronic mail Voice mail Telephone conversations Face-to-face conversations Source: Based on R. H. Lengel and R. L. Daft, “The Selection of Communication Media as an Executive Skill,” Academy of Management Executive (August 1988), pp. 225–232; and R. L. Daft and R. H. Lengel, “Organizational Information Requirements, Media Richness, and Structural Design,” Managerial Science (May 1996), pp. 554–572. Reproduced from R. L. Daft and R. A. Noe, Organizational Behavior (Fort Worth, TX: Harcourt, 2001), p. 311. Persuasive Communications 351 the personal touch of being present. Impersonal written media such as formal reports and bulletins rate lowest in richness. The choice of channel depends on whether the message is routine. Routine messages tend to be straightforward and have minimal ambiguity; channels low in richness can carry them efficiently. Nonroutine communications are likely to be complicated and have the potential for misunderstanding. Managers can communicate them effectively only by selecting rich channels. When tough times hit Manpower Business Solutions during the recent eco- nomic contraction, the company elected to communicate with employees daily in a variety of media to ensure that everyone remained informed. 44 Employees were given updates about the company’s plans for dealing with economic prob- lems, including advance warning before layoffs. The company believes its strat- egy of using rich communication channels for nonroutine information has paid off by reducing employee anxiety and increasing engagement with the organization. channel richness The amount of information that can be transmitted during a communication episode. automatic processing A relatively superficial consideration of evidence and information making use of heuristics. controlled processing A detailed consideration of evidence and information relying on facts, figures, and logic. Persuasive Communications We’ve discussed a number of methods for communication up to this point. Now we turn our attention to one of the functions of communication and the features that might make messages more or less persuasive to an audience. Automatic and Controlled Processing To understand the process of communication, it is useful to consider two relatively different ways that we process information. 45 Think about the last time you bought a can of soda. Did you carefully research brands and engage in your own double-blind taste test to see which types you actually prefer? Or did you reach for the can that had the most appealing advertising images? If we’re honest, we’ll admit glitzy ads and catchy slogans do indeed have an influence on our choices as consumers. We often rely on automatic process- ing , a relatively superficial consideration of evidence and information making use of heuristics like those we discussed in Chapter 6 . Automatic processing takes little time and low effort, so it makes sense to use it for processing per- suasive messages related to topics you don’t care much about. The disadvan- tage is that it lets us be easily fooled by a variety of tricks, like a cute jingle or glamorous photo. Now consider the last time you chose a place to live. For this more impor- tant decision, you probably did do some independent research among experts who know something about the area, gathered information about prices from a variety of sources, and considered the costs and benefits of renting versus buying. Here, you’re relying on more effortful controlled processing , a de- tailed consideration of evidence and information relying on facts, figures, and logic. Controlled processing requires effort and energy, but it’s harder to fool 7 Differentiate between automatic and controlled processing of persuasive messages. 352 CHAPTER 11 Communication someone who has taken the time and effort to engage in it. So what makes someone engage in either shallow or deep processing? There are a few rules of thumb for determining what types of processing an audience will use. Interest Level One of the best predictors of whether people will use an automatic or con- trolled process for reacting to a persuasive message is their level of interest in it. 46 Interest levels reflect the impact a decision is going to have on your life. When people are very interested in the outcome of a decision, they’re more likely to process information carefully. That’s probably why people look for so much more information when deciding about something important (like where to live) than something relatively unimportant (like which soda to drink). Prior Knowledge People who are very well informed about a subject area are also more likely to use controlled processing strategies. They have already thought through vari- ous arguments for or against a specific course of action, and therefore they won’t readily change their position unless very good, thoughtful reasons are provided. On the other hand, people who are poorly informed about a topic can change their minds more readily, even in the face of fairly superficial ar- guments presented without a great deal of evidence. In other words, a better informed audience is likely to be much harder to persuade. Personality Are you the type of person who always likes to read at least five reviews of a movie before deciding whether to see it? Do you carefully consider several mov- ies before making a choice? Perhaps you even research recent films by the same stars and director. If so, you are probably high in need for cognition, a personality trait of individuals who are most likely to be persuaded by evidence and facts. 47 Those who are lower in need for cognition are more likely to use automatic pro- cessing strategies, relying on intuition and emotion to guide their evaluation of persuasive messages. Message Characteristics Another factor that influences whether people use an automatic or controlled processing strategy is the characteristics of the message itself. Messages pro- vided through relatively lean communication channels, with little opportunity for users to interact with the content of the message, tend to encourage auto- matic processing. For example, most television advertisements go by too fast for really deliberative thought; we automatically process these. Conversely, mes- sages provided through richer communication channels, like a long magazine article, tend to encourage more deliberative processing. The most important implication of all this research is to match your persuasive message to the type of processing your audience is likely to use. When the audience is not especially interested in a persuasive message topic, when they are poorly informed, when they are low in need for cognition, and when information is transmitted through relatively lean channels, they’ll be more likely to use automatic processing. In these cases, use messages that are more emotion-laden and associate positive images with your preferred out- come. On the other hand, when the audience is interested in a topic, when they are high in need for cognition, or when the information is transmitted through rich channels, then it is a better idea to focus on rational arguments and evi- dence to make your case. Barriers to Effective Communication 353 Barriers to Effective Communication A number of barriers can retard or distort effective communication. In this sec- tion, we highlight the most important. Filtering Filtering refers to a sender’s purposely manipulating information so the re- ceiver will see it more favorably. A manager who tells his boss what he feels the boss wants to hear is filtering information. The more vertical levels in the organization’s hierarchy, the more opportu- nities there are for filtering. But some filtering will occur wherever there are status differences. Factors such as fear of conveying bad news and the desire to please the boss often lead employees to tell their superiors what they think they want to hear, thus distorting upward communications. Selective Perception We have mentioned selective perception before in this book. It appears again here because the receivers in the communication process selectively see and hear based on their needs, motivations, experience, background, and other personal characteristics. Receivers also project their interests and expectations into communications as they decode them. An employment interviewer who expects a female job applicant to put her family ahead of her career is likely to see that in all female applicants, regardless of whether they actually feel that way. As we said in Chapter 6 , we don’t see reality; we interpret what we see and call it reality. Information Overload Individuals have a finite capacity for processing data. When the information we have to work with exceeds our processing capacity, the result is informa- tion overload. We’ve seen that dealing with it has become a huge challenge for individuals and for organizations. It’s a challenge you can manage—to some degree—by following the steps outlined earlier in this chapter. What happens when individuals have more information than they can sort and use? They tend to select, ignore, pass over, or forget. Or they may put off further processing until the overload situation ends. In any case, lost informa- tion and less effective communication results, making it all the more important to deal well with overload. Emotions You may interpret the same message differently when you’re angry or dis- traught than when you’re happy. For example, individuals in positive moods are more confident about their opinions after reading a persuasive message, so well-crafted arguments have stronger impacts on their opinions. 48 People in negative moods are more likely to scrutinize messages in greater detail, whereas those in positive moods tend to accept communications at face value. 49 Extreme 8 Identify common barriers to effective communication. filtering A sender’s manipulation of information so that it will be seen more favorably by the receiver. 354 CHAPTER 11 Communication emotions such as jubilation or depression are most likely to hinder effective communication. In such instances, we are most prone to disregard our rational and objective thinking processes and substitute emotional judgments. Language Even when we’re communicating in the same language, words mean different things to different people. Age and context are two of the biggest factors that influence such differences. When Michael Schiller, a business consultant, was talking with his 15-year- old daughter about where she was going with her friends, he told her, “You need to recognize your KPIs and measure against them.” Schiller said that in response, his daughter “looked at him like he was from outer space.” (For the record, KPI stands for key performance indicators.) Those new to corporate lingo may find acronyms such as KPI, words such as deliverables (verifiable out- comes of a project), and phrases such as get the low-hanging fruit (deal with the easiest parts first) bewildering, in the same way parents may be mystified by teen slang. 50 In short, our use of language is far from uniform. If we knew how each of us modified the language, we could minimize communication difficulties, but we usually don’t know. Senders tend to assume the words and terms they use mean the same to the receiver as to them. This assumption is often incorrect. Silence It’s easy to ignore silence or lack of communication, precisely because it is defined by the absence of information. However, research suggests silence and withholding communication are both common and problematic. 51 One survey found that more than 85 percent of managers reported remaining silent about at least one issue of significant concern. 52 Employee silence means man- agers lack information about ongoing operational problems. And silence re- garding discrimination, harassment, corruption, and misconduct means top management cannot take action to eliminate this behavior. Finally, employees who are silent about important issues may also experience psychological stress. Managers of Hochtief, Germany’s largest construction firm, relied on controlled processing when address- ing employees during a supervisory board meeting at company head- quarters in Essen, Germany, shown here. In response to a takeover bid by the Spanish construction firm Actividades de Construccion & Servicios (ACS), Hochtief manage- ment focused on rational evidence and arguments in presenting its defense against the takeover bid and its plans to fend off the bid. Employees’ level of interest in the takeover attempt is high, because they fear that an ACS takeover would result in a major downsizing of Hochtief’s workforce and would put their jobs at risk. So u rc e : B e rn d T h is se n /d p a /p ic tu re -a ll ia n ce /N e w sc o m . Barriers to Effective Communication 355 Silence is less likely where minority opinions are treated with respect, workgroup identification is high, and high procedural justice prevails. 53 Practically, this means managers must make sure they behave in a supportive manner when employees voice divergent opinions or concerns, and they must take these under advisement. One act of ignoring or belittling an employee for expressing concerns may well lead the employee to withhold important future communication. Communication Apprehension An estimated 5 to 20 percent of the population suffers debilitating communica- tion apprehension , or social anxiety. 54 These people experience undue tension and anxiety in oral communication, written communication, or both. 55 They may find it extremely difficult to talk with others face-to-face or may become extremely anxious when they have to use the phone, relying on memos or e-mails when a phone call would be faster and more appropriate. Studies show oral-communication apprehensives avoid situations, such as teaching, for which oral communication is a dominant requirement. 56 But almost all jobs require some oral communication. Of greater concern is evidence that high oral-communication apprehensives distort the communica- tion demands of their jobs in order to minimize the need for communication. So be aware that some people severely limit their oral communication and ra- tionalize their actions by telling themselves communicating isn’t necessary for them to do their job effectively. Lying The final barrier to effective communication is outright misrepresentation of information, or lying. People differ in their definition of what constitutes a lie. For example, is deliberately withholding information about a mistake you made a lie, or do you have to actively deny your role in the mistake to pass the threshold of deceit? While the definition of a lie will continue to befuddle both ethicists and social scientists, there is no denying the prevalence of lying. In one diary study, the average person reported telling one to two lies per day, with some individuals telling considerably more. 57 Compounded across a large orga- nization, this is an enormous amount of deception happening every single day! Evidence also shows that people are more comfortable lying over the phone than face-to-face and more comfortable lying in e-mails than when they have to write with pen and paper. 58 Can you detect liars? Despite a great deal of investigation, research generally suggests most people are not very good at detecting deception in others. 59 The problem is, there are no nonverbal or verbal cues unique to lying—averting your gaze, pausing, and shifting your posture can also be signals of nervousness, shy- ness, or doubt. Moreover, most people who lie take a number of steps to guard against being detected, so they might deliberately look a person in the eye when lying because they know that direct eye contact is (incorrectly) assumed to be a sign of truthfulness. Finally, many lies are embedded in truths; liars usually give a somewhat true account with just enough details changed to avoid detection. In sum, the frequency of lying and the difficulty in detecting liars makes this an especially strong barrier to effective communication in organizations. communication apprehension Undue tension and anxiety about oral communication, written communication, or both. 356 CHAPTER 11 Communication T his statement is true, though we still have more to learn about the characteristics of proficient liars. As we have noted in this chapter, it is not easy to detect whether liars are telling the truth. We have re- viewed some of the reasons for this, but recent research has uncovered an obvious but only recently tested expla- nation for why it’s hard to catch a liar: some people are just good at lying, and we’re beginning to understand why. What causes people to be good liars? A major review of the literature identified six features of good liars: 1. Their natural behavior is disarming— they smile, make eye contact, mimic the gestures of their target, and avoid “ums” and “ehs.” 2. They do their homework—they have thought up plausible cover stories before they are demanded. 3. They don’t let their emotions get in the way—good liars are unusually calm and composed when lying. 4. They are good-looking—good liars are physically attractive; we are more likely to trust stories told by attractive people. 5. They have good insights into oth- ers’ thought processes. 6. They tend to believe their own lies—this has been established by studies that ask people to lie and later find many of them believe their original lies to be true. A sad truth of organizational behavior is that people are better liars than we think, and we are worse at unveiling them than we realize. Sources: A. Vrij, P. A. Granhag, and S. Porter, “Pitfalls and Opportunities in Nonverbal and Verbal Lie Detection,” Psychological Science in the Public Interest 11, no. 3 (2010), pp. 89–121; E. F. Loftus, “Catching Liars,” Psychological Science in the Public Interest 11, no. 3 (2010), pp. 87–88; and A. Vrij, P. A. Granhag, and S. Mann, “Good Liars,” Unpublished manuscript, University of Portsmouth, 2011, www.port.ac.uk/ departments/academic/psychology/staff/ downloads/filetodownload,89132,en . Myth or Science? “We Know What Makes Good Liars Good” Effective communication is difficult under the best of conditions. Cross-cultural factors clearly create the potential for increased communication problems. A gesture that is well understood and acceptable in one culture can be mean- ingless or lewd in another. Only 18 percent of companies have documented strategies for communicating with employees across cultures, and only 31 per- cent require that corporate messages be customized for consumption in other cultures. Procter & Gamble seems to be an exception; more than half the com- pany’s employees don’t speak English as their first language, so the company focuses on simple messages to make sure everyone knows what’s important. 60 Cultural Barriers Researchers have identified a number of problems related to language difficul- ties in cross-cultural communications. 61 First are barriers caused by semantics. Words mean different things to differ- ent people, particularly people from different national cultures. Some words don’t translate between cultures. The Finnish word sisu means something akin to “guts” or “dogged persistence” but is essentially untranslatable into English. The new capitalists in Russia may have difficulty communicating with British or Canadian counterparts because English terms such as efficiency, free market, and regulation have no direct Russian equivalents. Second are barriers caused by word connotations. Words imply different things in different languages. Negotiations between U.S. and Japanese executives can be difficult because the Japanese word hai translates as “yes,” but its connota- tion is “Yes, I’m listening” rather than “Yes, I agree.” 9 Show how to overcome the potential problems in cross- cultural communication. Global Implications www.port.ac.uk/departments/academic/psychology/staff/downloads/filetodownload,89132,en www.port.ac.uk/departments/academic/psychology/staff/downloads/filetodownload,89132,en www.port.ac.uk/departments/academic/psychology/staff/downloads/filetodownload,89132,en Global Implications 357 Third are barriers caused by tone differences. In some cultures, language is formal; in others, it’s informal. In some cultures, the tone changes depending on the con- text: People speak differently at home, in social situations, and at work. Using a personal, informal style when a more formal style is expected can be embarrassing. Fourth are differences in tolerance for conflict and methods for resolving conflicts. Individuals from individualist cultures tend to be more comfortable with direct conflicts and will make the source of their disagreements overt. Collectivists are more likely to acknowledge conflict only implicitly and avoid emotionally charged disputes. They may attribute conflicts to the situation more than to the individuals and therefore may not require explicit apologies to repair relation- ships, whereas individualists prefer explicit statements accepting responsibility for conflicts and public apologies to restore relationships. Cultural Context Cultures tend to differ in the degree to which context influences the meaning individuals take from communication. 62 In high-context cultures such as China, Korea, Japan, and Vietnam, people rely heavily on nonverbal and subtle situational cues in communicating with others, and a person’s official status, place in society, and reputation carry considerable weight. What is not said may be more significant than what is said. In contrast, people from Europe and North America reflect their low-context cultures . They rely essentially on spoken and written words to convey meaning; body language and formal titles are secondary (see Exhibit 11-7 ). These contextual differences actually mean quite a lot in terms of commu- nication. Communication in high-context cultures implies considerably more trust by both parties. What may appear to be casual and insignificant conver- sation in fact reflects the desire to build a relationship and create trust. Oral agreements imply strong commitments in high-context cultures. And who you are—your age, seniority, rank in the organization—is highly valued and heavily influences your credibility. But in low-context cultures, enforceable contracts tend to be in writing, precisely worded, and highly legalistic. Similarly, low- context cultures value directness. Managers are expected to be explicit and precise in conveying intended meaning. It’s quite different in high-context cultures, in which managers tend to “make suggestions” rather than give orders. high-context cultures Cultures that rely heavily on nonverbal and subtle situational cues in communication. low-context cultures Cultures that rely heavily on words to convey meaning in communication. High- versus Low-Context Cultures Exhibit 11-7 Chinese Korean Japanese Vietnamese Arab Greek Spanish Italian English North American Scandinavian Swiss German High context Low context 358 CHAPTER 11 Communication T hose who have traveled or done business internationally are often advised to be careful about how directly they communicate with peo- ple from different cultures. The popu- lar advice suggests that U.S. citizens prefer upbeat, positive communica- tion; the English prefer formal com- munication; central Europeans are more interested in direct communica- tion even if information is negative; and East Asians prefer to minimize disagreements and emphasize shared perspectives. Although there is more advice than research on this particular issue, some preliminary work does suggest some reliable differences in how cultures value direct and indirect communication. One study examined cultural dif- ferences in values, beliefs, and per- sonality data to see whether any consistent patterns in communica- tion could be found. A group of East Asian countries, including China, Taiwan, Singapore, and Japan, were marked by a bias for low levels of both agreement and disagreement in com- munication, preferring moderate dis- cussions with respondents not taking strong sides on an issue. Conversely, countries like Morocco, Iraq, Israel, and Saudi Arabia prefer high levels of both agreement and disagreement in their communications; in these coun- tries, the preferred communication style meant directly taking a stand on issues whether positive or negative. “Dissent” cultures like Germany, the United Kingdom, Sweden, and Greece favored high levels of disagreement in communication with relatively low levels of agreement. Nigeria, India, and Vietnam were found to be high in agreement and low in disagreement in communication. The results of studies of this nature should always be considered carefully in light of the large differences we also find within cultures. Some individuals from India may well value negative opinions and active disagreement from others, whereas some Germans might prefer to focus on areas of shared val- ues. However, some patterning of re- sponses across cultures does indicate a real difference in preferences for communication styles. Sources: P. B. Smith, “Communication Styles as Dimensions of National Culture,” Journal of Cross-Cultural Psychology 42, no. 2 (2011), pp. 216–233; and M. G. Kittler, D. Rygl, and A. Mackinnon, “Beyond Culture or Beyond Control? Reviewing the Use of Hall’s High-/Low-Context Concept,” International Journal of Cross Cultural Management 11, no. 1 (2011), pp. 63–82. glOBalization! A Cultural Guide When communicating with people from a different culture, what can you do to re- duce misinterpretations? Begin by trying to assess the cultural context. You’re likely to have fewer difficulties if it’s similar to yours. The following rules can be helpful: 63 1. Assume differences until similarity is proven. Most of us assume others are more similar to us than they actually are. You are less likely to err if you assume they are different from you until proven otherwise. 2. Emphasize description rather than interpretation or evaluation. Interpreting or evaluating what someone has said or done draws more on your own culture and background than on the observed situation. So delay judgment until you’ve had sufficient time to observe and interpret the situ- ation from the differing perspectives of all concerned. 3. Practice empathy. Before sending a message, put yourself in the recipient’s shoes. What are his or her values, experiences, and frames of reference? What do you know about his or her education, upbringing, and background that can give you added insight? Try to see the other person as he or she really is. 4. Treat your interpretations as a working hypothesis. Once you’ve devel- oped an explanation for a new situation or think you empathize with some- one from a foreign culture, treat your interpretation as a hypothesis that needs further testing rather than as a certainty. Carefully assess the feed- back recipients provide you, to see whether it confirms your hypothesis. For important decisions or communiqués, check with other foreign and home- country colleagues to make sure your interpretations are on target. How Direct Should You Be? Global Implications 359 Social Networking Is Good Business POINT COUNTERPOINT T here’s no doubt social networking has exploded. There is significant doubt, however, that this explosion is benefi- cial to employees and to organizations. Although there are many dangers in social networking, let’s focus on three. First, companies can get into legal hot water by looking into applicants’ social networking profiles. Equal Employment Opportunity laws require companies to hire without respect to race, sex, age, religion, national origin, or disability. Yet you can learn all these things from someone’s profile. And that’s not the only legal minefield. Recently, when a Chicago-area employee was reprimanded for posting her frustrations with her boss on her Facebook page, the National Labor Relations Board ruled against the company. Second, social networks are risky for employees and appli- cants too. They were originally established to connect friends— and that remains their primary purpose. When employers snoop into an employee or applicant’s Facebook page, fairly or not, they won’t judge the information and its informality as dialogue among friends. Rather, they’ll use it to draw the wrong con- clusions. As one employment expert says, “While employers shouldn’t use affiliations with social networks or your personal posts as reasons not to hire you, why take the risk?” Finally, and perhaps most important, today nearly all of us suffer from communication overload, and social networking only adds to it. “There are so many things coming at you,” says 29-year-old manager Jose Huitron. “Sometimes it can be so overwhelming,” says George Washington University student Ben Yarmis. Scores of research studies show that the growth in social networking has limited people’s attention spans and in- creased distractions. Says one neuroscientist who has studied the effect of social networking on how the mind works: “We are exposing our brains to an environment and asking them to do things we weren’t necessarily evolved to do. We know already there are consequences.” F acebook has passed a half a billion users for a reason. It’s an inspired idea that serves many useful purposes for or- ganizations and employees alike. Other social networking and media sites like Twitter are not far behind. Employers can learn a lot about prospective hires by exam- ining their Facebook (or other social networking) page. UPS re- cently ramped up its use of social networking to recruit. “Our reason for using social media is because that’s where we think the applicants are,” says a UPS manager in charge of recruit- ment. Applicants likewise can learn a lot about an organization by analyzing its online presence. Facebook and other social networks are also great ways for employees to communicate with one another, particularly when they work in geographically dispersed locales and do an in- creasing amount of their work remotely. Banning or discourag- ing employees from using social media needlessly places each employee in a communications silo. One social media expert said the Millennial generation “is horrified at how unconnected people in many organizations are.” Many firms, like UPS, are embracing social networking, though. IBM developed its own social networking software—called w3—to link its 400,000 em- ployees across the world. IBM manager John Rooney says the software “contributes to the integration of our company on a global basis. It’s seen as part of our ability to succeed.” In some companies, teams create Facebook groups around their projects to foster teamwork and open the lines of com- munication. Pushed to its full potential, social networking can even change a company’s culture given its open, democratic, and transparent nature. “You better believe it can democratize a company,” said one workplace expert. Isn’t that what we want?” Sources: J. A. Segal, “Dancing on the Edge of a Volcano,” HR Magazine (April 2011), pp. 83–86; T. L. Griffith, “Tapping Into Social-Media Smarts,” The Wall Street Journal (April 25, 2011), p. R6; L. Petrecca, “More Grads Use Social Media to Job Hunt,” USA Today (April 5, 2011), p. B1; J. Swartz, “Communications Overload,” USA Today (February 2, 2011), pp. 1B–2B; S. Ladika, “Socially Evolved,” Workforce Management (September 2010), pp. 18–22; M. Richtel, “Hooked on Gadgets, and Paying a Mental Price,” The New York Times (June 6, 2010), pp. A1, A12, A13; and A. Clark, “Watch What You’re Posting: Your Boss May Be Watching,” Gainesville Sun (February 19, 2011), pp. 1B, 5B. 360 CHAPTER 11 Communication S A L SELF-ASSESSMENT LIBRARY How Good Are My Listening Skills? In the Self-Assessment Library (available on CD or online), take assessment II.A.2 (How Good Are My Listening Skills?). MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Summary and Implications for Managers You’ve probably discovered the link between communication and employee satisfaction in this chapter: the less uncertainty, the greater the satisfaction. Distortions, ambiguities, and incongruities between verbal and nonverbal mes- sages all increase uncertainty and reduce satisfaction. 64 ● The less distortion, the more employees will receive goals, feedback, and other management messages as intended. 65 This, in turn, should reduce ambiguities and clarify the group’s task. ● Extensive use of vertical, lateral, and informal channels also increases communication flow, reduces uncertainty, and improves group perfor- mance and satisfaction. ● Perfect communication is unattainable. Yet a positive relationship exists between effective communication and worker productivity. 66 Choosing the correct channel, being an effective listener, and using feedback can make for more effective communication. ● Whatever the sender’s expectations, the message as decoded in the receiver’s mind represents his or her reality. And this reality will determine performance, along with the individual’s level of motivation and degree of satisfaction. ● Because we gather so much meaning from the way a message is communi- cated, the potential for misunderstanding in electronic communication is great despite its advantages . ● We sometimes process messages relatively automatically, while at other times we use a more effortful, controlled process. Make sure you use com- munication strategies appropriate to your audience and the type of mes- sage you’re sending. ● Finally, by keeping in mind communication barriers such as gender and cul- ture, we can overcome them and increase our communication effectiveness. 1 What are the primary functions of the communication process in organizations? 2 What are the key parts of the communication process, and how do you distinguish formal and informal communication? 3 What are the differences among downward, upward, and lateral communication? 4 What are the unique challenges to oral, written, and nonverbal communication? 5 What are the advantages and challenges of electronic communication? 6 What are the main forms of electronic communication? What are their unique benefits and challenges? QUESTIONS FOR REVIEW www.mymanagementlab.com Ethical Dilemma 361 EXPERIENTIAL EXERCISE An Absence of Nonverbal Communication This exercise will help you to see the value of nonverbal communication to interpersonal relations. 1. The class is to split up into pairs (party A and party B). 2. Party A is to select a topic from the following list: a. Managing in the Middle East is significantly different from managing in North America. b. Employee turnover in an organization can be functional. c. Some conflict in an organization is good. d. Whistle-blowers do more harm than good for an organization. e. An employer has a responsibility to provide every employee with an interesting and challenging job. f. Everyone should register to vote. g. Organizations should require all employees to un- dergo regular drug tests. h. Individuals who have majored in business or eco- nomics make better employees than those who have majored in history or English. i. The place where you get your college degree is more important in determining your career suc- cess than what you learn while you’re there. j. It’s unethical for a manager to purposely distort communications to get a favorable outcome. 3. Party B is to choose a position on this topic (for example, arguing against the view “Some conflict in an organization is good”). Party A now must automatically take the opposite position. 4. The two parties have 10 minutes in which to debate their topic. The catch is that the individuals can only communicate verbally. They may not use gestures, facial movements, body movements, or any other nonverbal communication. It may help for each party to sit on their hands to remind them of their restrictions and to maintain an expressionless look. 5. After the debate is over, form groups of six to eight and spend 15 minutes discussing the following: a. How effective was communication during these debates? b. What barriers to communication existed? c. What purposes does nonverbal communication serve? d. Relate the lessons learned in this exercise to prob- lems that might occur when communicating on the telephone or through e-mail. ETHICAL DILEMMA Pitfalls of E-Mail While e-mail may be a very useful—even indispensable— form of communication in organizations, it certainly has its limits and dangers. Indeed, e-mail can get you into trouble with more people, more quickly, than almost any other form of communication. Ask Bill Cochran. Cochran, 44, is a manager at Richmond Group, a Dallas-based advertising agency. As Richmond was gearing up to produce a Superbowl ad for one its clients—Bridgestone—Cochran’s boss sent an e-mail to 200 people describing the internal competition to determine which ad idea would be presented. Cochran chose the occasion to give a pep talk to his team. Using “locker room talk,” he composed an e-mail criticizing the other Richmond teams, naming employees he thought would provide them real competition—and those who wouldn’t. What Cochran did next—hit the Send key—seemed so innocuous. But it was a keystroke he would soon wish he could undo. Shortly after he sent the e-mail, a co-worker, Wendy Mayes, wrote to him: “Oh God . . . Bill. You just hit REPLY ALL!” Questions 1. After realizing what he had done, how should Cochran have responded to this situation? 2. After the incident, Mayes says of Cochran: “His name soon became synonymous with ’idiotic behavior’ such as ‘don’t pull a Cochran.’” Is it unethical to partici- pate in such ribbing? 3. Kaspar Rorsted, CEO of Henkil, a consumer and industrial products company based in Germany, says that copying others on e-mails is overused. “It’s 7 What is the difference between automatic and controlled processing of persuasive messages? 8 What are some common barriers to effective communication? 9 What unique problems underlie cross-cultural communication? 362 CHAPTER 11 Communication a waste of time,” he said. “If they want to write me, they can write me. People often copy me to cover their back.” Do you agree? How can you decide when copying others is necessary vs. “a waste of time”? Sources: E. Bernstein, “Reply All: The Button Everyone Loves to Hate,” The Wall Street Journal (March 8, 2011), pp. D1, D4; and A. Bryant, “No Need to Hit The ’Send’ Key. Just Talk to Me,” The New York Times (August 29, 2010), p. 2. CASE INCIDENT 1 Using Social Media to Your Advantage As you know, social media have transformed the way we interact. The transparent, rapid-fire communication they make possible means people can spread information about companies more rapidly than ever. Do organizations understand yet how to use social me- dia effectively? Perhaps not. As recently as 2010, only 19 of the top 50 chief executives in the world had Facebook accounts, only 6 had LinkedIn pages, and only 2 regularly used Twitter or blogs to communicate. Many executives are wary of these new technologies because they cannot always control the outcomes of their communications. However, whether they are directly involved with social media or not, companies should recognize that these messages are out there, so it behooves them to make their voices heard. And social media can be an important way to learn about emerg- ing trends. André Schneider, chief operating officer of the World Economic Forum, uses feedback from LinkedIn discussion groups and Facebook friends to discover emerg- ing trends and issues worldwide. Padmasree Warrior, chief technology officer of Cisco, has used social media to refine her presentations before a “test” audience. The first step in developing a social media strategy is es- tablishing a brand for your communications—define what you want your social media presence to express. Experts recommend that companies begin their social media strategy by leveraging their internal corporate networks to test their strategy in a medium that’s easier to control. Most companies already have the technology to use social media through their corporate Web sites. Begin by using these platforms for communicating with employees and fa- cilitating social networks for general information sharing. As social networking expert Soumitra Dutta from Insead notes, “My advice is to build your audience slowly and be selective about your contacts.” Despite the potential advantages, companies also need to be aware of significant drawbacks to social media. First, it’s very difficult to control social media communications. Microsoft found this out when the professional blogger it hired spent more time promoting himself than getting positive informa- tion out about the company. Second, important intellectual capital might leak out. Companies need to establish very clear policies and procedures to ensure that sensitive information about ongoing corporate strategies is not disseminated via so- cial media. Finally, managers should maintain motivation and interest beyond their initial forays into social media. A site that’s rarely updated can send a very negative message about the organization’s level of engagement with the world. Questions 1. Do you think organizations need to have a social media presence today? Are the drawbacks sufficient to make you think it’s better for them to avoid certain media? 2. What features would you look for in a social media outlet? What types of information would you avoid making part of your social media strategy? 3. Which social media sources do you think are most useful for organizations to send communications to external stakeholders, like stockholders or custom- ers? Are different social media more appropriate for communicating with employees? 4. What do you think is the future direction of social media? How might emerging technologies change them? Sources: S. Dutta, “What’s Your Personal Social Media Strategy,” Harvard Business Review (November 2010), pp. 127–130; and G. Connors, “10 Social Media Commandments for Employers,” Workforce Management Online (February 2010), www.workforce.com . CASE INCIDENT 2 Should Companies That Fire Shoot First? In the recessions in the early 1990s and after the 2001 terrorist attacks, layoffs were fairly private affairs. News often leaked out to local and national media outlets, but companies did their best to keep it as quiet as possible. Given the growth of the Internet in general, and of social networking sites in particular, that’s no longer possible. When Starbucks laid off employees in 2008 and 2009, the Web site StarbucksGossip.com received a barrage of posts from disgruntled employees. One 10-year employee wrote, “This company is going to lose every great partner that it has. I am sick and tired of being blamed for not meeting my budget when the economy is in a recession. www.workforce.com Endnotes 363 Sources: Based on C. C. Miller, “In Era of Blog Sniping, Companies Shoot First,” The New York Times (November 5, 2008), pp. B1, B11; M. Allison, “More Layoffs Expected at Starbucks,” Seattle Times (January 24, 2009), seattletimes.nwsource.com ; and C. Hirschman, “Giving Voice to Employee Concerns,” HR Magazine (August 2008), pp. 51–53. ENDNOTES 1. See, for example, R. S. Lau and A. T. Cobb, “Understanding the Connections between Relationship Conflict and Performance: The Intervening Roles of Trust and Exchange,” Journal of Organizational Behavior 31, no. 6 (2010), pp. 898–917; and M. Olekalns, L. L. Putnam, L. R. Weingart, and L. Metcalf, “Communication Processes and Conflict Management: The Psychology of Conflict and Conflict Management in Organizations,” in C. K. W. De Dreu and M. J. Gelfand, (eds.), The Psychology of Conflict and Conflict Management in Organizations . (New York: Taylor & Francis Group, 2008) pp. 81–114. 2. “Employers Cite Communication Skills, Honesty/Integrity as Key for Job Candidates,” IPMA-HR Bulletin (March 23, 2007), p. 1. 3. W. G. Scott and T. R. Mitchell, Organization Theory: A Structural and Behavioral Analysis (Homewood, IL: Irwin, 1976). 4. D. K. Berlo, The Process of Communication (New York: Holt, Rinehart & Winston, 1960), pp. 30–32; see also K. Byron, “Carrying Too Heavy a Load? The Communication and Miscommunication of Emotion by Email,” The Academy of Management Review 33, no. 2 (2008), pp. 309–327. 5. J. Langan-Fox, “Communication in Organizations: Speed, Diversity, Networks, and Influence on Organizational Effectiveness, Human Health, and Relationships,” in N. Anderson, D. S. Ones, H. K. Sinangil, and C. Viswesvaran (Eds.), Handbook of Industrial, Work and Organizational Psychology , vol. 2 (Thousand Oaks, CA: Sage, 2001), p. 190. 6. R. L. Simpson, “Vertical and Horizontal Communication in Formal Organizations,” Administrative Science Quarterly (September 1959), pp. 188–196; A. G. Walker and J. W. Smither, “A Five-Year Study of Upward Feedback: What Managers Do with Their Results Matter,” Personnel Psychology (Summer 1999), pp. 393–424; and J. W. Smither and A. G. Walker, “Are the Characteristics of Narrative Comments Related to Improvement in Multirater Feedback Ratings Over Time?” Journal of Applied Psychology 89, no. 3 (June 2004), pp. 575–581. 7. P. Dvorak, “How Understanding the ‘Why’ of Decisions Matters,” The Wall Street Journal (March 19, 2007), p. B3. 8. T. Neeley and P. Leonardi, “Effective Managers Say the Same Thing Twice (or More),” Harvard Business Review (May 2011), pp. 38–39. 9. J. Ewing, “Nokia: Bring on the Employee Rants,” BusinessWeek (June 22, 2009), p. 50. 10. E. Nichols, “Hyper-Speed Managers,” HRMagazine (April 2007), pp. 107–110. 11. L. Dulye, “Get Out of Your Office,” HRMagazine (July 2006), pp. 99–101. 12. L. S. Rashotte, “What Does That Smile Mean? The Meaning of Nonverbal Behaviors in Social Interaction,” Social Psychology Quarterly (March 2002), pp. 92–102. 13. J. Fast, Body Language (Philadelphia: M. Evan, 1970), p. 7. 14. A. Mehrabian, Nonverbal Communication (Chicago: Aldine- Atherton, 1972). 15. N. M. Henley, “Body Politics Revisited: What Do We Know Today?” in P. J. Kalbfleisch and M. J. Cody (eds.), Gender, Power, and Communication in Human Relationships (Hillsdale, NJ: Lawrence Erlbaum, 1995), pp. 27–61. 16. See, for example, N. B. Kurland and L. H. Pelled, “Passing the Word: Toward a Model of Gossip and Power in the Workplace,” Academy of Management Review (April 2000), pp. 428–438; and G. Michelson, A. van Iterson, I used to be proud of my company . . . now I am embar- rassed and feel physically ill every time I have to go to work.” Some companies are taking a proactive approach. When Tesla Motors laid off employees, its CEO Elon Musk posted a blog entry about it just before announcing the layoffs internally. “We had to say something to prevent articles being written that were not accurate,” he said. “Today, whatever you say inside a company will end up in a blog,” says Rusy Rueff, a former executive at PepsiCo. “So, you have a choice as a company—you can either be proactive and say, ‘Here’s what’s going on,’ or you can allow someone else to write the story for you.” Illustrating the perils of ignoring the blogosphere, when newspaper giant Gannett announced it was laying off 10 percent of its employees, it posted no blog entries and made no statement. Jim Hopkins, a 20-year veteran who left the company just before the layoffs, writes the unof- ficial Gannett Blog. “I try to give the unvarnished truth. I don’t think the company offers the same level of candor to employees,” he said. Gannett spokeswoman Tara Connell replied, “We attempt to make those personal communications happen as quickly as possible.” Says blog expert Andy Sernovitz, “There are hold-out companies that still wish there was traditional P.R. control of the message, but that day is long over.” Questions 1. Do you think Tesla CEO Elon Musk did the right thing when he blogged about impending layoffs just before announcing them to employees? Why or why not? 2. Do you think employees have a responsibility to be careful when they blog about their company? Why or why not? 3. Do you think employees who blog about their com- panies have an ethical responsibility to disclose their identities? 4. How can a company develop a policy for handling communication of sensitive issues inside, and outside, the company? 364 CHAPTER 11 Communication and K. Waddington, “Gossip in Organizations: Contexts, Consequences, and Controversies,” Group and Organization Management 35, no. 4 (2010), pp. 371–390. 17. Cited in “Heard It Through the Grapevine,” Forbes (February 10, 1997), p. 22. 18. G. Van Hoye and F. Lievens, “Tapping the Grapevine: A Closer Look at Word-of-Mouth as a Recruitment Source,” Journal of Applied Psychology 94, no. 2 (2009), pp. 341–352. 19. K. Davis, “Management Communication and the Grapevine,” Harvard Business Review (September–October 1953), pp. 43–49. 20. R. L. Rosnow and G. A. Fine, Rumor and Gossip: The Social Psychology of Hearsay (New York: Elsevier, 1976). 21. J. K. Bosson, A. B. Johnson, K. Niederhoffer, and W. B. Swann, Jr., “Interpersonal Chemistry Through Negativity: Bonding by Sharing Negative Attitudes About Others,” Personal Relationships 13 (2006), pp. 135–150. 22. T. J. Grosser, V. Lopez-Kidwell, and G. Labianca, “A Social Network Analysis of Positive and Negative Gossip in Organizational Life,” Group and Organization Management 35, no. 2 (2010), pp. 177–212. 23. B. Gates, “How I Work,” Fortune (April 17, 2006), money .cnn.com . 24. D. Brady, “*!#?@ the E-mail. Can We Talk?” BusinessWeek (December 4, 2006), p. 109. 25. E. Binney, “Is E-mail the New Pink Slip?” HR Magazine (November 2006), pp. 32–33; and R. L. Rundle, “Critical Case: How an Email Rant Jolted a Big HMO,” The Wall Street Journal (April 24, 2007), pp. A1, A16. 26. S. Hourigan, “62 Trillion Spam Emails Cause Huge Carbon Footprint,” Courier Mail (April 17, 2009), www.news.com.au/ couriermail . 27. R. Stross, “The Daily Struggle to Avoid Burial by E-Mail,” New York Times (April 21, 2008), p. BU5; and H. Rhodes, “You’ve Got Mail . . . Again,” Gainesville Sun (September 29, 2008), pp. 1D, 6D. 28. C. Byron, “Carrying Too Heavy a Load? The Communication and Miscommunication of Emotion by Email,” Academy of Management Review 33, no. 2 (2008), pp. 309–327. 29. D. Goleman, “Flame First, Think Later: New Clues to E-mail Misbehavior,” The New York Times (February 20, 2007), p. D5; and E. Krell, “The Unintended Word,” HRMagazine (August 2006), pp. 50–54. 30. J. E. Hall, M. T. Kobata, and M. Denis, “Employees and E-mail Privacy Rights,” Workforce Management (June 2010), p. 10. 31. R. Zeidner, “Keeping E-mail in Check,” HRMagazine (June 2007), pp. 70–74; “E-mail May Be Hazardous to Your Career,” Fortune (May 14, 2007), p. 24; and J. D. Glater, “Open Secrets,” The New York Times (June 27, 2008), pp. B1, B5. 32. A. Williams, “Mind Your BlackBerry or Mind Your Manners,” The New York Times (June 21, 2009), www.nytimes.com . 33. “Survey Finds Mixed Reviews on Checking E-mail During Meetings,” IPMA-HR Bulletin (April 27, 2007), p. 1. 34. K. Gurchiek, “Shoddy Writing Can Trip Up Employees, Organizations,” SHRM Online (April 27, 2006), pp. 1–2. 35. T. Henneman, “Companies Making Friends with Social Media,” Workforce Management , (April 2010), p. 4. 36. D. Lidsky, “It’s Not Just Who You Know,” Fast Company (May 2007), p. 56. 37. “Bosses Battle Risk by Firing E-mail, IM & Blog Violators,” IPMA-HR Bulletin (January 12, 2007), pp. 1–2; G. Krants, “Blogging with a Vendetta,” Workforce Week 8, no. 25 (June 10, 2007), www.workforce.com/section/quick_takes/49486_3 .html ; B. Leonard, “Blogs Can Present New Challenges to Employers,” SHRM Online (March 13, 2006), pp. 1–2; and J. Greenwald, “Monitoring Communications? Know Legal Pitfalls,” Workforce Management Online (February 2011), www.workforce.com . 38. E. Agnvall, “Meetings Go Virtual,” HR Magazine (January 2009), pp. 74–77. 39. C. Huff, “Staying Afloat in a Digital Flood,” Workforce Management Online (July 2008), www.workforce.com . 40. M. Richtel, “Lost in E-mail, Tech Firms Face Self-Made Beast,” The New York Times (June 14, 2008), pp. A1, A14; and M. Johnson, “Quelling Distraction,” HR Magazine (August 2008), pp. 43–46. 41. W. R. Boswell and J. B. Olson-Buchanan, “The Use of Communication Technologies After Hours: The Role of Work-Attitudes and Work-Life Conflict,” Journal of Management 33, no. 4 (2007), pp. 592–610. 42. “At Many Companies, Hunt for Leakers Expands Arsenal of Monitoring Tactics,” The Wall Street Journal (September 11, 2006), pp. B1, B3; and B. J. Alge, G. A. Ballinger, S. Tangirala, and J. L. Oakley, “Information Privacy in Organizations: Empowering Creative and Extrarole Performance,” Journal of Applied Psychology 91, No. 1 (2006), pp. 221–232. 43. See R. L. Daft and R. H. Lengel, “Information Richness: A New Approach to Managerial Behavior and Organization Design,” in B. M. Staw and L. L. Cummings (eds.), Research in Organizational Behavior, vol. 6 (Greenwich, CT: JAI Press, 1984), pp. 191–233; R. L. Daft and R. H. Lengel, “Organizational Information Requirements, Media Richness, and Structural Design,” Managerial Science (May 1986), pp. 554–572; R. E. Rice, “Task Analyzability, Use of New Media, and Effectiveness,” Organization Science (November 1992), pp. 475–500; S. G. Straus and J. E. McGrath, “Does the Medium Matter? The Interaction of Task Type and Technology on Group Performance and Member Reaction,” Journal of Applied Psychology (February 1994), pp. 87–97; L. K. Trevino, J. Webster, and E. W. Stein, “Making Connections: Complementary Influences on Communication Media Choices, Attitudes, and Use,” Organization Science (March–April 2000), pp. 163–182; and N. Kock, “The Psychobiological Model: Towards a New Theory of Computer- Mediated Communication Based on Darwinian Evolution,” Organization Science 15, no. 3 (May–June 2004), pp. 327–348. 44. E. Frauenheim, “Communicating For Engagement During Tough Times,” Workforce Management Online (April 2010), www.workforce.com . 45. R. E. Petty and P. Briñol, “Persuasion: From Single to Multiple to Metacognitive Processes,” Perspectives on Psychological Science 3, no. 2 (2008), pp. 137–147; F. A. White, M. A. Charles, and J. K. Nelson, “The Role of Persuasive Arguments in Changing Affirmative Action Attitudes and Expressed Behavior in Higher Education,” Journal of Applied Psychology 93, no. 6 (2008), pp. 1271–1286. 46. B. T. Johnson, and A. H. Eagly, “Effects of Involvement on Persuasion: A Meta-Analysis,” Psychological Bulletin 106, no. 2 (1989), pp. 290–314; and K. L. Blankenship and D. T. Wegener, “Opening the Mind to Close It: Considering a Message in Light of Important Values Increases Message Processing and Later Resistance to Change,” Journal of Personality and Social Psychology 94, no. 2 (2008), pp. 196–213. www.workforce.com/section/quick_takes/49486_3.html www.workforce.com/section/quick_takes/49486_3.html www.workforce.com www.workforce.com www.news.com.au/couriermail www.news.com.au/couriermail www.workforce.com www.nytimes.com Endnotes 365 47. See, for example, Y. H. M. See, R. E. Petty, and L. R. Fabrigar, “Affective and Cognitive Meta-Bases of Attitudes: Unique Effects of Information Interest and Persuasion,” Journal of Personality and Social Psychology 94, no. 6 (2008), pp. 938–955; M. S. Key, J. E. Edlund, B. J. Sagarin, and G. Y. Bizer, “Individual Differences in Susceptibility to Mindlessness,” Personality and Individual Differences 46 , no. 3 (2009), pp. 261–264 and M. Reinhard and M. Messner, “The Effects of Source Likeability and Need for Cognition on Advertising Effectiveness Under Explicit Persuasion,” Journal of Consumer Behavior 8, no. 4 (2009), pp. 179–191. 48. P. Briñol, R. E. Petty, and J. Barden, “Happiness Versus Sadness as a Determinant of Thought Confidence in Persuasion: A Self-Validation Analysis,” Journal of Personality and Social Psychology 93, no. 5 (2007), pp. 711–727. 49. R. C. Sinclair, S. E. Moore, M. M. Mark, A. S. Soldat, and C. A. Lavis, “Incidental Moods, Source Likeability, and Persuasion: Liking Motivates Message Elaboration in Happy People,” Cognition and Emotion 24, no. 6 (2010), pp. 940–961; and V. Griskevicius, M. N. Shiota, and S. L. Neufeld, “Influence of Different Positive Emotions on Persuasion Processing: A Functional Evolutionary Approach,” Emotion 10, no. 2 (2010), pp. 190–206. 50. J. Sandberg, “The Jargon Jumble,” The Wall Street Journal (October 24, 2006), p. B1. 51. E. W. Morrison and F. J. Milliken, “Organizational Silence: A Barrier to Change and Development in a Pluralistic World,” Academy of Management Review 25, no. 4 (2000), pp. 706–725; and B. E. Ashforth and V. Anand, “The Normalization of Corruption in Organizations,” Research in Organizational Behavior 25 (2003), pp. 1–52. 52. F. J. Milliken, E. W. Morrison, and P. F. Hewlin, “An Exploratory Study of Employee Silence: Issues That Employees Don’t Communicate Upward and Why,” Journal of Management Studies 40, no. 6 (2003), pp. 1453–1476. 53. S. Tangirala and R. Ramunujam, “Employee Silence on Critical Work Issues: The Cross-Level Effects of Procedural Justice Climate,” Personnel Psychology 61, no. 1 (2008), pp. 37–68; and F. Bowen and K. Blackmon, “Spirals of Silence: The Dynamic Effects of Diversity on Organizational Voice,” Journal of Management Studies 40, no. 6 (2003), pp. 1393–1417. 54. B. R. Schlenker and M. R. Leary, “Social Anxiety and Self- Presentation: A Conceptualization and Model,” Psychological Bulletin 92 (1982), pp. 641–669; and L. A. Withers, and L. L. Vernon, “To Err Is Human: Embarrassment, Attachment, and Communication Apprehension,” Personality and Individual Differences 40, no. 1 (2006), pp. 99–110. 55. See, for instance, S. K. Opt and D. A. Loffredo, “Rethinking Communication Apprehension: A Myers-Briggs Perspective,” Journal of Psychology (September 2000), pp. 556–570; and B. D. Blume, G. F. Dreher, and T. T. Baldwin, “Examining the Effects of Communication Apprehension within Assessment Centres,” Journal of Occupational and Organizational Psychology 83, no. 3 (2010), pp. 663–671. 56. See, for example, J. A. Daly and J. C. McCroskey, “Occupational Desirability and Choice as a Function of Communication Apprehension,” Journal of Counseling Psychology 22, no. 4 (1975), pp. 309–313; and T. L. Rodebaugh, “I Might Look OK, But I’m Still Doubtful, Anxious, and Avoidant: The Mixed Effects of Enhanced Video Feedback on Social Anxiety Symptoms,” Behaviour Research & Therapy 42, no. 12 (December 2004), pp. 1435–1451. 57. B. M. Depaulo, D. A. Kashy, S. E. Kirkendol, M. M. Wyer, and J. A. Epstein, “Lying in Everyday Life,” Journal of Personality and Social Psychology 70, No. 5 (1996), pp. 979–995; and K. B. Serota, T. R. Levine, and F. J. Boster, “The Prevalence of Lying in America: Three Studies of Self-Reported Lies,” Human Communication Research 36, No. 1. (2010), pp. 2–25. 58. DePaulo, Kashy, Kirkendol, Wyer, and Epstein, “Lying in Everyday Life”; and C. E. Naguin, T. R. Kurtzberg, and L. Y. Belkin, “The Finer Points of Lying Online: E-Mail Versus Pen and Paper,” Journal of Applied Psychology 95, No. 2 (2010), pp. 387–394. 59. A. Vrij, P. A. Granhag, and S. Porter, “Pitfalls and Opportunities in Nonverbal and Verbal Lie Detection,” Psychological Science in the Public Interest 11, No. 3 (2010), pp. 89–121. 60. R. E. Axtell, Gestures: The Do’s and Taboos of Body Language Around the World (New York: Wiley, 1991); Watson Wyatt Worldwide, “Effective Communication: A Leading Indicator of Financial Performance—2005/2006 Communication ROI Study,” www.watsonwyatt.com/research/resrender .asp?id=w-868 ; and A. Markels, “Turning the Tide at P&G,” U.S. News & World Report (October 30, 2006), p. 69. 61. See M. Munter, “Cross-Cultural Communication for Managers,” Business Horizons (May–June 1993), pp. 75–76; and H. Ren and B. Gray, “Repairing Relationship Conflict: How Violation Types and Culture Influence the Effectiveness of Restoration Rituals,” Academy of Management Review 34, no. 1 (2009), pp. 105–126. 62. See E. T. Hall, Beyond Culture (Garden City, NY: Anchor Press/Doubleday, 1976); W. L. Adair, “Integrative Sequences and Negotiation Outcome in Same- and Mixed-Culture Negotiations,” International Journal of Conflict Management 14, no. 3–4 (2003), pp. 1359–1392; W. L. Adair and J. M. Brett, “The Negotiation Dance: Time, Culture, and Behavioral Sequences in Negotiation,” Organization Science 16, no. 1 (2005), pp. 33–51; E. Giebels and P. J. Taylor, “Interaction Patterns in Crisis Negotiations: Persuasive Arguments and Cultural Differences,” Journal of Applied Psychology 94, no. 1 (2009), pp. 5–19; and M. G. Kittler, D. Rygl, and A. Mackinnon, “Beyond Culture or Beyond Control? Reviewing the Use of Hall’s High-/Low-Context Concept,” International Journal of Cross-Cultural Management 11, no. 1 (2011), pp. 63–82. 63. N. Adler, International Dimensions of Organizational Behavior, 4th ed. (Cincinnati, OH: South-Western Publishing, 2002), p. 94. 64. See, for example. R. S. Schuler, “A Role Perception Transactional Process Model for Organizational Communication-Outcome Relationships,” Organizational Behavior and Human Performance (April 1979), pp. 268–291. 65. J. P. Walsh, S. J. Ashford, and T. E. Hill, “Feedback Obstruction: The Influence of the Information Environment on Employee Turnover Intentions,” Human Relations (January 1985), pp. 23–46. 66. S. A. Hellweg and S. L. Phillips, “Communication and Productivity in Organizations: A State-of-the-Art Review,” in Proceedings of the 40th Annual Academy of Management Conference, Detroit, 1980, pp. 188–192. See also B. A. Bechky, “Sharing Meaning Across Occupational Communities: The Transformation of Understanding on a Production Floor,” Organization Science 14, no. 3 (May–June 2003), pp. 312–330. www.watsonwyatt.com/research/resrender.asp?id=w-868 www.watsonwyatt.com/research/resrender.asp?id=w-868 MAKING GOOGLE’S LEADERS 366 I n its 14-year history, Google has established a strong culture around some simple principles: Hire smart people. Leave them alone. Allow the engineers and programmers to do their job. If they are stuck, they can turn to their boss, whose technical expertise put him or her into that position in the first place. In the past few years, however, Google has been studying its leader selection and development programs. The results of that study, called Project Oxygen, challenge some of Google’s founding principles. Project Oxygen analyzed more than 10,000 observations about managers across more than 100 variables. Michelle Donovan and Prasad Setty were closely involved in it, as was Google’s Vice President for People Operations, Laszio Bock. “We want to understand what works at Google rather than what worked in any other organization” says Setty. But there was a more strategic reason. “The starting point was that our best managers have teams that perform better, are retained better, are happier—they do everything better,” says Bock. “So the biggest controllable factor that we could see was the quality of the manager, and how they sort of made things happen.” Project Oxygen uncovered eight competencies that separated effective from ineffective leaders. That technical competence was one of those eight wasn’t surprising to Google. That it finished dead last on the list, however, was. What finished first? The top three leadership competencies were: 1. Be a good coach. Provide specific, constructive feedback; have regular one-on-ones. 2. Empower your team and don’t micromanage. Balance giving freedom with being available for advice. 3. Express interest in team members’ success and personal well-being. Get to know your employees as people; make new members feel welcome. What is Google doing with its list? It is using it for both leadership selection and development. Already some Google managers feel the training has helped them become better leaders. To make their case, Project Oxygen’s team found an analytical approach invaluable. “The thing that moves or nudges Google is facts; they like information,” says Donovan. Sources: A. Bryant, “Google’s Quest to Build a Better Boss,” The New York Times (March 13, 2011), p. BU1–BU6; E. A. Cevallos, “Project Oxygen: Building Better Bosses,” BIZ-THINK (April 13, 2011), downloaded from http://biz-think.blogspot.com/2011/04/project-oxygen-building- better-bosses.html on July 26, 2011; and R. L. Brandt, “Google Project Oxygen: Rules for Good Management,” Entrepreneur Watch (March 12, 2011), downloaded July 26, 2011, from http:// richardbrandt.blogs.com/entrepreneurwatch/2011/03/google-project-oxygen- rules-for- good-management.html . LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Define leadership and contrast leadership and management. 2 Summarize the conclusions of trait theories of leadership. 3 Identify the central tenets and main limitations of behavioral theories. 4 Assess contingency theories of leadership by their level of support. 5 Compare and contrast charismatic and transformational leadership. 6 Define authentic leadership and show why effective leaders exemplify ethics and trust. 7 Demonstrate the role mentoring plays in our understanding of leadership. 8 Address challenges to the effectiveness of leadership. MyManagementLab Access a host of interactive learning aids to help strengthen your under standing of the chapter concepts at www.mymanagementlab.com . www.mymanagementlab.com http://richardbrandt.blogs.com/entrepreneurwatch/2011/03/google-project-oxygen-rules-for-good-management.html http://richardbrandt.blogs.com/entrepreneurwatch/2011/03/google-project-oxygen-rules-for-good-management.html http://richardbrandt.blogs.com/entrepreneurwatch/2011/03/google-project-oxygen-rules-for-good-management.html http://biz-think.blogspot.com/2011/04/project-oxygen-building-better-bosses.html http://biz-think.blogspot.com/2011/04/project-oxygen-building-better-bosses.html Leadership 12 I am more afraid of an army of 100 sheep led by a lion than an army of 100 lions led by a sheep. —Talleyrand 367 Ph ot o: M ic he lle D on ov an ( le ft) , P ra sa d Se tty ( ri gh t), a t t he G oo gl e H R of fic es . S ou rc e: P et er D as ilv a/ Th e N ew Y or k Ti m es /R ed ux P ic tu re s . 367 368 CHAPTER 12 Leadership S A L SELF-ASSESSMENT LIBRARY A s the Google example shows, leadership styles differ considerably. So which styles, and which people, are most effective? These are some of the questions we’ll tackle in this chapter. To assess yourself on a specific set of qualities that we’ll discuss shortly, take the following self-assessment. In this chapter, we look at what makes an effective leader and what differentiates leaders from nonleaders. First, we present trait theories, which dominated the study of leadership until the late 1940s. Then we discuss behavioral theories, popular until the late 1960s. Next, we introduce con- tingency and interactive theories. Finally, we discuss the most contemporary approaches: charismatic, transformational, and authentic leadership. Most of the research discussed in this chapter was conducted in English-speaking countries. We know very little about how culture might influence the validity of the theories, particularly in Eastern cultures. However, analysis of the Global Leadership and Organizational Behavior Effectiveness (GLOBE) research proj- ect has produced some useful preliminary insights that we discuss throughout. 1 But first, let’s clarify what we mean by leadership. What’s My Leadership Style? In the Self-Assessment Library (available on CD and online) take assessment II.B.1 (What’s My Leadership Style?) and answer the following questions. 1. How did you score on the two scales? 2. Do you think a leader can be both task oriented and people oriented? Do you think there are situations in which a leader has to make a choice between the two styles? 3. Do you think your leadership style will change over time? Why or why not? We define leadership as the ability to influence a group toward the achievement of a vision or set of goals. The source of this influence may be formal, such as that provided by managerial rank in an organization. But not all leaders are managers, nor, for that matter, are all managers leaders. Just because an organization provides its managers with certain formal rights is no assurance they will lead effectively. Nonsanctioned leadership— the ability to influence that arises outside the formal structure of the organization—is often as important or more important than formal influ- ence. In other words, leaders can emerge from within a group as well as by formal appointment. Organizations need strong leadership and strong management for optimal effectiveness. We need leaders today to challenge the status quo, create visions of the future, and inspire organizational members to want to achieve the visions. We also need managers to formulate detailed plans, create efficient organizational structures, and oversee day-to-day operations. 1 Define leadership and contrast leadership and management. What Is Leadership? Trait Theories 369 Throughout history, strong leaders—Buddha, Napoleon, Mao, Churchill, Roosevelt, Reagan—have been described in terms of their traits. Trait theories of leadership thus focus on personal qualities and characteristics. We recognize leaders like South Africa’s Nelson Mandela, Virgin Group CEO Richard Branson, Apple co-founder Steve Jobs, and American Express chairman Ken Chenault as charismatic, enthusiastic, and courageous. The search for personality, social, physical, or intellectual attributes that differentiate leaders from non- leaders goes back to the earliest stages of leadership research. Early research efforts to isolate leadership traits resulted in a number of dead ends. A review in the late 1960s of 20 different studies identified nearly 80 leadership traits, but only 5 were common to 4 or more of the investigations. 2 By the 1990s, after numerous studies and analyses, about the best we could say was that most leaders “are not like other people,” but the particular traits that characterized them varied a great deal from review to review. 3 It was a pretty confusing state of affairs. A breakthrough, of sorts, came when researchers began organizing traits around the Big Five personality framework (see Chapter 5 ). 4 Most of the dozens of traits in various leadership reviews fit under one of the Big Five (ambition and energy are part of extraversion, for instance), giving strong support to traits as predictors of leadership. 2 Summarize the conclusions of trait theories of leadership. Trait Theories The personal qualities and traits of Indra Nooyi make her a great leader. Nooyi is CEO and board chairman of PepsiCo, the second largest food and beverage firm in the world. She is described as fun- loving, sociable, agreeable, consci- entious, emotionally stable, and open to experiences. Nooyi’s per- sonality traits have contributed to her job performance and career suc- cess. She joined PepsiCo in 1994 as head of corporate strategy and was promoted to president and chief financial officer before moving into the firm’s top management posi- tion. Nooyi has been named one of the most powerful women in busi- ness and one of the most powerful women in the world. So u rc e : P R N e w sF o to /P e p si C o , R a y H a n d . leadership The ability to influence a group toward the achievement of a vision or set of goals. trait theories of leadership Theories that consider personal qualities and characteristics that differentiate leaders from nonleaders. 370 CHAPTER 12 Leadership A comprehensive review of the leadership literature, when organized around the Big Five, has found extraversion to be the most important trait of effective leaders, 5 but it is more strongly related to the way leaders emerge than to their effectiveness. Sociable and dominant people are more likely to assert themselves in group situations, but leaders need to make sure they’re not too assertive—one study found leaders who scored very high on assertiveness were less effective than those who were moderately high. 6 Unlike agreeableness and emotional stability, conscientiousness and open- ness to experience also showed strong relationships to leadership, though not quite as strong as extraversion. Overall, the trait approach does have something to offer. Leaders who like being around people and are able to assert themselves (extraverted), who are disciplined and able to keep commitments they make (conscientious), and who are creative and flexible (open) do have an apparent advantage when it comes to leadership, suggesting good leaders do have key traits in common. One reason is that conscientiousness and extraversion are positively related to leaders’ self-efficacy, which explained most of the variance in subordinates’ ratings of leader performance. 7 People are more likely to follow someone who is confident she’s going in the right direction. Another trait that may indicate effective leadership is emotional intelligence (EI), discussed in Chapter 4 . Advocates of EI argue that without it, a person can have outstanding training, a highly analytical mind, a compelling vision, and an endless supply of terrific ideas but still not make a great leader. This may be especially true as individuals move up in an organization. 8 Why is EI so critical to effective leadership? A core component of EI is empathy. Empathetic leaders can sense others’ needs, listen to what followers say (and don’t say), and read the reactions of others. A leader who effectively displays and manages emotions will find it easier to influence the feelings of followers, by both expressing genu- ine sympathy and enthusiasm for good performance and by using irritation for those who fail to perform. 9 The link between EI and leadership effectiveness may be worth investigating in greater detail. 10 Some recent research has demonstrated that people high in EI are more likely to emerge as leaders, even after taking cognitive ability and personality into account, which helps to answer some of the most significant criticisms of this research. 11 Based on the latest findings, we offer two conclusions. First, contrary to what we believed 20 years ago and thanks to the Big Five, we can say that traits can predict leadership. Second, traits do a better job predicting the emergence of leaders and the appearance of leadership than actually distinguishing between effective and ineffective leaders. 12 The fact that an individual exhibits the traits and that others consider him or her a leader does not necessarily mean the leader is successful at getting the group to achieve its goals. The failures of early trait studies led researchers in the late 1940s through the 1960s to wonder whether there was something unique in the way effective lead- ers behave. Trait research provides a basis for selecting the right people for lead- ership. In contrast, behavioral theories of leadership implied we could train people to be leaders. 3 Identify the central tenets and main limitations of behavioral theories. Behavioral Theories Behavioral Theories 371 The most comprehensive theories resulted from the Ohio State Studies in the late 1940s, 13 which sought to identify independent dimensions of leader be- havior. Beginning with more than a thousand dimensions, the studies narrowed the list to two that substantially accounted for most of the leadership behavior described by employees: initiating structure and consideration. Initiating structure is the extent to which a leader is likely to define and structure his or her role and those of employees in the search for goal attain- ment. It includes behavior that attempts to organize work, work relationships, and goals. A leader high in initiating structure is someone who “assigns group members to particular tasks,” “expects workers to maintain definite standards of performance,” and “emphasizes the meeting of deadlines.” Consideration is the extent to which a person’s job relationships are char- acterized by mutual trust, respect for employees’ ideas, and regard for their feelings. A leader high in consideration helps employees with personal prob- lems, is friendly and approachable, treats all employees as equals, and expresses appreciation and support. In a recent survey, when asked to indicate what most motivated them at work, 66 percent of employees mentioned appreciation. 14 Leadership studies at the University of Michigan’s Survey Research Center had similar objectives: to locate behavioral characteristics of leaders that ap- peared related to performance effectiveness. The Michigan group also came up with two behavioral dimensions: the employee-oriented leader emphasized Morgan Smith is an employee- oriented leader. As owner and managing partner of Boneheads Restaurant in Lake Forest, California, Smith (left) takes a per- sonal interest in the needs of his employees. Described as generous, kind, and cheerful, he shows respect for his employees and invests a great deal of time in helping them at work and assisting them in their personal lives such as donating food for their weddings. Smith’s goal for his employees is for them to reach their full potential. During bi- weekly one-on-one meetings with employees, Smith serves as their leader, trainer, role model, and advisor. He also provides quarterly training for employees and includes them in reviewing the restaurant’s profit and loss statement. So u rc e : o 4 4 /Z U M A P re ss /N e w sc o m . behavioral theories of leadership Theories proposing that specific behaviors differentiate leaders from nonleaders. consideration The extent to which a leader is likely to have job relationships characterized by mutual trust, respect for subordinates’ ideas, and regard for their feelings. employee-oriented leader A leader who emphasizes interpersonal relations, takes a personal interest in the needs of employees, and accepts individual differences among members. initiating structure The extent to which a leader is likely to define and structure his or her role and those of subordinates in the search for goal attainment. 372 CHAPTER 12 Leadership interpersonal relationships by taking a personal interest in the needs of em- ployees and accepting individual differences among them, and the production- oriented leader emphasized the technical or task aspects of the job, focusing on accomplishing the group’s tasks. These dimensions are closely related to the Ohio State dimensions. Employee-oriented leadership is similar to consid- eration, and production-oriented leadership is similar to initiating structure. In fact, most leadership researchers use the terms synonymously. 15 At one time, the results of testing behavioral theories were thought to be disappointing. However, a more recent review of 160 studies found the follow- ers of leaders high in consideration were more satisfied with their jobs, were more motivated, and had more respect for their leader. Initiating structure was more strongly related to higher levels of group and organization productivity and more positive performance evaluations. Some research from the GLOBE study suggests there are international differences in preference for initiating structure and consideration. 16 Based on the values of Brazilian employees, a U.S. manager leading a team in Brazil would need to be team oriented, participative, and humane. Leaders high in consid- eration would succeed best in this culture. As one Brazilian manager said in the GLOBE study, “We do not prefer leaders who take self-governing decisions and act alone without engaging the group. That’s part of who we are.” Compared to U.S. employees, the French have a more bureaucratic view of leaders and are less likely to expect them to be humane and considerate. A leader high in initiating structure (relatively task-oriented) will do best and can make deci- sions in a relatively autocratic manner. A manager who scores high on consid- eration (people oriented) may find that style backfiring in France. According to the GLOBE study, Chinese culture emphasizes being polite, considerate, and unselfish, but it also has a high performance orientation. Thus, consideration and initiating structure may both be important. Summary of Trait Theories and Behavioral Theories Leaders who have certain traits and who display consideration and structuring behaviors do appear to be more effective. Perhaps you’re wondering whether con- scientious leaders (trait) are more likely to be structuring (behavior) and extra- verted leaders (trait) to be considerate (behavior). Unfortunately, we can’t be sure there is a connection. Future research is needed to integrate these approaches. Some leaders may have the right traits or display the right behaviors and still fail. As important as traits and behaviors are in identifying effective or ineffec- tive leaders, they do not guarantee success. The context matters, too. Some tough-minded leaders seem to gain a lot of admirers when they take over struggling companies and help lead them out of the doldrums. Home Depot and Chrysler didn’t hire former CEO Bob Nardelli for his winning personality. However, such leaders also seem to be quickly dismissed when the situation stabilizes. The rise and fall of leaders like Bob Nardelli illustrate that predicting leadership success is more complex than isolating a few traits or behaviors. In their cases, what worked in very bad times and in very good times didn’t seem to translate into long-term success. When researchers looked at situational 4 Assess contingency theories of leadership by their level of support. Contingency Theories Contingenc y Theories 373 influences, it appeared that under condition a, leadership style x would be ap- propriate, whereas style y was more suitable for condition b, and style z for con- dition c. But what were conditions a , b , c? We next consider three approaches to isolating situational variables: the Fiedler model, situational theory, path–goal theory, and the leader-participation model. The Fiedler Model Fred Fiedler developed the first comprehensive contingency model for leadership. 17 The Fiedler contingency model proposes that effective group performance depends on the proper match between the leader’s style and the degree to which the situation gives the leader control. Identifying Leadership Style Fiedler believes a key factor in leadership success is the individual’s basic leadership style. He created the least preferred co-worker (LPC) questionnaire to identify that style by measuring whether a person is task or relationship oriented. The LPC questionnaire asks respondents to think of all the co-workers they have ever had and describe the one they least enjoyed working with by rating that person on a scale of 1 to 8 for each of 16 sets of contrasting adjectives (such as pleasant–unpleasant, efficient–inefficient, open–guarded, supportive–hostile). If you describe the person you are least able to work with in favorable terms (a high LPC score), Fiedler would label you relationship ori- ented . If you see your least-preferred co-worker in unfavorable terms (a low LPC score), you are primarily interested in productivity and are task oriented. About 16 percent of respondents score in the middle range 18 and thus fall outside the theory’s predictions. The rest of our discussion relates to the 84 percent who score in either the high or low range of the LPC questionnaire. Fiedler assumes an individual’s leadership style is fixed. This means if a situation requires a task-oriented leader and the person in the leadership position is relationship oriented, either the situation has to be modified or the leader has to be replaced to achieve optimal effectiveness. S A L SELF-ASSESSMENT LIBRARY What’s My LPC Score? In the Self-Assessment Library (available on CD and online) take assessment IV.E.5 (What’s My LPC Score?). Defining the Situation After assessing an individual’s basic leadership style through the LPC questionnaire, we match the leader with the situation. Fiedler has identified three contingency or situational dimensions: 1. Leader–member relations is the degree of confidence, trust, and respect members have in their leader. production-oriented leader A leader who emphasizes technical or task aspects of the job. Fiedler contingency model The theory that effective groups depend on a proper match between a leader’s style of interacting with subordinates and the degree to which the situation gives control and influence to the leader. least preferred co-worker (LPC) questionnaire An instrument that purports to measure whether a person is task or relationship oriented. leader–member relations The degree of confidence, trust, and respect subordinates have in their leader. 374 CHAPTER 12 Leadership 2. Task structure is the degree to which the job assignments are procedurized (that is, structured or unstructured). 3. Position power is the degree of influence a leader has over power variables such as hiring, firing, discipline, promotions, and salary increases. The next step is to evaluate the situation in terms of these three variables. Fiedler states that the better the leader–member relations, the more highly structured the job, and the stronger the position power, the more control the leader has. A very favorable situation (in which the leader has a great deal of control) might include a payroll manager who is well respected and whose em- ployees have confidence in her (good leader–member relations); activities that are clear and specific—such as wage computation, check writing, and report fil- ing (high task structure); and provision of considerable freedom to reward and punish employees (strong position power). An unfavorable situation might be that of the disliked chairperson of a volunteer United Way fundraising team. In this job, the leader has very little control. Matching Leaders and Situations Combining the three contingency dimen- sions yields eight possible situations in which leaders can find themselves ( Exhibit 12-1 ). The Fiedler model proposes matching an individual’s LPC score and these eight situations to achieve maximum leadership effectiveness. 19 Fiedler concluded that task-oriented leaders perform better in situations very favorable to them and very unfavorable. So, when faced with a category I, II, III, VII, or VIII situation, task-oriented leaders perform better. Relationship- oriented leaders, however, perform better in moderately favorable situations— categories IV, V, and VI. In recent years, Fiedler has condensed these eight situations down to three. 20 He now says task-oriented leaders perform best in Findings from the Fiedler Model Exhibit 12-1 Good High Strong Good High Weak Good Low Strong Good Task oriented Relationship oriented Good Poor Category Leader–member relations Task structure Position power Favorable Moderate Unfavorable P e rf o rm a n ce Low Weak Poor High Strong Poor High Weak Poor Low Strong Poor Low Weak I II III IV V VI VII VIII Contingenc y Theories 375 situations of high and low control, while relationship-oriented leaders perform best in moderate control situations. How would you apply Fiedler’s findings? You would match leaders—in terms of their LPC scores—with the type of situation—in terms of leader– member relationships, task structure, and position power—for which they were best suited. But remember that Fiedler views an individual’s leadership style as fixed. Therefore, there are only two ways to improve leader effectiveness. First, you can change the leader to fit the situation—as a baseball man- ager puts a right- or left-handed pitcher into the game depending on the hitter. If a group situation rates highly unfavorable but is currently led by a relationship-oriented manager, the group’s performance could be improved under a manager who is task-oriented. The second alternative is to change the situation to fit the leader by restructuring tasks or increasing or decreasing the leader’s power to control factors such as salary increases, promotions, and disciplinary actions. Evaluation Studies testing the overall validity of the Fiedler model find considerable evidence to support substantial parts of it. 21 If we use only three categories rather than the original eight, ample evidence supports Fiedler’s conclusions. 22 But the logic underlying the LPC questionnaire is not well understood, and respondents’ scores are not stable. 23 The contingency variables are also complex and difficult for practitioners to assess. 24 Other Contingency Theories Although LPC theory is the most widely researched contingency theory, three others deserve mention. task structure The degree to which job assignments are procedurized. position power Influence derived from one’s formal structural position in the organization; includes power to hire, fire, discipline, promote, and give salary increases. When Yahoo’s growth and revenues slowed for several years, the com- pany hired Carol Bartz as its new chief executive. Known as a task- oriented leader, Bartz previously led a successful turnaround at software maker Autodesk where, under her leadership, the company’s revenues grew from $300  million to more than $1.5  billion. But after two and a half years at Yahoo, Bartz was fired as CEO for failing to revive the company’s revenues and stock price. According to Fiedler’s contingency model, Bartz’s task- oriented style was not effective in improving Yahoo’s performance. Observers noted that Bartz failed to provide the visionary leadership and focused strategic direction and execution needed to position the company for growth. So u rc e : P a u l Sa k u m a /A P I m a g e s. 376 CHAPTER 12 Leadership Situational Leadership Theory Situational leadership theory (SLT) focuses on the followers. It says successful leadership depends on selecting the right leader- ship style contingent on the followers’ readiness, or the extent to which they are willing and able to accomplish a specific task. A leader should choose one of four behaviors depending on follower readiness. If followers are unable and unwilling to do a task, the leader needs to give clear and specific directions; if they are unable and willing, the leader needs to display high task orientation to compensate for followers’ lack of ability and high relationship orientation to get them to “buy into” the leader’s desires. If followers are able and unwilling, the leader needs to use a supportive and participative style; if they are both able and willing, the leader doesn’t need to do much. SLT has intuitive appeal. It acknowledges the importance of followers and builds on the logic that leaders can compensate for their limited ability and motivation. Yet research efforts to test and support the theory have generally been disappointing. 25 Why? Possible explanations include internal ambigui- ties and inconsistencies in the model itself as well as problems with research methodology in tests. So, despite its intuitive appeal and wide popularity, any endorsement must be cautious for now. Path–Goal Theory Developed by Robert House, path–goal theory extracts elements from the Ohio State leadership research on initiating structure and consideration and the expectancy theory of motivation. 26 It says it’s the leader’s job to provide followers with the information, support, or other resources nec- essary to achieve their goals. (The term path–goal implies effective leaders clarify followers’ paths to their work goals and make the journey easier by reducing roadblocks.) According to path–goal theory, whether a leader should be directive or supportive or should demonstrate some other behavior depends on complex analysis of the situation. It predicts the following: ● Directive leadership yields greater satisfaction when tasks are ambiguous or stressful than when they are highly structured and well laid out. ● Supportive leadership results in high performance and satisfaction when employees are performing structured tasks. ● Directive leadership is likely to be perceived as redundant among employees with high ability or considerable experience. Testing path–goal theory has not been easy. A review of the evidence found mixed support for the proposition that removing obstacles is a component of effective leadership. Another review found the lack of support “shocking and disappointing.” 27 Others argue that adequate tests of the theory have yet to be conducted. 28 Thus, the jury is still out. Because path–goal theory is so complex to test, that may remain the case for some time. In a study of 162 workers in a document-processing organization, research- ers found workers’ conscientiousness was related to higher levels of perfor- mance only when supervisors set goals and defined roles, responsibilities, and priorities. 29 Other research has found that goal-focused leadership can lead to higher levels of emotional exhaustion for subordinates who are low in consci- entiousness and emotional stability. 30 These studies demonstrate that leaders who set goals enable conscientious followers to achieve higher performance and may cause stress for workers who are low in conscientiousness. Leader-Participation Model The final contingency theory we cover argues that the way the leader makes decisions is as important as what she or he decides. MyManagementLab For an interactive application of this topic, check out this chapter’s simulation activity at www.mymanagementlab.com. www.mymanagementlab.com Leader–Member Exchange (LMX) Theor y 377 Victor Vroom and Phillip Yetton’s leader-participation model relates leader- ship behavior and participation in decision making. 31 Like path–goal theory, it says leader behavior must adjust to reflect the task structure. The model is normative—it provides a decision tree of seven contingencies and five leader- ship styles for determining the form and amount of participation in decision making. Research testing both the original and revised leader-participation models has not been encouraging, although the revised model rates higher in effective- ness. 32 Criticism focuses on the model’s complexity and the variables it omits. 33 Although Vroom and Jago have developed a computer program to guide managers through all the decision branches in the revised model, it’s not very realistic to expect practicing managers to consider 12 contingency variables, eight problem types, and five leadership styles to select the decision process for a problem. As one leadership scholar noted, “Leaders do not exist in a vacuum”; leadership is a symbiotic relationship between leaders and followers. 34 But the theories we’ve covered to this point assume leaders use a fairly homogeneous style with everyone in their work unit. Think about your experiences in groups. Did leaders often act very differently toward different people? Our next theory considers differences in the relationships leaders form with different followers. Think of a leader you know. Did this leader have favorites who made up his or her ingroup? If you answered “yes,” you’re acknowledging the foundation of leader–member exchange theory. 35 Leader–member exchange (LMX) theory argues that, because of time pressures, leaders establish a special relationship with a small group of their followers. These individuals make up the ingroup— they are trusted, get a disproportionate amount of the leader’s attention, and are more likely to receive special privileges. Other followers fall into the toutgroup. The theory proposes that early in the history of the interaction between a leader and a given follower, the leader implicitly categorizes the follower as an “in” or an “out” and that relationship is relatively stable over time. Leaders in- duce LMX by rewarding those employees with whom they want a closer linkage and punishing those with whom they do not. 36 But for the LMX relationship to remain intact, the leader and the follower must invest in the relationship. Just how the leader chooses who falls into each category is unclear, but there is evidence ingroup members have demographic, attitude, and personality characteristics similar to those of their leader or a higher level of competence Leader–Member Exchange (LMX) Theory situational leadership theory (SLT) A contingency theory that focuses on followers’ readiness. path–goal theory A theory that states that it is the leader’s job to assist followers in attaining their goals and to provide the necessary direction and/or support to ensure that their goals are compatible with the overall objectives of the group or organization. leader-participation model A leadership theory that provides a set of rules to determine the form and amount of participative decision making in different situations. leader–member exchange (LMX) theory A theory that supports leaders’ creation of in-groups and out-groups; subordinates with in-group status will have higher performance ratings, less turnover, and greater job satisfaction. 378 CHAPTER 12 Leadership than outgroup members 37 (see Exhibit 12-2 ). Leaders and followers of the same gender tend to have closer (higher LMX) relationships than those of different genders. 38 Even though the leader does the choosing, the follower’s character- istics drive the categorizing decision. Research to test LMX theory has been generally supportive, with substantive evidence that leaders do differentiate among followers; these disparities are far from random; and followers with ingroup status will have higher performance ratings, engage in more helping or “citizenship” behaviors at work, and report greater satisfaction with their superior. 39 One study conducted in both Portugal Leader–Member Exchange Theory Exhibit 12-2 Personal compatibility, subordinate competence, and/or extraverted personality Leader Trust High interactions Formal relations In-group Out-group Subordinate A Subordinate B Subordinate C Subordinate D Subordinate E Subordinate F W hile a great deal has been said about international differences in leadership styles and their effectiveness, another issue probably matters more for most organizations: How can we develop leaders who are effective across cultural boundaries? Is it possible to create a truly global lead- ership style that will extend across cul- tures? Some recent forays into the field of cross-cultural leadership highlight possibilities for how global organiza- tions might proceed. Some of the leadership styles we have described in this chapter do seem to generalize across cultures. For ex- ample, research suggests charismatic leadership is effective in a variety of national contexts. In many cultures, terms like visionary, symbolizer, and self-sacrificer appear as descriptors of effective leaders, and positive leader– member exchanges also are associ- ated with high performance across a variety of cultures. Culturally intelligent leaders are flexible and adaptable, tai- loring their leadership styles to the spe- cific and changing needs of the global workforce. Researchers agree that learning to be a global leader requires gaining active experience in dealing with mul- tiple cultures simultaneously. These experiences give leaders a chance to observe how different leadership styles work with different groups of people and build confidence in working across cultural boundaries. Leadership development programs can also use 360-degree feedback from supervi- sors, colleagues, and subordinates to help leaders recognize when their behavior is not effective with certain populations of employees. Companies like PepsiCo and Ford have their most effective global leaders provide seminars to emerging leaders so they can describe practices that have been especially effective. Sources: K. Ng, L. Van Dyne, and S. Ang, “From Experience to Experiential Learning: Cultural Intelligence as a Learning Capacity for Global Leader Development,” Academy of Management Learning and Education 9, no. 4 (2009), pp. 511–526; C. B. Gibson and D. M. McDaniel, “Moving Beyond Conventional Wisdom: Advancements in Cross-Cultural Theories of Leadership, Conflict, and Teams,” Perspectives on Psychological Science 5, no. 4 (2010), pp. 450–462; and D. Simmonds and O. Tsui, “Effective Design of a Global Leadership Programme,” Human Resource Development International 13, no. 5 (2010), pp. 519–540. glOBalization! Cross-Cultural Leadership Styles Charismatic Leadership and Transformational Leadership 379 and the United States found that leader–member exchange was associated especially strongly with followers’ commitment to the organization when the leaders were seen as embodying the values and identity of the organization. 40 These positive findings for ingroup members shouldn’t be surprising, given our knowledge of self-fulfilling prophecy (see Chapter 6 ). Leaders invest their re- sources with those they expect to perform best. And believing ingroup members are the most competent, leaders treat them as such and unwittingly fulfill their prophecy. Conversely, a study in Turkey demonstrated that when leaders differ- entiated strongly among their followers in terms of their relationships (some fol- lowers had very positive leader–member exchange, others very poor), employees responded with more negative work attitudes and higher levels of withdrawal behavior. 41 Leader–follower relationships may be stronger when followers have a more active role in shaping their own job performance. Research on 287 soft- ware developers and 164 supervisors showed leader– member relationships have a stronger impact on employee performance and attitudes when employees have higher levels of autonomy and a more internal locus of control. 42 In this section, we present two contemporary leadership theories—charismatic leadership and transformational leadership—with a common theme: they view leaders as individuals who inspire followers through their words, ideas, and behaviors. Charismatic Leadership John F. Kennedy, Martin Luther King Jr., Ronald Reagan, Bill Clinton, Mary Kay Ash (founder of Mary Kay Cosmetics), and Steve Jobs (co-founder of Apple Computer) are frequently cited as charismatic leaders. What do they have in common? What Is Charismatic Leadership? Max Weber, a sociologist, defined charisma (from the Greek for “gift”) more than a century ago as “a certain quality of an individual personality, by virtue of which he or she is set apart from ordinary people and treated as endowed with supernatural, superhuman, or at least spe- cifically exceptional powers or qualities. These are not accessible to the ordinary person and are regarded as of divine origin or as exemplary, and on the basis of them the individual concerned is treated as a leader.” 43 Weber argued that charismatic leadership was one of several ideal types of authority. The first researcher to consider charismatic leadership in terms of OB was Robert House. According to House’s charismatic leadership theory , followers attribute heroic or extraordinary leadership abilities when they observe certain behaviors. 44 A number of studies have attempted to identify the characteris- tics of charismatic leaders: they have a vision, they are willing to take personal 5 Compare and contrast charismatic and transforma- tional leadership. Charismatic Leadership and Transformational Leadership charismatic leadership theory A leadership theory that states that followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviors. 380 CHAPTER 12 Leadership risks to achieve that vision, they are sensitive to follower needs, and they exhibit extraordinary behaviors 45 (see Exhibit 12-3 ). Are Charismatic Leaders Born or Made? Are charismatic leaders born with their qualities? Or can people actually learn to be charismatic leaders? Yes, and yes. Individuals are born with traits that make them charismatic. In fact, studies of identical twins have found they score similarly on charismatic leadership measures, even if they were raised in different households and had never met. Personality is also related to charismatic leadership; charismatic leaders are likely to be extraverted, self-confident, and achievement oriented. 46 Consider Presidents Barack Obama and Ronald Reagan: like them or not, they are often compared because both possess the qualities of charismatic leaders. Most experts believe individuals can be trained to exhibit charismatic behaviors. 47 After all, just because we inherit certain tendencies doesn’t mean we can’t learn to change. One set of authors proposes a three-step process. 48 First, develop an aura of charisma by maintaining an optimistic view; using passion as a catalyst for generating enthusiasm; and communicating with the whole body, not just with words. Second, draw others in by creating a bond that inspires them to follow. Third, bring out the potential in followers by tapping into their emotions. The approach seems to work, according to researchers who have asked undergraduate business students to “play” charismatic. 49 The students were taught to articulate an overarching goal, communicate high performance expectations, exhibit confidence in the ability of followers to meet these expectations, and empathize with the needs of their followers; they learned to project a powerful, confident, and dynamic presence; and they practiced using a captivating and engaging voice. They were also trained to evoke charismatic nonverbal characteristics: they alternated between pacing and sitting on the edges of their desks, leaned toward the subjects, maintained direct eye contact, and had relaxed postures and animated facial expressions. Their followers had higher task performance, task adjustment, and adjustment to the leader and the group than did followers of noncharismatic leaders. How Charismatic Leaders Influence Followers How do charismatic leaders actually influence followers? Evidence suggests a four-step process. 50 It begins with articulating an appealing vision , a long-term strategy for attaining a goal by linking the present with a better future for the organization. Desirable visions fit the times and circumstances and reflect the uniqueness of the organization. Steve Jobs championed the iPod at Apple, noting, “It’s as Apple as anything Key Characteristics of a Charismatic Leader Exhibit 12-3 1. Vision and articulation. Has a vision—expressed as an idealized goal—that proposes a future better than the status quo; and is able to clarify the importance of the vision in terms that are understandable to others. 2. Personal risk. Willing to take on high personal risk, incur high costs, and engage in self- sacrifice to achieve the vision. 3. Sensitivity to follower needs. Perceptive of others’ abilities and responsive to their needs and feelings. 4. Unconventional behavior. Engages in behaviors that are perceived as novel and counter to norms. Source: Based on J. A. Conger and R. N. Kanungo, Charismatic Leadership in Organizations (Thousand Oaks, CA: Sage, 1998), p. 94. Charismatic Leadership and Transformational Leadership 381 Apple has ever done.” People in the organization must also believe the vision is challenging yet attainable. Second, a vision is incomplete without an accompanying vision statement , a formal articulation of an organization’s vision or mission. Charismatic leaders may use vision statements to imprint on followers an overarching goal and pur- pose. They build followers’ self-esteem and confidence with high performance expectations and belief that followers can attain them. Next, through words and actions the leader conveys a new set of values and sets an example for follow- ers to imitate. One study of Israeli bank employees showed charismatic leaders were more effective because their employees personally identified with them. Charismatic leaders also set a tone of cooperation and mutual support. A study of 115 government employees found they had a stronger sense of personal be- longing at work when they had charismatic leaders, increasing their willingness to engage in helping and compliance-oriented behavior. 51 Finally, the charismatic leader engages in emotion-inducing and often un- conventional behavior to demonstrate courage and conviction about the vision. Followers “catch” the emotions their leader is conveying. 52 Does Effective Charismatic Leadership Depend on the Situation? Re- search shows impressive correlations between charismatic leadership and high performance and satisfaction among followers. 53 People working for charismatic leaders are motivated to exert extra effort and, because they like and respect their leader, express greater satisfaction. Organizations with charismatic CEOs are also more profitable, and charismatic college professors enjoy higher course evalua- tions. 54 However, charisma appears most successful when the follower’s task has an ideological component or the environment includes a high degree of stress and uncertainty. 55 Even in laboratory studies, when people are psychologically aroused, they are more likely to respond to charismatic leaders. 56 This may ex- plain why, when charismatic leaders surface, it’s likely to be in politics or religion, or during wartime, or when a business is in its infancy or facing a life-threatening crisis. Franklin D. Roosevelt offered a vision to get the United States out of the Great Depression in the 1930s. In 1997, when Apple Computer was floundering and lacking direction, the board persuaded charismatic co-founder Steve Jobs to return as interim CEO and return the company to its innovative roots. Another situational factor apparently limiting charisma is level in the organization. Top executives create vision; it’s more difficult to utilize a person’s charismatic leadership qualities in lower-level management jobs or to align his or her vision with the larger goals of the organization. Finally, people are especially receptive to charismatic leadership when they sense a crisis, when they are under stress, or when they fear for their lives. Charismatic leaders are able to reduce stress for their employees, per- haps because they help make work seem more meaningful and interesting. 57 And some peoples’ personalities are especially susceptible to charismatic leadership. 58 Consider self-esteem. An individual who lacks self-esteem and questions his or her self-worth is more likely to absorb a leader’s direction rather than establish his or her own way of leading or thinking. The Dark Side of Charismatic Leadership Charismatic business leaders like AIG’s Hank Greenberg, GE’s Jack Welch, Tyco’s Dennis Kozlowski, Southwest Airlines’ Herb Kelleher, Disney’s Michael Eisner, and HP’s Carly Fiorina became vision A long-term strategy for attaining a goal or goals. vision statement A formal articulation of an organization’s vision or mission. 382 CHAPTER 12 Leadership celebrities on the order of David Beckham and Madonna. Every company wanted a charismatic CEO, and to attract them boards of directors gave them unprece- dented autonomy and resources—the use of private jets and multimillion-dollar penthouses, interest-free loans to buy beach homes and artwork, security staffs, and similar benefits befitting royalty. One study showed charismatic CEOs were able to leverage higher salaries even when their performance was mediocre. 59 Unfortunately, charismatic leaders who are larger than life don’t necessarily act in the best interests of their organizations. 60 Many have allowed their personal goals to override the goals of the organization. The results at companies such as Enron, Tyco, WorldCom, and HealthSouth were leaders who recklessly used organizational resources for their personal benefit and executives who violated laws and ethical boundaries to inflate stock prices and allow leaders to cash in millions of dollars in stock options. It’s little wonder research has shown that in- dividuals who are narcissistic are also higher in some behaviors associated with charismatic leadership. 61 It’s not that charismatic leadership isn’t effective; overall, it is. But a char- ismatic leader isn’t always the answer. Success depends, to some extent, on the situation and on the leader’s vision. Some charismatic leaders—Hitler, for example—are all too successful at convincing their followers to pursue a vision that can be disastrous. S A L SELF-ASSESSMENT LIBRARY How Charismatic Am I? In the Self-Assessment Library (available on CD and online), take assessment II.B.2 (How Charismatic Am I?). Transformational Leadership A stream of research has focused on differentiating transformational from transactional leaders. 62 The Ohio State studies, Fiedler’s model, and path–goal theory describe transactional leaders , who guide their followers toward estab- lished goals by clarifying role and task requirements. Transformational leaders inspire followers to transcend their self-interests for the good of the organi- zation and can have an extraordinary effect on their followers. Andrea Jung at Avon, Richard Branson of the Virgin Group, and Jim McNerney of Boeing are all transformational leaders. They pay attention to the concerns and needs of individual followers; they change followers’ awareness of issues by helping them look at old problems in new ways; and they excite and inspire followers to put out extra effort to achieve group goals. Exhibit 12-4 briefly identifies and defines the characteristics that differentiate these two types of leaders. Transactional and transformational leadership complement each other; they aren’t opposing approaches to getting things done. 63 Transformational leadership builds on transactional leadership and produces levels of follower effort and performance beyond what transactional leadership alone can do. But the reverse isn’t true. So if you are a good transactional leader but do not have transformational qualities, you’ll likely only be a mediocre leader. The best leaders are transactional and transformational. Full Range of Leadership Model Exhibit 12-5 shows the full range of leader- ship model. Laissez-faire is the most passive and therefore least effective of leader behaviors. 64 Management by exception—active or passive—is slightly better, but it’s still considered ineffective. Management-by-exception lead- ers tend to be available only when there is a problem, which is often too late. Contingent reward leadership can be an effective style of leadership but will not get employees to go above and beyond the call of duty. Charismatic Leadership and Transformational Leadership 383 Transactional Leader Contingent Reward: Contracts exchange of rewards for effort, promises rewards for good performance, recognizes accomplishments. Management by Exception (active): Watches and searches for deviations from rules and standards, takes correct action. Management by Exception (passive): Intervenes only if standards are not met. Laissez-Faire: Abdicates responsibilities, avoids making decisions. Transformational Leader Idealized Influence: Provides vision and sense of mission, instills pride, gains respect and trust. Inspirational Motivation: Communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple ways. Intellectual Stimulation: Promotes intelligence, rationality, and careful problem solving. Individualized Consideration: Gives personal attention, treats each employee individually, coaches, advises. Source: Based on A. H. Eagly, M. C. Johannesen-Schmidt, and M. L. Van Engen, “Transformational, Transactional, and Laissez-faire Leadership Styles: A Meta-Analysis Comparing Women and Men,” Psychological Bulletin 129, no. 4 (2003), pp. 569–591; and T. A. Judge and J. E. Bono, “Five Factor Model of Personality and Transformational Leadership,” Journal of Applied Psychology 85, no. 5 (2000), pp. 751–765. Characteristics of Transactional and Transformational Leaders Exhibit 12-4 transactional leaders Leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements. transformational leaders Leaders who inspire followers to transcend their own self-interests and who are capable of having a profound and extraordinary effect on followers. Only with the four remaining styles—all aspects of transformational leadership—are leaders able to motivate followers to perform above expec- tations and transcend their self-interest for the sake of the organization. Individualized consideration, intellectual stimulation, inspirational motivation, and idealized influence all result in extra effort from workers, higher productiv- ity, higher morale and satisfaction, higher organizational effectiveness, lower turnover, lower absenteeism, and greater organizational adaptability. Based on this model, leaders are generally most effective when they regularly use each of the four transformational behaviors. How Transformational Leadership Works Transformational leaders are more effective because they are more creative, but also because they encourage those who follow them to be creative, too. 65 Companies with transformational leaders have greater decentralization of responsibility, managers have more propensity to take risks, and compensation plans are geared toward long-term results—all of which facilitate corporate entrepreneurship. 66 One study of information technol- ogy workers in China found empowering leadership behavior led to feelings of positive personal control among workers, which increased their creativity at work. 67 Companies with transformational leaders also show greater agreement among top managers about the organization’s goals, which yields superior orga- nizational performance. 68 The Israeli military has seen similar results, showing 384 CHAPTER 12 Leadership that transformational leaders improve performance by building consensus among group members. 69 Transformational leaders are able to increase follower self-efficacy, giving the group a “can do” spirit. 70 Followers are more likely to pursue ambitious goals, agree on the strategic goals of the organiza- tion, and believe the goals they are pursuing are personally important. 71 Just as vision helps explain how charismatic leadership works, it also explains part of the effect of transformational leadership. One study found vision was even more important than a charismatic (effusive, dynamic, lively) communi- cation style in explaining the success of entrepreneurial firms. 72 Finally, trans- formational leadership engenders commitment on the part of followers and instills greater trust in the leader. 73 Evaluation of Transformational Leadership Transformational leadership has been impressively supported at diverse job levels and occupations (school prin- cipals, teachers, marine commanders, ministers, presidents of MBA associa- tions, military cadets, union shop stewards, sales reps). One study of R&D firms found teams whose project leaders scored high on transformational leader- ship produced better-quality products as judged 1 year later and higher profits 5 years later. 74 Another study looking at employee creativity and transforma- tional leadership more directly found employees with transformational leaders had more confidence in their ability to be creative at work and higher levels of creative performance. 75 A review of 117 studies testing transformational leader- ship found it was related to higher levels of individual follower performance, team performance, and organizational performance. 76 Full Range of Leadership Model Exhibit 12-5 Idealized Influence Inspirational Motivation Intellectual Stimulation Individualized Consideration Contingent Reward Management by Exception Laissez-Faire Passive Active Ineffective Tr an sa ct io na l Tr an sf or m at io na l Effective Charismatic Leadership and Transformational Leadership 385 Transformational leadership isn’t equally effective in all situations. It has a greater impact on the bottom line in smaller, privately held firms than in more complex organizations. 77 The personal nature of transformational leadership may be most effective when leaders can directly interact with the workforce and make decisions than when they report to an external board of directors or deal with a complex bureaucratic structure. Another study showed transforma- tional leaders were more effective in improving group potency in teams higher in power distance and collectivism. 78 Other recent research using a sample of employees both in China and the United States found that transformational leadership had a more positive relationship with perceived procedural justice among individuals who were lower in power-distance orientation, which in turn related to a stronger transformational leadership-citizenship behavior relation- ship among those higher in power distance. 79 Transformational leaders also obtain higher levels of trust, which reduces stress for followers. 80 In short, trans- formational leadership works through a number of different processes. One study examined how different types of transformational leadership can be effective depending on whether work is evaluated at the team or the individual level. 81 Individual-focused transformational leadership is behavior that empow- ers individual followers to develop, enhance their abilities, and increase self- efficacy. Team-focused transformational leadership emphasizes group goals, shared values and beliefs, and unified efforts. Evidence from a sample of 203 team members and 60 leaders in a business unit found individual transformational leadership associated with higher individual-level performance, whereas team- focused transformational leadership drew higher group-level performance. Transformational leadership theory is not perfect. Contingent reward lead- ership may not characterize transactional leaders only. And contrary to the full range of leadership model, the four I’s in transformational leadership are not always superior in effectiveness to transactional leadership (contingent reward leadership sometimes works as well as transformational leadership). In summary, transformational leadership is more strongly correlated than transactional leadership with lower turnover rates, higher productivity, lower employee stress and burnout, and higher employee satisfaction. 82 Like charisma, it can be learned. One study of Canadian bank managers found branches man- aged by those who underwent transformational leadership training performed significantly better than branches whose managers did not receive training. Other studies show similar results. 83 The GLOBE study—of 18,000 leaders from 825 organizations in 62 countries— links a number of elements of transformational leadership with effective lead- ership, regardless of country. 84 This conclusion is very important because it disputes the contingency view that leadership style needs to adapt to cultural differences. What elements of transformational leadership appear universal? Vision, fore- sight, providing encouragement, trustworthiness, dynamism, positiveness, and proactiveness top the list. The GLOBE team concluded that “effective business leaders in any country are expected by their subordinates to provide a powerful and proactive vision to guide the company into the future, strong motivational skills to stimulate all employees to fulfill the vision, and excellent planning skills to assist in implementing the vision.” 85 A vision is important in any culture, then, but the way it is formed and com- municated may need to vary by culture. A GE executive who used his U.S. lead- ership style in Japan recalls, “Nothing happened. I quickly realized that I had to adapt my approach, to act more as a consultant to my colleagues and to adopt a team-based motivational decision-making process rather than the more vocal style which tends to be common in the West. In Japan the silence of a leader means far more than a thousand words uttered by somebody else.” 86 386 CHAPTER 12 Leadership Although theories have increased our understanding of effective leadership, they do not explicitly deal with the role of ethics and trust, which some argue is essential to complete the picture. Here, we consider these two concepts under the rubric of authentic leadership. 87 What Is Authentic Leadership? Mike Ullman, JCPenney CEO, argues that leaders have to be selfless, listen well, and be honest. Campbell Soup’s CEO Douglas R. Conant is decidedly understated. When asked to reflect on the strong performance of Campbell Soup, he says, “We’re hitting our stride a little bit more (than our peers).” He regularly admits mistakes and often says, “I can do better.” Ullman and Conant appear to be good exemplars of authentic leadership. 88 Authentic leaders know who they are, know what they believe in and value, and act on those values and beliefs openly and candidly. Their followers consider them ethical people. The primary quality produced by authentic leadership, therefore, is trust. Authentic leaders share information, encourage open communication, and stick to their ideals. The result: people come to have faith in them. Because the concept is new, there has been little research on authentic lead- ership. However, it’s a promising way to think about ethics and trust in leader- ship because it focuses on the moral aspects of being a leader. Transformational or charismatic leaders can have a vision and communicate it persuasively, but sometimes the vision is wrong (as in the case of Hitler), or the leader is more concerned with his or her own needs or pleasures, as were Dennis Kozlowski (ex-CEO of Tyco), Jeff Skilling (ex-CEO of Enron), and Raj Rajaratnam (founder of the Galleon Group). 89 6 Define authentic leadership and show why effective leaders exemplify ethics and trust. Authentic Leadership: Ethics and Trust S A L SELF-ASSESSMENT LIBRARY Am I an Ethical Leader? In the Self-Assessment Library (available on CD and online), take assessment IV.E.4 (Am I an Ethical Leader?). Ethics and Leadership Only recently have researchers begun to consider the ethical implications in lead- ership. 90 Why now? One reason may be the growing interest in ethics throughout the field of management. Another may be the discovery that many past leaders— such as Martin Luther King Jr., John F. Kennedy, and Thomas Jefferson— suffered ethical shortcomings. Some companies, like Boeing, are tying executive compensation to ethics to reinforce the idea that, in CEO Jim McNerney’s words, “there’s no compromise between doing things the right way and performance.” 91 Ethics and leadership intersect at a number of junctures. We can think of transformational leaders as fostering moral virtue when they try to change the attitudes and behaviors of followers. 92 Charisma, too, has an ethical compo- nent. Unethical leaders use their charisma to enhance power over followers, directed toward self-serving ends. Ethical leaders use it in a socially constructive way to serve others. 93 Leaders who treat their followers with fairness, especially by providing honest, frequent, and accurate information, are seen as more ef- fective. 94 Leaders rated highly ethical tend to have followers who engage in Authentic Leadership: Ethics and Trust 387 more organizational citizenship behaviors and who are more willing to bring problems to the leaders’ attention. 95 Because top executives set the moral tone for an organization, they need to set high ethical standards, demonstrate them through their own behavior, and encourage and reward integrity in oth- ers while avoiding abuses of power such as giving themselves large raises and bonuses while seeking to cut costs by laying off longtime employees. Leadership is not value-free. In assessing its effectiveness, we need to ad- dress the means a leader uses in trying to achieve goals, as well as the content of those goals. Scholars have tried to integrate ethical and charismatic leadership by advancing the idea of socialized charismatic leadership —leadership that conveys other-centered (not self-centered) values by leaders who model ethical conduct. 96 Socialized charismatic leaders are able to bring employee values in line with their own values through their words and actions. 97 Servant Leadership Scholars have recently considered ethical leadership from a new angle by exam- ining servant leadership . 98 Servant leaders go beyond their own self-interest and focus on opportunities to help followers grow and develop. They don’t use power to achieve ends; they emphasize persuasion. Characteristic behaviors include lis- tening, empathizing, persuading, accepting stewardship, and actively developing followers’ potential. Because servant leadership focuses on serving the needs of others, research has focused on its outcomes for the well-being of followers. What are the effects of servant leadership? One study of 123 supervisors found it resulted in higher levels of commitment to the supervisor, self-efficacy, and perceptions of justice, which all were related to organizational citizenship behavior. 99 This relationship between servant leadership and follower OCB ap- pears to be stronger when followers are focused on being dutiful and respon- sible. 100 Second, servant leadership increases team potency (a belief that one’s team has above-average skills and abilities), which in turn leads to higher levels of group performance. 101 Third, a study with a nationally representative sample of 250 workers found higher levels of citizenship associated with a focus on growth and advancement, which in turn was associated with higher levels of creative performance. 102 Servant leadership may be more prevalent and more effective in certain cultures. 103 When asked to draw images of leaders, U.S. subjects tend to draw them in front of the group, giving orders to followers. Singaporeans tend to draw leaders at the back of the group, acting more to gather a group’s opinions together and then unify them from the rear. This suggests the East Asian proto- type is more like a servant leader, which might mean servant leadership is more effective in these cultures. Trust and Leadership Trust is a psychological state that exists when you agree to make yourself vul- nerable to another because you have positive expectations about how things are going to turn out. 104 Even though you aren’t completely in control of the authentic leaders Leaders who know who they are, know what they believe in and value, and act on those values and beliefs openly and candidly. Their followers would consider them to be ethical people. socialized charismatic leadership A leadership concept that states that leaders convey values that are other centered versus self centered and who role-model ethical conduct. servant leadership A leadership style marked by going beyond the leader’s own self-interest and instead focusing on opportunities to help followers grow and develop. trust A positive expectation that another will not act opportunistically. 388 CHAPTER 12 Leadership situation, you are willing to take a chance that the other person will come through for you. Trust is a primary attribute associated with leadership; breaking it can have serious adverse effects on a group’s performance. 105 As one author noted, “Part of the leader’s task has been, and continues to be, working with people to find and solve problems, but whether leaders gain access to the knowledge and cre- ative thinking they need to solve problems depends on how much people trust them. Trust and trust-worthiness modulate the leader’s access to knowledge and cooperation.” 106 Followers who trust a leader are confident their rights and interests will not be abused. 107 Transformational leaders create support for their ideas in part by arguing that their direction will be in everyone’s best interests. People are unlikely to look up to or follow someone they perceive as dishonest or likely to take advantage of them. Thus, as you might expect, transformational leaders do generate higher levels of trust from their followers, which in turn is related L eaders are expected to monitor performance and assign work tasks. But do they also have a responsibility to protect their followers as well? Should they “take the heat” so employees can be more produc- tive? Former research and develop- ment head at 3M William Coyne felt one of his most significant contribu- tions as a manager of creative employ- ees was to prevent them from being bombarded with questions and sug- gestions from higher-ups. Especially in creative fields, leaders need to make the environment safe for employees to express their ideas, even if it means generating conflict with upper lev- els in the organization. Leaders may also need to protect up-and-coming employees from longer-tenured employees who see them as a threat. Important components of servant leadership include putting subordi- nates first, helping them grow, and empowering them. We might thus expect servant leaders to protect their followers from negative pressures in the organization. Studies also show that higher levels of servant leadership are associated with more citizenship behavior, higher performance, and greater creativity in work groups. As our review of the literature shows, acting to protect workers has a dem- onstrated impact on effective perfor- mance in the real world. Still, shielding workers may not be in the organization’s best interest all the time. Close personal relationships with subordinates can make it difficult to provide negative feedback when it’s needed. A leader might be coddling a poor performer rather than protect- ing him or her from excess scrutiny. Thus, leaders need to take care when exercising their protecting role and be objective about what function it is serving. So what should leaders do to effec- tively protect workers without falling into the trap of protecting the incom- petent? Here are a few suggestions: 1. Try to identify barriers to effective performance in the work environ- ment and protect employees from these unnecessary sources of politi- cal infighting, distraction, and delay. 2. Assess employee contributions re- alistically. Try to separate your feel- ings about an employee from your desire to protect him or her from outside scrutiny. 3. Sometimes the best thing to do is let an employee handle problems independently and wait for him or her to ask for help. This can be sur- prisingly hard for many leaders who are used to seeing themselves in a proactive role. Sources: Based on R. I. Sutton, “The Boss as Human Shield,” Harvard Business Review (September, 2010), pp. 106–109; J. Hu and R. C. Liden, “Antecedents of Team Potency and Team Effectiveness: An Examination of Goal and Process Clarity and Servant Leadership,” Journal of Applied Psychology , Online first publication (February 14, 2011), doi: 10.1037/a0022465; and F. O. Walumbwa, C. A. Hartnell, and A. Oke, “Servant Leadership, Procedural Justice Climate, Service Climate, Employee Attitudes, and Organizational Citizenship Behavior: A Cross-Level Investigation,” Journal of Applied Psychology 95, no. 3 (2010), pp. 517–529. An Ethical Choice Do Leaders Have a Responsibility to Protect Followers? Authentic Leadership: Ethics and Trust 389 to higher levels of team confidence and, ultimately, higher levels of team performance. 108 In a simple contractual exchange of goods and services, your employer is legally bound to pay you for fulfilling your job description. But today’s rapid reorganizations, diffusion of responsibility, and collaborative team-based work style mean employment relationships are not stable long-term contracts with explicit terms. Rather, they are more fundamentally based on trusting relation- ships than ever before. You have to trust that if you show your supervisor a creative project you’ve been working on, she won’t steal the credit behind your back. You have to trust that extra work you’ve been doing will be recognized in your performance appraisal. In contemporary organizations, where less work is closely documented and specified, voluntary employee contribution based on trust is absolutely necessary. And only a trusted leader will be able to encourage employees to reach beyond themselves to a transformational goal. How Is Trust Developed? Trust isn’t just about the leader; the characteristics of followers also influence its development. What key characteristics lead us to believe a leader is trustworthy? Evidence has identified three: integrity, benevolence, and ability (see Exhibit 12-6 ). 109 Integrity refers to honesty and truthfulness. It seems the most critical charac- teristic in assessing another’s trustworthiness. 110 When 570 white-collar employ- ees were given a list of 28 attributes related to leadership, they rated honesty the most important by far. 111 Integrity also means having consistency between what you do and say. “Nothing is noticed more quickly . . . than a discrepancy between what executives preach and what they expect their associates to practice.” 112 Benevolence means the trusted person has your interests at heart, even if yours aren’t necessarily in line with theirs. Caring and supportive behavior is part of the emotional bond between leaders and followers. Ability encompasses an individual’s technical and interpersonal knowledge and skills. Even a highly principled person with the best intentions in the world won’t be trusted to accomplish a positive outcome for you if you don’t have faith in his or her ability to get the job done. Does the person know what he or she is talking about? You’re unlikely to listen to or depend on someone whose abilities you don’t respect. The Nature of Trust Exhibit 12-6 Risk Taking Information Sharing Group Effectiveness Productivity Trust Integrity Leader Trustworthiness Benevolence Ability Propensity to Trust 390 CHAPTER 12 Leadership Trust as a Process Trust propensity refers to how likely a particular employee is to trust a leader. Some people are simply more likely to believe others can be trusted. 113 Those who care- fully document every promise or conversation with their supervisors aren’t very high in trust propensity, and they probably aren’t going to take a leader’s word for anything. Those who think most people are basically honest and forthright will be much more likely to seek out evidence that their leaders have behaved in a trustworthy manner. Trust propensity is closely linked to the personality trait of agreeableness, while people with lower self-esteem are less likely to trust others. 114 Time is the final ingredient in the recipe for trust. We come to trust people based on observing their behavior over a period of time. 115 Leaders need to demonstrate they have integrity, benevolence, and ability in situations where trust is important—say, where they could behave opportunistically or let employees down but don’t. Trust can also be won in the ability domain simply by demonstrating competence. Leaders who break the psychological contract with workers, demonstrating they aren’t trustworthy, will find employees are less satisfied and less committed, have a higher intent toward turnover, engage in less citizenship behavior, and have lower task performance. 116 Leaders who betray trust are especially likely to be evaluated negatively by followers if there is already a low level of leader– member exchange. 117 Once it is violated, trust can be regained, but only in certain situations that depend on the type of violation. 118 If the cause is lack of ability, it’s usually best to apologize and recognize you should have done better. When lack of integrity is the problem, though, apologies don’t do much good. Regardless of the violation, simply saying nothing or refusing to confirm or deny guilt is never an effective strategy for regaining trust. Trust can be restored when we observe a consistent pattern of trustworthy behavior by the transgres- sor. However, if the transgressor used deception, trust never fully returns, not even after apologies, promises, or a consistent pattern of trustworthy actions. 119 What Are the Consequences of Trust? Trust between supervisors and employees has a number of important advan- tages. Here are just a few that research has shown: ● Trust encourages taking risks. Whenever employees decide to deviate from the usual way of doing things, or to take their supervisors’ word on a new direction, they are taking a risk. In both cases, a trusting relationship can facilitate that leap. ● Trust facilitates information sharing. One big reason employees fail to express concerns at work is that they don’t feel psychologically safe reveal- ing their views. When managers demonstrate they will give employees’ ideas a fair hearing and actively make changes, employees are more will- ing to speak out. 120 ● Trusting groups are more effective. When a leader sets a trusting tone in a group, members are more willing to help each other and exert ex- tra effort, which further increases trust. Conversely, members of mistrust- ing groups tend to be suspicious of each other, constantly guard against exploitation, and restrict communication with others in the group. These actions tend to undermine and eventually destroy the group. ● Trust enhances productivity. The bottom-line interest of companies also appears positively influenced by trust. Employees who trust their supervisors tend to receive higher performance ratings. 121 People re- spond to mistrust by concealing information and secretly pursuing their own interests. Leading for the Future: Mentoring 391 Leaders often take responsibility for developing future leaders. Let’s consider what makes mentoring valuable as well as its potential pitfalls. Mentoring A mentor is a senior employee who sponsors and supports a less-experienced employee, a protégé. Successful mentors are good teachers. They present ideas clearly, listen well, and empathize with protégés’ problems. Mentoring relation- ships serve both career functions and psychosocial functions (see Exhibit 12-7 ). 122 Traditional informal mentoring relationships develop when leaders identify a less experienced, lower-level employee who appears to have potential for fu- ture development. 123 The protégé will often be tested with a particularly chal- lenging assignment. If he or she performs acceptably, the mentor will develop the relationship, informally showing the protégé how the organization really works outside its formal structures and procedures. Why would a leader want to be a mentor? 124 Many feel they have something to share with the younger generation and want to provide a legacy. Mentoring also provides unfiltered access to the attitudes of lower-ranking employees, and protégés can be an excellent source of early warning signals that identify poten- tial organizational problems. Are all employees in an organization equally likely to participate in a men- toring relationship? Unfortunately, no. 125 In the United States, upper managers in most organizations have traditionally been white males, and because mentors tend to select protégés similar to themselves in background, education, gender, 7 Demonstrate the role mentoring plays in our understanding of leadership. Leading for the Future: Mentoring mentor A senior employee who sponsors and supports a less- experienced employee, called a protégé. Career Functions Psychosocial Functions • Lobbying to get the protégé challenging • Counseling the protégé to bolster and visible assignments his or her self-confidence • Coaching the protégé to help develop his • Sharing personal experiences with or her skills and achieve work objectives the protégé • Providing exposure to influential individuals • Providing friendship and within the organization acceptance • Protecting the protégé from possible risks • Acting as a role model to his or her reputation • Sponsoring the protégé by nominating him or her for potential advances or promotions • Acting as a sounding board for ideas the protégé might be hesitant to share with a direct supervisor Career and Psychological Functions of the Mentoring Relationship Exhibit 12-7 392 CHAPTER 12 Leadership race, ethnicity, and religion, minorities and women are less likely to be chosen. “People naturally move to mentor and can more easily communicate with those with whom they most closely identify.” 126 Senior male managers may also select male protégés to minimize problems such as sexual attraction or gossip. Many organizations have created formal programs to ensure mentoring relationships are equally available to minorities and women. 127 Although be- gun with the best intentions, these formal relationships are not as effective as informal ones. 128 Poor planning and design may often be the reason. Mentor commitment is critical to a program’s effectiveness; mentors must see the relationship as beneficial to themselves and the protégé. The protégé, too, must feel he or she has input into the relationship; someone who feels it’s foisted on him or her will just go through the motions. 129 Formal mentoring programs are also most likely to succeed if they appropriately match the work style, needs, and skills of protégé and mentor. 130 You might assume mentoring is valuable for objective outcomes like compensation and job performance, but research suggests the gains are pri- marily psychological. One review concluded, “Though mentoring may not be properly labeled an utterly useless concept to careers, neither can it be argued to be as important as the main effects of other influences on career success such as ability and personality.” 131 It may feel nice to have a mentor, but it doesn’t appear that having a good mentor, or any mentor, is critical to your career. Mentors may be effective not because of the functions they provide, but be- cause of the resources they can obtain: a mentor connected to a powerful net- work can build relationships that will help the protégé advance. Most evidence suggests that network ties, whether built through a mentor or not, are a signifi- cant predictor of career success. 132 If a mentor is not well connected or not a very strong performer, the best mentoring advice in the world will not be very beneficial. S omewhat surprisingly, this state- ment appears to be partly true. All leaders, of course, have some power (we’ll consider power in the next chapter). But how do differ- ences in power between leaders affect how they do their jobs? Most of us probably think that when leaders obtain more power, they relax and “rest on their laurels”—or worse, they abuse it. Several recent studies, however, suggest that this is not quite the case. Power actually can help a leader do his or her job more effectively. In a series of experiments, researchers found that when individuals were given power as leaders, they performed more effec- tively. Why? Power gives leaders a greater sense of responsibility toward their group—as a result, powerful lead- ers were more likely to exert effort and make sacrifices than those with less power. If you’re powerless (or think you’re powerless), after all, why bother? Interestingly, though, the research also suggested that if leaders happen to see a task as beneath them, they will disregard it. Thus, if leaders are given more power, it’s important that they don’t use it to dismiss as trivial the duties that truly matter. Of course, we don’t really know whether these experimental results generalize to more realistic settings, or whether power has long-term corrupt- ing effects. But the findings do sug- gest that giving leaders more power is not always a bad idea. Source: C. N. DeWall, R. F. Baumeister, N. L. Mead, and K. D. Vohs, “How Leaders Self-Regulate Their Task Performance: Evidence That Power Promotes Diligence, Depletion, and Disdain,” Journal of Personality and Social Psychology 100, no. 1 (2010), pp. 47–65. Myth or Science? “Power Helps Leaders Perform Better” Challenges to the Leadership Construct 393 “In the 1500s, people ascribed all events they didn’t understand to God. Why did the crops fail? God. Why did someone die? God. Now our all-purpose ex- planation is leadership.” 133 But much of an organization’s success or failure is due to factors outside the influence of leadership. Sometimes it’s just a matter of being in the right or wrong place at a given time. In this section, we present two perspectives and one technological change that challenge accepted beliefs about the value of leadership. Leadership as an Attribution As you may remember from Chapter 6 , attribution theory examines how people try to make sense of cause-and-effect relationships. The attribution theory of leadership says leadership is merely an attribution people make about other individuals. 134 Thus we attribute to leaders intelligence, outgoing personality, strong verbal skills, aggressiveness, understanding, and industriousness. 135 At the organizational level, we tend to see leaders, rightly or wrongly, as respon- sible for extremely negative or extremely positive performance. 136 One longitudinal study of 128 major U.S. corporations found that whereas perceptions of CEO charisma did not lead to objective company performance, company performance did lead to perceptions of charisma. 137 Employee per- ceptions of their leaders’ behaviors are significant predictors of whether they blame the leader for failure, regardless of how the leader assesses him- or 8 Address challenges to the effectiveness of leadership. Challenges to the Leadership Construct attribution theory of leadership A leadership theory that says that leadership is merely an attribution that people make about other individuals. Elements of transformational lead- ership such as vision and foresight appear to be universal. In China, for example, Wang Jianzhou is the CEO of China Mobile, the world’s largest mobile phone operator with more than 600 million subscribers. With vision and foresight, Jianzhou is expanding mobile service through- out China’s vast rural areas and plans to expand in emerging mar- kets such as Africa, Asia, and Latin America. Proactive and positive, Jianzhou’s leadership draws from his extensive knowledge of and more than 30 years of experience in the telecommunications industry. Jianzhou is shown here during the launch of the firm’s OPhone operat- ing system platform. So u rc e : B a o f a n / I m a g in e ch in a /A P I m a g e s. 394 CHAPTER 12 Leadership herself. 138 A study of more than 3,000 employees from western Europe, the United States, and the Middle East found people who tended to “romanticize” leadership in general were more likely to believe their own leaders were trans- formational. 139 When Merrill Lynch began to lose billions in 2008 as a result of its invest- ments in mortgage securities, it wasn’t long before CEO Stan O’Neal lost his job. He appeared before the House Oversight and Government Reform Committee of the U.S. Congress for what one committee member termed “a public flog- ging.” Some called him a “criminal,” and still others suggested Merrill’s losses represented “attempted destruction.” 140 Whether O’Neal was responsible for the losses at Merrill or deserved his nine-figure severance package are difficult questions to answer. However, it is not difficult to argue that he probably changed very little between 2004 when Fortune described him as a “turnaround genius” and 2009 when he was fired. What did change was the performance of the organization he led. It’s not nec- essarily wrong to terminate a CEO for failing or flagging financial performance. However, O’Neal’s story illustrates the power of the attribution approach to leadership: hero and genius when things are going well, villain when they aren’t. We also make demographic assumptions about leaders. Respondents in a study assumed a leader described with no identifying racial information was white at a rate beyond the base rate of white employees in a company. In sce- narios where identical leadership situations are described but the leaders’ race is manipulated, white leaders are rated as more effective than leaders of other racial groups. 141 One large-scale summary study (a meta-analysis) found that many individuals hold stereotypes of men as having more leader characteristics than women, although as you might expect, this tendency to equate leader- ship with masculinity has decreased over time. 142 Other data suggest women’s perceived success as transformational leaders may be based on demographic characteristics. Teams prefer male leaders when aggressively competing against other teams, but they prefer female leaders when the competition is within teams and calls for improving positive relationships within the group. 143 Attribution theory suggests what’s important is projecting the appearance of being a leader rather than focusing on actual accomplishments. Leader-wannabes who can shape the perception that they’re smart, personable, verbally adept, aggressive, hardworking, and consistent in their style can increase the probabil- ity their bosses, colleagues, and employees will view them as effective leaders. Substitutes for and Neutralizers of Leadership One theory of leadership suggests that in many situations leaders’ actions are irrelevant. 144 Experience and training are among the substitutes that can replace the need for a leader’s support or ability to create structure. Organizational characteristics such as explicit formalized goals, rigid rules and procedures, and cohesive work groups can also replace formal leadership, while indiffer- ence to organizational rewards can neutralize its effects. Neutralizers make it impossible for leader behavior to make any difference to follower outcomes (see Exhibit 12-8 ). This observation shouldn’t be too surprising. After all, we’ve introduced a number of variables—such as attitudes, personality, ability, and group norms— that affect employee performance and satisfaction. It’s simplistic to think employees are guided to goal accomplishments solely by the actions of their leader. Leadership is simply another independent variable in our overall OB model. Sometimes the difference between substitutes and neutralizers is fuzzy. If I’m working on a task that’s intrinsically enjoyable, theory predicts leadership Challenges to the Leadership Construct 395 will be less important because the task itself provides enough motivation. But does that mean intrinsically enjoyable tasks neutralize leadership effects, or substitute for them, or both? Another problem is that while substitutes for leadership (such as employee characteristics, the nature of the task, and so forth) matter to performance, that doesn’t necessarily mean leadership doesn’t. 145 Online Leadership How do you lead people who are physically separated from you and with whom you communicate electronically? This question needs attention from OB researchers. 146 Today’s managers and employees are increasingly linked by networks rather than geographic proximity. We propose that online leaders have to think carefully about what actions they want their digital messages to initiate. They confront unique challenges, the greatest of which appears to be developing and maintaining trust. Identification-based trust , based on a mutual understanding of each other’s intentions and appreciation of the other’s wants and desires, is particularly difficult to achieve without face-to-face interaction. 147 And online negotiations can also be hindered because parties express lower levels of trust. 148 We tentatively conclude that good leadership skills will soon include the abilities to communicate support, trust, and inspiration through keyboarded words and accurately read emotions in others’ messages. In electronic communication, writing skills are likely to become an extension of interpersonal skills. Substitutes for and Neutralizers of Leadership Exhibit 12-8 Relationship- Task- Oriented Oriented Defining Characteristics Leadership Leadership Individual Experience/training No effect on Substitutes for Professionalism Substitutes for Substitutes for Indifference to rewards Neutralizes Neutralizes Job Highly structured task No effect on Substitutes for Provides its own feedback No effect on Substitutes for Intrinsically satisfying Substitutes for No effect on Organization Explicit formalized goals No effect on Substitutes for Rigid rules and procedures No effect on Substitutes for Cohesive work groups Substitutes for Substitutes for Source: Based on S. Kerr and J. M. Jermier, “Substitutes for Leadership: Their Meaning and Measurement,” Organizational Behavior and Human Performance (December 1978), p. 378. substitutes Attributes, such as experience and training, that can replace the need for a leader’s support or ability to create structure. neutralizers Attributes that make it impossible for leader behavior to make any difference to follower outcomes. identification-based trust Trust based on a mutual understanding of each other’s intentions and appreciation of each other’s wants and desires. 396 CHAPTER 12 Leadership How can organizations find or create effective leaders? Let’s try to answer that question. Selecting Leaders The entire process organizations go through to fill management positions is essentially an exercise in trying to identify effective leaders. You might begin by reviewing the knowledge, skills, and abilities needed to do the job effectively. Personality tests can identify traits associated with leadership—extraversion, conscientiousness, and openness to experience. High self-monitors are better at reading situations and adjusting their behavior accordingly. Candidates with high emotional intelligence should have an advantage, especially in situations requiring transformational leadership. 149 Experience is a poor predictor of leader effectiveness, but situation-specific experience is relevant. Because nothing lasts forever, the most important event an organization needs to plan for is a change in leadership. Recently, Apple’s board of direc- tors has been very concerned with identifying a successor to Steve Jobs. Other organizations seem to spend no time on leadership succession and are surprised when their picks turn out poorly. University of Kentucky chose its men’s basket- ball coach, Billy Gillispie, within 2 weeks of the departure of Tubby Smith. Yet within 2 years Gillispie had been fired, causing observers to wonder whether Kentucky had done its homework in leadership succession. Training Leaders Organizations spend billions of dollars on leadership training and develop- ment. 150 These efforts take many forms—from $50,000 executive leadership pro- grams offered by universities such as Harvard to sailing experiences offered by the Outward Bound program. Business schools, including some elite programs such as those at Dartmouth, MIT, and Stanford, are placing renewed emphasis on leadership development. Some companies, too, place a lot of emphasis on leadership development. Goldman Sachs is well known for developing leaders; BusinessWeek called it the “Leadership Factory.” 151 How can managers get maximum effect from their leadership-training bud- gets? 152 First, let’s recognize the obvious. Leadership training of any kind is likely to be more successful with high self-monitors. Such individuals have the flexibility to change their behavior. Second, what can organizations teach that might be related to higher leader effectiveness? Probably not “vision creation” but, likely, implementation skills. We can train people to develop “an understanding about content themes criti- cal to effective visions.” 153 We can also teach skills such as trust building and mentoring. And leaders can be taught situational-analysis skills. They can learn how to evaluate situations, modify them to better fit their style, and assess which leader behaviors might be most effective in given situations. BHP Billiton, Best Buy, Nokia, and Adobe have hired coaches to help top executives one on one to improve their interpersonal skills and act less autocratically. 154 Behavioral training through modeling exercises can increase an individual’s ability to exhibit charismatic leadership qualities. Recall the researchers who scripted undergraduate business students to “play” charismatic. 155 Finally, lead- ers can be trained in transformational leadership skills that have bottom-line results, whether in the financial performance of Canadian banks or the effec- tiveness of soldiers in the Israeli Defense Forces. 156 Finding and Creating Effective Leaders Richard Wagoner was fired as CEO and chairman of General Motors. His leadership was faulted for playing a part in the automaker’s bankruptcy, with critics saying that he did not force much-needed radi- cal change in reducing debt, cutting costs, and investing in fuel-efficient cars. Wagoner, however, inherited a messy situation and accomplished much in fixing GM during his 9 years as CEO. He cut GM’s U.S. workforce from 177,000 to 92,000, closed factories, saved billions of dollars by globalizing engineer- ing, manufacturing, and design, and led a resurgence in quality and performance. But the attribution approach to leadership would sug- gest a reverse causality: that GM’s failures caused people to question his leadership, and not the other way around. So u rc e : C a rl o s O so ri o /A P I m a g e s. Summary and Implications for Managers 397 The Leadership GapOB Poll 0 4020 60 8070503010 Important to our organization 75.3% Percent of organizations that evaluated leadership development in the organization as . . . Effective in our organization 24.1% Source: G. Kranz, “Special Report: Leadership Development,” Workforce Management (May 2011), pp. 28–32; and P. J. Kiger, “The Leadership Formula,” Workforce Management (May 2010), pp. 25–31. MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Leadership plays a central part in understanding group behavior, because it’s the leader who usually directs us toward our goals. Knowing what makes a good leader should thus be valuable in improving group performance. ● The early search for a set of universal leadership traits failed. However, recent efforts using the Big Five personality framework show strong and consistent relationships between leadership and extraversion, conscientiousness, and openness to experience. ● The behavioral approach’s major contribution was narrowing leadership into task-oriented (initiating structure) and people-oriented (consider- ation) styles. By considering the situation in which the leader operates, contingency theories promised to improve on the behavioral approach, but only LPC theory has fared well in leadership research. ● Research on charismatic and transformational leadership has made major contributions to our understanding of leadership effective- ness. Organizations want managers who can exhibit transformational leadership qualities and who have vision and the charisma to carry it out. ● Effective managers must develop trusting relationships with followers because, as organizations have become less stable and predictable, strong bonds of trust are replacing bureaucratic rules in defining expectations and relationships. ● Tests and interviews help identify people with leadership qualities. Managers should also consider investing in leadership training such as formal courses, workshops, rotating job responsibilities, coaching, and mentoring. 9 Assess whether charis- matic and transformational leadership generalize across cultures. Summary and Implications for Managers www.mymanagementlab.com 398 CHAPTER 12 Leadership Heroes Are Made, Not Born POINT COUNTERPOINT O f course heroes are not like everyone else. That’s what makes them heroes. A generation of evidence from behavioral genetics reveals that “everything is genetic,” meaning we have yet to discover an important human behavior that does not have genetic origins. Though we’re not aware of any such study with respect to heroism, it would be surprising if courageous behav- ior were not at least partly genetic. It’s foolish to think courageous people aren’t exceptional because of who they are. Just as we know there is an entre- preneurial personality and a leader personality, there is a heroic personality. Research suggests, for example, that people who score high on conscientiousness are more likely to engage in courageous behavior. Not all leaders are heroes, but many have exhibited courageous behavior. When Richard Branson launches his latest attempt to set the world record for an around-the-world balloon flight or sloop sailing, he is the same leader who also exhibits courageous behavior as CEO of Virgin Group. Virgin Group now includes more than 400 companies, including Virgin Galactic, a space tourism company, and Virgin Fuels, whose goal is to revolutionize the industry by providing sustainable fuels for automobiles and aircraft. Same leader, same heroic behavior—in work and in life. Are we really to believe that Richard Branson and other courageous leaders are just like everyone else? F rom Apple CEO Steve Jobs and Microsoft CEO Bill Gates to US Air Pilot Sully Sullenberger and Walmart founder Sam Walton, we often ascribe heroic qualities to our leaders. They are courageous in the face of great risk. They persevered when few would. They take action when most sit by. Heroes are exceptional people who display exceptional behavior. But some social psychologists question this conventional wisdom. They note that heroism can be found in many spheres of life, including in the behavior of whistleblowers, explorers, religious leaders, scientists, Good Samaritans, and those who beat the odds. At some time in our lives, we all show acts of heroism when the situation allows us to do so. If we want to see more heroic behavior, we need to create more situations that produce it. Stanford psychologist Phil Zimbardo goes even further to argue that our romantic, inborn, trait-based view of heroic behavior is misplaced: “The banality of evil is matched by the banality of heroism. Neither is the consequence of dispositional tendencies. . . . Both emerge in particular situations at particular times, when situational forces play a compelling role in moving individuals across the line from inaction to action.” People exhibit brave behavior every day. The workers who risked their lives to contain Japan’s earthquake-ravaged nuclear reactors are a great example. Thus, we err when we think leaders are uniquely positioned to behave heroically. We all can be heroes in the right situation. Sources: Z. E. Franco, K. Blau, and P. G. Zimbardo, “Heroism: A Conceptual Analysis and Differentiation Between Heroic Action and Altruism,” Review of General Psychology 15, no. 2 (2011), pp. 99–113; O. Dorell, “At Nuke Plant, Heroes Emerge,” USA Today (March 25, 2011), pp. 1A, 2A; L. J. Walker, J. A. Frimer, and W. L. Dunlop, “Varieties of Moral Personality: Beyond the Banality of Heroism,” Journal of Personality 78, no. 3 (2010), pp. 907–942; and J. Lehrer, “Are Heroes Born, or Can They Be Made?” The Wall Street Journal (December 11, 2010), p. C12. Ethical Dilemma 399 1 Are leadership and management different from one another? If so, how? 2 What is the difference between trait and behavioral theories? Are the theories valid? 3 What are the main limitations of behavioral theories of leadership? 4 What is Fiedler’s contingency model? Has it been supported in research? 5 How do charismatic and transformational leadership compare and contrast? Are they valid? 6 What is authentic leadership? Why do ethics and trust matter to leadership? 7 How is mentoring valuable to leadership? What are the keys to effective mentoring? 8 How can organizations select and develop effective leaders? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE What Is a Leader? 1. Working on your own, write down 12 adjectives that describe an effective business leader. 2. Break into groups of four or five. Appoint a note- taker and spokesperson. Compare your lists of adjec- tives, making a new list of those common across two or more persons’ lists. (Count synonyms—steadfast and unwavering, for example—as the same.) 3. Each spokesperson should present the group’s list to the class. 4. Are there many similarities among the lists? What does this tell you about the nature of leadership? ETHICAL DILEMMA Undercover Leaders As you saw in one of the Chapter 1 cases, the television show Undercover Boss features a leader working undercover in his or her own company to find out how the organization really works. In Chapter 1 , we considered the show as an example of management by walking around (MBWA). Here, we con- sider the ethical leadership lessons it might offer. Executives from DirecTV, Hooters, 7-Eleven, NASCAR, Chiquita, and Choice Hotels have been featured on the show. Typically, the executive works undercover for a week. Then the employees with whom and under whom the leader has worked are summoned to company head- quarters and rewarded, or punished, for their actions. In one episode, Waste Management’s president Larry O’Donnell, sporting gray stubble and work clothes, works the back of a trash truck. Later, he sorts recyclables from a fast-moving conveyer belt. Under the barking orders of a supervisor, he even cleans a long line of portable toilets. Some criticize the show for its faux realism. The CEOs know they are on camera, so every word and facial expression is for the cameras. Many employees know they are on camera too. One critic commented, “Because the series’ very existence requires cooperation from the ex- ecutives that it purports to make suffer for their sins, it has to raise them higher, in the end, than it found them at the start.” Realistic or not, the series continues to be popular. After all, haven’t you sometimes wondered what it would be like to do someone else’s job? The idea has moved beyond television too. Recently, the Australian government created a program that places CEOs undercover in their own workplaces. One CEO, Phil Smith of clothing retailer Fletcher Jones, said in tears of the experience, “I learnt a lot from this that I wouldn’t have found out any other way.” Questions 1. Do you think it is ethical for a leader to go undercover in his or her organization? Why or why not? 400 CHAPTER 12 Leadership 2. Do you think leaders who work undercover are really changed as a result of their experiences? 3. Would you support a government program that gave companies incentives to send leaders undercover? Sources: K. Jones, “CEOs Go Undercover Over Workplace Safety,” SafetyAtWorkBlog (February 5, 2011), downloaded June 10, 2011, from http://safetyatworkblog.wordpress.com/ ; W. Kern, “The Fakery of CEOs Undercover,” Bloomberg Businessweek (February 15, 2010), pp. 78–79. CASE INCIDENT 1 Leadership Mettle Forged in Battle In 2008, facing a serious shortage of leadership-ready em- ployees at the store management level, Walmart decided to recruit from the U.S. military. The company sent re- cruiters to military job fairs and hired 150 junior military officers, pairing them with store mentors to learn on the job. The result: Walmart claims that it’s been able to bring in world-class leaders who were ready to take over once they had learned the retail business that Walmart could easily teach them. Other organizations that have heavily recruited from the military in recent years include GE, Home Depot, Lowe’s, State Farm Insurance, Merck, and Bank of America. It’s not really surprising to see companies turn to the military for leadership potential. A long tradition of books and seminars advises leaders to think like military leaders ranging from Sun Tzu to Norman Schwarzkopf. And military veterans do have a variety of valuable skills learned through experience. General David Petraeus notes, “Tell me anywhere in the business world where a 22- or 23-year-old is responsible for 35 or 40 other indi- viduals on missions that involve life and death . . . They’re under enormous scrutiny, on top of everything else. These are pretty formative experiences. It’s a bit of a crucible-like experience that they go through.” Military leaders are also used to having to make due in less than optimal conditions, negotiate across cultures, and oper- ate under extreme stress. However, they do have to relearn some lessons from the service. Some may not be used to leading someone like an eccentric computer programmer who works strange hours and dresses like a slob, but who brings more to the com- pany’s bottom line than a conventional employee would. Indeed, in some companies like Google, there is nothing like the chain of command military leaders are used to. Still, most forecasts suggest there will be an ample supply of battle-tested military leaders ready to report for cor- porate duty in the near future, and many companies are eager to have them. Questions 1. Do you think leaders in military contexts exhibit the same qualities as organizational leaders? Why or why not? 2. In what ways not mentioned in the case would mili- tary leadership lessons not apply in the private sector? What might military leaders have to re-learn to work in business? 3. Are specific types of work or situations more likely to benefit from the presence of “battle-tested” leaders? List a few examples. Sources: B. O’Keefe, J. Birger, and D. Burke, “Battle Tested,” Fortune (March 22, 2010), p. 108–118; B. Whitmore, “Hiring Military Veterans Is Good Business,” Huntington WV Herald-Dispatch (November 6, 2010), www.herald-dispatch.com ; and B. Wansink, C. R. Payne, and K. van Ittersum, “Profiling the Heroic Leader: Empirical Lessons from Combat-Decorated Veterans of World War II,” Leadership Quarterly 19, no. 5 (2008), pp. 547–555. CASE INCIDENT 2 Leadership Factories Companies differ markedly in their ability to produce fu- ture leaders, as several recent analyses of the 1,187 larg- est publicly traded U.S. companies revealed. Among the CEOs in one study, a remarkable total of 26 once worked at General Electric (GE). However, as the following table shows, on a per- employee basis, that ability earns GE only tenth place in terms of the likelihood of a current or former employee becoming CEO of a large company. Top on the list is management consulting firm McKinsey & Company. Amazingly, if we extrapolate into the future from the current stock of McKinsey alums who are CEOs, of every 1,060 McKinsey employees, one will become CEO of a Fortune 1000 company. www.herald-dispatch.com http://safetyatworkblog.wordpress.com/ Endnotes 401 Company Size (employees) CEOs Produced Odds McKinsey & Co. 17,000 16 1,060:1 Baxter International 48,500 11 4,410:1 Motorola 60,000 7 8,570:1 Intel 82,500 8 10,310:1 Procter & Gamble (P&G) 127,000 12 10,580:1 General Electric (GE) 287,000 26 11,040:1 Ernst & Young 144,000 12 12,000:1 Some companies did not fare nearly as well, such as Citigroup (odds: 30,180:1), AT&T (odds: 23,220:1) and Johnson & Johnson (odds: 15,275:1). While some might dismiss the results, not surpris- ingly, the companies at the top of the list do not. “We are a leadership engine and a talent machine,” said retiring Procter & Gamble CEO A. G. Lafley. Questions 1. Management consulting firms did very well on a per-employee basis, partly because they are mostly made up of managers (as opposed to blue-collar or entry-level workers). How big a factor do you think composition of the workforce is in likelihood of producing a CEO? 2. Do you think so-called leadership factories are also better places for nonleaders to work? Why or why not? 3. Assume you had job offers from two companies that differed only in how often they produced CEOs. Would this difference affect your decision? 4. Do these data support the value of leader selection and leader development? Why or why not? Source: Based on D. McCarthy, “The 2008 Best Companies for Leaders,” Great Leadership (February 17, 2009), www.greatleadership bydan.com/2009/02/2008-best-companies-for-leaders.html ; D. Jones, “Some Firms’ Fertile Soil Grows Crop of Future CEOs,” USA Today (January 9, 2008), pp. 1B, 2B; and P.  O’Connell, “How Companies Develop Great Leaders,” Bloomberg Businessweek (February 16, 2010), www.businessweek.com . ENDNOTES 1. M. Javidan, P. W. Dorfman, M. S. de Luque, and R. J. House, “In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project Globe,” Academy of Management Perspectives (February 2006), pp. 67–90. 2. J. G. Geier, “A Trait Approach to the Study of Leadership in Small Groups,” Journal of Communication (December 1967), pp. 316–323. 3. S. A. Kirkpatrick and E. A. Locke, “Leadership: Do Traits Matter?” Academy of Management Executive (May 1991), pp. 48–60; and S. J. Zaccaro, R. J. Foti, and D. A. Kenny, “Self-Monitoring and Trait-Based Variance in Leadership: An Investigation of Leader Flexibility Across Multiple Group Situations,” Journal of Applied Psychology (April 1991), pp. 308–315. 4. See T. A. Judge, J. E. Bono, R. Ilies, and M. W. Gerhardt, “Personality and Leadership: A Qualitative and Quantitative Review,” Journal of Applied Psychology (August 2002), pp. 765–780. 5. Judge, Bono, Ilies, and Gerhardt, “Personality and Leadership.” 6. D. R. Ames and F. J. Flynn, “What Breaks a Leader: The Curvilinear Relation Between Assertiveness and Leadership,” Journal of Personality and Social Psychology 92, no. 2 (2007), pp. 307–324. 7. K. Ng, S. Ang, and K. Chan, “Personality and Leader Effectiveness: A Moderated Mediation Model of Leadership Self-Efficacy, Job Demands, and Job Autonomy,” Journal of Applied Psychology 93, no. 4 (2008), pp. 733–743. 8. This section is based on J. M. George, “Emotions and Leadership: The Role of Emotional Intelligence,” Human Relations (August 2000), pp. 1027–1055; C.-S. Wong and K. S. Law, “The Effects of Leader and Follower Emotional Intelligence on Performance and Attitude: An Exploratory Study,” Leadership Quarterly (June 2002), pp. 243–274; and J. Antonakis, N. M. Ashkanasy, and M. T. Dasborough, “Does Leadership Need Emotional Intelligence?” Leadership Quarterly 20 (2009), pp. 247–261. 9. R. H. Humphrey, J. M. Pollack, and T. H. Hawver, “Leading with Emotional Labor,” Journal of Managerial Psychology 23 (2008), pp. 151–168. 10. F. Walter, M. S. Cole, and R. H. Humphrey, “Emotional Intelligence: Sine Qua Non of Leadership or Folderol?” www.greatleadershipbydan.com/2009/02/2008-best-companies-for-leaders.html www.businessweek.com 402 CHAPTER 12 Leadership Academy of Management Perspectives (February 2011), pp. 45–59. 11. S. Côté, P. N. Lopez, P. Salovey, and C. T. H. Miners, “Emotional Intelligence and Leadership Emergence in Small Groups,” Leadership Quarterly 21 (2010), pp. 496–508. 12. R. G. Lord, C. L. DeVader, and G. M. Alliger, “A Meta- Analysis of the Relation Between Personality Traits and Leadership Perceptions: An Application of Validity Generalization Procedures,” Journal of Applied Psychology (August 1986), pp. 402–410; and J. A. Smith and R. J. 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House, “In the Eye of the Beholder: Cross Cultural Lessons in Leadership from Project GLOBE,” Academy of Management Perspectives (February 2006), pp. 67–90. 17. F. E. Fiedler, A Theory of Leadership Effectiveness (New York: McGraw-Hill, 1967). 18. S. Shiflett, “Is There a Problem with the LPC Score in LEADER MATCH?” Personnel Psychology (Winter 1981), pp. 765–769. 19. F. E. Fiedler, M. M. Chemers, and L. Mahar, Improving Leadership Effectiveness: The Leader Match Concept (New York: Wiley, 1977). 20. Cited in R. J. House and R. N. Aditya, “The Social Scientific Study of Leadership,” Journal of Management 23, no. 3 (1997), p. 422. 21. L. H. Peters, D. D. Hartke, and J. T. Pohlmann, “Fiedler’s Contingency Theory of Leadership: An Application of the Meta-Analysis Procedures of Schmidt and Hunter,” Psychological Bulletin (March 1985), pp. 274–285; C. A. Schriesheim, B. J. Tepper, and L. A. Tetrault, “Least Preferred Coworker Score, Situational Control, and Leadership Effectiveness: A Meta-Analysis of Contingency Model Performance Predictions,” Journal of Applied Psychology (August 1994), pp. 561–573; and R. Ayman, M. M. Chemers, and F. Fiedler, “The Contingency Model of Leadership Effectiveness: Its Levels of Analysis,” Leadership Quarterly (Summer 1995), pp. 147–167. 22. House and Aditya, “The Social Scientific Study of Leadership.” 23. See, for instance, R. W. Rice, “Psychometric Properties of the Esteem for the Least Preferred Coworker (LPC) Scale,” Academy of Management Review (January 1978), pp. 106–118; C. A. Schriesheim, B. D. Bannister, and W. H.  Money, “Psychometric Properties of the LPC Scale: An Extension of Rice’s Review,” Academy of Management Review (April 1979), pp. 287–290; and J. K. Kennedy, J. M. Houston, M.  A.  Korgaard, and D. D. 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House, “Path-Goal Theory of Leadership: Lessons, Legacy, and a Reformulated Theory,” Leadership Quarterly (Fall 1996), pp. 323–352. 27. J. C. Wofford and L. Z. Liska, “Path-Goal Theories of Leadership: A Meta-Analysis,” Journal of Management (Winter 1993), pp. 857–876; and P. M. Podsakoff, S. B. MacKenzie, and M. Ahearne, “Searching for a Needle in a Haystack: Trying to Identify the Illusive Moderators of Leadership Behaviors,” Journal of Management 21 (1995), pp. 423–470. 28. J. R. Villa, J. P. Howell, and P. W. Dorfman, “Problems with Detecting Moderators in Leadership Research Using Moderated Multiple Regression,” Leadership Quarterly 14 (2003), pp. 3–23; C. A. Schriesheim and L. Neider, “Path- Goal Leadership Theory: The Long and Winding Road,” Leadership Quarterly 7 (1996), pp. 317–321; and M. G. Evans, “R. J. House’s ‘A Path-Goal Theory of Leader Effectiveness,’” Leadership Quarterly 7 (1996), pp. 305–309. 29. A. E. Colbert and L. A. Witt, “The Role of Goal- Focused Leadership in Enabling the Expression of Conscientiousness,” Journal of Applied Psychology 94, no. 3 (2009), pp. 790–796. 30. S. J. Perry, L. A. Witt, L. M. Penney, and L. Atwater, “The Downside of Goal-Focused Leadership: The Role of Personality in Subordinate Exhaustion,” Journal of Applied Psychology 95, no. 6 (2010), pp. 1145–1153. 31. See V. H. Vroom and P. W. Yetton, Leadership and Decision- Making (Pittsburgh: University of Pittsburgh Press, 1973); and V. H. Vroom and A. G. Jago, “The Role of the Situation in Leadership,” American Psychologist (January 2007), pp. 17–24. 32. See, for example, R. H. G. Field, “A Test of the Vroom- Yetton Normative Model of Leadership,” Journal of Applied Endnotes 403 Psychology (October 1982), pp. 523–532; C. R. Leana, “Power Relinquishment Versus Power Sharing: Theoretical Clarification and Empirical Comparison of Delegation and Participation,” Journal of Applied Psychology (May 1987), pp.  228–233; J. T. 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H o w e l l a n d B . J . A v o l i o , “ T h e E t h i c s of Charismatic Leadership: Submission or Liberation?” Academy of Management Executive (May 1992), pp. 43–55. 94. D. van Knippenberg, D. De Cremer, and B. van Knippenberg, “Leadership and Fairness: The State of the Art,” European Journal of Work and Organizational Psychology 16, no. 2 (2007), pp. 113–140. 95. K. M. Kacmar, D. G. Bachrach, K. J. Harris, and S. Zivnuska, “Fostering Good Citizenship Through Ethical Leadership: Exploring the Moderating Role of Gender and Organizational Politics,” Journal of Applied Psychology, Advance Online Publication (December 13, 2010), doi: 10.1037/a0021872; F. O. Walumbwa and J. Schaubroeck, “Leader Personality Traits and Employee Voice Behavior: Mediating Roles of Ethical Leadership and Work Group Psychological Safety,” Journal of Applied Psychology 94, no. 5 (2009), pp. 1275–1286. 96. M. E. Brown and L. K. Treviño, “Socialized Charismatic Leadership, Values Congruence, and Deviance in Work Groups,” Journal of Applied Psychology 91, no. 4 (2006), pp. 954–962. 97. M. E. Brown and L. K. Treviño, “Leader-Follower Values Congruence: Are Socialized Charismatic Leaders Better Able to Achieve It?” Journal of Applied Psychology 94, no. 2 (2009), pp. 478–490. 98. D. van Dierendonck, “Servant Leadership: A Review and Synthesis,” Journal of Management 37, no. 4 (2011), pp. 1228–1261. 99. F. Walumbwa, C. A. Hartnell, and A. Oke, “Servant Leadership, Procedural Justice Climate, Service Climate, Employee Attitudes, and Organizational Citizenship Behavior: A Cross-Level Investigation,” Journal of Applied Psychology 95, no. 3 (2010), pp. 517–529. 100. D. De Cremer, D. M. Mayer, M. van Dijke, B. C. Schouten, and M. Bardes, “When Does Self-Sacrificial Leadership Motivate Prosocial Behavior? It Depends on Followers’ Prevention Focus,” Journal of Applied Psychology 2009, no. 4 (2009), pp. 887–899. 101. J. Hu and R. C. Liden, “Antecedents of Team Potency and Team Effectiveness: An Examination of Goal and Process Clarity and Servant Leadership," Journal of Applied Psychology , Online first publication (February 14, 2011), doi: 10.1037/a0022465. 102. M. J. Neubert, K. M. Kacmar, D. S. Carlson, L. B. Chonko, and J. A. Roberts, “Regulatory Focus as a Mediator of the Influence of Initiating Structure and Servant Leadership on Employee Behavior,” Journal of Applied Psychology 93, no. 6 (2008), pp. 1220–1233. 103. T. Menon, J. Sim, J. Ho-Ying Fu, C. Chiu, and Y. Hong, “Blazing the Trail Versus Trailing the Group: Culture and Perceptions of the Leader’s Position,” Organizational Behavior and Human Decision Processes 113, no. 1 (2010), pp. 51–61. 104. D. M. Rousseau, S. B. Sitkin, R. S. Burt, and C. Camerer, “Not So Different After All: A Cross-Discipline View of Trust,” Academy of Management Review (July 1998), pp. 393–404; and J. A. Simpson, “Psychological Foundations of Trust,” Current Directions in Psychological Science 16, no. 5 (2007), pp. 264–268. 105. See, for instance, K. Dirks and D. Ferrin, “Trust in Leadership: Meta-Analytic Findings and Implications for Research and Practice,” Journal of Applied Psychology 87, no.4, (2002), pp. 611–628; D. I. Jung and B. J. Avolio, “Opening the Black Box: An Experimental Investigation of the Mediating Effects of Trust and Value Congruence on Transformational and Transactional Leadership,” Journal of Organizational Behavior (December 2000), pp. 949–964; and A. Zacharatos, J. Barling, and R.  D. Iverson, “High-Performance Work Systems and Occupational Safety,” Journal of Applied Psychology (January 2005), pp. 77–93. 106. D. E. Zand, The Leadership Triad: Knowledge, Trust, and Power (New York: Oxford University Press, 1997), p. 89. 107. Based on L. T. Hosmer, “Trust: The Connecting Link Between Organizational Theory and Philosophical Ethics,” Academy of Management Review (April 1995), p.  393; R. C. Mayer, J. H. Davis, and F. D. Schoorman, “An Integrative Model of Organizational Trust,” Academy of Management Review (July 1995), pp. 709–734; and F. D. Schoorman, R. C. Mayer, and J. H. Davis, “An Integrative Model of Organizational Trust: Past, Present, and Future,” Academy of Management Review 32, no. 2 (2007), pp. 344–354. 108. J. Schaubroeck, S. S. K. Lam, and A. C. Peng, “Cognition- Based and Affect-Based Trust as Mediators of Leader http://www.cnbc.com/ http://www.cnbc.com/ Endnotes 407 Behavior Influences on Team Performance.” Journal of Applied Psychology, Advance online publication (February 7, 2011), doi: 10.1037/a0022625. 109. Mayer, Davis, and Schoorman, “An Integrative Model of Organizational Trust”; and J. A. Colquitt, B. A. Scott, and J. A. LePine, “Trust, Trustworthiness, and Trust Propensity: A Meta-Analytic Test of Their Unique Relationships with Risk Taking and Job Performance,” Journal of Applied Psychology 92, no. 4 (2007), pp. 909–927. 110. H. H. Tan and C. S. F. Tan, “Toward the Differentiation of Trust in Supervisor and Trust in Organization,” Genetic, Social, and General Psychology Monographs (May 2000), pp. 241–260. 111. Cited in D. Jones, “Do You Trust Your CEO?” USA Today (February 12, 2003), p. 7B. 112. B. Nanus, The Leader’s Edge: The Seven Keys to Leadership in a Turbulent World (Chicago: Contemporary Books, 1989), p. 102. 113. R. C. Mayer and J. H. Davis, “The Effect of the Performance Appraisal System on Trust for Management: A Quasi- Experiment,” Journal of Applied Psychology 84, no. 1 (1999), pp. 123–136; and R. C. Mayer and M. B. Gavin, “Trust in Management and Performance: Who Minds the Shop While the Employees Watch the Boss?” Academy of Management Journal 38 (2005), pp. 874–888. 114. J. A. Simpson, “Foundations of Interpersonal Trust,” in A. W. Kruglanski and E. T. Higgins (eds.), Social Psychology: Handbook of Basic Principles, 2nd ed. (New York: Guilford, 2007), pp. 587–607. 115. Ibid. 116. H. Zhao, S. J. Wayne, B. C. Glibkowski, and J. Bravo, “The Impact of Psychological Contract Breach on Work-Related Outcomes: A Meta-Analysis,” Personnel Psychology 60 (2007), pp. 647–680. 117. D. L. Shapiro, A. D. Boss, S. Salas, S. Tangirala, and M. A. Von Glinow, “When Are Transgressing Leaders Punitively Judged? An Empirical Test," Journal of Applied Psychology 96, no. 2 (2011), pp. 412–422. 118. D. L. Ferrin, P. H. Kim, C. D. Cooper, and K. T. Dirks, “Silence Speaks Volumes: The Effectiveness of Reticence in Comparison to Apology and Denial for Responding to Integrity- and Competence-Based Trust Violations,” Journal of Applied Psychology 92, no. 4 (2007), pp. 893–908. 119. M. E. Schweitzer, J. C. Hershey, and E. T. Bradlow, “Promises and Lies: Restoring Violated Trust,” Organizational Behavior and Human Decision Processes 101, no. 1 (2006), pp. 1–19. 120. J. R. Detert and E. R. Burris, “Leadership Behavior and Employee Voice: Is the Door Really Open?” Academy of Management Journal 50, no. 4 (2007), pp. 869–884. 121. Colquitt, Scott, and LePine, “Trust, Trustworthiness, and Trust Propensity.” 122. See, for example, M. Murray, Beyond the Myths and Magic of Mentoring: How to Facilitate an Effective Mentoring Process, rev. ed. (New York: Wiley, 2001); K. E. Kram, “Phases of the Mentor Relationship,” Academy of Management Journal (December 1983), pp. 608–625; R. A. Noe, “An Investigation of the Determinants of Successful Assigned Mentoring Relationships,” Personnel Psychology (Fall 1988), pp. 559–580; and L. Eby, M. Butts, and A. Lockwood, “Protégés’ Negative Mentoring Experiences: Construct Development and Nomological Validation,” Personnel Psychology (Summer 2004), pp. 411–447. 123. B. R. Ragins and J. L. Cotton, “Easier Said than Done: Gender Differences in Perceived Barriers to Gaining a Mentor,” Academy of Management Journal 34, no. 4 (1993), pp. 939–951; C. R. Wanberg, E. T. Welsh, and S. A. Hezlett, “Mentoring Research: A Review and Dynamic Process Model,” in G. R. Ferris and J. J. Martocchio (eds.), Research in Personnel and Human Resources Management, vol. 22 (Greenwich, CT: Elsevier Science, 2003), pp. 39–124; and T. D. Allen, “Protégé Selection by Mentors: Contributing Individual and Organizational Factors,” Journal of Vocational Behavior 65, no. 3 (2004), pp. 469–483. 124. T. D. Allen, M. L. Poteet, J. E. A. Russell, and G. H. Dobbins, “A Field Study of Factors Related to Supervisors’ Willingness to Mentor Others,” Journal of Vocational Behavior 50, no. 1 (1997), pp. 1–22; S. Aryee, Y. W. Chay, and J. Chew, “The Motivation to Mentor Among Managerial Employees in the Maintenance Career Stage: An Interactionist Perspective,” Group and Organization Management 21, no. 3 (1996), pp. 261–277; L. T. Eby, A. L. Lockwood, and M. Butts, “Perceived Support for Mentoring: A Multiple Perspectives Approach,” Journal of Vocational Behavior 68, no. 2 (2006), pp. 267–291; and T. D. Allen, E. Lentz, and R. Day, “Career Success Outcomes Associated with Mentoring Others: A  Comparison of Mentors and Nonmentors,” Journal of Career Development 32, no. 3 (2006), pp. 272–285. 125. See, for example, K. E. Kram and D. T. Hall, “Mentoring in a Context of Diversity and Turbulence,” in E. E. Kossek and S. A. Lobel (eds.), Managing Diversity (Cambridge, MA: Blackwell, 1996), pp. 108–136; B. R. Ragins and J. L. Cotton, “Mentor Functions and Outcomes: A Comparison of Men and Women in Formal and Informal Mentoring Relationships,” Journal of Applied Psychology (August 1999), pp. 529–550; and D. B. Turban, T. W. Dougherty, and F.  K. Lee, “Gender, Race, and Perceived Similarity Effects in Developmental Relationships: The Moderating Role of Relationship Duration,” Journal of Vocational Behavior (October 2002), pp. 240–262. 126. J. A. Wilson and N. S. Elman, “Organizational Benefits of Mentoring,” Academy of Management Executive 4, no. 4 (1990), p. 90. 127. See, for instance, K. Houston-Philpot, “Leadership Development Partnerships at Dow Corning Corporation,” Journal of Organizational Excellence (Winter 2002), pp. 13–27. 128. Ragins and Cotton, “Mentor Functions and Outcomes”; and C. M. Underhill, “The Effectiveness of Mentoring Programs in Corporate Settings: A Meta-Analytical Review of the Literature,” Journal of Vocational Behavior 68, no. 2 (2006), pp. 292–307. 129. T. D. Allen, E. T. Eby, and E. Lentz, “The Relationship Between Formal Mentoring Program Characteristics and 408 CHAPTER 12 Leadership Perceived Program Effectiveness,” Personnel Psychology 59 (2006), pp. 125–153; T. D. Allen, L. T. Eby, and E. Lentz, “Mentorship Behaviors and Mentorship Quality Associated with Formal Mentoring Programs: Closing the Gap Between Research and Practice,” Journal of Applied Psychology 91, no. 3 (2006), pp. 567–578; and M. R. Parise and M. L. Forret, “Formal Mentoring Programs: The Relationship of Program Design and Support to Mentors’ Perceptions of Benefits and Costs,” Journal of Vocational Behavior 72, no. 2 (2008), pp. 225–240. 130. L. T. Eby and A. Lockwood, “Protégés’ and Mentors’ Reactions to Participating in Formal Mentoring Programs: A Qualitative Investigation,” Journal of Vocational Behavior 67, no. 3 (2005), pp. 441–458; G. T. Chao, “Formal Mentor- ing: Lessons Learned from Past Practice,” Professional Psychology: Research and Practice 40, no. 3 (2009), pp. 314–320; and C. R. Wanberg, J. D. Kammeyer-Mueller, and M. Marchese, “Mentor and Protégé Predictors and Outcomes of Mentoring in a Formal Mentoring Program,” Journal of Vocational Behavior 69 (2006), pp. 410–423. 131. T. D. Allen, L. T. Eby, M. L. Poteet, E. Lentz, and L. Lima, “Career Benefits Associated with Mentoring for Protégés: A Meta-Analysis,” Journal of Applied Psychology (February 2004), pp. 127–136; and J. D. Kammeyer-Mueller and T. A. Judge, “A Quantitative Review of the Mentoring Literature: Test of a Model,” Journal of Vocational Behavior 72 (2008), pp. 269–283. 132. M. K. Feeney and B. Bozeman, “Mentoring and Network Ties,” Human Relations 61, no. 12 (2008), pp. 1651–1676; N. Bozionelos, “Intra-Organizational Network Resources: How They Relate to Career Success and Organizational Commitment,” Personnel Review 37, no. 3 (2008), pp. 249–263; and S. A. Hezlett and S. K. Gibson, “Linking Mentoring and Social Capital: Implications for Career and Organization Development,” Advances in Developing Human Resources 9, no. 3 (2007), pp. 384–412. 133. Comment by Jim Collins, cited in J. Useem, “Conquering Vertical Limits,” Fortune (February 19, 2001), p. 94. 134. See, for instance, J. R. Meindl, “The Romance of Leadership as a Follower-centric Theory: A Social Constructionist Approach,” Leadership Quarterly (Fall 1995), pp. 329–341; and B. Schyns, J. Felfe, and H. Blank, “Is Charisma Hyper- Romanticism? Empirical Evidence from New Data and a Meta-Analysis,” Applied Psychology: An International Review 56, no. 4 (2007), pp. 505–527. 135. R. G. Lord, C. L. DeVader, and G. M. Alliger, “A Meta- Analysis of the Relation Between Personality Traits and Leadership Perceptions: An Application of Validity Generalization Procedures,” Journal of Applied Psychology (August 1986), pp. 402–410. 136. J. R. Meindl, S. B. Ehrlich, and J. M. Dukerich, “The Romance of Leadership,” Administrative Science Quarterly (March 1985), pp. 78–102; and M. C. Bligh, J. C. Kohles, C.  L. Pearce, J. E. Justin, and J. F. Stovall, “When the Romance Is Over: Follower Perspectives of Aversive Leadership,” Applied Psychology: An International Review 56, no. 4 (2007), pp. 528–557. 137. B. R. Agle, N. J. Nagarajan, J. A. Sonnenfeld, and D.  Srinivasan, “Does CEO Charisma Matter?” Academy of Management Journal 49, no. 1 (2006), pp. 161–174. 138. Bligh, Kohles, Pearce, Justin, and Stovall, “When the Romance Is Over.” 139. Schyns, Felfe, and Blank, “Is Charisma Hyper- Romanticism?” 140. J. Cassidy, “Subprime Suspect: The Rise and Fall of Wall Street’s First Black C.E.O.,” The New Yorker (March 31, 2008), pp. 78–91. 141. A. S. Rosette, G. J. Leonardelli, and K. W. Phillips, “ T h e W h i t e S t a n d a r d : R a c i a l B i a s i n L e a d e r Categorization,” Journal of Applied Psychology 93, no. 4 (2008), pp. 758–777. 142. A. M. Koenig, A. H. Eagly, A. A. Mitchell, and T. Ristikari, “Are Leader Stereotypes Masculine? A Meta-Analysis of Three Research Paradigms,” Psychological Bulletin 137, no. 4 (2011), pp. 616–642. 143. M. Van Vugt and B. R. Spisak, “Sex Differences in the Emergence of Leadership During Competitions Within and Between Groups,” Psychological Science 19, no. 9 (2008), pp. 854–858. 144. M. Van Vugt and B. R. Spisak, “Sex Differences in the Emergence of Leadership During Competitions Within and Between Groups,” Psychological Science 19, no. 9 (2008), pp. 854–858. 145. S. D. Dionne, F. J. Yammarino, L. E. Atwater, and L. R. James, “Neutralizing Substitutes for Leadership Theory: Leadership Effects and Common-Source Bias,” Journal of Applied Psychology, 87 (2002), pp. 454–464; and J. R. Villa, J. P. Howell, P. W. Dorfman, and D. L. Daniel, “Problems with Detecting Moderators in Leadership Research Using Moderated Multiple Regression,” Leadership Quarterly 14 (2002), pp. 3–23. 146. L. A. Hambley, T. A. O’Neill, and T. J. B. Kline, “Virtual Team Leadership: The Effects of Leadership Style and Communication Medium on Team Interaction Styles and Outcomes,” Organizational Behavior and Human Decision Processes 103 (2007), pp. 1–20; and B. J. Avolio and S. S. Kahai, “Adding the ‘E’ to E-Leadership: How It May Impact Your Leadership,” Organizational Dynamics 31, no. 4 (2003), pp. 325–338. 147. S. J. Zaccaro and P. Bader, “E-Leadership and the Challenges of Leading E-Teams: Minimizing the Bad and Maximizing the Good,” Organizational Dynamics 31, no. 4 (2003), pp. 381–385. 148. C. E. Naquin and G. D. Paulson, “Online Bargaining and Interpersonal Trust,” Journal of Applied Psychology (February 2003), pp. 113–120. 149. B. M. Bass, “Cognitive, Social, and Emotional Intelligence of Transformational Leaders,” in R. E. Riggio, S. E. Murphy, and F. J. Pirozzolo (eds.), Multiple Intelligences and Leadership (Mahwah, NJ: Lawrence Erlbaum, 2002), pp. 113–114. 150. See, for instance, P. Dvorak, “M.B.A. Programs Hone ‘Soft Skills,’” The Wall Street Journal (February 12, 2007), p. B3. Endnotes 409 151. J. Weber, “The Leadership Factor,” BusinessWeek (June 12, 2006), pp. 60–64. 152. See, for instance, Barling, Weber, and Kelloway, “Effects of Transformational Leadership Training on Attitudinal and Financial Outcomes”; and D. V. Day, “Leadership Development: A Review in Context,” Leadership Quarterly (Winter 2000), pp. 581–613. 153. M. Sashkin, “The Visionary Leader,” in J. A. Conger, R.  N. Kanungo, et al. (eds.), Charismatic Leadership (San Francisco: Jossey-Bass, 1988), p. 150. 154. D. Brady, “The Rising Star of CEO Consulting” Bloomberg Businessweek (November 24, 2010), www .businessweek.com . 155. Howell and Frost, “A Laboratory Study of Charismatic Leadership.” 156. Dvir, Eden, and Avolio, “Impact of Transformational Leadership on Follower Development and Performance”; B. J. Avolio and B. M. Bass, Developing Potential Across a Full Range of Leadership: Cases on Transactional and Transformational Leadership (Mahwah, NJ: Lawrence Erlbaum, 2002); A. J. Towler, “Effects of Charismatic Influence Training on Attitudes, Behavior, and Performance,” Personnel Psychology (Summer 2003), pp. 363–381; and Barling, Weber, and Kelloway, “Effects of Transformational Leadership Training on Attitudinal and Financial Outcomes.” www.businessweek.com www.businessweek.com APPEARANCES CAN BE DECEIVING 410 H e led one of the world’s most trusted and prestigious consulting firms, McKinsey & Company. As a philanthropist, he raised tens of millions of dollars for health care, education, and AIDS. He was often mentioned as a business executive-to-philanthropist role model in the same breath as Warren Buffett and Bill Gates. He collaborated with some of the world’s most famous leaders, including Gates, former President Bill Clinton, and leading CEOs. He served on the boards of directors of some of the world’s most respected companies, including Goldman Sachs, Procter & Gamble, and American Airlines, often as chair. He was advisor to many of the world’s leading business schools, including Harvard Business School, Tsinghua University, IIT, MIT Sloan School of Management, Wharton’s Lauder Institute, and Northwestern’s Kellogg School of Management. When President Obama hosted the Indian Prime minister at a state dinner, he was at the White House. People described him as “humble” and “egoless.” His colleagues at McKinsey admired him for the value he placed on family. He described him- self as a “servant leader.” Bloomberg Businessweek noted that he was “that rare businessman whose integrity was beyond reproach.” Yet this man—Rajat Gupta—appears to have led a double life. When the FBI and SEC were investigating Galleon Group founder and CEO Raj Rajaratnam (convicted in 2011 on 14 charges of fraud and insider trad- ing), they uncovered a “flurry” of phone conversations between Rajaratnam and Gupta. In wiretapped calls, Gupta appears to have alerted Rajaratnam to an upcoming $5 billion investment in Goldman by Berkshire Hathaway. On another occasion, 23 seconds after hanging up on a Goldman conference call, Gupta called Rajaratnam with news that Goldman would report a quar- terly loss. All the while, Gupta was investing in and profiting from Galleon’s profits on these and other trades. Rajaratnam also “loaned” Gupta millions so he could increase his investments in Galleon. When these facts became public in 2010 and 2011, the companies with whom Gupta had a relationship—from McKinsey to Goldman Sachs to Proctor & Gamble—quietly ended their associations with him. By mid-2011, not a single company or university still listed Gupta as an advisor. As of this writing, Gupta has not yet been convicted of insider trading. Even if he is acquitted, however, the damage has been done. A CEO who once was as powerful, networked, and admired as any whose names aren’t Gates, Buffett, or Jobs, Gupta is now a pariah and his power is gone. LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Define power and contrast leadership and power. 2 Contrast the five bases of power. 3 Explain the role of dependence in power relationships. 4 Identify nine power or influence tactics and their contingencies. 5 Show the connection between sexual harassment and the abuse of power. 6 Identify the causes and consequences of political behavior. 7 Apply impression management techniques. 8 Determine whether a political action is ethical. MyManagementLab Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com . www.mymanagementlab.com Power and Politics 13 Power is not revealed by striking hard or often, but by striking true. —Honoré de Balzac 411 Ph ot o: R aj at G up ta S ou rc e: E ri c Pi er m on t/ A FP /G et ty Im ag es /N ew sc om . 4114114114111411411411411411444111111141141411111144414141141411 412 CHAPTER 13 Power and Politics Why did a man with such power decide to risk it all? Only Gupta knows for certain. Source: S. Andrews, “How Gupta Came Undone,” Bloomberg Businessweek (May 19, 2011), pp. 56– 63; M. Gordon and L. Neumeister, “Ex-Goldman Sachs Director Rajat Gupta Charged with Insider Trading,” Washington Post (March 1, 2011), downloaded June 18, 2011 from www. washingtonpost .com/ ; W. Pavlo, “Goldman’s Boardroom Meetings—Less Proprietary Than Computer Code?” Forbes (March 17, 2011), downloaded June 21, 2011, from http://blogs.forbes.com/ . I n both research and practice, power and politics have been described as the last dirty words. It is easier for most of us to talk about sex or money than about power or political behavior. People who have power deny it, people who want it try not to look like they’re seeking it, and those who are good at getting it are secretive about how they do so. 1 To see whether you think your work environment is political, take the accompanying self-assessment. A major theme of this chapter is that power and political behavior are natu- ral processes in any group or organization. Given that, you need to know how power is acquired and exercised if you are to fully understand organizational behavior. Although you may have heard that “Power corrupts, and absolute power corrupts absolutely,” power is not always bad. As one author noted, most medicines can kill if taken in the wrong amount, and thousands die each year in automobile accidents, but we don’t abandon chemicals or cars because of the dangers associated with them. Rather, we consider danger an incentive to get training and information that will help us to use these forces productively. 2 The same applies to power. It’s a reality of organizational life, and it’s not going to go away. By learning how power works in organizations, you’ll be better able to use your knowledge to become a more effective manager. S A L SELF-ASSESSMENT LIBRARY Is My Workplace Political? In the Self-Assessment Library (available on CD and online), take assessment IV.F.1 (Is My Workplace Political?). If you don’t currently have a job, answer for your most recent job. Then answer the following questions. 1. How does your score relate to those of your classmates? Do you think your score is accurate? Why or why not? 2. Do you think a political workplace is a bad thing? If yes, why? If no, why not? 3. What factors cause your workplace to be political? Power refers to a capacity that A has to influence the behavior of B so B acts in accordance with A ’s wishes. 3 Someone can thus have power but not use it; it is a capacity or poten- tial. Probably the most important aspect of power is that it is a function of dependence . The greater B ’s dependence on A, the greater A ’s power in the relationship. Dependence, in turn, is based on alternatives that B perceives and 1 Define power and contrast leadership and power. A Definition of Power www.washingtonpost.com/ www.washingtonpost.com/ http://blogs.forbes.com/ Contrasting Leadership and Power 413 the importance B places on the alternative(s) A controls. A person can have power over you only if he or she controls something you desire. If you want a college degree and have to pass a certain course to get it, and your current instructor is the only faculty member in the college who teaches that course, he or she has power over you. Your alternatives are highly limited, and you place a high degree of importance on obtaining a passing grade. Similarly, if you’re attending college on funds totally provided by your parents, you prob- ably recognize the power they hold over you. You’re dependent on them for financial support. But once you’re out of school, have a job, and are making a good income, your parents’ power is reduced significantly. Who among us, though, has not known or heard of a rich relative who is able to control a large number of family members merely through the implicit or explicit threat of “writing them out of the will”? One study even suggests that powerful people might be better liars because they are more confident in their status. Researchers gave one group of research subjects bigger offices and more authority, while another group received smaller offices and less authority. Then half the subjects in each condition were told to steal a $100 bill and convince an interviewer they hadn’t taken it. If they were able to fool the interviewer, they could keep the money. In the interviews, those in positions of power showed fewer signs of dishonesty and stress like shoulder shrugs and stuttering when lying—perhaps because they felt less dependent on others. Recall that this simulation involved only hypothetical, experimentally manipulated power, so imagine the effects when real power is on the line. 4 One study investigated how people respond to the poor performance of a subordinate dependent on them in a work context. 5 To study this, a labora- tory mockup of a performance review was developed, and participants acted the part of either powerful or unpowerful managers. The result? Powerful manag- ers were more likely to respond to poor performers by either directly confront- ing them or frankly encouraging them to get training to improve. Less powerful managers enacted strategies not to confront the poor performer, like compen- sating for poor performance or avoiding the individual altogether. In other words, they were less likely to actively engage in a potential conflict with the subordinate, possibly because they would be more vulnerable if the subordinate wanted to “get revenge” for the negative feedback. Contrasting Leadership and Power A careful comparison of our description of power with our description of lead- ership in Chapter 12 reveals the concepts are closely intertwined. Leaders use power as a means of attaining group goals. How are the two terms different? Power does not require goal compatibility, merely dependence. Leadership, on the other hand, requires some congruence between the goals of the leader and those being led. A second difference relates to the direction of influence. Leadership focuses on the downward influence on followers. It minimizes the importance of lateral and upward influence patterns. Power does not. In still another difference, leadership research, for the most power A capacity that A has to influence the behavior of B so that B acts in accordance with A ’s wishes. dependence B ’s relationship to A when A possesses something that B requires. 414 CHAPTER 13 Power and Politics part, emphasizes style. It seeks answers to questions such as these: How sup- portive should a leader be? How much decision making should be shared with followers? In contrast, the research on power focuses on tactics for gaining com- pliance. It goes beyond the individual as the exerciser of power, because groups as well as individuals can use power to control other individuals or groups. Where does power come from? What gives an individual or a group influence over others? We answer by dividing the bases or sources of power into two general groupings—formal and personal—and then breaking each of these down into more specific categories. 6 Formal Power Formal power is based on an individual’s position in an organization. It can come from the ability to coerce or reward, or from formal authority. Coercive Power The coercive power base depends on fear of the negative results from failing to comply. It rests on the application, or the threat of appli- cation, of physical sanctions such as the infliction of pain, frustration through restriction of movement, or the controlling by force of basic physiological or safety needs. At the organizational level, A has coercive power over B if A can dismiss, suspend, or demote B, assuming B values his or her job. If A can assign B work activities B finds unpleasant, or treat B in a manner B finds embarrassing, A pos- sesses coercive power over B. Coercive power can also come from withholding key information. People in an organization who have data or knowledge others need can make those others dependent on them. Reward Power The opposite of coercive power is reward power , with which people comply because it produces positive benefits; someone who can distrib- ute rewards others view as valuable will have power over them. These rewards can be either financial—such as controlling pay rates, raises, and bonuses—or nonfinancial, including recognition, promotions, interesting work assignments, friendly colleagues, and preferred work shifts or sales territories. 7 Legitimate Power In formal groups and organizations, probably the most common access to one or more of the power bases is through legitimate power . It represents the formal authority to control and use organizational resources based on structural position in the organization. Legitimate power is broader than the power to coerce and reward. Specifically, it includes members’ acceptance of the authority of a position. We associate power so closely with the concept of hierarchy that just drawing longer lines in an organization chart leads people to infer the leaders are especially powerful, and when a powerful executive is described, people tend to put the person at a higher position when drawing an organization chart. 8 When school principals, bank presidents, or army captains speak (assuming their directives are viewed as within the authority of their positions), teachers, tellers, and first lieutenants listen and usually comply. 2 Contrast the five bases of power. Bases of Power Bases of Power 415 Personal Power Many of the most competent and productive chip designers at Intel have power, but they aren’t managers and have no formal power. What they have is personal power , which comes from an individual’s unique characteristics. There are two bases of personal power: expertise and the respect and admiration of others. Expert Power Expert power is influence wielded as a result of expertise, special skill, or knowledge. As jobs become more specialized, we become increasingly dependent on experts to achieve goals. It is generally acknowledged that physi- cians have expertise and hence expert power: Most of us follow our doctor’s advice. Computer specialists, tax accountants, economists, industrial psycholo- gists, and other specialists wield power as a result of their expertise. Referent Power Referent power is based on identification with a person who has desirable resources or personal traits. If I like, respect, and admire you, you can exercise power over me because I want to please you. Referent power develops out of admiration of another and a desire to be like that person. It helps explain, for instance, why celebrities are paid millions of dollars to endorse products in commercials. Marketing research shows people such as LeBron James and Tom Brady have the power to influence your choice of athletic shoes and credit cards. With a little practice, you and I could probably deliver as smooth a sales pitch as these celebrities, but the buying public doesn’t identify with you and me. Some people who are not in formal leadership posi- tions nonetheless have referent power and exert influence over others because of their charismatic dynamism, likability, and emotional effects on us. coercive power A power base that is dependent on fear of the negative results from failing to comply. reward power Compliance achieved based on the ability to distribute rewards that others view as valuable. legitimate power The power a person receives as a result of his or her position in the formal hierarchy of an organization. personal power Influence derived from an individual’s characteristics. expert power Influence based on special skills or knowledge. referent power Influence based on identification with a person who has desirable resources or personal traits. Nike CEO Mark Parker has expert power. Since joining Nike in 1979 as a footwear designer, Parker has been involved in many of Nike’s most significant design innovations. His primary responsibilities and leadership positions at Nike have been in product research, design, and development. Nike depends on Parker’s expertise in leading the company’s innovation initiatives and in setting corporate strategy to achieve the growth of its global business portfolio that includes Converse, Nike Golf, and Cole Haan. Parker is shown here introducing Nike’s Considered Design during a news conference about the com- pany’s latest products that combine sustainability and innovation. So u rc e : M a rk L e n n ih a n /A P I m a g e s. 416 CHAPTER 13 Power and Politics Which Bases of Power Are Most Effective? Of the three bases of formal power (coercive, reward, legitimate) and two bases of personal power (expert, referent), which is most important to have? Research suggests pretty clearly that the personal sources of power are most effective. Both expert and referent power are positively related to employees’ satisfaction with supervision, their organizational commitment, and their per- formance, whereas reward and legitimate power seem to be unrelated to these outcomes. One source of formal power—coercive power—actually can backfire in that it is negatively related to employee satisfaction and commitment. 9 Consider Steve Stoute’s company, Translation, which matches pop-star spokespersons with corporations that want to promote their brands. Stoute has paired Gwen Stefani with HP, Justin Timberlake with McDonald’s, Beyoncé Knowles with Tommy Hilfiger, and Jay-Z with Reebok. Stoute’s business seems to be all about referent power. His firm’s work aims to use the credibility of these artists and performers to reach youth culture. 10 In other words, people buy products associated with cool figures because they wish to identify with and emulate them. Power and Perceived Justice Individuals in positions of power tend to be blamed for their failures and cred- ited for their successes to a greater degree than those who have less power. In the same way, studies suggest that leaders and managers in positions of power pay greater costs for unfairness and reap greater benefits for fairness. 11 Specifically, authorities are given greatest trust when they have a lot of power and their organizations are seen as operating fairly, and the least trust when they have a lot of power and their organizations are seen as operating unfairly. Thus, it appears that people think powerful leaders should have the discretion to shape organizational policies and change unfair rules, and if they fail to do so, they will be seen especially negatively. The most important aspect of power is that it is a function of dependence. In this section, we show how understanding dependence helps us understand power itself. The General Dependence Postulate Let’s begin with a general postulate: the greater B ’s dependence on A , the more power A has over B. When you possess anything others require that you alone control, you make them dependent on you, and therefore you gain power over them. 12 If something is plentiful, possessing it will not increase your power. But as the old saying goes, “In the land of the blind, the one-eyed man is king!” Conversely, the more you can expand your own options, the less power you place in the hands of others. This explains why most organizations develop multiple suppliers rather than give their business to only one. It also explains why so many aspire to financial independence. Independence reduces the power others can wield who can limit our access to opportunities and resources. Dependence: The Key to Power Dependence: The Key to Power 417 What Creates Dependence? Dependence increases when the resource you control is important, scarce, and nonsubstitutable. 13 Importance If nobody wants what you have, it’s not going to create depen- dence. Because organizations, for instance, actively seek to avoid uncertainty, 14 we should expect that individuals or groups that can absorb uncertainty will be perceived as controlling an important resource. A study of industrial organiza- tions found their marketing departments were consistently rated the most pow- erful. 15 The researcher concluded that the most critical uncertainty facing these firms was selling their products, suggesting that engineers, as a group, would be more powerful at technology company Matsushita than at consumer products giant Procter & Gamble. These inferences appear to be generally valid. Matsu- shita, which is heavily technologically oriented, depends heavily on its engineers to maintain its products’ technical advantages and quality, and so they are a powerful group. At Procter & Gamble, marketing is the name of the game, and marketers are the most powerful occupational group. Scarcity Ferruccio Lamborghini, who created the exotic supercars that still carry his name, understood the importance of scarcity and used it to his advantage during World War II. Lamborghini was in Rhodes with the Italian army. His superiors were impressed with his mechanical skills, as he demonstrated an al- most uncanny ability to repair tanks and cars no one else could fix. After the war, he admitted his ability was largely due to his having been the first person on the island to receive the repair manuals, which he memorized and then de- stroyed so as to become indispensable. 16 We see the scarcity–dependence relationship in the power of occupational categories. Where the supply of labor is low relative to demand, workers can negotiate compensation and benefits packages far more attractive than can Mary Pochobradsky (center) is in a position of power at Procter & Gamble. She is the North American marketing director for P&G’s fabric enhancing products that include the Downy brand, one of 24 company brands that each generate more than $1 billion in sales a year. Mary is shown here announcing a new marketing campaign for the 50-year-old Downy brand that includes TV ads, social networks, and a live window display at Macy’s retail store featuring comedian Mike Birbiglia. At consumer product firms like P&G, marketers are the most powerful occupational group because they control the important resource of selling products. So u rc e : A P P h o to /A l B e h rm a n . 418 CHAPTER 13 Power and Politics those in occupations with an abundance of candidates. College administrators have no problem today finding English instructors. The market for network sys- tems analysts, in contrast, is comparatively tight, with demand high and supply limited. The bargaining power of computer-engineering faculty allows them to negotiate higher salaries, lighter teaching loads, and other benefits. Nonsubstitutability The fewer viable substitutes for a resource, the more power control over that resource provides. At universities with strong pressures on the faculty to publish, the more recognition the faculty member receives through publication, the more mobile he or she is, because other universities want faculty who are highly published and visible. Although tenure can alter this relationship by restricting the department head’s alternatives, faculty members with few or no publications have the least mobility and are subject to the great- est influence from their superiors. What power tactics do people use to translate power bases into specific action? What options do they have for influencing their bosses, co-workers, or employees? In this section, we review popular tactical options and the conditions that may make one more effective than another. Research has identified nine distinct influence tactics: 17 ● Legitimacy. Relying on your authority position or saying a request accords with organizational policies or rules. ● Rational persuasion. Presenting logical arguments and factual evidence to demonstrate a request is reasonable. ● Inspirational appeals. Developing emotional commitment by appealing to a target’s values, needs, hopes, and aspirations. ● Consultation. Increasing the target’s support by involving him or her in deciding how you will accomplish your plan. ● Exchange. Rewarding the target with benefits or favors in exchange for following a request. ● Personal appeals. Asking for compliance based on friendship or loyalty. ● Ingratiation. Using flattery, praise, or friendly behavior prior to making a request. ● Pressure. Using warnings, repeated demands, and threats. ● Coalitions. Enlisting the aid or support of others to persuade the target to agree. Some tactics are more effective than others. Rational persuasion, inspira- tional appeals, and consultation tend to be the most effective, especially when the audience is highly interested in the outcomes of a decision process. Pressure tends to backfire and is typically the least effective of the nine tactics. 18 You can also increase your chance of success by using two or more tactics together or sequentially, as long as your choices are compatible. 19 Using both ingratiation and legitimacy can lessen negative reactions to your appearing to dictate out- comes, but only when the audience does not really care about the outcome of a decision process or the policy is routine. 20 Let’s consider the most effective way of getting a raise. You can start with rational persuasion: figure out how your pay compares to that of peers, or land 3 Explain the role of dependence in power relationships. Power Tactics Power Tactics 419 a competing job offer, or show objective results that testify to your performance. Kitty Dunning, a vice president at Don Jagoda Associates, landed a 16 percent raise when she e-mailed her boss numbers showing she had increased sales. 21 You can also make good use of salary calculators such as Salary.com to compare your pay with comparable others. But the effectiveness of some influence tactics depends on the direction of influence. 22 As Exhibit 13-1 shows, rational persuasion is the only tactic effective across organizational levels. Inspirational appeals work best as a downward-influencing tactic with subordinates. When pressure works, it’s generally downward only. Personal appeals and coalitions are most effective as lateral influence. Other factors that affect the effectiveness of influence include the sequencing of tactics, a person’s skill in using the tactic, and the organiza- tional culture. You’re more likely to be effective if you begin with “softer” tactics that rely on personal power, such as personal and inspirational appeals, rational persuasion, and consultation. If these fail, you can move to “harder” tactics, such as exchange, coalitions, and pressure, which emphasize formal power and incur greater costs and risks. 23 Interestingly, a single soft tactic is more effective than a single hard tactic, and combining two soft tactics or a soft tactic and rational persuasion is more effective than any single tactic or combination of hard tactics. 24 The effectiveness of tactics depends on the audience. 25 People especially likely to comply with soft power tactics tend to be more reflective and intrinsically motivated; they have high self-esteem and greater desire for con- trol. Those likely to comply with hard power tactics are more action-oriented and extrinsically motivated and are more focused on getting along with others than on getting their own way. People in different countries prefer different power tactics. 26 Those from individualistic countries tend to see power in personalized terms and as a legitimate means of advancing their personal ends, whereas those in collectiv- istic countries see power in social terms and as a legitimate means of helping others. 27 A study comparing managers in the United States and China found that U.S. managers prefer rational appeal, whereas Chinese managers preferred coalition tactics. 28 These differences tend to be consistent with the values in these two countries. Reason is consistent with the U.S. preference for direct confrontation and rational persuasion to influence others and resolve differ- ences, while coalition tactics align with the Chinese preference for meeting power tactics Ways in which individuals translate power bases into specific actions. Preferred Power Tactics by Influence Direction Exhibit 13-1 Upward Influence Downward Influence Lateral Influence Rational persuasion Rational persuasion Rational persuasion Inspirational appeals Consultation Pressure Ingratiation Consultation Exchange Ingratiation Legitimacy Exchange Personal appeals Legitimacy Coalitions 420 CHAPTER 13 Power and Politics difficult or controversial requests with indirect approaches. Research also has shown that individuals in Western, individualistic cultures tend to engage in more self-enhancement behaviors (such as self-promotion) than individuals in more collectivistic Eastern cultures. 29 People differ in their political skill , or their ability to influence others to en- hance their own objectives. The politically skilled are more effective users of all the influence tactics. Political skill also appears more effective when the stakes are high—such as when the individual is accountable for important organizational outcomes. Finally, the politically skilled are able to exert their influence without others detecting it, a key element in being effective (it’s damaging to be labeled political). 30 However, these individuals also appear most able to use their political skills in environments marked by low levels of procedural and distributive justice. When an organization is run with open and fairly applied rules, free of favoritism or biases, political skill is actually negatively related to job performance ratings. 31 Finally, we know cultures within organizations differ markedly—some are warm, relaxed, and supportive; others are formal and conservative. Some encourage participation and consultation, some encourage reason, and still others rely on pressure. People who fit the culture of the organization tend to obtain more influence. 32 Specifically, extraverts tend to be more influential in team-oriented organizations, and highly conscientious people are more influ- ential in organizations that value working alone on technical tasks. People who fit the culture are influential because they can perform especially well in the do- mains deemed most important for success. In other words, they are influential because they are competent. Thus, the organization itself will influence which subset of power tactics is viewed as acceptable for use. T hroughout this book, you may have noticed a lot of international research into the differences between individualistic and collectiv- istic countries. Differences in power distance between countries are also likely to affect organizational behavior. Power distance is the extent to which people with low levels of power in soci- ety accept and expect that power will be distributed unequally. Cultures high in power distance tend to have greater differentiation between leaders and followers in organizations, and less power sharing between employees and upper management. How does power distance affect the development and implementation of new ideas in organizations? One study that looked at data from 212 Chinese firms found control mechanisms and strict rules in higher power-distance organizations to be associated with lower levels of information exchange and experimentation. This implies fewer opportunities for creation of new knowl- edge when power distance is great. Power distance might also restrict the implementation of new workplace practices. A study across 16 European countries with different levels of power distance showed that innovative work practices like job rotation, autonomous teams, job autonomy, and upward communication were less common in countries with higher power dis- tance. Similar results were obtained in a study of 743 workers in Turkey. This tendency toward less empower- ment in high power distance cultures probably reflects the stronger prefer- ences among workers and managers alike for hierarchical social relation- ships. However, it may come with a price, because power sharing and autonomy-enhancing practices are most likely to lead to greater innovation. Source: Based on A. Ollo-López, A. Bayo- Moriones, and M. Larraza-Kintana, “The Impact of Country Level Factors on the Use of New Work Practices,” Journal of World Business 46, no. 3 (2011), pp. 394–403; D. Wang, Z. Su, and D. Yang, “Organizational Culture and Knowledge Creation Capability,” Journal of Knowledge Management 15, no. 3 (2011), pp. 363–373; and N. D. Cakar and A. Ertürk, “Comparing Innovation Capability of Small and Medium- Sized Enterprises: Examining the Effects of Organizational Culture and Empowerment,” Journal of Small Business Management 48, no. 3 (2010), pp. 325–359. glOBalization! Power Distance and Innovation Sexual Harassment: Unequal Power in the Workplace 421 Sexual Harassment: Unequal Power in the Workplace Sexual harassment is wrong. It can also be costly to employers. Just ask execu- tives at Walmart, the World Bank, and the United Nations. 33 Mitsubishi paid $34 million to settle a sexual harassment case. And a former UPS manager won an $80 million suit against UPS on her claims it fostered a hostile work environ- ment when it failed to listen to her complaints of sexual harassment. Of course, it’s not only big organizations that run into trouble: A jury awarded Janet Bianco, a nurse at New York’s Flushing Hospital, $15 million for harassment she suffered at the hands of Dr. Matthew Miller. After the verdict, Bianco said, “I think that people take it lightly when you say sexual harassment. They don’t understand how it affects your life, not only in your job, but in your home, with your friends.” 34 In addition to the legal dangers to sexual harassment, obviously it can have a negative impact on the work environment, too. Sexual harassment negatively affects job attitudes and leads those who feel harassed to withdraw from the organization. In many cases, reporting sexual harassment doesn’t improve the situation because the organization responds in a negative or unhelpful way. When organizational leaders make honest efforts to stop the harassment, the outcomes are much more positive. 35 Sexual harassment is defined as any unwanted activity of a sexual nature that affects an individual’s employment and creates a hostile work environ- ment. The U.S. Supreme Court helped to clarify this definition by adding a key test for determining whether sexual harassment has occurred—when com- ments or behavior in a work environment “would reasonably be perceived, and [are] perceived, as hostile or abusive.” 36 But disagreement continues about what specifically constitutes sexual harassment. Organizations have generally made progress toward limiting overt forms of sexual harassment. This includes unwanted physical touching, recurring requests for dates when it is made clear the person isn’t interested, and coercive threats that a person will lose his or her job for refusing a sexual proposition. Problems today are likely to surface around more subtle forms of sexual harassment—unwanted looks or comments, off-color jokes, sexual artifacts like pinups posted in the workplace, or misinter- pretations of where the line between being friendly ends and harassment begins. A recent review concluded that 58 percent of women report having experienced potentially harassing behaviors, and 24 percent report having experienced sexual harassment at work. 37 Other research suggests that despite increased media attention and training, perceptions of sexual harassment levels have been fairly stable since the 1990s. 38 One problem with reporting is that sexual harassment is, to some degree, in the eye of the beholder. Women are more likely than men to see a given behavior or set of behaviors as constitut- ing sexual harassment. Men are less likely to see harassment in such behav- iors as kissing someone, asking for a date, or making sex-stereotyped jokes. As the authors of one study note, “Although progress has been made at defining sexual harassment, it is still unclear as to whose perspective should be taken.” 39 Witnesses offering sexual harassment testimony also find that victims who took 4 Identify nine power or influence tactics and their contingencies. sexual harassment Any unwanted activity of a sexual nature that affects an individual’s employment and creates a hostile work environment. A federal jury awarded this young woman a $95 million judgment in a sexual harassment lawsuit against her employer Aaron’s Rents. She reported that her supervisor, the store’s general manager, sexually harassed her with hostile and abusive behavior that included lewd propositions and unwanted physical sexual contact. She alleged that she called a company harassment hotline but that an investigator never contacted her and that she was denied a promo- tion for complaining about her boss’s behavior. In their verdicts, the jurors found the supervisor guilty of assault and battery and the company liable for negligent supervision, sexual harassment, and intentional infliction of emotional distress. So u rc e : B il l G re e b la tt /U P I/ N e w sc o m . political skill The ability to influence others in such a way as to enhance one’s objectives. 422 CHAPTER 13 Power and Politics either an aggressive or a passive tone in making their complaints were seen as less plausible than victims who took a more neutral tone. 40 This research suggests that people may not be able to be entirely objective when listening to sexual harassment complaints, taking the tone of the victim into account when making judgments rather than simply relying on the facts of the case at hand. The best approach is to be careful—refrain from any behavior that may be taken as harassing, even if that was not the intent. Realize that what you see as an innocent joke or hug may be seen as harassment by the other party. Most studies confirm that the concept of power is central to understanding sexual harassment. 41 This seems true whether the harassment comes from a supervisor, a co-worker, or an employee. And sexual harassment is more likely to occur when there are large power differentials. The supervisor–employee dyad best characterizes an unequal power relationship, where formal power gives the supervisor the capacity to reward and coerce. Because employees want favorable performance reviews, salary increases, and the like, supervisors control resources most employees consider important and scarce. Thus, sexual harassment by the boss typically creates the greatest difficulty for those being harassed. If there are no witnesses, it is the victim’s word against the harasser’s. Has this boss harassed others, and, if so, will they come forward or fear retali- ation? Male respondents in one study in Switzerland who were high in hostile sexism reported higher intentions to sexually harass in organizations that had low levels of justice, suggesting that failure to have consistent policies and pro- cedures for all employees might actually increase levels of sexual harassment. 42 Women in positions of power in an organization can be subjected to sexual harassment from males who occupy less powerful positions, although this situ- ation doesn’t get nearly as much attention as harassment by a supervisor. The employee devalues the woman in power by highlighting traditional gender ste- reotypes that reflect negatively on her (such as helplessness, passivity, or lack of career commitment), usually in an attempt to gain power over her or minimize power differentials. Increasingly, too, there are cases of women in positions of power harassing male employees. Reports of Sexual Harassment Differ by CountryOB Poll 0 Sample of 11,940 employed adults in 22 countries. 2010 3025155 India China Saudi Arabia Mexico South Africa Italy United States South Korea Russia Brazil Spain Japan Canada Germany Great Britain Australia Sweden France 26% Percent of individuals indicating they had been sexually harassed at work . . . 18% 16% 13% 10% 9% 8% 8% 8% 8% 6% 6% 6% 5% 4% 4% 3% 3% Note: Sample of 11,940 employed adults in 22 countries. Source: J. Wright, “Physical Assault and Sexual Harassment in the Workplace” Ipsos Global @dvisory (August 12, 2010), downloaded June 20, 2011, from www.ipsos-na.com/ . www.ipsos-na.com/ Sexual Harassment: Unequal Power in the Workplace 423 A recent review of the literature shows the damage caused by sexual harass- ment. As you would expect, victims report lower job satisfaction and diminished organizational commitment as a result. Sexual harassment undermines their mental and physical health, as well as lowering productivity in the group in which they work. The authors of this study conclude that sexual harassment “is significantly and substantively associated with a host of harms.” 43 Sexual harassment can wreak havoc on an organization, not to mention on the victims themselves, but it can be avoided. The manager’s role is critical. Here are some ways managers can protect themselves and their employees from sexual harassment: 1. Make sure an active policy defines what constitutes sexual harassment, informs employees they can be fired for sexually harassing another employee, and establishes procedures for making complaints. 2. Reassure employees they will not encounter retaliation if they file a complaint. 3. Investigate every complaint, and inform the legal and human resource departments. 4. Make sure offenders are disciplined or terminated. 5. Set up in-house seminars to raise employee awareness of sexual harassment issues. T he difficulty in monitoring and defining sexual harassment at work has led some organizations to go beyond discouraging overt sexu- ally harassing behaviors. Companies ranging from Walmart to Staples to Xerox have disciplined employees for workplace romances and upheld policies that ban hierarchical roman- tic relationships, such as between a supervisor and subordinate. The idea is that such relationships are so fraught with potential for abuse of power that they cannot possibly be consensual for extended periods of time. Surveys by the Society of Human Resource Management suggest that concerns about both potential sexual harass- ment and lowered productivity have motivated prohibitions on workplace romances. However, ethicists and legal scholars have thrown some “no romance” policies into question on the grounds they are patronizing or invade employee privacy. What does organizational behavior research have to say about consensual sexual behavior at work? One study of more than 1,000 respondents found 40 percent were exposed to sexual behavior in some form in the past year. Counter to the idea that all sexual behavior at work is negative, some female and many male respondents reported enjoying the experience. However, exposure to sexual behav- ior at work was negatively related to performance and psychological well- being. People may report enjoying it, but it might be hurting their productiv- ity and well-being anyway. When thinking about a sexual harassment policy for your own organi- zation that might prohibit all workplace romances, consider the following questions: 1. Are there potential problems in monitoring and enforcing such a comprehensive policy on all employees? 2. Does the organization have the right to actively determine what types of behaviors consenting em- ployees engage in outside the work environment? 3. Can the policy be written in a less restrictive manner, such as by prohibiting employees who work together closely from having workplace romances? In this way, the organization might be able to transfer employees who are in a relationship so they don’t work di- rectly with one another, and thus they can be retained in the orga- nization and their personal privacy respected. Source: Based on J. L. Berdahl and K. Aquino, “Sexual Behavior at Work: Fun or Folly?” Journal of Applied Psychology 94, no. 1 (2009), pp. 34–47; and C. Boyd, “The Debate over the Prohibition of Romance in the Workplace,” Journal of Business Ethics 97, no. 2 (2010), pp. 325–338. An Ethical Choice Should All Sexual Behavior Be Prohibited at Work? 424 CHAPTER 13 Power and Politics The bottom line is that managers have a responsibility to protect their employees from a hostile work environment, but they also need to protect themselves. Managers may be unaware that one of their employees is being sex- ually harassed. But being unaware does not protect them or their organization. If investigators believe a manager could have known about the harassment, both the manager and the company can be held liable. When people get together in groups, power will be exerted. People want to carve out a niche from which to exert influence, earn rewards, and advance their careers. When employees in organizations convert their power into action, we describe them as being engaged in politics. Those with good political skills have the ability to use their bases of power effectively. 44 Definition of Organizational Politics There is no shortage of definitions of organizational politics. Essentially, this type of politics focuses on the use of power to affect decision making in an organization, or on self-serving and organizationally unsanctioned behaviors. 45 For our pur- poses, political behavior in organizations consists of activities that are not required as part of an individual’s formal role but that influence, or attempt to influence, the distribution of advantages and disadvantages within the organization. 46 This definition encompasses what most people mean when they talk about organizational politics. Political behavior is outside specified job requirements. It requires some attempt to use power bases. It includes efforts to influence the goals, criteria, or processes used for decision making. Our definition is broad enough to include varied political behaviors such as withholding key infor- mation from decision makers, joining a coalition, whistleblowing, spreading rumors, leaking confidential information to the media, exchanging favors with others in the organization for mutual benefit, and lobbying on behalf of or against a particular individual or decision alternative. The Reality of Politics Interviews with experienced managers show that most believe political behav- ior is a major part of organizational life. 47 Many managers report some use of political behavior is both ethical and necessary, as long as it doesn’t directly harm anyone else. They describe politics as a necessary evil and believe someone who never uses political behavior will have a hard time getting things done. Most also indicate they had never been trained to use political behavior effectively. But why, you may wonder, must politics exist? Isn’t it possible for an organiza- tion to be politics free? It’s possible —but unlikely. Organizations are made up of individuals and groups with different values, goals, and interests. 48 This sets up the potential for conflict over the allocation of limited resources, such as departmental budgets, space, project responsibilities, and salary adjustments. 49 If resources were abundant, then all constituencies within the organization could satisfy their goals. But because they are limited, not everyone’s interests can be satisfied. Furthermore, gains by one individual or group are often perceived as coming at the expense of others within the orga- nization (whether they are or not). These forces create real competition among members for the organization’s limited resources. 5 Show the connection between sexual harassment and the abuse of power. Politics: Power in Action After police officer Toshiro Semba (center) blew the whistle on his bosses in the police department, they took his gun away, claiming he was too emotionally unstable to carry a weapon, and reassigned him as a dispatcher. Semba revealed that for decades his superiors wrote false reports to secure public funds and then used the funds for their personal benefit. A district court in Japan ruled that Semba’s treatment was retaliation for his exposure of corruption. Traditionally, whistle- blowers in Japan have been viewed as traitors, and their exposure of wrongdoing as a betrayal of their superiors. But this perception of whistleblowing as a political behav- ior is changing as employees like Semba are now being recognized for doing the right thing by expos- ing illegal, corrupt, or unethical conduct in the workplace. S o u rc e : K yo d o N e w s/ A P I m a g e s. Politics: Power in Action 425 Maybe the most important factor leading to politics within organizations is the realization that most of the “facts” used to allocate the limited resources are open to interpretation. What, for instance, is good performance? What’s an ad- equate improvement? What constitutes an unsatisfactory job? One person’s “self- less effort to benefit the organization” is seen by another as a “blatant attempt to further one’s interest.” 50 The manager of any major league baseball team knows a .400 hitter is a high performer and a .125 hitter is a poor performer. You don’t need to be a baseball genius to know you should play your .400 hitter and send the .125 hitter back to the minors. But what if you have to choose be- tween players who hit .280 and .290? Then less objective factors come into play: fielding expertise, attitude, potential, ability to perform in a clutch, loyalty to the team, and so on. More managerial decisions resemble the choice between a .280 and a .290 hitter than between a .125 hitter and a .400 hitter. It is in this large and ambiguous middle ground of organizational life—where the facts don’t speak for themselves—that politics flourish (see Exhibit 13-2 ). political behavior Activities that are not required as part of a person’s formal role in the organization but that influence, or attempt to influence, the distribution of advantages and disadvantages within the organization. Source: Based on T. C. Krell, M. E. Mendenhall, and J. Sendry, “Doing Research in the Conceptual Morass of Organizational Politics,” paper presented at the Western Academy of Management Conference, Hollywood, CA, April 1987. “Political” Label “Effective Management” Label 1. Blaming others vs. Fixing responsibility 2. “Kissing up” vs. Developing working relationships 3. Apple polishing vs. Demonstrating loyalty 4. Passing the buck vs. Delegating authority 5. Covering your rear vs. Documenting decisions 6. Creating conflict vs. Encouraging change and innovation 7. Forming coalitions vs. Facilitating teamwork 8. Whistle-blowing vs. Improving efficiency 9. Scheming vs. Planning ahead 10. Overachieving vs. Competent and capable 11. Ambitious vs. Career minded 12. Opportunistic vs. Astute 13. Cunning vs. Practical minded 14. Arrogant vs. Confident 15. Perfectionist vs. Attentive to detail A behavior one person labels as “organizational politics” is very likely to seem like “effective management” to another. The fact is not that effective management is necessarily political, although in some cases it might be. Rather, a person’s reference point determines what he or she classifies as organizational politics. For example, one experimental study showed that power-oriented behavior performed by a permanent, tenured employee is seen as more legitimate and less harsh than the same behavior performed by a temporary employee.43 Take a look at the following labels used to describe the same phenomenon. These suggest that politics, like beauty, is in the eye of the beholder. Politics Is in the Eye of the Beholder Exhibit 13-2 426 CHAPTER 13 Power and Politics Factors That Influence Political Behavior Exhibit 13-3 Political behavior Low High Favorable outcomes • Rewards • Averted punishments Individual factors • High self-monitors • Internal locus of control • High Mach personality • Organizational investment • Perceived job alternatives • Expectations of success Organizational factors • Reallocation of resources • Promotion opportunities • Low trust • Role ambiguity • Unclear performance evaluation system • Zero-sum reward practices • Democratic decision making • High performance pressures • Self-serving senior managers Finally, because most decisions have to be made in a climate of ambiguity— where facts are rarely fully objective and thus are open to interpretation— people within organizations will use whatever influence they can to taint the facts to support their goals and interests. That, of course, creates the activities we call politicking. Therefore, to answer the question whether it is possible for an organization to be politics-free, we can say “yes”—if all members of that organization hold the same goals and interests, if organizational resources are not scarce, and if performance outcomes are completely clear and objective. But that doesn’t describe the organizational world in which most of us live. Factors Contributing to Political Behavior Not all groups or organizations are equally political. In some organizations, for instance, politicking is overt and rampant, while in others politics plays a small role in influencing outcomes. Why this variation? Recent research and obser- vation have identified a number of factors that appear to encourage political behavior. Some are individual characteristics, derived from the unique qualities of the people the organization employs; others are a result of the organization’s culture or internal environment. Exhibit 13-3 illustrates how both individual and organizational factors can increase political behavior and provide favorable outcomes (increased rewards and averted punishments) for both individuals and groups in the organization. Individual Factors At the individual level, researchers have identified certain personality traits, needs, and other factors likely to be related to political 6 Identify the causes and consequences of political behavior. Causes and Consequences of Political Behavior Causes and Consequences of Political Behavior 427 behavior. In terms of traits, we find that employees who are high self-monitors, possess an internal locus of control, and have a high need for power are more likely to engage in political behavior. 51 The high self-monitor is more sensitive to social cues, exhibits higher levels of social conformity, and is more likely to be skilled in political behavior than the low self-monitor. Because they believe they can control their environment, individuals with an internal locus of control are more prone to take a proactive stance and attempt to manipulate situations in their favor. Not surprisingly, the Machiavellian personality—characterized by the will to manipulate and the desire for power—is comfortable using politics as a means to further his or her self-interest. In addition, an individual’s investment in the organization, perceived alternatives, and expectations of success influence the degree to which he or she will pursue illegitimate means of political action. 52 The more a person expects increased future benefits from the organization, the more that person has to lose if forced out and the less likely he or she is to use illegitimate means. The more alternative job opportunities an individual has—due to a favorable job market or the possession of scarce skills or knowledge, a prominent reputation, or influential contacts outside the organization—the more likely that individual is to risk illegitimate political actions. Finally, an individual with low expecta- tions of success from illegitimate means is unlikely to use them. High expecta- tions from such measures are most likely to be the province of both experienced and powerful individuals with polished political skills and inexperienced and naïve employees who misjudge their chances. Organizational Factors Although we acknowledge the role individual differ- ences can play, the evidence more strongly suggests that certain situations and cultures promote politics. Specifically, when an organization’s resources are declining, when the existing pattern of resources is changing, and when there is opportunity for promotions, politicking is more likely to surface. 53 When organizations downsize to improve efficiency, resources must be reduced, and people may engage in political actions to safeguard what they have. But any changes, especially those that imply significant reallocation of resources within the organization, are likely to stimulate conflict and increase politicking. The opportunity for promotions or advancement has consistently been found to encourage competition for a limited resource as people try to positively influence the decision outcome. Cultures characterized by low trust, role ambiguity, unclear performance evaluation systems, zero-sum reward allocation practices, democratic decision making, high pressures for performance, and self-serving senior managers will also create breeding grounds for politicking. 54 The less trust within the organization, the higher the level of political behavior and the more likely it will be of the illegitimate kind. So, high trust should suppress political behavior in general and inhibit illegitimate actions in particular. Role ambiguity means the prescribed employee behaviors are not clear. There are, therefore, fewer limits to the scope and functions of the employee’s political actions. Because political activities are defined as those not required as part of the employee’s formal role, the greater the role ambiguity, the more employees can engage in unnoticed political activity. Performance evaluation is far from a perfect science. The more organizations use subjective criteria in the appraisal, emphasize a single outcome measure, or allow significant time to pass between the time of an action and its appraisal, the greater the likelihood that an employee can get away with politicking. Subjective performance criteria create ambiguity. The use of a single outcome measure encourages individuals to do whatever is necessary to “look good” on 428 CHAPTER 13 Power and Politics that measure, but that often occurs at the cost of good performance on other important parts of the job that are not being appraised. The longer the time between an action and its appraisal, the more unlikely it is that the employee will be held accountable for political behaviors. The more an organization’s culture emphasizes the zero-sum or win–lose approach to reward allocations, the more employees will be motivated to T his statement appears to be true. Political influence behavior cer- tainly appears to pay in some situ- ations. According to a recent review of the literature, that applies to organiza- tional political influence as well. Much organizational political activ- ity takes the form of exchange, such as when favorable government treat- ment is exchanged for political support or donations to political candidates. A different kind of political activity takes place when competitors col- lude against a common adversary. For example, major league sports team owners often join forces to obtain more favorable labor settlements. Unions that normally compete for union members may do the same. A review of 78 studies on the link between organizational political activity and firm performance found a signifi- cant positive relationship. The authors conclude that their finding “explains why more business interests are en- gaged in [political activity] than at any other time in recorded history.” In 2011, it came to light that General Electric (GE) paid no taxes in 2010, despite earning global profits of $14.2 billion, including $5.1 billion from U.S. operations. Although GE disputes the charge, many credited the firm’s political activities with its favorable treatment (GE CEO Jeff Immelt chairs President Obama’s Jobs and Competitiveness Council). GE spokes- man Gary Sheffer defended the com- pany’s political activity, saying, “We want to be sure our voice is heard.” Sources: S. Lux, T. R. Crook, and D. J. Woehr, “Mixing Business with Politics: A Meta- Analysis of the Antecedents and Outcomes of Corporate Political Activity,” Journal of Management 37, no. 1 (2011), pp. 223– 247; J. D. McKinnon, “New Fight Brews Over Corporate Taxes,” The Wall Street Journal (May 26, 2011), downloaded on June 17, 2011, from http://blogs.wsj.com/ ; and D.  Kocieniewski, “G.E.’s Strategies Let It Avoid Taxes Altogether,” The New York Times (March 24, 2011), p. A1. Myth or Science? “Corporate Political Activity Pays” Organizations foster politicking when they reduce resources in order to improve performance. As part of a restructuring program, Germany’s Allianz AG announced plans to eliminate 5,000 jobs at its insurance operation and 2,500 jobs at its banking subsidiary. Allianz stated that the job cuts were neces- sary to improve efficiency and to increase its competitiveness and would result in savings of between $600 and $750,000 million. The company’s cost-cutting measures stimulated conflict and political activity, as trade union workers joined Allianz employees in staging a token strike to safeguard their jobs. So u rc e : W in fr ie d R o th e rm e l/ A P I m a g e s. http://blogs.wsj.com/ Causes and Consequences of Political Behavior 429 engage in politicking. The zero-sum approach treats the reward “pie” as fixed, so any gain one person or group achieves has to come at the expense of another person or group. If $15,000 in annual raises is to be distributed among five employees, any employee who gets more than $3,000 takes money away from one or more of the others. Such a practice encourages making others look bad and increasing the visibility of what you do. Finally, when employees see the people on top engaging in political behav- ior, especially doing so successfully and being rewarded for it, a climate is cre- ated that supports politicking. Politicking by top management in a sense gives those lower in the organization permission to play politics by implying that such behavior is acceptable. How Do People Respond to Organizational Politics? Trish O’Donnell loves her job as a writer on a weekly television comedy series but hates the internal politics. “A couple of the writers here spend more time kissing up to the executive producer than doing any work. And our head writer clearly has his favorites. While they pay me a lot and I get to really use my creativity, I’m sick of having to be on alert for backstabbers and constantly hav- ing to self-promote my contributions. I’m tired of doing most of the work and getting little of the credit.” Are Trish O’Donnell’s comments typical of people who work in highly politicized workplaces? We all know friends or relatives who regularly complain about the politics at their job. But how do people in general react to organizational politics? Let’s look at the evidence. In our earlier discussion in this chapter of factors that contribute to political behavior, we focused on the favorable outcomes. But for most people—who have modest political skills or are unwilling to play the politics game— outcomes tend to be predominantly negative. Exhibit 13-4 summarizes the extensive research (mostly conducted in the United States) on the relationship between organizational politics and individual outcomes. 55 Very strong evidence indicates, for instance, that perceptions of organizational politics are negatively related to job satisfaction. 56 The perception of politics also tends to increase job anxiety and stress, possibly because people believe they may be losing ground Employee Responses to Organizational Politics Exhibit 13-4 Organizational politics may threaten employees. Decreased job satisfaction Increased anxiety and stress Increased turnover Reduced performance 430 CHAPTER 13 Power and Politics to others who are active politickers or, conversely, because they feel additional pressures from entering into and competing in the political arena. 57 Politics may lead to self-reported declines in employee performance, perhaps because employees perceive political environments to be unfair, which demotivates them. 58 Not surprisingly, when politicking becomes too much to handle, it can lead employees to quit. 59 When employees of two agencies in a recent study in Nigeria viewed their work environments as political, they reported higher levels of job distress and were less likely to help their co-workers. Thus, although developing countries such as Nigeria are perhaps more ambiguous and more political environments in which to work, the negative consequences of politics appear to be the same as in the United States. 60 Researchers have also noted several interesting qualifiers. First, the politics– performance relationship appears to be moderated by an individual’s under- standing of the “hows” and “whys” of organizational politics. “An individual who has a clear understanding of who is responsible for making decisions and why they were selected to be the decision makers would have a better understand- ing of how and why things happen the way they do than someone who does not understand the decision-making process in the organization.” 61 When both politics and understanding are high, performance is likely to increase because the individual will see political actions as an opportunity. This is consistent with what you might expect among individuals with well-honed political skills. But when understanding is low, individuals are more likely to see politics as a threat, which can have a negative effect on job performance. 62 Second, political behavior at work moderates the effects of ethical leader- ship. 63 One study found that male employees were more responsive to ethical leadership and showed the most citizenship behavior when levels of both poli- tics and ethical leadership were high. Women, on the other hand, appear most likely to engage in citizenship behavior when the environment is consistently ethical and apolitical. Third, when employees see politics as a threat, they often respond with defensive behaviors —reactive and protective behaviors to avoid action, blame, or change. 64 ( Exhibit 13-5 provides some examples of these behaviors.) And defensive behaviors are often associated with negative feelings toward the job and work environment. 65 In the short run, employees may find that defensive- ness protects their self-interest, but in the long run it wears them down. People who consistently rely on defensiveness find that, eventually, it is the only way they know how to behave. At that point, they lose the trust and support of their peers, bosses, employees, and clients. S A L SELF-ASSESSMENT LIBRARY How Good Am I at Playing Politics? In the Self-Assessment Library (available on CD and online), take assessment II.C.3 (How Good Am I at Playing Politics?). Impression Management We know people have an ongoing interest in how others perceive and evaluate them. For example, North Americans spend billions of dollars on diets, health club memberships, cosmetics, and plastic surgery—all intended to make them more attractive to others. 66 Being perceived positively by others should have benefits for people in organizations. It might, for instance, help them initially to get the jobs they want in an organization and, once hired, to get favorable 7 Apply impression management techniques. Causes and Consequences of Political Behavior 431 evaluations, superior salary increases, and more rapid promotions. In a political context, it might help sway the distribution of advantages in their favor. The process by which individuals attempt to control the impression others form of them is called impression management (IM) . 67 Who might we predict will engage in IM? No surprise here. It’s our old friend, the high self-monitor. 68 Low self-monitors tend to present images of themselves that are consistent with their personalities, regardless of the ben- eficial or detrimental effects for them. In contrast, high self-monitors are good at reading situations and molding their appearances and behavior to fit each situation. If you want to control the impression others form of you, what IM techniques can you use? Exhibit 13-6 summarizes some of the most popular and provides an example of each. Keep in mind that when people engage in IM, they are sending a false mes- sage that might be true under other circumstances. 69 Excuses, for instance, may be offered with sincerity. Referring to the example in Exhibit 13-6 , you can actually believe that ads contribute little to sales in your region. But misrepre- sentation can have a high cost. If you “cry wolf” once too often, no one is likely to believe you when the wolf really comes. So the impression manager must be defensive behaviors Reactive and protective behaviors to avoid action, blame, or change. impression management (IM) The process by which individuals attempt to control the impression others form of them. Defensive Behaviors Exhibit 13-5 Avoiding Action Overconforming. Strictly interpreting your responsibility by saying things like “The rules clearly state . . . ” or “This is the way we’ve always done it.” Buck passing. Transferring responsibility for the execution of a task or decision to someone else. Playing dumb. Avoiding an unwanted task by falsely pleading ignorance or inability. Stretching. Prolonging a task so that one person appears to be occupied—for example, turning a two-week task into a 4-month job. Stalling. Appearing to be more or less supportive publicly while doing little or nothing privately. Avoiding Blame Buffing. This is a nice way to refer to “covering your rear.” It describes the practice of rigorously documenting activity to project an image of competence and thoroughness. Playing safe. Evading situations that may reflect unfavorably. It includes taking on only projects with a high probability of success, having risky decisions approved by superiors, qualifying expressions of judgment, and taking neutral positions in conflicts. Justifying. Developing explanations that lessen one’s responsibility for a negative outcome and/or apologizing to demonstrate remorse, or both. Scapegoating. Placing the blame for a negative outcome on external factors that are not entirely blameworthy. Misrepresenting. Manipulation of information by distortion, embellishment, deception, selective presentation, or obfuscation. Avoiding Change Prevention. Trying to prevent a threatening change from occurring. Self-protection. Acting in ways to protect one’s self-interest during change by guarding information or other resources. 432 CHAPTER 13 Power and Politics Source: Based on B. R. Schlenker, Impression Management s(Monterey, CA: Brooks/Cole, 1980); M. C. Bolino, K. M. Kacmar, W. H. Turnley, and J. B. Gilstrap, “A Multi-Level Review of Impression Management Motives and Behaviors,” Journal of Management 34, no. 6 (2008), pp. 1080–1109; and R. B. Cialdini, “Indirect Tactics of Image Management Beyond Basking,” in R. A. Giacalone and P. Rosenfeld (eds.), Impression Management in the Organization (Hillsdale, NJ: Lawrence Erlbaum, 1989), pp. 45–71 . Conformity Agreeing with someone else’s opinion to gain his or her approval is a form of ingratiation. Example: A manager tells his boss, “You’re absolutely right on your reorganization plan for the western regional office. I couldn’t agree with you more.” Favors Doing something nice for someone to gain that person’s approval is a form of ingratiation. Example: A salesperson says to a prospective client, “I’ve got two tickets to the theater tonight that I can’t use. Take them. Consider it a thank-you for taking the time to talk with me.” Excuses Explanations of a predicament-creating event aimed at minimizing the apparent severity of the predicament is a defensive IM technique. Example: A sales manager says to her boss, “We failed to get the ad in the paper on time, but no one responds to those ads anyway.” Apologies Admitting responsibility for an undesirable event and simultaneously seeking to get a pardon for the action is a defensive IM technique. Example: An employee says to his boss, “I’m sorry I made a mistake on the report. Please forgive me.” Self-Promotion Highlighting one’s best qualities, downplaying one’s deficits, and calling attention to one’s achievements is a self-focused IM technique. Example: A salesperson tells his boss, “Matt worked unsuccessfully for three years to try to get that account. I sewed it up in six weeks. I’m the best closer this company has.” Enhancement Claiming that something you did is more valuable than most other members of the organizations would think is a self-focused IM technique. Example: A journalist tells his editor, “My work on this celebrity divorce story was really a major boost to our sales” (even though the story only made it to page 3 in the entertainment section). Flattery Complimenting others about their virtues in an effort to make oneself appear perceptive and likeable is an assertive IM technique. Example: A new sales trainee says to her peer, “You handled that client’s complaint so tactfully! I could never have handled that as well as you did.” Exemplification Doing more than you need to in an effort to show how dedicated and hard working you are is an assertive IM technique. Example: An employee sends e-mails from his work computer when he works late so that his supervisor will know how long he’s been working. Impression Management (IM) Techniques Exhibit 13-6 cautious not to be perceived as insincere or manipulative. 70 Consider the effect of implausible name-dropping as an example of this principle. Participants in a study in Switzerland disliked an experimental confederate who claimed to be a personal friend of the well-liked Swiss tennis star Roger Federer, but Causes and Consequences of Political Behavior 433 they generally liked confederates who just said they were fans. 71 Another study found that when managers attributed an employee’s citizenship behaviors to impression management, they actually felt angry (probably because they felt manipulated) and gave subordinates lower performance ratings. When manag- ers attributed the same behaviors to prosocial values and concern about the organization, they felt happy and gave higher performance ratings. 72 In sum, people don’t like to feel others are manipulating them through impression management, so such tactics should be employed with caution. Are there situations in which individuals are more likely to misrepresent themselves or more likely to get away with it? Yes—situations characterized by high uncertainty or ambiguity provide relatively little information for challeng- ing a fraudulent claim and reduce the risks associated with misrepresentation. 73 The increasing use of telework may be increasing the use of IM. Individuals who work remotely from their supervisors engage in high levels of IM relative to those who work closely with their supervisors. 74 Most of the studies undertaken to test the effectiveness of IM techniques have related it to two criteria: interview success and performance evaluations. Let’s consider each of these. The evidence indicates most job applicants use IM techniques in interviews 75 and that it works. 76 In one study, for instance, interviewers felt applicants for a position as a customer service representative who used IM techniques per- formed better in the interview, and they seemed somewhat more inclined to hire these people. 77 Moreover, when the researchers considered applicants’ credentials, they concluded it was the IM techniques alone that influenced the interviewers—that is, it didn’t seem to matter whether applicants were well or poorly qualified. If they used IM techniques, they did better in the interview. Some IM techniques work better in interviews than others. Researchers have compared applicants whose IM techniques focused on promoting their accomplishments (called self-promotion ) to those who focused on complimenting the interviewer and finding areas of agreement (referred to as ingratiation ). In general, applicants appear to use self-promotion more than ingratiation. 78 What’s more, self-promotion tactics may be more important to interviewing success. Applicants who work to create an appearance of competence by enhancing their accomplishments, taking credit for successes, and explaining away failures do better in interviews. These effects reach beyond the interview: applicants who use more self-promotion tactics also seem to get more follow-up job-site visits, even after adjusting for grade-point average, gender, and job type. Ingratiation also works well in interviews; applicants who compliment the interviewer, agree with his or her opinions, and emphasize areas of fit do better than those who don’t. 79 In terms of performance ratings, the picture is quite different. Ingratiation is positively related to performance ratings, meaning those who ingratiate with their supervisors get higher performance evaluations. However, self-promotion appears to backfire: those who self-promote actually seem to receive lower per- formance evaluations. 80 There is an important qualifier to this general result. It appears that individuals high in political skill are able to translate IM into higher performance appraisals, whereas those lower in political skill are more likely to be hurt by their IM attempts. 81 Another study of 760 boards of directors found that individuals who ingratiate themselves to current board members (express agreement with the director, point out shared attitudes and opinions, compliment the director) increase their chances of landing on a board. 82 What explains these results? If you think about them, they make sense. Ingratiating always works because everyone—both interviewers and supervisors—likes to be treated nicely. However, self-promotion may work only in interviews and backfire on the job because, whereas the interviewer has little 434 CHAPTER 13 Power and Politics idea whether you’re blowing smoke about your accomplishments, the supervi- sor knows because it’s his or her job to observe you. Thus, if you’re going to self-promote, remember that what works in an interview won’t always work once you’re on the job. Are our conclusions about responses to politics globally valid? Should we ex- pect employees in Israel, for instance, to respond the same way to workplace politics that employees in the United States do? Almost all our conclusions on employee reactions to organizational politics are based on studies conducted in North America. The few studies that have included other countries suggest some minor modifications. 83 One study of managers in U.S. culture and three Chinese cultures (People’s Republic of China, Hong Kong, and Taiwan) found U.S. man- agers evaluated “gentle persuasion” tactics such as consultation and inspirational appeal as more effective than did their Chinese counterparts. 84 Other research suggests that effective U.S. leaders achieve influence by focusing on personal goals of group members and the tasks at hand (an analytical approach), whereas influential East Asian leaders focus on relationships among group members and meeting the demands of the people around them (a holistic approach). 85 As another example, Israelis and the British seem to generally respond as do North Americans—that is, their perception of organizational politics relates to decreased job satisfaction and increased turnover. 86 But in countries that are more politically unstable, such as Israel, employees seem to demonstrate greater tolerance of intense political processes in the workplace, perhaps be- cause they are used to power struggles and have more experience in coping with them. 87 This suggests that people from politically turbulent countries in the Middle East or Latin America might be more accepting of organizational politics, and even more willing to use aggressive political tactics in the work- place, than people from countries such as Great Britain or Switzerland. Although there are no clear-cut ways to differentiate ethical from unethical poli- ticking, there are some questions you should consider. For example, what is the utility of engaging in politicking? Sometimes we do it for little good reason. Major league baseball player Al Martin claimed he played football at USC when in fact he never did. As a baseball player, he had little to gain by pretending to have played football. Outright lies like this may be a rather extreme example of impres- sion management, but many of us have at least distorted information to make a favorable impression. One thing to keep in mind is whether it’s really worth the risk. Another question to ask is this: how does the utility of engaging in the political behavior balance out any harm (or potential harm) it will do to others? Complimenting a supervisor on his or her appearance in order to curry favor is probably much less harmful than grabbing credit for a project that others deserve. Finally, does the political activity conform to standards of equity and justice? Sometimes it is difficult to weigh the costs and benefits of a political action, but its ethicality is clear. The department head who inflates the performance evaluation of a favored employee and deflates the evaluation of a disfavored employee—and then uses these evaluations to justify giving the former a big raise and nothing to the latter—has treated the disfavored employee unfairly. Unfortunately, powerful people can become very good at explaining self- serving behaviors in terms of the organization’s best interests. They can persua- sively argue that unfair actions are really fair and just. Our point is that immoral 8 Determine whether a political action is ethical. The Ethics of Behaving Politically Summary and Implications for Managers 435 people can justify almost any behavior. Those who are powerful, articulate, and persuasive are most vulnerable to ethical lapses because they are likely to be able to get away with unethical practices successfully. When faced with an ethical dilemma regarding organizational politics, try to consider whether play- ing politics is worth the risk and whether others might be harmed in the pro- cess. If you have a strong power base, recognize the ability of power to corrupt. Remember that it’s a lot easier for the powerless to act ethically, if for no other reason than they typically have very little political discretion to exploit. MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Summary and Implications for Managers If you want to get things done in a group or an organization, it helps to have power. Here are several suggestions for how to deal with power in your own work life: ● As a manager who wants to maximize your power, you will want to in- crease others’ dependence on you. You can, for instance, increase your power in relation to your boss by developing knowledge or a skill she needs and for which she perceives no ready substitute. But you will not be alone in attempting to build your power bases. Others, particularly em- ployees and peers, will be seeking to increase your dependence on them, while you are trying to minimize it and increase their dependence on you. The result is a continual battle. ● Few employees relish being powerless in their job and organization. Try to avoid putting others in a position where they feel they have no power. ● People respond differently to the various power bases. Expert and refer- ent power are derived from an individual’s personal qualities. In contrast, coercion, reward, and legitimate power are essentially organizationally derived. Competence especially appears to offer wide appeal, and its use as a power base results in high performance by group members. The mes- sage for managers seems to be “Develop and use your expert power base!” ● An effective manager accepts the political nature of organizations. By assessing behavior in a political framework, you can better predict the actions of others and use that information to formulate political strategies that will gain advantages for you and your work unit. ● Some people are significantly more politically astute than others, meaning that they are aware of the underlying politics and can manage impressions. Those who are good at playing politics can be expected to get higher performance evaluations and, hence, larger salary increases and more promotions than the politically naïve or inept. The politically astute are also likely to exhibit higher job satisfaction and be better able to neutralize job stressors. ● Employees who have poor political skills or are unwilling to play the politics game generally relate perceived organizational politics to lower job satisfac- tion and self-reported performance, increased anxiety, and higher turnover. www.mymanagementlab.com 436 CHAPTER 13 Power and Politics Power Corrupts People POINT COUNTERPOINT P ower may help leaders do some aspects of their jobs more effectively, but that isn’t the whole story. Most of the great deeds in history required great power. Do you really think George Washington would have been of more use to the Continental Army if he was a private rather a general? Would Steven Jobs have had more impact on computer technology innovations if he remained a technician with video-game maker Atari? We want our best and brightest in positions where their qualities can do the most good, and that means we want them to be in power. When Bill Gates used his wealth and power to start the Bill  & Melinda Gates Foundation, and when Warren Buffett announced his intention to give 85 percent of his wealth to the foundation, they were using their wealth and power to do acts of good the rest of us can only dream about. You may not think Gates or Buffett is any better than the rest of us, but can you imagine starting your own philanthropic foundation or giving away 85 percent of your wealth? Yes, it is easier for them to do good because they’re rich and powerful, but that’s the point: they could still be good without their wealth and power, but they couldn’t do as much good. Yes, power is dangerous. But so is electricity. Just be- cause something can be misused in the wrong hands does not mean we abandon it. Nor should we mistake the real cause of corrupt behavior. The only difference between a petty thief and billion-dollar swindler Bernie Madoff is scale—a petty thief in Madoff’s shoes with Madoff’s talents would do the same thing Madoff did. Power is therefore a conduit—of both good and bad motives. Most of the great acts in history were done by people with power. And, yes, many of the most evil acts were done by people with power. But the issue isn’t power itself; it’s what we do with it. L ord Acton famously wrote: “All power tends to corrupt and absolute power corrupts absolutely.” Most of us prob- ably believe that leaders with more power are more likely to abuse their power to the detriment of others and, ultimately, of the entity they lead. For this reason, most organizations— including governments and corporations—put checks and balances in place to keep leaders from amassing too much power. If we look at the history of corruption and malfeasance among government, business, and other organizational leaders, rarely would we conclude that the core reason for corruption was that the leader had too little power. Why is power so toxic? As one expert plainly states, “Power quickly turns us into hypocrites.” In one study, researchers found that the more powerful people felt, the more likely they were to see misreporting travel expenses as unethical. But these researchers next studied how these same people self- reported the results of a game of chance, when it was in their self-interest to lie about their results. What did they find? You guessed it: the more powerful the people felt, the more likely they were to self-report results significantly better than chance. Power really does seem to breed hypocrisy. The powerful are more likely to see behavior as unethical, but more likely to behave unethically themselves. Researchers speculate that power allows people to better rationalize away ethical lapses. “They’re important people, with important things to do,” says one expert. The study of the corrupting effects of power is not limited to laboratory studies. A fascinating study of 1,000 Supreme Court decisions found that as justices gained power on the court, their opinions tended to become less complex and nuanced. They considered fewer perspectives and possible outcomes. The really bad news is that as their power increased, of course, their opinions were more likely to become majority opinions, and thus the law of the land. Power may be effective in allowing us to get our way. But that power, while good for the individual getting it, is bad for almost everyone else. Sources: J. Lehrer, “The Power Trip,” The Wall Street Journal (August 14, 2010), pp. W1–2; J. Lehrer, “How Power Corrupts,” The Frontal Cortex (May 18, 2011), downloaded June 7, 2011, from www.wired.com/ ; and K. Heim, “The New Gates Foundation Headquarters Reflects Charity’s Roots—and Reach,” Seattle Times (May 21, 2011), downloaded on June 7, 2011, from http://seattletimes.nwsource.com/ . www.wired.com/ http://seattletimes.nwsource.com/ Experiential Exercise 437 1 What is power? How is leadership different from power? 2 What are the similarities and differences among the five bases of power? 3 What is the role of dependence in power relationships? 4 What are the nine most often identified power or influence tactics and their contingencies? 5 What is the connection between sexual harassment and the abuse of power? 6 What are the causes and consequences of political behavior? 7 What are some examples of impression management techniques? 8 What standards can you use to determine whether a political action is ethical? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE Understanding Power Dynamics Create Groups Each student is to turn in a dollar bill (or similar value of currency) to the instructor, and students are then divided into three groups (based on criteria given by the instruc- tor), assigned to their workplaces, and instructed to read the following rules and tasks. The money is divided into thirds, and two-thirds of it is given to the top group, one-third to the middle group, and none to the bottom group. Conduct Exercise Groups go to their assigned workplaces and have 30 minutes to complete their tasks. Rules Members of the top group are free to enter the space of either of the other groups and to communicate whatever they wish, whenever they wish. Members of the middle group may enter the space of the lower group when they wish but must request permission to enter the top group’s space (which the top group can refuse). Members of the lower group may not disturb the top group in any way unless specifically invited by the top. The lower group does have the right to knock on the door of the middle group and request permission to communicate with them (which can also be refused). The members of the top group have the authority to make any change in the rules that they wish, at any time, with or without notice. Tasks ● Top group. Responsible for the overall effective- ness and learning from the exercise and to decide how to use its money. ● Middle group. Assist the top group in providing for the overall welfare of the organization and deciding how to use its money. ● Bottom group. Identify the organization’s re- sources and decide how best to provide for learning and the overall effectiveness of the organization. Debriefing Each of the three groups chooses two representatives to go to the front of the class and discuss the following: 1. Summarize what occurred within and among the three groups. 2. What are some of the differences between being in the top group and being in the bottom group? 3. What can we learn about power from this experience? 4. How accurate do you think this exercise is in reflecting the reality of resource allocation decisions in large organizations? Source: Adapted from L. Bolman and T. E. Deal, Exchange 3, no. 4 (1979), pp. 38–42. Reprinted by permis- sion of Sage Publications Inc. 438 CHAPTER 13 Power and Politics Source: J. J. Fialka, “Hugger-Mugger in the Executive Suite,” The Wall Street Journal (February 5, 2010), p. W10; E. Javers, Broker, Trader, Lawyer, Spy (New York: Harper, 2010); and J. Scott, “Is Corporate Spying Legal?” Forbes (May 31, 2011), downloaded June 15, 2011, from http://blogs.forbes.com/ . CASE INCIDENT 1 Delegate Power, or Keep It Close? Samantha Parks is the owner and CEO of Sparks, a small New York agency that develops advertising, promotions, and marketing materials for high-fashion firms. Parks has tended to keep a tight rein on her business, overseeing most proj- ects from start to finish. However, as the firm has grown, she has found it necessary to delegate more and more decisions to her associates. She’s recently been approached by a hair- styling chain that wants a comprehensive redefinition of its entire marketing and promotions look. Should Samantha try to manage this project in her traditional way, or should she delegate major parts to her employees? Most managers confront this question at some point in their careers. Some experts propose that top executives need to stay very close to the creative core of their busi- ness, which means that even if their primary responsibility is to manage, CEOs should never cede too much control to committees of creative individuals or they can lose sight of the firm’s overall future direction. Moreover, executives who do fall out of touch with the creative process risk being passed over by a new generation of “plugged in” employees who better understand how the business really works. Others offer the opposite advice, saying it’s not a good idea for a CEO to “sweat the small stuff” like managing individual client accounts or projects. These experts advise executives to identify everything they can “outsource” to other employees and to delegate as much as possible. By eliminating trivial tasks, executives will be better able to focus their attention on the most important decision- making and control aspects of their jobs, which will help the business and also ensure that the top executive main- tains control over the functions that really matter. These pieces of advice are not necessarily in conflict with one another. The real challenge is to identify what you can delegate effectively without ceding too much power and control away from the person with the unifying vision. That is certainly easier said than done, though. Questions 1. If you were Samantha Parks, how would you prioritize which projects or parts of projects to delegate? 2. In explaining what makes her decisions hard, Parks said, “I hire good people, creative people, to run ETHICAL DILEMMA Corporate Spying In a conference call with investors and financial analysts, the chief financial officer (CFO) for a major corpora- tion outlines the company’s positive expected earnings for the next quarter despite some serious economic chal- lenges. Unknown to the CFO, party to this conference call is an ex-CIA interrogator trained in “tactical behavioral assessment.” The investigator detects nervousness and eva- siveness in the CFO’s hurried answers to questions. In his report, he concludes that the CFO is probably lying. Who is the recipient of the report? A hedge fund. Based on the report, the fund shorts the company’s stock— selling borrowed shares in anticipation that the price will drop—and when the company’s earnings do fall short of expectations, the hedge fund buys the shares back at the lower price and profits greatly. Whatever trust you may place in the ability of investiga- tors to detect lying, this sort of espionage happens. And it goes further. When Swiss chocolatier Nestlé was trying to sell a chocolate-covered toy in the United States, its U.S. competitor, Mars, covertly used consultants to prod government officials with misinformation that the toy was a safety hazard. The strategy worked. Learning of Mars’ activities, Nestlé paid former Secret Service agents to bribe garbage collectors so it could acquire Mars’ corporate trash and counterspy. Chinese companies hacked into Google’s website, gain- ing access to corporate premises using night-vision glasses stolen from a U.S. military contractor. Hewlett-Packard used “pretexting” by investigators who impersonated HP board members in order to obtain their phone records as a means to investigate it own board members. These stories are all true. Questions 1. One corporate spy said, “Companies do this in order to stay in front of problems.” Can you envision a business problem so dangerous that you would approve a spy mission if you were in charge? 2. Are there ever circumstances in which corporate spying is ethical? If so, what are they? 3. Recently, LinkedIn reposted a tweet that ques- tioned whether Facebook was appropriate for public schools. Is it ever ethical for a company to attempt to undermine another in this way? http://blogs.forbes.com/ Case Incident 2 439 these projects, and I worry that they will see my over- sight and authority as interfering with their creative process.” How can she deal with these concerns with- out giving up too much control? 3. Should executives try to control projects to maintain their position of authority? Do they have a right to control projects and keep in the loop on important decisions just so they can remain in charge? 4. What are some tasks in an organization that a top executive should never delegate to others? Source: Based on M. L. Tushman, W. K. Smith, and A. Binns, “The Ambidextrous CEO,” Harvard Business Review (June 2011), pp. 74–79; and S. Bogan, “Find Your Focus,” Financial Planning (February 2011), p. 72. CASE INCIDENT 2 The Persuasion Imperative At one point in time, bosses gave orders and subordinates followed them without question. Those of you who have seen the AMC series Mad Men —based on Madison Avenue marketing executives in the 1960s—will know this image of deference to authority, obedience to those higher up in the hierarchy, and relationships between supervisors and employees that are highly paternalistic. With time comes change. The male-dominated organi- zation with rampant sexual harassment portrayed in Mad Men is far less prevalent than it was in the 1960s. Laws and policies are in place that better protect employees against the sometimes-capricious whims of supervisors. Another sign of shifting cultural values is the way managers use their power. Commandments are out. Persuasion is in. When IBM manager Kate Riley Tenant needed to reassign managers and engineers to form a database soft- ware team, she had to persuade IBM employees from all corners of the globe, none of whom directly reported to her. According to Tenant, it’s a big change from when she started in the field 20 years ago. “You just decided things, and people went off and executed,” she said. Now, “not everybody reports to you, and so there’s much more negotiation and influence.” John Churchill, a manager with Florida-based Gerdau Ameristeel Corporation, agrees. The question now, he says, is, “How do I influence this group and gain credibility?” At IBM, the challenge of persuading employees across reporting relationships has become so significant that the firm developed a 2-hour online course to help managers persuade other employees to help with projects crucial to is business. IBM’s tips for managers include the following: ● Build a shared vision. ● Negotiate collaboratively. ● Make trade-offs. ● Build and maintain your network. Despite meeting initial resistance, after completing the training program, Tenant was able to persuade most IBM managers and engineers to join the team. This doesn’t mean authority has lost all its power. Robert Cialdini, a social psychologist who has studied persuasion for decades, lists authority as one of his keys to influence. Even more important may be “social proof”—Cialdini and others have found that people are often deeply persuaded by observing what others are doing. From his research, no message more effectively got hotel guests to reuse their towels than citing statistics that others were reusing their towels. So, if you’re a manager who needs to persuade, present the vision behind the request and be collaborative, but it also wouldn’t hurt to tell those you’re trying to persuade about others who have already agreed to your request. Questions 1. Are the precepts of the IBM training program con- sistent with the concepts in this chapter? Why or why not? 2. Again based on the chapter, are there other keys to persuasion and influence that might be added to the IBM program? 3. If you had a manager who wanted you to do some- thing against your initial inclination, which of IBM’s elements would work best on you? Why? 4. Drawing from Chapter 5 , do you think generational values explain the changing nature of the employer– employee relationship? Why or why not? Source: Based on E. White, “Art of Persuasion Becomes Key,” The Wall Street Journal (May 19, 2008), p. B5; B. Tsui, “Greening with Envy,” The Atlantic (July/August 2009), www.theatlantic.com ; and R. Cialdini, Influence: The Psychology of Persuasion (New York: HarperBusiness, 2007). www.theatlantic.com 440 CHAPTER 13 Power and Politics ENDNOTES 1. R. M. Kanter, “Power Failure in Management Circuits,” Harvard Business Review (July–August 1979), p. 65. 2. J. Pfeffer, “Understanding Power in Organizations,” California Management Review (Winter 1992), p. 35. 3. Based on B. M. Bass, Bass & Stogdill’s Handbook of Leadership, 3rd ed. (New York: The Free Press, 1990). 4. D. Carney, “Powerful People Are Better Liars,” Harvard Business Review (May 2010), pp. 32–33. 5. A. J. Ferguson, M. E. Ormiston, and H. Moon, “From Approach to Inhibition: The Influence of Power on Responses to Poor Performers,” Journal of Applied Psychology 95, no. 2 (2010), pp. 305–320. 6. J. R. P. French Jr. and B. Raven, “The Bases of Social Power,” in D. Cartwright (ed.), Studies in Social Power (Ann Arbor, MI: University of Michigan, Institute for Social Research, 1959), pp. 150–167; B. J. Raven, “The Bases of Power: Origins and Recent Developments,” Journal of Social Issues (Winter 1993), pp. 227–251; and G. Yukl, “Use Power Effectively,” in E. A. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 242–247. 7. E. A. Ward, “Social Power Bases of Managers: Emergence of a New Factor,” Journal of Social Psychology (February 2001), pp. 144–147. 8. S. R. Giessner and T. W. Schubert, “High in the Hierarchy: How Vertical Location and Judgments of Leaders’ Power Are Interrelated,” Organizational Behavior and Human Decision Processes 104, no. 1 (2007), pp. 30–44. 9. P. M. Podsakoff and C. A. Schriesheim, “Field Studies of French and Raven’s Bases of Power: Critique, Reanalysis, and Suggestions for Future Research,” Psychological Bulletin (May 1985), pp. 387–411; T. R. Hinkin and C. A. Schriesheim, “Development and Application of New Scales to Measure the French and Raven (1959) Bases of Social Power,” Journal of Applied Psychology (August 1989), pp. 561–567; and P. P. Carson, K. D. Carson, and C. W. Roe, “Social Power Bases: A Meta-Analytic Examination of Interrelationships and Outcomes,” Journal of Applied Social Psychology 23, no. 14 (1993), pp. 1150–1169. 10. S. Perman, “Translation Advertising: Where Shop Meets Hip Hop,” Time (August 30, 2010), www.time.com . 11. M. van Dijke, D. De Cremer, and D. M. Mayer, “The Role of Authority Power in Explaining Procedural Fairness Effects,” Journal of Applied Psychology 95, no. 3 (2010), pp. 488–502. 12. R. E. Emerson, “Power–Dependence Relations,” American Sociological Review (February 1962), pp. 31–41. 13. H. Mintzberg, Power In and Around Organizations (Upper Saddle River, NJ: Prentice Hall, 1983), p. 24. 14. R. M. Cyert and J. G. March, A Behavioral Theory of the Firm (Upper Saddle River, NJ: Prentice Hall, 1963). 15. C. Perrow, “Departmental Power and Perspective in Industrial Firms,” in M. N. Zald (ed.), Power in Organizations (Nashville, TN: Vanderbilt University Press, 1970). 16. N. Foulkes, “Tractor Boy,” High Life (October 2002), p. 90. 17. See, for example, D. Kipnis and S. M. Schmidt, “Upward- Influence Styles: Relationship with Performance Evaluations, Salary, and Stress,” Administrative Science Quarterly (December 1988), pp. 528–542; G. Yukl and J. B. Tracey, “Consequences of Influence Tactics Used with Subordinates, Peers, and the Boss,” Journal of Applied Psychology (August 1992), pp. 525–535; G. Blickle, “Influence Tactics Used by Subordinates: An Empirical Analysis of the Kipnis and Schmidt Subscales,” Psychological Reports (February 2000), pp. 143–154; and G. Yukl, “Use Power Effectively,” pp. 249–252. 18. G. Yukl, Leadership in Organizations, 5th ed. (Upper Saddle River, NJ: Prentice Hall, 2002), pp. 141–174; G. R. Ferris, W. A. Hochwarter, C. Douglas, F. R. Blass, R. W. Kolodinksy, and D. C. Treadway, “Social Influence Processes in Organizations and Human Resource Systems,” in G. R. Ferris and J. J. Martocchio (eds.), Research in Personnel and Human Resources Management, vol. 21 (Oxford, UK: JAI Press/ Elsevier, 2003), pp. 65–127; and C. A. Higgins, T. A. Judge, and G. R. Ferris, “Influence Tactics and Work Outcomes: A Meta-Analysis,” Journal of Organizational Behavior (March 2003), pp. 89–106. 19. C. M. Falbe and G. Yukl, “Consequences for Managers of Using Single Influence Tactics and Combinations of Tactics,” Academy of Management Journal (July 1992), pp. 638–653. 20. R. E. Petty and P. Briñol, “Persuasion: From Single to Multiple to Metacognitive Processes,” Perspectives on Psychological Science 3, no. 2 (2008), pp. 137–147. 21. J. Badal, “Getting a Raise from the Boss,” The Wall Street Journal (July 8, 2006), pp. B1, B5. 22. Yukl, Leadership in Organizations. 23. Ibid. 24. Falbe and Yukl, “Consequences for Managers of Using Single Influence Tactics and Combinations of Tactics.” 25. A. W. Kruglanski, A. Pierro, and E. T. Higgins, “Regulatory Mode and Preferred Leadership Styles: How Fit Increases Job Satisfaction,” Basic and Applied Social Psychology 29, no. 2 (2007), pp. 137–149; and A. Pierro, L. Cicero, and B. H. Raven, “Motivated Compliance with Bases of Social Power,” Journal of Applied Social Psychology 38, no. 7 (2008), pp. 1921–1944. 26. P. P. Fu and G. Yukl, “Perceived Effectiveness of Influence Tactics in the United States and China,” Leadership Quarterly (Summer 2000), pp. 251–266; O. Branzei, “Cultural Explanations of Individual Preferences for Influence Tactics in Cross-Cultural Encounters,” International Journal of Cross Cultural Management (August 2002), pp. 203–218; G. Yukl, P. P. Fu, and R. McDonald, “Cross-Cultural Differences in Perceived Effectiveness of Influence Tactics for Initiating or Resisting Change,” Applied Psychology: An International Review (January 2003), pp. 66–82; and P. P. Fu, T. K. Peng, J. C. Kennedy, and G. Yukl, “Examining the Preferences of Influence Tactics in Chinese Societies: A Comparison of Chinese Managers in Hong Kong, Taiwan, and Mainland China,” Organizational Dynamics 33, no. 1 (2004), pp. 32–46. 27. C. J. Torelli and S. Shavitt, “Culture and Concepts of Power,” Journal of Personality and Social Psychology 99, no. 4 (2010), pp. 703–723. 28. Fu and Yukl, “Perceived Effectiveness of Influence Tactics in the United States and China.” 29. S. J. Heine, “Making Sense of East Asian Self-Enhancement,” Journal of Cross-Cultural Psychology (September 2003), pp. 596–602. 30. G. R. Ferris, D. C. Treadway, P. L. Perrewé, R. L. Brouer, C. Douglas, and S. Lux, “Political Skill in Organizations,” www.time.com Endnotes 441 Journal of Management (June 2007), pp. 290–320; K. J. Harris, K. M. Kacmar, S. Zivnuska, and J. D. Shaw, “The Impact of Political Skill on Impression Management Effectiveness,” Journal of Applied Psychology 92, no. 1 (2007), pp. 278–285; W. A. Hochwarter, G. R. Ferris, M. B. Gavin, P. L. Perrewé, A. T. Hall, and D. D. Frink,” Political Skill as Neutralizer of Felt Accountability–Job Tension Effects on Job Performance Ratings: A Longitudinal Investigation,” Organizational Behavior and Human Decision Processes 102 (2007), pp. 226–239; and D. C. Treadway, G. R. Ferris, A. B. Duke, G. L. Adams, and J. B. Tatcher, “The Moderating Role of Subordinate Political Skill on Supervisors’ Impressions of Subordinate Ingratiation and Ratings of Subordinate Interpersonal Facilitation,” Journal of Applied Psychology 92, no. 3 (2007), pp. 848–855. 31. M. C. Andrews, K. M. Kacmar, and K. J. Harris, “Got Political Skill? The Impact of Justice on the Importance of Political Skills for Job Performance.” Journal of Applied Psychology 94, no. 6 (2009), pp. 1427–1437. 32. C. Anderson, S. E. Spataro, and F. J. Flynn, “Personality and Organizational Culture as Determinants of Influence,” Journal of Applied Psychology 93, no. 3 (2008), pp. 702–710. 33. S. Stecklow, “Sexual-Harassment Cases Plague U.N.,” The Wall Street Journal (May 21, 2009), p. A1. 34. N. Bode, “Flushing Hospital Nurse Gets $15 Million Award in Sexual Harassment Suit,” New York Daily News (February 23, 2009), www.nydailynews.com . 35. L. J. Munson, C. Hulin, and F. Drasgow, “Longitudinal Analysis of Dispositional Influences and Sexual Harassment: Effects on Job and Psychological Outcomes,” Personnel Psychology (Spring 2000), pp. 21–46; T. M. Glomb, L. J. Munson, C. L. Hulin, M. E. Bergman, and F. Drasgow, “Structural Equation Models of Sexual Harassment: L o n g i t u d i n a l E x p l o r a t i o n s a n d C r o s s - S e c t i o n a l Generalizations,” Journal of Applied Psychology (February 1999), pp. 14–28; M. E. Bergman, R. D. Langhout, P. A. Palmieri, L. M. Cortina, and L. F. Fitzgerald, “The (Un)rea- sonableness of Reporting: Antecedents and Consequences of Reporting Sexual Harassment,” Journal of Applied Psychology (April 2002), pp. 230–242; and L. R. Offermann and A. B. Malamut, “When Leaders Harass: The Impact of Target Perceptions of Organizational Leadership and Climate on Harassment Reporting and Outcomes,” Journal of Applied Psychology (October 2002), pp. 885–893. 36. S. Silverstein and S. Christian, “Harassment Ruling Raises Free-Speech Issues,” Los Angeles Times (November 11, 1993), p. D2. 37. R. Ilies, N. Hauserman, S. Schwochau, and J. Stibal, “Reported Incidence Rates of Work-Related Sexual Harassment in the United States: Using Meta-Analysis to Explain Reported Rate Disparities,” Personnel Psychology (Fall 2003), pp. 607–631. 38. K. Bursik and J. Gefter, “Still Stable After All These Years: Perceptions of Sexual Harassment in Academic Contexts,” The Journal of Social Psychology 151, no. 3 (2011), pp. 331–349. 39. M. Rotundo, D. Nguyen, and P. R. Sackett, “A Meta-Analytic Review of Gender Differences in Perceptions of Sexual Harassment,” Journal of Applied Psychology (October 2001), pp. 914–922. 40. R. L. Weiner, R. Reiter-Palmon, R. J. Winter, E. Richter, A. Humke, and E. Maeder, “Complainant Behavioral Tone, Ambivalent Sexism, and Perceptions of Sexual Harassment,” Psychology, Public Policy, and Law 16, no. 1 (2010), pp. 56–84. 41. Ilies, Hauserman, Schwochau, and Stibal, “Reported Incidence Rates of Work-Related Sexual Harassment in the United States; A. B. Malamut and L. R. Offermann, “Coping with Sexual Harassment: Personal, Environmental, and Cognitive Determinants,” Journal of Applied Psychology (December 2001), pp. 1152–1166; L. M. Cortina and S. A. Wasti, “Profiles in Coping: Responses to Sexual Harassment Across Persons, Organizations, and Cultures,” Journal of Applied Psychology (February 2005), pp. 182–192; and J. W. Kunstman, “Sexual Overperception: Power, Mating Motives, and Biases in Social Judgment,” Journal of Personality and Social Psychology 100, no. 2 (2011), pp. 282–294. 42. F. Krings and S. Facchin, “Organizational Justice and Men’s Likelihood to Sexually Harass: The Moderating Role of Sexism and Personality,” Journal of Applied Psychology 94, no. 2 (2009), pp. 501–510. 43. C. R. Willness, P. Steel, and K. Lee, “A Meta-Analysis of the Antecedents and Consequences of Workplace Sexual Harassment,” Personnel Psychology 60 (2007), pp. 127–162. 44. Mintzberg, Power In and Around Organizations, p. 26. See also K. M. Kacmar and R. A. Baron, “Organizational Politics: The State of the Field, Links to Related Processes, and an Agenda for Future Research,” in G. R. Ferris (ed.), Research in Personnel and Human Resources Management, vol.  17 (Greenwich, CT: JAI Press, 1999), pp. 1–39; and G. R. Ferris, D. C. Treadway, R. W. Kolokinsky, W. A. Hochwarter, C. J. Kacmar, and D. D. Frink, “Development and Validation of the Political Skill Inventory,” Journal of Management (February 2005), pp. 126–152. 45. S. B. Bacharach and E. J. Lawler, “Political Alignments in Organizations,” in R. M. Kramer and M. A. Neale (eds.), Power and Influence in Organizations (Thousand Oaks, CA: Sage, 1998), pp. 68–69. 46. A. Drory and T. Romm, “The Definition of Organizational Politics: A Review,” Human Relations (November 1990), pp.  1133–1154; and R. S. Cropanzano, K. M. Kacmar, and D.  P. Bozeman, “Organizational Politics, Justice, and Support: Their Differences and Similarities,” in R.  S. Cropanzano and K. M. Kacmar (eds.), Organizational Politics, Justice and Support: Managing Social Climate at Work (Westport, CT: Quorum Books, 1995), pp. 1–18; and G. R. Ferris and W.  A. Hochwarter, “Organizational Politics,” in S.  Zedeck (ed.), APA Handbook of Industrial and Organizational Psychology, vol.  3 (Washington, DC: American Psychological Association, 2011), pp. 435–459. 47. D. A. Buchanan, “You Stab My Back, I’ll Stab Yours: Management Experience and Perceptions of Organization Political Behavior,” British Journal of Management 19, no. 1 (2008), pp. 49–64. 48. J. Pfeffer, Power: Why Some People Have It—And Others Don’t (New York: Harper Collins, 2010). 49. Drory and Romm, “The Definition of Organizational Politics.” 50. S. M. Rioux and L. A. Penner, “The Causes of Organizational Citizenship Behavior: A Motivational Analysis,” Journal of Applied Psychology (December 2001), pp. 1306–1314; M. A. Finkelstein and L. A. Penner, “Predicting Organizational Citizenship Behavior: Integrating the Functional and Role www.nydailynews.com 442 CHAPTER 13 Power and Politics Identity Approaches,” Social Behavior & Personality 32, no. 4 (2004), pp. 383–398; and J. Schwarzwald, M. Koslowsky, and M. Allouf, “Group Membership, Status, and Social Power Preference,” Journal of Applied Social Psychology 35, no. 3 (2005), pp. 644–665. 51. See, for example, G. R. Ferris, G. S. Russ, and P. M. Fandt, “Politics in Organizations,” in R. A. Giacalone and P. Rosenfeld (eds.), Impression Management in the Organization (Hillsdale, NJ: Lawrence Erlbaum, 1989), pp. 155–156; and W. E. O’Connor and T. G. Morrison, “A Comparison of Situational and Dispositional Predictors of Perceptions of Organizational Politics,” Journal of Psychology (May 2001), pp. 301–312. 52. Farrell and Petersen, “Patterns of Political Behavior in Organizations,” Academy of Management Review 7, no. 3 (1982), pp. 403–412. 53. G. R. Ferris and K. M. Kacmar, “Perceptions of Organizational Politics,” Journal of Management (March 1992), pp. 93–116. 54. See, for example, P. M. Fandt and G. R. Ferris, “The Management of Information and Impressions: When Employees Behave Opportunistically,” Organizational Behavior and Human Decision Processes (February 1990), pp. 140–158; Ferris, Russ, and Fandt, “Politics in Organizations,” p. 147; and J. M. L. Poon, “Situational Antecedents and Outcomes of Organizational Politics Perceptions,” Journal of Managerial Psychology 18, no. 2 (2003), pp. 138–155. 55. Ferris and Hochwarter, “Organizational Politics.” 56. W. A. Hochwarter, C. Kiewitz, S. L. Castro, P. L. Perrewe, and G. R. Ferris, “Positive Affectivity and Collective Efficacy as Moderators of the Relationship Between Perceived Politics and Job Satisfaction,” Journal of Applied Social Psychology (May 2003), pp. 1009–1035; and C. C. Rosen, P. E. Levy, and R. J. Hall, “Placing Perceptions of Politics in the Context of Feedback Environment, Employee Attitudes, and Job Performance,” Journal of Applied Psychology 91, no. 1 (2006), pp. 211–230. 57. G. R. Ferris, D. D. Frink, M. C. Galang, J. Zhou, K. M. Kacmar, and J. L. Howard, “Perceptions of Organizational Politics: Prediction, Stress-Related Implications, and Outcomes,” Human Relations (February 1996), pp. 233–266; and E. Vigoda, “Stress-Related Aftermaths to Workplace Politics: The Relationships Among Politics, Job Distress, and Aggressive Behavior in Organizations,” Journal of Organizational Behavior (August 2002), pp. 571–591. 58. S. Aryee, Z. Chen, and P. S. Budhwar, “Exchange Fairness and Employee Performance: An Examination of the Relationship Between Organizational Politics and Procedural Justice,” Organizational Behavior & Human Decision Processes (May 2004), pp. 1–14; and K. M. Kacmar, D. P. Bozeman, D. S. Carlson, and W. P. Anthony, “An Examination of the Perceptions of Organizational Politics Model.” Human Relations 52 , no. 3 (1999), pp. 383-416. 59. C. Kiewitz, W. A. Hochwarter, G. R. Ferris, and S. L. Castro, “The Role of Psychological Climate in Neutralizing the Effects of Organizational Politics on Work Outcomes,” Journal of Applied Social Psychology (June 2002), pp. 1189–1207; and M. C. Andrews, L. A. Witt, and K. M. Kacmar, “The Interactive Effects of Organizational Politics and Exchange Ideology on Manager Ratings of Retention,” Journal of Vocational Behavior (April 2003), pp. 357–369. 60. O. J. Labedo, “Perceptions of Organisational Politics: Examination of the Situational Antecedent and Consequences Among Nigeria’s Extension Personnel,” Applied Psychology: An International Review 55, no. 2 (2006), pp. 255–281. 61. Kacmar, Bozeman, Carlson, and Anthony, “An Examination of the Perceptions of Organizational Politics Model,” p. 389. 62. Ibid., p. 409. 63. K. M. Kacmar, D. G. Bachrach, K. J. Harris, and S. Zivnuska, “Fostering Good Citizenship Through Ethical Leadership: Exploring the Moderating Role of Gender and Organizational Politics,” Journal of Applied Psychology 96 (2011), pp. 633–642. 64. B. E. Ashforth and R. T. Lee, “Defensive Behavior in Organizations: A Preliminary Model,” Human Relations (July 1990), pp. 621–648. 65. M. Valle and P. L. Perrewe, “Do Politics Perceptions Relate to Political Behaviors? Tests of an Implicit Assumption and Expanded Model,” Human Relations (March 2000), pp. 359–386. 66. M. R. Leary and R. M. Kowalski, “Impression Management: A Literature Review and Two-Component Model,” Psychological Bulletin (January 1990), pp. 34–47. 67. See, for instance, W. L. Gardner and M. J. Martinko, “Impression Management in Organizations,” Journal of Management (June 1988), pp. 321–338; M. C. Bolino and W. H. Turnley, “More Than One Way to Make an Impression: Exploring Profiles of Impression Management,” Journal of Management 29, no. 2 (2003), pp. 141–160; S.  Zivnuska, K.  M. Kacmar, L. A. Witt, D. S. Carlson, and V.  K. Bratton, “Interactive Effects of Impression Management and Organizational Politics on Job Performance,” Journal of Organizational Behavior (August 2004), pp. 627–640; and M. C. Bolino, K. M. Kacmar, W. H. Turnley, and J. B. Gilstrap, “A Multi-Level Review of Impression Management Motives and Behaviors,” Journal of Management 34, no. 6 (2008), pp. 1080–1109. 68. M. Snyder and J. Copeland, “Self-monitoring Processes in Organizational Settings,” in R. A. Giacalone and P. Rosenfeld (eds.), Impression Management in the Organization (Hillsdale, NJ: Lawrence Erlbaum, 1989), p. 11; Bolino and Turnley, “More Than One Way to Make an Impression”; and W. H. Turnley and M. C. Bolino, “Achieved Desired Images While Avoiding Undesired Images: Exploring the Role of Self- Monitoring in Impression Management,” Journal of Applied Psychology (April 2001), pp. 351–360. 69. Leary and Kowalski, “Impression Management,” p. 40. 70. J. Ham and R. Vonk, “Impressions of Impression Management: Evidence of Spontaneous Suspicion of Ulterior Motivation.” Journal of Experimental Social Psychology 47, no. 2 (2011), pp. 466–471; and W. M. Bowler, J. R. B. Halbesleben, and J. R. B. Paul, “If You’re Close with the Leader, You Must Be a Brownnose: The Role of Leader– Member Relationships in Follower, Leader, and Coworker Attributions of Organizational Citizenship Behavior Motives.” Human Resource Management Review 20, no. 4 (2010), pp. 309–316. 71. C. Lebherz, K. Jonas, and B. Tomljenovic, “Are We Known by the Company We Keep? Effects of Name Dropping on First Impressions,” Social Influence 4, no. 1 (2009), pp. 62–79. 72. J. R. B. Halbesleben, W. M. Bowler, M. C. Bolino, and W. H Turnley, “Organizational Concern, Prosocial Values, or Endnotes 443 Impression Management? How Supervisors Attribute Motives to Organizational Citizenship Behavior,” Journal of Applied Social Psychology 40, no. 6 (2010), pp. 1450–1489. 73. Ferris, Russ, and Fandt, “Politics in Organizations.” 74. Z. I. Barsness, K. A. Diekmann, and M. L. Seidel, “Motivation and Opportunity: The Role of Remote Work, Demographic Dissimilarity, and Social Network Centrality in Impression Management,” Academy of Management Journal 48, no. 3 (2005), pp. 401–419. 75. A. P. J. Ellis, B. J. West, A. M. Ryan, and R. P. DeShon, “The Use of Impression Management Tactics in Structural Interviews: A Function of Question Type?” Journal of Applied Psychology (December 2002), pp. 1200–1208. 76. C. K. Stevens and A. L. Kristof, “Making the Right Impression: A Field Study of Applicant Impression Management During Job Interviews,” Journal of Applied Psychology 80 (1995), pp. 587– 606; L. A. McFarland, A. M. Ryan, and S. D. Kriska, “Impression Management Use and Effectiveness Across Assessment Methods,” Journal of Management 29, no. 5 (2003), pp. 641–661; C. A. Higgins and T. A. Judge, “The Effect of Applicant Influence Tactics on Recruiter Perceptions of Fit and Hiring Recommendations: A Field Study,” Journal of Applied Psychology 89, no. 4 (2004), pp. 622–632; and W. C. Tsai, C. C. Chen, and S. F. Chiu, “Exploring Boundaries of the Effects of Applicant Impression Management Tactics in Job Interviews,” Journal of Management (February 2005), pp. 108– 125. 77. D. C. Gilmore and G. R. Ferris, “The Effects of Applicant Impression Management Tactics on Interviewer Judgments,” Journal of Management 15, no. 4 (1989), pp. 557–564 78. Stevens and Kristof, “Making the Right Impression.” 79. C. A. Higgins, T. A. Judge, and G. R. Ferris, “Influence Tactics and Work Outcomes: A Meta-Analysis,” Journal of Organizational Behavior (March 2003), pp. 89–106. 80. Ibid. 81. K. J. Harris, K. M. Kacmar, S. Zivnuska, and J. D. Shaw, “The Impact of Political Skill on Impression Management Effectiveness,” Journal of Applied Psychology 92, no. 1 (2007), pp. 278–285; and D. C. Treadway, G. R. Ferris, A. B. Duke, G. L. Adams, and J. B. Thatcher, “The Moderating Role of Subordinate Political Skill on Supervisors’ Impressions of Subordinate Ingratiation and Ratings of Subordinate Interpersonal Facilitation,” Journal of Applied Psychology 92, no. 3 (2007), pp. 848–855. 82. J. D. Westphal and I. Stern, “Flattery Will Get You Everywhere (Especially if You Are a Male Caucasian): How Ingratiation, Boardroom Behavior, and Demographic Minority Status Affect Additional Board Appointments of U.S. Companies,” Academy of Management Journal 50, no. 2 (2007), pp. 267–288. 83. See T. Romm and A. Drory, “Political Behavior in Organizations: A Cross-Cultural Comparison,” International Journal of Value Based Management 1 (1988), pp. 97–113; and E. Vigoda, “Reactions to Organizational Politics: A Cross- Cultural Examination in Israel and Britain,” Human Relations (November 2001), pp. 1483–1518. 84. J. L. T. Leong, M. H. Bond, and P. P. Fu, “Perceived Effectiveness of Influence Strategies in the United States and Three Chinese Societies,” International Journal of Cross Cultural Management (May 2006), pp. 101–120. 85. Y. Miyamoto and B. Wilken, “Culturally Contingent Situated Cognition: Influencing Other People Fosters Analytic Perception in the United States but Not in Japan,” Psychological Science 21, no. 11 (2010), pp. 1616–1622. 86. E. Vigoda, “Reactions to Organizational Politics,” p. 1512. 87. Ibid., p. 1510. NO CONFLICT AT THE POST OFFICE . . . IS THAT GOOD? 444 D o you remember a strike of U.S. Postal Service (USPS) workers? You probably don’t, because the last one was more than 40 years ago—in 1970. USPS leadership and the unions that represent its employees are proud of their cooperation. In March 2011, the USPS reached an agreement with the American Postal Workers Union (APWU) that, among other things: ● Provides a 3.5 percent annual raise for APWU workers. ● Includes seven uncapped cost-of-living increases. ● Extends the no-layoff provision in the contract. Both union and management are happy with the contract. “The union and management have reached an agreement that is a ‘win–win’ proposition,” says APWU president Cliff Guffey. Postmaster General Patrick R. Donahoe hailed the agreement as well: “By working together we have created a new contract that serves the best interest of our customers, our employees and the future of the Postal Service.” When two sides cooperate and show few signs of conflict, it is usually a sign of a healthy relationship, right? No, say many experts, including the man assigned to review the USPS, Phillip Herr of the Government Accountability Office (GAO). The problem, according to these experts, is that the business model for the USPS is fatally flawed. The USPS loses billions nearly every year it oper- ates. It has borrowed $12 billion from the U.S. Treasury and is on the verge of defaulting on a $5.5 billion payment to cover future retirees’ health care costs. It is asking Congress to waive its debt obligations. (In 2006, Congress already relieved the USPS of a $27 billion pension obligation, shifting the debt to U.S. taxpayers.) Why is the USPS losing so much money even with heavy subsidies? One fundamental reason is volume. With the growth of e-mail commu- nication, mail volume is down—way down. It plummeted 20 percent from 2006 to 2010, and nearly everyone expects the downward trend to con- tinue, if not accelerate. In anticipation, many other nations have privatized their mail services, which have been faster to adapt. Sweden’s largely priva- tized postal system gives mail recipients the option to receive their mail by scanned copy, it maintains a digital archive of mail going back seven years, and it recently introduced an app that lets users turn cell phone pictures into postcards. USPS continues to charge the same rate per ounce to deliver anywhere—whether it’s down the street or by pack mule to the bottom of the Grand Canyon. The majority of USPS’s revenue comes from junk mail, which is, of course, mostly mail no one wants to receive. LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Define conflict. 2 Differentiate among the traditional, interactionist, and managed-conflict views of conflict. 3 Outline the conflict process. 4 Define negotiation. 5 Contrast distributive and integrative bargaining. 6 Apply the five steps of the negotiation process. 7 Show how individual differences influence negotiations. 8 Assess the roles and functions of third-party negotiations. MyManagementLab Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com . www.mymanagementlab.com Conflict and Negotiation 14 Let us never negotiate out of fear. But let us never fear to negotiate. —John F. Kennedy 445 Ph o to : A p o st a l e m p lo ye e a tt e n d s to a n a u to m a te d s o rt in g m a ch in e . So u rc e : R o b yn B e ck /A FP /N e w sc o m 445 446 CHAPTER 14 Conflict and Negotiation Finally, USPS is not particularly competitive with Federal Express (FedEx) and United Parcel Service (UPS), its rivals in the lucrative overnight and ground shipping business. Though USPS is much larger—it employs 571,566 full-time workers, making it the nation’s largest employer after Walmart—FedEx and UPS hold 84 percent of the express and ground shipping market. One reason USPS is not competitive? More than 80 percent of its budget goes to employee wages and benefits, as opposed to 43 percent for FedEx and 61 percent for UPS. To be fair, USPS does many things well, it has many dedicated workers, and its leaders continue to talk of changing. But change is rarely easy, and it rarely comes without ruffling some feathers. Meanwhile, USPS continues to follow the path of least resistance. Says one expert: “Pretty soon it’s going to be a government- run [junk mail] service. Does that make any sense?” Sources: D. Leonard, “The End of Mail,” Bloomberg Businessweek (May 30, 2011), pp. 60–65; G. Easterbrook, “The Post Office—Return to Sender,” Reuters (June 1, 2011), downloaded June 30, 2011, from http://blogs.reuters.com/ ; and E. O’Keefe, “Postal Union Contract Ratified,” Washington Post (May 12, 2011), downloaded on July 10, 2011, from www.washingtonpost.com/ . A s we see in the USPS example, both the presence and the absence of conflict and negotiation are often complex—and controversial—interpersonal processes. While we generally see conflict as a negative topic and negotiation as a positive one, each can generate positive and negative outcomes, and what we deem positive or negative often depends on our perspec- tive. Let’s first gauge how you handle conflict. Take the following self-assessment. There has been no shortage of definitions of conflict , 1 but common to most is the idea that conflict is a perception. If no one is aware of a conflict, then it is generally agreed no conflict exists. Also needed to begin the conflict process are opposition or incompatibility and some form of interaction. We can define conflict , then, as a process that begins when one party per- ceives another party has or is about to negatively affect something the first party cares about. 2 This definition is purposely broad. It describes that point in 1 Define conflict. A Definition of Conflict S A L SELF-ASSESSMENT LIBRARY What’s My Preferred Conflict-Handling Style? In the Self-Assessment Library (available on CD and online), take assessment II.C.5 (What’s My Preferred Conflict-Handling Style?) and answer the following questions. 1. Judging from your highest score, what’s your primary conflict-handling style? 2. Do you think your style varies, depending on the situation? 3. Would you like to change any aspects of your conflict-handling style? www.washingtonpost.com/ http://blogs.reuters.com/ Transitions in Conflict Thought 447 any ongoing activity when an interaction crosses over to become an interparty conflict. It encompasses the wide range of conflicts people experience in organizations: incompatibility of goals, differences over interpretations of facts, disagreements based on behavioral expectations, and the like. Finally, our defi- nition is flexible enough to cover the full range of conflict levels—from overt and violent acts to subtle forms of disagreement. conflict A process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about. traditional view of conflict The belief that all conflict is harmful and must be avoided. functional conflict Conflict that supports the goals of the group and improves its performance. It is entirely appropriate to say there has been conflict over the role of conflict in groups and organizations. One school of thought has argued that conflict must be avoided—that it indicates a malfunctioning within the group. We call this the traditional view. Another perspective proposes not only that conflict can be a positive force in a group but that some conflict is absolutely necessary for a group to perform effectively. We label this the interactionist view. Finally, recent research argues that instead of encouraging “good” or discouraging “bad” con- flict, it’s more important to resolve naturally occurring conflicts productively. This perspective is the managed conflict view. Let’s take a closer look at each view. The Traditional View of Conflict The early approach to conflict assumed all conflict was bad and to be avoided. Conflict was viewed negatively and discussed with such terms as violence, destruc- tion, and irrationality to reinforce its negative connotation. This traditional view of conflict was consistent with attitudes about group behavior that prevailed in the 1930s and 1940s. Conflict was a dysfunctional outcome resulting from poor communication, a lack of openness and trust between people, and the failure of managers to be responsive to the needs and aspirations of their employees. The view that all conflict is bad certainly offers a simple approach to looking at the behavior of people who create conflict. We need merely direct our atten- tion to the causes of conflict and correct those malfunctions to improve group and organizational performance. This view of conflict fell out of favor for a long time as researchers came to realize that some level of conflict was inevitable. The Interactionist View of Conflict The interactionist view of conflict encourages conflict on the grounds that a harmonious, peaceful, tranquil, and cooperative group is prone to becoming static, apathetic, and unresponsive to needs for change and innovation. 3 The major contribution of this view is recognizing that a minimal level of conflict can help keep a group viable, self-critical, and creative. The interactionist view does not propose that all conflicts are good. Rather, functional conflict supports the goals of the group and improves its performance Transitions in Conflict Thought 2 Differentiate among the traditional, interactionist, and managed-conflict views of conflict. interactionist view of conflict The belief that conflict is not only a positive force in a group but also an absolute necessity for a group to perform effectively. 448 CHAPTER 14 Conflict and Negotiation and is, thus, a constructive form of conflict. A conflict that hinders group performance is a destructive or dysfunctional conflict . What differentiates func- tional from dysfunctional conflict? The evidence indicates we need to look at the type of conflict—whether it’s connected to task, relationship, or process. 4 Task conflict relates to the content and goals of the work. Relationship conflict focuses on interpersonal relationships. Process conflict relates to how the work gets done. Studies demonstrate that relationship conflicts are almost always dys- functional. 5 Why? It appears that the friction and interpersonal hostilities inherent in relationship conflicts increase personality clashes and decrease mutual under- standing, which hinders the completion of organizational tasks. Unfortunately, managers spend a lot of effort resolving personality conflicts among staff mem- bers; one survey indicated this task consumes 18 percent of their time. 6 In contrast, low levels of process conflict and low to moderate levels of task conflict can be functional, but only in very specific cases. Recent reviews have shown that task conflicts are usually just as disruptive as relationship conflicts. 7 For conflict to be productive, it must be kept within certain boundaries. For example, one study in China found that moderate levels of task conflict in the early development stage could increase creativity in groups, but high levels of task conflict decreased team performance, and task conflicts were unrelated to performance once the group was in the later stages of group development. 8 Intense arguments about who should do what become dysfunctional when they create uncertainty about task roles, increase the time to complete tasks, and lead members to work at cross-purposes. Low to moderate levels of task conflict stim- ulate discussion of ideas. This means task conflicts relate positively to creativity and innovation, but they are not related to routine task performance. Groups performing routine tasks that don’t require creativity won’t benefit from task conflict. Moreover, if the group is already engaged in active discussion of ideas in a nonconfrontational way, adding conflict will not help generate more ideas. Task conflict is also related to these positive outcomes only when all members share the same goals and have high levels of trust. 9 Another way of saying this is that task conflicts are related to increased performance only when all mem- bers believe the team is a safe place for taking risks and that members will not deliberately undermine or reject those who speak up. 10 Task conflict is often functional, but one of its dangers is that it can escalate and become a battle of wills. For example, as a Target Corporation investor, William Ackman tried, unsuccessfully, for many years to convince the retailer to change its business strategy to improve performance and boost shareholder returns. Ackman sought to bring in new board members with a proxy vote. He asked share- holders to elect candidates who would bring new ideas to Target’s board, which he claimed was slow in making critical decisions. After a long battle that cost Target mil- lions of dollars in defending itself, the shareholders voted to keep the current board members. Ackman is shown here meeting with the media after losing the proxy battle in which his candidates received less than 20 percent of the vote. So u rc e : A ll e n F re d ri ck so n / R e u te rs / La n d o v M e d ia . The Conflict Process 449 Resolution-Focused View of Conflict Researchers, including those who had strongly advocated the interactionist view, have begun to recognize some problems with encouraging conflict. 11 As we will see, there are some very specific cases in which conflict can be benefi- cial. However, workplace conflicts are not productive, they take time away from job tasks or interacting with customers, and hurt feelings and anger often linger after conflicts appear to be over. People can seldom wall off their feelings into neat categories of “task” or “relationship” disagreements, so task conflicts some- times escalate into relationship conflicts. 12 A study conducted in Taiwan and Indonesia found that when levels of relationship conflict are high, increases in task conflict are consistently related to lower levels of team performance and team member satisfaction. 13 Conflicts produce stress, which may lead people to become more close minded and adversarial. 14 Studies of conflict in laboratories also fail to take account of the reductions in trust and cooperation that oc- cur even with relationship conflicts. Longer-term studies show that all conflicts reduce trust, respect, and cohesion in groups, which reduces their long-term viability. 15 In light of these findings, researchers have started to focus more on man- aging the whole context in which conflicts occur, both before and after the behavioral stage of conflict occurs. A growing body of research, which we review later, suggests we can minimize the negative effects of conflict by focusing on preparing people for conflicts, developing resolution strategies, and facilitat- ing open discussion. Researchers interested in cross-cultural conflicts have also encouraged individuals to recognize impediments to agreement like hidden emotional attachments to a particular course of action and social identities that place people on different “sides” of an issue based on national or cultural vari- ables. Resolving cross-cultural conflicts begins by addressing these emotional and identity-based concerns and building bonds between parties through com- mon interests. 16 In sum, the traditional view was shortsighted in assuming all conflict should be eliminated. The interactionist view that conflict can stimulate active discus- sion without spilling over into negative, disruptive emotions is incomplete. The managed conflict perspective does recognize that conflict is probably inevitable in most organizations, and it focuses more on productive conflict resolution. The research pendulum has swung from eliminating conflict, to encouraging limited levels of conflict, and now to finding constructive methods for resolving conflicts productively so their disruptive influence can be minimized. dysfunctional conflict Conflict that hinders group performance. relationship conflict Conflict based on interpersonal relationships. conflict process A process that has five stages: potential opposition or incompatibility, cognition and personalization, intentions, behavior, and outcomes. task conflict Conflict over content and goals of the work. process conflict Conflict over how work gets done. The conflict process has five stages: potential opposition or incompatibility, cognition and personalization, intentions, behavior, and outcomes. The pro- cess is diagrammed in Exhibit 14-1 . The Conflict Process 3 Outline the conflict process. 450 CHAPTER 14 Conflict and Negotiation Stage I: Potential Opposition or Incompatibility The first step in the conflict process is the appearance of conditions that create opportunities for conflict to arise. These conditions need not lead directly to con- flict, but one of them is necessary if conflict is to surface. For simplicity’s sake, we group the conditions (which we can also look at as causes or sources of conflict) into three general categories: communication, structure, and personal variables. Communication Susan had worked in supply chain management at Bristol- Myers Squibb for 3 years. She enjoyed her work in large part because her man- ager, Harry, was a great boss. Then Harry got promoted, and Chuck took his place. Six months later, Susan says her job is a lot more frustrating. “Harry and I were on the same wavelength. It’s not that way with Chuck. He tells me some- thing, and I do it. Then he tells me I did it wrong. I think he means one thing but says something else. It’s been like this since the day he arrived. I don’t think a day goes by when he isn’t yelling at me for something. You know, there are some people you just find it easy to communicate with. Well, Chuck isn’t one of those!” Susan’s comments illustrate that communication can be a source of con- flict. 17 They represent the opposing forces that arise from semantic difficulties, misunderstandings, and “noise” in the communication channels. Recall our comments on communication in Chapter 11 . A review of the research suggests that differing word connotations, jargon, insufficient exchange of information, and noise in the communication chan- nel are all barriers to communication and potential antecedent conditions to conflict. Research has further demonstrated a surprising finding: the potential for conflict increases when either too little or too much communication takes place. Apparently, an increase in communication is functional up to a point, after which it is possible to overcommunicate, with a resultant increase in the potential for conflict. Structure Charlotte and Mercedes both work at the Portland Furniture Mart— a large discount furniture retailer. Charlotte is a salesperson on the floor, and Mercedes is the company credit manager. The two women have known each other for years and have much in common: they live within two blocks of each other, and their oldest daughters attend the same middle school and are best friends. If Charlotte and Mercedes had different jobs, they might be best friends themselves, but they are constantly fighting battles with each other. Charlotte’s Increased group performance Decreased group performance Overt conflict • Party’s behavior • Other’s reaction Conflict-handling intentions • Competing • Collaborating • Compromising • Avoiding • Accommodating Antecedent conditions • Communication • Structure • Personal variables Perceived conflict Cognition and personalization Intentions Behavior OutcomesPotential opposition or incompatibility Stage II Stage III Stage IV Stage VStage I Felt conflict The Conflict Process Exhibit 14-1 The Conflict Process 451 job is to sell furniture, and she does it well. But most of her sales are made on credit. Because Mercedes’ job is to make sure the company minimizes credit losses, she regularly has to turn down the credit application of a customer with whom Charlotte has just closed a sale. It’s nothing personal between the women; the requirements of their jobs just bring them into conflict. The conflicts between Charlotte and Mercedes are structural in nature. The term structure in this context includes variables such as size of the group, degree of specialization in the tasks assigned to group members, jurisdictional clarity, member–goal compatibility, leadership styles, reward systems, and the degree of dependence between groups. Size and specialization can stimulate conflict. The larger the group and the more specialized its activities, the greater the likelihood of conflict. Tenure and conflict have been found to be inversely related; the potential for conflict is greatest when group members are younger and when turnover is high. The greater the ambiguity about where responsibility for actions lies, the greater the potential for conflict to emerge. Such jurisdictional ambiguities in- crease intergroup fighting for control of resources and territory. Diversity of goals among groups is also a major source of conflict. When groups within an organization seek diverse ends, some of which—like sales and credit at Portland Furniture Mart—are inherently at odds, opportunities for conflict increase. Reward systems, too, create conflict when one member’s gain comes at anoth- er’s expense. Finally, if a group is dependent on another group (in contrast to the two being mutually independent), or if interdependence allows one group to gain at another’s expense, opposing forces are stimulated. Personal Variables Have you ever met someone for whom you felt an immedi- ate dislike? You disagreed with most of the opinions he expressed. Even insig- nificant characteristics—the sound of his voice, the smirk when he smiled, his personality—annoyed you. We’ve all met people like that. When you have to work with such individuals, the potential for conflict arises. Our last category of potential sources of conflict is personal variables, which include personality, emotions, and values. Personality does appear to play a role in the conflict process: some people just tend to get into conflicts a lot. In par- ticular, people high in the personality traits of disagreeableness, neuroticism, or self-monitoring are prone to tangle with other people more often, and to react poorly when conflicts occur. 18 Emotions can also cause conflict. An employee who shows up to work irate from her hectic morning commute may carry that anger with her to her 9:00 a.m. meeting. The problem? Her anger can annoy her colleagues, which can result in a tension-filled meeting. 19 Stage II: Cognition and Personalization If the conditions cited in Stage I negatively affect something one party cares about, then the potential for opposition or incompatibility becomes actualized in the second stage. As we noted in our definition of conflict, one or more of the parties must be aware that antecedent conditions exist. However, because a conflict is a perceived conflict does not mean it is personalized. In other words, “ A may be aware that B and A are in serious disagreement . . . but it may not make A tense perceived conflict Awareness by one or more parties of the existence of conditions that create opportunities for conflict to arise. 452 CHAPTER 14 Conflict and Negotiation or anxious, and it may have no effect whatsoever on A ’s affection toward B .” 20 It is at the felt conflict level, when individuals become emotionally involved, that they experience anxiety, tension, frustration, or hostility. Keep in mind two points. First, Stage II is important because it’s where conflict issues tend to be defined, where the parties decide what the conflict is about. 21 If I define our salary disagreement as a zero-sum situation (if you get the increase in pay you want, there will be just that amount less for me), I am going to be far less willing to compromise than if I frame the conflict as a potential win–win situation (the dollars in the salary pool might be increased so both of us could get the added pay we want). Thus, the definition of a conflict is important because it typically delineates the set of possible settlements. Our second point is that emotions play a major role in shaping percep- tions. 22 Negative emotions allow us to oversimplify issues, lose trust, and put negative interpretations on the other party’s behavior. 23 In contrast, positive feelings increase our tendency to see potential relationships among the ele- ments of a problem, to take a broader view of the situation, and to develop more innovative solutions. 24 Stage III: Intentions Intentions intervene between people’s perceptions and emotions and their overt behavior. They are decisions to act in a given way. 25 We separate out intentions as a distinct stage because we have to infer the other’s intent to know how to respond to his or her behavior. Many conflicts escalate simply because one party attributes the wrong intentions to the other. There is also typically a great deal of slippage between intentions and behavior, so behavior does not always accurately reflect a person’s intentions. Exhibit 14-2 represents one author’s effort to identify the primary conflict- handling intentions. Using two dimensions— cooperativeness (the degree to which one party attempts to satisfy the other party’s concerns) and assertiveness OB Poll Generation Differences Cause Some Workplace Conflict Not at all 28% To a slight degree 44% To some degree To what extent is intergenerational conflict an issue in your workplace? 50 40 30 20 10 0 25% To a large degree 3% Source: Based on “Intergenerational Conflict in the Workplace,” SHRM News (April 29, 2011). The Conflict Process 453 felt conflict Emotional involvement in a conflict that creates anxiety, tenseness, frustration, or hostility. competing A desire to satisfy one’s interests, regardless of the impact on the other party to the conflict. avoiding The desire to withdraw from or suppress a conflict. (the degree to which one party attempts to satisfy his or her own concerns)— we can identify five conflict-handling intentions: competing (assertive and unco- operative), collaborating (assertive and cooperative), avoiding (unassertive and uncooperative), accommodating (unassertive and cooperative), and compromising (midrange on both assertiveness and cooperativeness). 26 Competing When one person seeks to satisfy his or her own interests regard- less of the impact on the other parties to the conflict, that person is competing . You compete when you place a bet that only one person can win, for example. Collaborating When parties in conflict each desire to fully satisfy the concerns of all parties, there is cooperation and a search for a mutually beneficial out- come. In collaborating , the parties intend to solve a problem by clarifying dif- ferences rather than by accommodating various points of view. If you attempt to find a win–win solution that allows both parties’ goals to be completely achieved, that’s collaborating. Avoiding A person may recognize a conflict exists and want to withdraw from or suppress it. Examples of avoiding include trying to ignore a conflict and avoiding others with whom you disagree. Accommodating A party who seeks to appease an opponent may be willing to place the opponent’s interests above his or her own, sacrificing to maintain the relationship. We refer to this intention as accommodating . Supporting someone else’s opinion despite your reservations about it, for example, is accommodating. Dimensions of Conflict-Handling Intentions Exhibit 14-2 Competing Collaborating Avoiding Compromising Uncooperative U na ss er tiv e A ss er tiv e A ss e rt iv e n e ss Cooperative Cooperativeness Accommodating Source: Figure from “Conflict and Negotiation Processes in Organizations” by K. Thomas in Handbook of Industrial and Organizational Psychology , 2/e, Vol. 3, ed. by M. D. Dunnette and L. M. Hough, p. 668 (Palo Alto, CA: Consulting Psychologists Press, 1992). Used with permission. intentions Decisions to act in a given way. collaborating A situation in which the parties to a conflict each desire to satisfy fully the concerns of all parties. accommodating The willingness of one party in a conflict to place the opponent’s interests above his or her own. 454 CHAPTER 14 Conflict and Negotiation Compromising In compromising , there is no clear winner or loser. Rather, there is a willingness to ration the object of the conflict and accept a solution that provides incomplete satisfaction of both parties’ concerns. The distinguish- ing characteristic of compromising, therefore, is that each party intends to give up something. Intentions are not always fixed. During the course of a conflict, they might change if the parties are able to see the other’s point of view or respond emo- tionally to the other’s behavior. However, research indicates people have pref- erences among the five conflict-handling intentions we just described. 27 We can predict a person’s intentions rather well from a combination of intellectual and personality characteristics. Stage IV: Behavior When most people think of conflict situations, they tend to focus on Stage IV because this is where conflicts become visible. The behavior stage includes the statements, actions, and reactions made by the conflicting parties, usually as overt attempts to implement their own intentions. As a result of miscalculations or unskilled enactments, overt behaviors sometimes deviate from these original intentions. 28 It helps to think of Stage IV as a dynamic process of interaction. For ex- ample, you make a demand on me, I respond by arguing, you threaten me, I threaten you back, and so on. Exhibit 14-3 provides a way of visualizing conflict behavior. All conflicts exist somewhere along this continuum. At the lower part are conflicts characterized by subtle, indirect, and highly controlled forms of tension, such as a student questioning in class a point the instructor has just made. Conflict intensities escalate as they move upward along the continuum until they become highly destructive. Strikes, riots, and wars clearly fall in this upper range. Conflicts that reach the upper ranges of the continuum are al- most always dysfunctional. Functional conflicts are typically confined to the lower range of the continuum. If a conflict is dysfunctional, what can the parties do to de-escalate it? Or, conversely, what options exist if conflict is too low and needs to be increased? This brings us to techniques of conflict management . Exhibit 14-4 lists the major resolution and stimulation techniques that allow managers to control conflict levels. We have already described several as conflict-handling intentions. This shouldn’t be surprising. Under ideal conditions, a person’s intentions should translate into comparable behaviors. Conflict-Intensity Continuum Exhibit 14-3 Annihilatory conflict Overt efforts to destroy the other party Aggressive physical attacks Threats and ultimatums Assertive verbal attacks Overt questioning or challenging of others Minor disagreements or misunderstandings No conflict Sources: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 93–97; and F. Glasi, “The Process of Conflict Escalation and the Roles of Third Parties,” in G. B. J. Bomers and R. Peterson (eds.), Conflict Management and Industrial Relations (Boston: Kluwer-Nijhoff, 1982), pp. 119–140. The Conflict Process 455 compromising A situation in which each party to a conflict is willing to give up something. conflict management The use of resolution and stimulation techniques to achieve the desired level of conflict. Conflict-Resolution Techniques Problem solving Face-to-face meeting of the conflicting parties for the purpose of identifying the problem and resolving it through open discussion. Superordinate goals Creating a shared goal that cannot be attained without the cooperation of each of the conflicting parties. Expansion of resources When a conflict is caused by the scarcity of a resource (for example, money, promotion, opportunities, office space), expansion of the resource can create a win-win solution. Avoidance Withdrawal from or suppression of the conflict. Smoothing Playing down differences while emphasizing common interests between the conflicting parties. Compromise Each party to the conflict gives up something of value. Authoritative command Management uses its formal authority to resolve the conflict and then communicates its desires to the parties involved. Altering the human variable Using behavioral change techniques such as human relations training to alter attitudes and behaviors that cause conflict. Altering the structural variables Changing the formal organization structure and the interaction patterns of conflicting parties through job redesign, transfers, creation of coordinating positions, and the like. Conflict-Stimulation Techniques Communication Using ambiguous or threatening messages to increase conflict levels. Bringing in outsiders Adding employees to a group whose backgrounds, values, attitudes, or managerial styles differ from those of present members. Restructuring the organization Realigning work groups, altering rules and regulations, increasing interdependence, and making similar structural changes to disrupt the status quo. Appointing a devil’s advocate Designating a critic to purposely argue against the majority positions held by the group. Source: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 59–89. Stage V: Outcomes The action–reaction interplay between the conflicting parties results in conse- quences. As our model demonstrates (see Exhibit 14-1 ), these outcomes may be functional, if the conflict improves the group’s performance, or dysfunctional, if it hinders performance. Functional Outcomes How might conflict act as a force to increase group per- formance? It is hard to visualize a situation in which open or violent aggression could be functional. But it’s possible to see how low or moderate levels of con- flict could improve the effectiveness of a group. Let’s consider some examples and then review the research evidence. Note that all our examples focus on task and process conflicts and exclude the relationship variety. Conflict is constructive when it improves the quality of decisions, stimulates creativity and innovation, encourages interest and curiosity among group mem- bers, provides the medium through which problems can be aired and tensions released, and fosters an environment of self-evaluation and change. The evi- dence suggests conflict can improve the quality of decision making by allow- ing all points to be weighed, particularly those that are unusual or held by a minority. 29 Conflict is an antidote for groupthink. It doesn’t allow the group to passively rubber-stamp decisions that may be based on weak assumptions, Conflict Management Techniques Exhibit 14-4 456 CHAPTER 14 Conflict and Negotiation inadequate consideration of relevant alternatives, or other debilities. Conflict challenges the status quo and therefore furthers the creation of new ideas, pro- motes reassessment of group goals and activities, and increases the probability that the group will respond to change. An open discussion focused on higher- order goals can make these functional outcomes more likely. Groups that are extremely polarized do not manage their underlying disagreements effectively and tend to accept suboptimal solutions, or they avoid making decisions alto- gether rather than working out the conflict. 30 Research studies in diverse settings confirm the functionality of active discus- sion. Groups whose members have different interests tend to produce higher- quality solutions to a variety of problems than do homogeneous groups. 31 Team members with greater differences in work styles and experience also tend to share more information with one another. 32 These observations lead us to predict benefits to organizations from the in- creasing cultural diversity of the workforce. And that’s what the evidence indi- cates, under most conditions. Heterogeneity among group and organization members can increase creativity, improve the quality of decisions, and facilitate change by enhancing member flexibility. 33 Researchers compared decision- making groups composed of all-Caucasian individuals with groups that also contained members from Asian, Hispanic, and Black ethnic groups. The ethni- cally diverse groups produced more effective and more feasible ideas, and the unique ideas they generated tended to be of higher quality than the unique ideas produced by the all-Caucasian group. Dysfunctional Outcomes The destructive consequences of conflict on the per- formance of a group or an organization are generally well known: uncontrolled opposition breeds discontent, which acts to dissolve common ties and eventu- ally leads to the destruction of the group. And, of course, a substantial body of literature documents how dysfunctional conflicts can reduce group effective- ness. 34 Among the undesirable consequences are poor communication, reduc- tions in group cohesiveness, and subordination of group goals to the primacy IBM benefits from the diversity of its employees who engage in functional conflict that improves the company’s performance. At IBM, diversity drives innovation. Achieving the full potential of its diverse workforce is a business priority fundamental to IBM’s com- petitive success. For innovation to flourish, IBM needs different employee experiences, perspectives, skills, ideas, interests, information, and thinking. It relies on creative tension and opposing ideas that increase creativity, improve the quality of decisions, and facilitate change. IBM employees shown here broaden their diversity experiences and perspectives by participating in overseas assignments in emerging markets. So u rc e : C h ri s Se w a rd /M C T /N e w sc o m . The Conflict Process 457 of infighting among members. All forms of conflict—even the functional varieties—appear to reduce group member satisfaction and trust. 35 When ac- tive discussions turn into open conflicts between members, information sharing between members decreases significantly. 36 At the extreme, conflict can bring group functioning to a halt and threaten the group’s survival. We noted that diversity can usually improve group performance and deci- sion making. However, if differences of opinion open up along demographic fault lines, harmful conflicts result and information sharing decreases. 37 For example, if differences of opinion in a gender-diverse team line up so that men all hold one opinion and women hold another, group members tend to stop listening to one another. They fall into ingroup favoritism and won’t take the other side’s point of view into consideration. Managers in this situation need to pay special attention to these fault lines and emphasize the shared goals of the team. The demise of an organization as a result of too much conflict isn’t as unusual as you might think. One of New York’s best-known law firms, Shea & Gould, closed down solely because the 80 partners just couldn’t get along. 38 As one legal consultant familiar with the organization said, “This was a firm that had basic and principled differences among the partners that were basically irreconcilable.” That same consultant also addressed the partners at their last meeting: “You don’t have an economic problem,” he said. “You have a personal- ity problem. You hate each other!” Managing Functional Conflict If managers recognize that in some situations conflict can be beneficial, what can they do to manage conflict effectively in their organizations? Let’s look at some approaches organizations are using to encourage their people to challenge the system and develop fresh ideas. One of the keys to minimizing counterproductive conflicts is recognizing when there really is a disagreement. Many apparent conflicts are due to people using different language to discuss the same general course of action. For ex- ample, someone in marketing might focus on “distribution problems,” while someone from operations will talk about “supply chain management” to de- scribe essentially the same issue. Successful conflict management recognizes these different approaches and attempts to resolve them by encouraging open, frank discussion focused on interests rather than issues (we’ll have more to say about this when we contrast distributive and integrative bargaining styles). Another approach is to have opposing groups pick parts of the solution that are most important to them and then focus on how each side can get its top needs satisfied. Neither side may get exactly what it wants, but both sides will get the most important parts of its agenda. 39 Groups that resolve conflicts successfully discuss differences of opinion openly and are prepared to manage conflict when it arises. 40 The most disrup- tive conflicts are those that are never addressed directly. An open discussion makes it much easier to develop a shared perception of the problems at hand; it also allows groups to work toward a mutually acceptable solution. Managers need to emphasize shared interests in resolving conflicts, so groups that dis- agree with one another don’t become too entrenched in their points of view and start to take the conflicts personally. Groups with cooperative conflict styles and a strong underlying identification to the overall group goals are more effec- tive than groups with a competitive style. 41 Differences across countries in conflict resolution strategies may be based on collectivistic tendencies and motives. 42 Collectivist cultures see people as deeply embedded in social situations, whereas individualist cultures see them as auton- omous. As a result, collectivists are more likely to seek to preserve relationships 458 CHAPTER 14 Conflict and Negotiation and promote the good of the group as a whole. They will avoid direct expres- sion of conflicts, preferring indirect methods for resolving differences of opin- ion. Collectivists may also be more interested in demonstrations of concern and working through third parties to resolve disputes, whereas individualists will be more likely to confront differences of opinion directly and openly. Some research does support this theory. Compared to collectivist Japanese negotiators, their more individualist U.S. counterparts are more likely to see offers from their counterparts as unfair and to reject them. Another study re- vealed that whereas U.S. managers were more likely to use competing tactics in the face of conflicts, compromising and avoiding are the most preferred meth- ods of conflict management in China. 43 Interview data, however, suggests top management teams in Chinese high-technology firms prefer collaboration even more than compromising and avoiding. 44 Having considered conflict—its nature, causes, and consequences—we now turn to negotiation, which often resolves conflict. Negotiation permeates the interactions of almost everyone in groups and orga- nizations. There’s the obvious: labor bargains with management. There’s the not-so-obvious: managers negotiate with employees, peers, and bosses; sales- people negotiate with customers; purchasing agents negotiate with suppliers. And there’s the subtle: an employee agrees to cover for a colleague for a few minutes in exchange for some past or future benefit. In today’s loosely struc- tured organizations, in which members work with colleagues over whom they have no direct authority and with whom they may not even share a common boss, negotiation skills become critical. We can define negotiation as a process that occurs when two or more parties decide how to allocate scarce resources. 45 Although we commonly think of the outcomes of negotiation in one-shot economic terms, like negotiating over the price of a car, every negotiation in organizations also affects the relationship between the negotiators and the way the negotiators feel about themselves. 46 Depending on how much the parties are going to interact with one another, sometimes maintaining the social relationship and behaving ethically will be just as important as achieving an immediate outcome of bargaining. Note that we use the terms negotiation and bargaining interchangeably. In this section, we contrast two bargaining strategies, provide a model of the negotiation process, ascertain the role of moods and personality traits on bargaining, review gender and cul- tural differences in negotiation, and take a brief look at third-party negotiations. Bargaining Strategies There are two general approaches to negotiation— distributive bargaining and integrative bargaining . 47 As Exhibit 14-5 shows, they differ in their goal and moti- vation, focus, interests, information sharing, and duration of relationship. Let’s define each and illustrate the differences. Distributive Bargaining You see a used car advertised for sale online. It ap- pears to be just what you’ve been looking to buy. You go out to see the car. It’s great, and you want it. The owner tells you the asking price. You don’t want to pay that much. The two of you then negotiate. The negotiating strategy you’re 4 Define negotiation. Negotiation 5 Contrast distributive and integrative bargaining. Negotiation 459 negotiation A process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them. distributive bargaining Negotiation that seeks to divide up a fixed amount of resources; a win–lose situation. fixed pie The belief that there is only a set amount of goods or services to be divvied up between the parties. engaging in is called distributive bargaining . Its identifying feature is that it operates under zero-sum conditions—that is, any gain I make is at your expense and vice versa. Every dollar you can get the seller to cut from the car’s price is a dollar you save, and every dollar more the seller can get from you comes at your expense. So the essence of distributive bargaining is negotiating over who gets what share of a fixed pie. By fixed pie , we mean a set amount of goods or services to be divvied up. When the pie is fixed, or the parties believe it is, they tend to bargain distributively. Probably the most widely cited example of distributive bargaining is labor– management negotiations over wages. Typically, labor’s representatives come to the bargaining table determined to get as much money as possible from management. Because every cent labor negotiates increases management’s costs, each party bargains aggressively and treats the other as an opponent who must be defeated. The essence of distributive bargaining is depicted in Exhibit 14-6 . Parties A and B represent two negotiators. Each has a target point that defines what he or she would like to achieve. Each also has a resistance point, which marks the lowest acceptable outcome—the point below which the party would break off Distributive Versus Integrative Bargaining Exhibit 14-5 Bargaining Distributive Integrative Characteristic Bargaining Bargaining Goal Get as much of the pie as Expand the pie so that both possible parties are satisfied Motivation Win–lose Win–win Focus Positions (“I can’t go Interests (“Can you explain why beyond this point on this this issue is so important to you?”) issue.”) Interests Opposed Congruent Information sharing Low (Sharing information High (Sharing information will will only allow other party allow each party to find ways to to take advantage) satisfy interests of each party) Duration of relationship Short term Long term Staking Out the Bargaining Zone Exhibit 14-6 Party A’s aspiration range Party B’s aspiration range Party B’s target point Party A’s resistance point Party B’s resistance point Party A’s target point Settlement range 460 CHAPTER 14 Conflict and Negotiation negotiations rather than accept a less favorable settlement. The area between these two points makes up each party’s aspiration range. As long as there is some overlap between A ’s and B ’s aspiration ranges, there exists a settlement range in which each one’s aspirations can be met. When you are engaged in distributive bargaining, research consistently shows one of the best things you can do is make the first offer, and make it an aggres- sive one. Making the first offer shows power; individuals in power are much more likely to make initial offers, speak first at meetings, and thereby gain the advan- tage. Another reason this is a good strategy is the anchoring bias, mentioned in Chapter 6 . People tend to fixate on initial information. Once that anchoring point is set, they fail to adequately adjust it based on subsequent information. A savvy negotiator sets an anchor with the initial offer, and scores of negotiation studies show that such anchors greatly favor the person who sets them. 48 Say you have a job offer, and your prospective employer asks you what sort of starting salary you’d want. You’ve just been given a great gift—you have a chance to set the anchor, meaning you should ask for the highest salary you think the employer could reasonably offer. Asking for a million dollars is only going to make most of us look ridiculous, which is why we suggest being on the high end of what you think is reasonable. Too often, we err on the side of caution, afraid of scaring off the employer and thus settling for too little. It is possible to scare off an employer, and it’s true employers don’t like candidates to be assertive in salary negotiations, but liking isn’t the same as doing what it takes to hire or retain someone. 49 What happens much more often is that we ask for less than we could have gotten. Another distributive bargaining tactic is revealing a deadline. Erin is a hu- man resources manager. She is negotiating salary with Ron, who is a highly sought-after new hire. Because Ron knows the company needs him, he decides to play hardball and ask for an extraordinary salary and many benefits. Erin tells Ron the company can’t meet his requirements. Ron tells Erin he is going to have to think things over. Worried the company is going to lose Ron to a competitor, Erin decides to tell Ron she is under time pressure and needs to reach an agreement with him immediately, or she will have to offer the job to another candidate. Would you consider Erin to be a savvy negotiator? Well, she is. Why? Negotiators who reveal deadlines speed concessions from their nego- tiating counterparts, making them reconsider their position. And even though negotiators don’t think this tactic works, in reality, negotiators who reveal dead- lines do better. 50 Integrative Bargaining Jake is a 5-year-old Chicago luxury boutique owned by Jim Wetzel and Lance Lawson. In the early days of the business, Wetzel and Lawson had no trouble moving millions of dollars of merchandise from many up-and-coming designers. They developed such a good rapport that many de- signers would send allotments to Jake without requiring advance payment. When the economy soured in 2008, Jake had trouble selling inventory, and the designers found they were not being paid for what they had shipped to the store. Despite the fact that many designers were willing to work with the store on a delayed payment plan, Wetzel and Lawson stopped returning their calls. Lamented one designer, Doo-Ri Chung, “You kind of feel this familiarity with people who supported you for so long. When they have cash-flow issues, you want to make sure you are there for them as well.” 51 Ms. Chung’s attitude shows the promise of integrative bargaining . In contrast to distributive bargain- ing, integrative bargaining operates under the assumption that one or more of the possible settlements can create a win–win solution. Of course, as the Jake example shows and we’ll highlight later, integrative bargaining takes “two to tango”—both parties must be engaged for it to work. Negotiation 461 In terms of intraorganizational behavior, all things being equal, integrative bargaining is preferable to distributive bargaining because the former builds long-term relationships. Integrative bargaining bonds negotiators and al- lows them to leave the bargaining table feeling they have achieved a victory. Distributive bargaining, however, leaves one party a loser. It tends to build ani- mosities and deepen divisions when people have to work together on an ongo- ing basis. Research shows that over repeated bargaining episodes, a “losing” party who feels positive about the negotiation outcome is much more likely to bargain cooperatively in subsequent negotiations. This points to an important advantage of integrative negotiations: even when you “win,” you want your op- ponent to feel good about the negotiation. 52 Why, then, don’t we see more integrative bargaining in organizations? The answer lies in the conditions necessary for it to succeed. These include oppos- ing parties who are open with information and candid about their concerns, are sensitive to the other’s needs and trust, and are willing to maintain flexibil- ity. 53 Because these conditions seldom exist in organizations, it isn’t surprising that negotiations often take on a win-at-any-cost dynamic. There are ways to achieve more integrative outcomes. Individuals who bargain in teams reach more integrative agreements than those who bargain individually because more ideas are generated when more people are at the bargaining table. So, try bargaining in teams. 54 Another way to achieve higher joint-gain settlements is to put more issues on the table. The more negotiable issues introduced into a negotiation, the more opportunity for “logrolling,” where issues are traded off because people have different preferences. This integrative bargaining Negotiation that seeks one or more settlements that can create a win–win solution. United Auto Workers officials (left) and Ford Motor Company officials shake hands during a news confer- ence for the start of national nego- tiations in July 2011. Both UAW and Ford say that they are committed to integrative bargaining in find- ing mutually acceptable solutions to create a win-win settlement that will help boost their competitive- ness with other automakers in the United States and abroad. The negotiations reflect a 70-year his- tory of UAW and Ford working together to share information that will help address difficult business challenges. So u rc e : A P P h o to /P a u l Sa n cy a . 462 CHAPTER 14 Conflict and Negotiation T his statement is true. At no time in human history has the contact between mem- bers of different cultures been higher. Supply chains are increasingly multina- tional networks. Large organizations market their products and services in many nations. Global virtual teams work to make their organizations glob- ally competitive. Most of these sup- plier/customer/manager/employee relationships include negotiating over something. Only the smallest and most local organization is insulated from the need to negotiate cross-culturally. Because negotiation is an intense communication process, you might think that globalization has placed a pre- mium on communicating well in nego- tiations. A recent study supported that view, but it also gave important details about what’s necessary to communi- cate well in cross-cultural negotiations: Clarity —did each party understand each other? Responsiveness —did each party respond quickly and smoothly? Comfort —did each party feel com- fortable and trust the other? The authors found that cross- cultural negotiations did have lower communication quality with respect to all three characteristics than did within- country negotiations. They also found that higher levels of communication quality contributed to success in cross- cultural negotiations—in terms of both the joint gains the parties achieved and their satisfaction with the agreements. Because communication quality was measured at the end of the negotiation, this study can’t determine cause-and-effect (it’s possible that negotiation outcomes cause the par- ties to perceive communication more favorably). However, it does suggest that cross-cultural negotiations need not always result in lower outcomes— if the parties commit themselves to communicating clearly, responsively, and in such a way to make the other side comfortable. Source: Based on L. A. Liu, C. H. Chua, and G. K. Stahl, “Quality of Communication Experience: Definition, Measurement, and Implications for Intercultural Negotiations,” Journal of Applied Psychology 95, No. 3 (2010), pp. 469–487. Myth or Science? “Communicating Well Is More Important in Cross-Cultural Negotiations” creates better outcomes for each side than if they negotiated each issue indi- vidually. 55 A final piece of advice is to focus on the underlying interests of both sides rather than on issues. In other words, it is better to concentrate on why an employee wants a raise rather than focusing just on the raise amount—some unseen potential for integrative outcomes may arise if both sides concentrate on what they really want rather than on the specific items they’re bargaining over. Typically, it’s easier to concentrate on underlying interests when parties to a negotiation are focused on broad, overall goals rather than on immediate outcomes of a specific decision. 56 Negotiations that occur when both parties are focused on learning and understanding the other side tend to also yield higher joint outcomes than those in which parties are more interested in their individual bottom-line outcomes. 57 Finally, recognize that compromise may be your worst enemy in negotiat- ing a win–win agreement. Compromising reduces the pressure to bargain in- tegratively. After all, if you or your opponent caves in easily, it doesn’t require anyone to be creative to reach a settlement. Thus, people end up settling for less than they could have obtained if they had been forced to consider the other party’s interests, trade off issues, and be creative. 58 Think of the classic example in which two sisters are arguing over who gets an orange. Unknown to them, one sister wants the orange to drink the juice, whereas the other wants the orange peel to bake a cake. If one sister simply capitulates and gives the other sister the orange, they will not be forced to explore their reasons for wanting the orange, and thus they will never find the win–win solution: they could each have the orange because they want different parts of it! Negotiation 463 The Negotiation Process Exhibit 14-7 provides a simplified model of the negotiation process. It views ne- gotiation as made up of five steps: (1) preparation and planning, (2) definition of ground rules, (3) clarification and justification, (4) bargaining and problem solving, and (5) closure and implementation. 59 Preparation and Planning Before you start negotiating, you need to do your homework. What’s the nature of the conflict? What’s the history leading up to this negotiation? Who’s involved and what are their perceptions of the conflict? What do you want from the negotiation? What are your goals? If you’re a supply manager at Dell Computer, for instance, and your goal is to get a significant cost reduction from your supplier of keyboards, make sure this goal stays para- mount in your discussions and doesn’t get overshadowed by other issues. It of- ten helps to put your goals in writing and develop a range of outcomes—from “most hopeful” to “minimally acceptable”—to keep your attention focused. You also want to assess what you think are the other party’s goals. What are they likely to ask? How entrenched is their position likely to be? What intan- gible or hidden interests may be important to them? On what might they be willing to settle? When you can anticipate your opponent’s position, you are better equipped to counter arguments with the facts and figures that support your position. Relationships will change as a result of a negotiation, so that’s another out- come to take into consideration. If you could “win” a negotiation but push the other side into resentment or animosity, it might be wiser to pursue a more compromising style. If preserving the relationship will make you seem weak and easily exploited, you may want to consider a more aggressive style. As an ex- ample of how the tone of a relationship set in negotiations matters, consider that people who feel good about the process of a job offer negotiation are more satisfied with their jobs and less likely to turn over a year later regardless of their actual outcomes from these negotiations. 60 Once you’ve gathered your information, use it to develop a strategy. For example, expert chess players know ahead of time how they will respond to 6 Apply the five steps of the negotiation process. The Negotiation Exhibit 14-7 Preparation and planning Definition of ground rules Clarification and justification Bargaining and problem solving Closure and implementation 464 CHAPTER 14 Conflict and Negotiation any given situation. As part of your strategy, you should determine your and the other side’s b est a lternative t o a n egotiated a greement, or BATNA . 61 Your BATNA determines the lowest value acceptable to you for a negotiated agree- ment. Any offer you receive that is higher than your BATNA is better than an impasse. Conversely, you shouldn’t expect success in your negotiation effort unless you’re able to make the other side an offer it finds more attractive than its BATNA. If you go into your negotiation having a good idea of what the other party’s BATNA is, even if you’re not able to meet it you might be able to elicit a change. Think carefully about what the other side is willing to give up. People who underestimate their opponent’s willingness to give on key issues before the negotiation even starts end up with lower outcomes from a negotiation. 62 Definition of Ground Rules Once you’ve done your planning and developed a strategy, you’re ready to begin defining with the other party the ground rules and procedures of the negotiation itself. Who will do the negotiating? Where will it take place? What time constraints, if any, will apply? To what issues will negotiation be limited? Will you follow a specific procedure if an impasse is reached? During this phase, the parties will also exchange their initial proposals or demands. Clarification and Justification When you have exchanged initial positions, both you and the other party will explain, amplify, clarify, bolster, and justify your original demands. This step needn’t be confrontational. Rather, it’s an opportunity for educating and informing each other on the issues, why they are important, and how you arrived at your initial demands. Provide the other party with any documentation that helps support your position. Bargaining and Problem Solving The essence of the negotiation process is the actual give-and-take in trying to hash out an agreement. This is where both par- ties will undoubtedly need to make concessions. Closure and Implementation The final step in the negotiation process is for- malizing the agreement you have worked out and developing any procedures necessary for implementing and monitoring it. For major negotiations— from labor–management negotiations to bargaining over lease terms to buy- ing a piece of real estate to negotiating a job offer for a senior management position—this requires hammering out the specifics in a formal contract. For most cases, however, closure of the negotiation process is nothing more formal than a handshake. Individual Differences in Negotiation Effectiveness Are some people better negotiators than others? The answer is more complex than you might think. Four factors influence how effectively individuals negoti- ate: personality, mood/emotions, culture, and gender. Personality Traits in Negotiation Can you predict an opponent’s negotiating tactics if you know something about his or her personality? Because personality and negotiation outcomes are related but only weakly, the answer is, at best, “sort of.” Negotiators who are agreeable or extraverted are not very successful in distributive bargaining. Why? Because extraverts are outgoing and friendly, they tend to share more information than they should. And agreeable people are more interested in finding ways to cooperate rather than to butt heads. These traits, while slightly helpful in integrative negotiations, are liabilities 7 Show how individual differences influence negotiations. Negotiation 465 BATNA The b est a lternative t o a n egotiated a greement; the least the individual should accept. when interests are opposed. So the best distributive bargainer appears to be a disagreeable introvert—someone more interested in his or her own outcomes than in pleasing the other party and having a pleasant social exchange. People who are highly interested in having positive relationships with other people, and who are not very concerned about their own outcomes, are especially poor negotiators. These people tend to be very anxious about disagreements and plan to give in quickly to avoid unpleasant conflicts even before negotiations start. 63 Research also suggests intelligence predicts negotiation effectiveness, but, as with personality, the effects aren’t especially strong. 64 In a sense, these weak links are good news because they mean you’re not severely disadvantaged, even if you’re an agreeable extrovert, when it’s time to negotiate. We all can learn to be better negotiators. In fact, people who think so are more likely to do well in negotiations because they persist in their efforts even in the face of temporary setbacks. 65 Moods/Emotions in Negotiation Do moods and emotions influence negotia- tion? They do, but the way they do appears to depend on the type of negotia- tion. In distributive negotiations, it appears that negotiators in a position of power or equal status who show anger negotiate better outcomes because their anger induces concessions from their opponents. Angry negotiators also feel more focused and assertive in striking a bargain. This appears to hold true even when the negotiators are instructed to show anger despite not being truly angry. On the other hand, for those in a less powerful position, displaying anger leads to worse outcomes. Thus, if you’re a boss negotiating with a peer or a subordi- nate, displaying anger may help you, but if you’re an employee negotiating with a boss, it might hurt you. 66 So what happens when two parties have to negotiate and one has shown anger in the past? Does the other try to get revenge and act extra tough, or does this party have some residual fear that the angry negotiator might get angry again? Evidence suggests that being angry has a spillover effect, such that angry negotiators are perceived as “tough” when the parties meet a second time, which leads negotiation partners to give up more concessions again. 67 Anxiety also appears to have an impact on negotiation. For example, one study found that individuals who experienced more anxiety about a negotiation used more deceptions in dealing with others. 68 Another study found that anx- ious negotiators expect lower outcomes from negotiations, respond to offers more quickly, and exit the bargaining process more quickly, which leads them to obtain worse outcomes. 69 All these findings regarding emotions have related to distributive bargains. In integrative negotiations, in contrast, positive moods and emotions appear to lead to more integrative agreements (higher levels of joint gain). This may hap- pen because, as we noted in Chapter 4 , positive mood is related to creativity. 70 Culture in Negotiations  One study compared U.S. and Japanese negotiators and found the generally conflict-avoidant Japanese negotiators tended to com- municate indirectly and adapt their behaviors to the situation. A follow-up study showed that, whereas early offers by U.S. managers led to the anchoring effect we noted when discussing distributive negotiation, for Japanese negotiators, 466 CHAPTER 14 Conflict and Negotiation early offers led to more information sharing and better integrative outcomes. 71 In another study, managers with high levels of economic power from Hong Kong, which is a high power-distance country, were more cooperative in ne- gotiations over a shared resource than German and U.S. managers, who were lower in power distance. 72 This suggests that in high power-distance countries, those in positions of power might exercise more restraint. Another study looked at differences between U.S. and Indian negotiators. 73 Indian respondents reported having less trust in their negotiation counterparts than did U.S. respondents. These lower levels of trust were associated with lower discovery of common interests between parties, which occurred because Indian negotiators were less willing to disclose and solicit information. In both cultures, use of question-and-answer methods of negotiation were associated with superior negotiation outcomes, so although there are some cultural differ- ences in negotiation styles, it appears that some negotiation tactics yield supe- rior outcomes across cultures. Gender Differences in Negotiations Do men and women negotiate differently? And does gender affect negotiation outcomes? The answer to the first question appears to be no. 74 The answer to the second is a qualified yes. 75 A popular stereotype is that women are more cooperative and pleasant in negotiations than are men. The evidence doesn’t support this belief. However, men have been found to negotiate better outcomes than women, although the difference is relatively small. It’s been postulated that men and women place unequal values on outcomes. “It is possible that a few hundred dollars more in salary or the corner office is less important to women than forming and main- taining an interpersonal relationship.” 76 Because women are expected to be “nice” and men “tough,” research shows women are penalized when they initiate negotiations. 77 What’s more, when women and men actually do conform to these stereotypes—women act “nice” and men “tough”—it becomes a self-fulfilling prophecy, reinforcing the stereo- typical gender differences between male and female negotiators. 78 Thus, one of the reasons negotiations favor men is that women are “damned if they do, damned if they don’t.” Negotiate tough and they are penalized for violating a gender stereotype. Negotiate nice and it only reinforces and lets others take advantage of the stereotype. In this photo, Japanese labor union leader Hidekazu Kitagawa (right) presents the group’s annual wage and benefits demands to Ikuo Mori, president of Fuji Heavy Industries, Ltd., the manufacturer of Subaru automobiles. Studies on how nego- tiating styles vary across national cultures reveal that the generally conflict-avoidant Japanese negotia- tors tend to communicate indirectly and use a more polite conversa- tional style. Their style of interac- tion is less aggressive than other cultures, favoring frequent silent periods and more positive recom- mendations and commitments and de-emphasizing the use of threats and commands. So u rc e : * /K yo d o /N e w sc o m . Negotiation 467 W e’ve discussed anger as a negotiating tactic, but do different cultures view the expression of anger differently? Evidence suggest they do, meaning the use of anger is not a consistently wise negotiation strategy. One study explicitly compared how U.S. and Chinese negotiators react to an angry counterpart. Chinese negotiators increased their use of distributive ne- gotiating tactics, whereas U.S. nego- tiators decreased their use of these tactics. That is, Chinese negotiators began to drive a harder bargain once they saw that their negotiation partner was becoming angry, whereas U.S. negotiators actually capitulate some- what in the face of angry demands. Why do East Asian negotiators respond more negatively to angry negotiators? In a second study, researchers found that European Americans tended to give larger concessions when faced with an angry negotiation partner, whereas Asian negotiators again gave smaller ones. This difference may occur because individuals from East Asian cultures feel that using anger to get your way in a negotiation is not a legitimate tactic, so they respond by refusing to cooperate when their opponents become upset. Sources: Based on M. Liu, “The Intrapersonal and Interpersonal Effects of Anger on Negotiation Strategies: A Cross-Cultural Investigation,” Human Communication Research 35, no. 1 (2009), pp. 148–169; and H. Adam, A. Shirako, and W. W. Maddux, “Cultural Variance in the Interpersonal Effects of Anger in Negotiations,” Psychological Science 21, no. 6 (2010), pp. 882–889. glOBalization! Evidence also suggests women’s own attitudes and behaviors hurt them in ne- gotiations. Managerial women demonstrate less confidence than men in anticipa- tion of negotiating and are less satisfied with their performance afterward, even when their performance and the outcomes they achieve are similar to those for men. 79 Women are also less likely than men to see an ambiguous situation as an op- portunity for negotiation. It appears that women may unduly penalize themselves by failing to engage in negotiations that would be in their best interests. Some research suggests that women are less aggressive in negotiations because they are worried about backlash from others. There is an interesting qualifier to this result: women are more likely to engage in assertive negotiation when they are bargaining on behalf of someone else than when they are bargaining on their own behalf. 80 Third-Party Negotiations To this point, we’ve discussed bargaining in terms of direct negotiations. Occasionally, however, individuals or group representatives reach a stalemate and are unable to resolve their differences through direct negotiations. In such cases, they may turn to a third party to help them find a solution. There are three basic third-party roles: mediator, arbitrator, and conciliator. A mediator is a neutral third party who facilitates a negotiated solution by using reasoning and persuasion, suggesting alternatives, and the like. S A L SELF-ASSESSMENT LIBRARY What’s My Negotiating Style? In the Self-Assessment Library (available on CD and online), take assessment II.C.6 (What’s My Negotiating Style?). 8 Assess the roles and functions of third-party negotiations. mediator A neutral third party who facilitates a negotiated solution by using reasoning, persuasion, and suggestions for alternatives. Anger and Conflict Across Cultures 468 CHAPTER 14 Conflict and Negotiation Mediators are widely used in labor–management negotiations and in civil court disputes. Their overall effectiveness is fairly impressive. The settle- ment rate is approximately 60 percent, with negotiator satisfaction at about 75 percent. But the situation is the key to whether mediation will succeed; the conflicting parties must be motivated to bargain and resolve their conflict. In addition, conflict intensity can’t be too high; mediation is most effective under moderate levels of conflict. Finally, perceptions of the mediator are important; to be effective, the mediator must be perceived as neutral and noncoercive. An arbitrator is a third party with the authority to dictate an agreement. Arbitration can be voluntary (requested by the parties) or compulsory (forced on the parties by law or contract). The big plus of arbitration over mediation is that it always results in a settlement. Whether there is a negative side depends on how heavy-handed the arbitrator appears. If one party is left feeling over- whelmingly defeated, that party is certain to be dissatisfied and the conflict may resurface at a later time. A conciliator is a trusted third party who provides an informal communica- tion link between the negotiator and the opponent. This role was made famous by Robert Duval in the first Godfather film. As Don Corleone’s adopted son and a lawyer by training, Duval acted as an intermediary between the Corleones and the other Mafioso families. Comparing conciliation to mediation in terms of effectiveness has proven difficult because the two overlap a great deal. In practice, conciliators typically act as more than mere communication conduits. They also engage in fact-finding, interpret messages, and persuade disputants to develop agreements. Y ou may have noticed that much of our advice for negotiating effec- tively depends on understanding the perspective and goals of the per- son with whom you are negotiating. Preparing checklists of your negotia- tion partner’s interests, likely tactics, and BATNA have all been shown to improve negotiation outcomes. Can these steps make you a more ethical negotiator as well? Studies suggest that it might. Researchers asked respondents to indicate how much they tended to think about other people’s feel- ings and emotions and to describe the types of tactics they engaged in during a negotiation exercise. More empathetic individuals consistently engaged in fewer unethical negotiation behaviors like making false promises and manipulating information, and emotions. To put this in terms familiar to you from personality research, it appears that individuals who are higher in agreeableness will be more ethical negotiators. When considering how to improve your ethical negotiation behavior, follow these guidelines: 1. Try to understand your negotiation partner’s perspective, not just by understanding cognitively what the other person wants, but by empathizing with the emotional reaction he or she will have to the possible outcomes. 2. Be aware of your own emotions, because many moral reactions are fundamentally emotional. One study found that engaging in unethical negotiation strategies increased feelings of guilt, so by extension, feeling guilty in a negotiation may mean you are engaging in behavior you’ll regret later. 3. Beware of empathizing so much that you work against your own interests. Just because you try to un- derstand the motives and emotional reactions of the other side does not mean you have to assume the other person is going to be honest and fair in return. So be on guard. Sources: Based on T. R. Cohen, “Moral Emotions and Unethical Bargaining: The Differential Effects of Empathy and Perspective Taking in Deterring Deceitful Negotiation,” Journal of Business Ethics 94, no. 4 (2010), pp. 569–579; and R. Volkema, D. Fleck, and A. Hofmeister, “Predicting Competitive-Unethical Negotiating Behavior and Its Consequences,” Negotiation Journal 26, no. 3 (2010), pp. 263–286. An Ethical Choice Using Empathy to Negotiate More Ethically Summary and Implications for Managers 469 arbitrator A third party to a negotiation who has the authority to dictate an agreement. conciliator A trusted third party who provides an informal communication link between the negotiator and the opponent. MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Summary and Implications for Managers While many people assume conflict lowers group and organizational performance, this assumption is frequently incorrect. Conflict can be either constructive or destructive to the functioning of a group or unit. As shown in Exhibit 14-8 , levels of conflict can be either too high or too low to be constructive. Either extreme hinders performance. An optimal level is one that prevents stagnation, stimulates creativity, allows tensions to be released, and ini- tiates the seeds of change without being disruptive or preventing coordination of activities. What advice can we give managers faced with excessive conflict and the need to reduce it? Don’t assume one conflict-handling strategy will al- ways be best! Select a strategy appropriate for the situation. Here are some guidelines: 81 ● Use competition when quick decisive action is needed (in emergen- cies), when issues are important, when unpopular actions need to be implemented (in cost cutting, enforcement of unpopular rules, discipline), when the issue is vital to the organization’s welfare and you know you’re right, and when others are taking advantage of noncompeti- tive behavior. ● Use collaboration to find an integrative solution when both sets of con- cerns are too important to be compromised, when your objective is to learn, when you want to merge insights from people with different per- spectives or gain commitment by incorporating concerns into a consen- sus, and when you need to work through feelings that have interfered with a relationship. ● Use avoidance when an issue is trivial or symptomatic of other issues, when more important issues are pressing, when you perceive no chance of satisfying your concerns, when potential disruption outweighs the bene- fits of resolution, when people need to cool down and regain perspective, when gathering information supersedes immediate decision, and when others can resolve the conflict more effectively. ● Use accommodation when you find you’re wrong, when you need to learn or show reasonableness, when you should allow a better position to be heard, when issues are more important to others than to yourself, when you want to satisfy others and maintain cooperation, when you can build social credits for later issues, when you are outmatched and losing (to minimize loss), when harmony and stability are especially important, and when employees can develop by learning from mistakes. www.mymanagementlab.com 470 CHAPTER 14 Conflict and Negotiation ● Use compromise when goals are important but not worth the effort of po- tential disruption of more assertive approaches, when opponents with equal power are committed to mutually exclusive goals, when you seek temporary settlements to complex issues, when you need expedient solu- tions under time pressure, and as a backup when collaboration or compe- tition is unsuccessful. ● Distributive bargaining can resolve disputes, but it often reduces the satisfaction of one or more negotiators because it is confrontational and focused on the short term. Integrative bargaining, in contrast, tends to provide outcomes that satisfy all parties and build lasting relationships. ● Make sure you set aggressive negotiating goals and try to find creative ways to achieve the objectives of both parties, especially when you value the long-term relationship with the other party. That doesn’t mean sacri- ficing your self-interest; rather, it means trying to find creative solutions that give both parties what they really want. Conflict and Unit Performance Exhibit 14-8 A (Low) (High)Level of Conflict U ni t P er fo rm an ce (High) B C Situation A B C Level of Conflict Low or none Optimal High Type of Conflict Dysfunctional Functional Dysfunctional Unit’s Internal Characteristics Apathetic Stagnant Nonresponsive to change Lack of new ideas Viable Self-critical Innovative Disruptive Chaotic Uncooperative Unit Performance Outcome Low High Low Summary and Implications for Managers 471 Player–Owner Disputes Are Unnecessary POINT COUNTERPOINT S ports teams are an easy target. It’s true that most major league players are well re- warded for their exceptional talents and the risks they take. It’s also true that owners who are able to invest in teams are wealthy—investors usually are. But do the resources on each side mean their conflict should just melt away? The reason these disputes happen is that real interests and real money is at stake. The operation of major league sports is a complex busi- ness. The owners and players can be caricatured, but if you delve a bit deeper, you can see that their disputes are fairly natural. Let’s look at hockey. NHL clubs spent 76 percent of their gross revenues on players’ salaries and collectively lost $273 million the year before the lockout. The NHL tried to convince players to accept a wage structure that linked player salaries to league revenues, guaranteeing the clubs “cost certainty.” Understandably, the players’ union resisted, arguing that “cost certainty” was nothing more than another term for a salary cap. They argued in favor of retaining the “market-based” system in which players individually negotiated contracts with teams, and teams had complete control over how much it spent on players. The NFL lockout hinged on a number of issues that divided the owners and players, including the owners’ desire for an 18- game season (with no increase in player compensation), the way costs are considered in revenue sharing, and pensions for retired players. These aren’t trivial issues, and neither are they entirely different from issues that arise in other labor–management disputes. Finally, it’s easy to argue that major league sports have an unusual number of labor disputes, but that’s not necessarily ac- curate. Did you hear about the 2011 Saskatchewan Teachers Federation strike? Sports interest us (which is why there’s so much money involved), and thus we’re more likely to notice ma- jor league sports labor disputes, but that doesn’t prove they’re more common. Yes, owners are rich and players make a lot of money. We’re the ones who helped them do it, and we shouldn’t fault them for wanting more of what we gave them. I t seems there’s always a major sports league on the verge of a strike. In the past few years, Major League Baseball (MLB), the National Basketball Association (NBA), the National Hockey League (NHL), and the National Football League (NFL) have had major labor disputes. When greed meets greed, guess who loses? Yes, the fans. A few years ago, an entire NHL season was canceled due to a labor dispute (NHL owners staged a work stoppage or “lock- out” that lasted 311 days). The main issue? How to divide the more than $2 billion in revenues generated by the league. The average NHL player earns an annual salary of $1.35 million, and that doesn’t include income from endorsements, appearances, merchandise, and so on. The owners aren’t hurting, either. Most are millionaires many times over. Los Angeles Kings owner Philip Anschutz is reported to have a net worth of $7 billion. The NFL is a variation on the same theme. During the 2011 lockout, during which the player’s union temporarily disbanded so it could claim it wasn’t a union, the owners and players fought over how to divide $9 billion in revenues. The average player makes $1.9 million a year. The average net worth of an NFL owner is $1.4 billion. And each side squabbles over getting more. Yes, players get injured. Some lives are permanently dam- aged. But do you think being a construction worker, farmer, po- lice officer, fisher, or loading-dock worker is a piece of cake? How often do these groups strike? They earn far less than pro- fessional athletes (the average fisher earns 2 percent of the av- erage salary of an NHL player!), but they do work year-round, which is much more dangerous. Meanwhile, ticket prices for sports events continue to soar. In the past 20 years, major league ticket prices have increased at double the rate of inflation. But what are the owners and players focused on? How to line their pockets even further. Was it any surprise when Minnesota Vikings running back Adrian Peterson, fuming over the dispute, called NFL players “modern- day slaves”? (He earns more than $10 million a year.) Billionaires feuding with millionaires. These are unseemly— and unnecessary—conflicts. Sources: A. Benoit, “2010 Jets: What the Film Revealed,” The New York Times (April 14, 2011), downloaded on July 1, 2011, from http://fifthdown.blogs.nytimes.com/ ; D. Farrar, “Adrian Peterson Expresses Frustration on Labor Issues,” Yahoo! Sports (March 15, 2011), downloaded June 30, 2011, from http://sports.yahoo.com/nfl/ ; and J. Z. Klein and S. Hackel, “SLAP SHOT; A Labor Dispute Still Shapes the N.H.L.,” The New York Times (January 3, 2010), downloaded July 2, 2011, from http://query. nytimes.com/ . http://fifthdown.blogs.nytimes.com/ http://sports.yahoo.com/nfl/ http://query.nytimes.com/ http://query.nytimes.com/ 472 CHAPTER 14 Conflict and Negotiation 1 What is conflict? 2 What are the differences among the traditional, interactionist, and managed-conflict views of conflict? 3 What are the steps of the conflict process? 4 What is negotiation? 5 What are the differences between distributive and integrative bargaining? 6 What are the five steps in the negotiation process? 7 How do the individual differences of personality and gender influence negotiations? 8 What are the roles and functions of third-party negotiations? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE A Negotiation Role-Play This role-play is designed to help you develop your nego- tiating skills. The class is to break into pairs. One person will play the role of Alex, the department supervisor. The other person will play C. J., Alex’s boss. Both participants should read “The Situation,” “The Negotiation,” and then their role only. The Situation Alex and C. J. work for Nike in Beaverton, Oregon. Alex supervises a research laboratory. C. J. is the manager of research and development. Alex and C. J. are former col- lege runners who have worked for Nike for more than 6 years. C. J. has been Alex’s boss for 2 years. One of Alex’s employees has greatly impressed Alex. This employee is Lisa Roland. Lisa was hired 11 months ago. She is 24 years old and holds a master’s degree in mechanical engineer- ing. Her entry-level salary was $57,500 per year. Alex told her that, in accordance with corporation policy, she would receive an initial performance evaluation at 6 months and a comprehensive review after 1 year. Based on her per- formance record, Lisa was told she could expect a salary adjustment at the time of the 1-year evaluation. Alex’s evaluation of Lisa after 6 months was very posi- tive. Alex commented on the long hours Lisa was putting in, her cooperative spirit, the fact that others in the lab enjoyed working with her, and that she was making an immediate positive impact on the project assigned to her. Now that Lisa’s first anniversary is coming up, Alex has again reviewed Lisa’s performance. Alex thinks Lisa may be the best new person the R&D group has ever hired. After only a year, Alex has ranked Lisa as the number-3 performer in a department of 11. Salaries in the department vary greatly. Alex, for in- stance, has a base salary of $86,000, plus eligibility for a bonus that might add another $7,000 to $12,000 a year. The salary range of the 11 department members is $48,400 to $76,350. The individual with the lowest salary is a recent hire with a bachelor’s degree in physics. The two people whom Alex has rated above Lisa earn base salaries of $69,200 and $76,350. They’re both 27 years old and have been at Nike for 3 and 4 years, respectively. The median salary in Alex’s department is $64,960. Alex’s Role You want to give Lisa a big raise. Although she’s young, she has proven to be an excellent addition to the depart- ment. You don’t want to lose her. More importantly, she knows in general what other people in the department are earning, and she thinks she’s underpaid. The com- pany typically gives 1-year raises of 5 percent, although 10 percent is not unusual, and 20 to 30 percent increases have been approved on occasion. You’d like to get Lisa as large an increase as C. J. will approve. C. J.’s Role All your supervisors typically try to squeeze you for as much money as they can for their people. You understand this because you did the same thing when you were a supervisor, but your boss wants to keep a lid on costs. He wants you to keep raises for recent hires generally in the 5 to 8 percent range. In fact, he’s sent a memo to all manag- ers and supervisors saying this. He also said that managers will be evaluated on their ability to maintain budgetary control. However, your boss is also concerned with equity and paying people what they’re worth. You feel assured that he will support any salary recommendation you make, as long as it can be justified. Your goal, consistent with cost reduction, is to keep salary increases as low as possible. The Negotiation Alex has a meeting scheduled with C. J. to discuss Lisa’s performance review and salary adjustment. Take a couple of minutes to think through the facts in this exercise and to prepare a strategy. Then take up to 15 minutes to conduct your negotiation. When your negotiation is com- plete, the class will compare the various strategies used and pair outcomes. Case Incident 1 473 ETHICAL DILEMMA The Lowball Applicant Consider this real-life scenario: A freelance project manager, I was hired to find someone to fill a highly specialized job. When I asked an impres- sive candidate her pay rate, she named a figure far below the industry standard. I could have rejected her for this lack of sophistication or exploited her low bid. Instead, I coached her to a figure nearly twice her bid yet about 30 percent below my client’s budget. I did not inform my client about the discrepancy, and she was hired at the rate I recommended. Did I do wrong by either party? —NAME WITHHELD, New York Questions 1. In coaching the applicant to request a higher salary, did the project manager work against the interests of the client organization by which he or she is employed? Why or why not? 2. Could the manager have avoided this dilemma by proposing a salary figure that was the industry norm? Would that be in the interests of the client organization? 3. If you were in the project manager’s situation, would you have handled this negotiation differently? If so, how so? Source: R. Cohen, “The Ethicist,” New York Times Magazine (July 18, 2010), p. 19. CASE INCIDENT 1 Choosing Your Battles While much of this chapter has discussed methods for achieving harmonious relationships and getting out of conflicts, it’s also important to remember there are situ- ations in which too little conflict can be a problem. As we noted, in creative problem-solving teams, some level of task conflict early in the process of formulating a solution can be an important stimulus to innovation. However, the conditions must be right for productive conflict. In particular, individuals must feel psychologically safe in bringing up issues for discussion. If people fear that what they say is going to be held against them, they may be reluctant to speak up or rock the boat. Experts suggest that effective conflicts have three key characteristics: they should (1) speak to what is possible, (2) be compelling, and (3) involve uncertainty. So how should a manager “pick a fight?” First, ensure that the stakes are sufficient to actually warrant a disrup- tion. Second, focus on the future, and on how to resolve the conflict rather than on whom to blame. Third, tie the conflict to fundamental values. Rather than concentrating on winning or losing, encourage both parties to see how successfully exploring and resolving the conflict will lead to optimal outcomes for all. If managed successfully, some degree of open disagreement can be an important way for companies to manage simmering and potentially destruc- tive conflicts. Do these principles work in real organizations? The an- swer is yes. Dropping its old ways of handling scheduling and logistics created a great deal of conflict at Burlington Northern Santa Fe railroad, but applying these principles to managing the conflict helped the railroad adopt a more sophisticated system and recover its competitive position in the transportation industry. Doug Conant, CEO of Campbell Soup, increased functional conflicts in his or- ganization by emphasizing a higher purpose to the orga- nization’s efforts rather than focusing on whose side was winning a conflict. Thus, a dysfunctional conflict environ- ment changed dramatically and the organization was able to move from one of the world’s worst-performing food companies to one that was recognized as a top performer by both the Dow Jones Sustainability Index and Fortune 500 data on employee morale. Questions 1. How would you ensure sufficient discussion of contentious issues in a work group? How can manag- ers bring unspoken conflicts into the open without making them worse? 2. How can negotiators utilize conflict management strategies to their advantage so that differences in interests lead not to dysfunctional conflicts but rather to positive integrative solutions? 3. Can you think of situations in your own life in which silence has worsened a conflict between parties? What might have been done differently to ensure that open communication facilitated collaboration instead? Sources: Based on S. A. Joni and D. Beyer, “How to Pick a Good Fight,” Harvard Business Review (December 2009), pp. 48–57; and B. H. Bradley, B. E. Postlewaite, A. C. Klotz, M. R. Hamdani, and K. G. Brown., “Reaping the Benefits of Task Conflict in Teams: The Critical Role of Team Psychological Safety Climate,” Journal of Applied Psychology, Advance publication (July 4, 2011), doi: 10.1037/a0024200. 474 CHAPTER 14 Conflict and Negotiation CASE INCIDENT 2 Mediation: Master Solution to Employment Disputes? We typically think of mediation as the province of marital counselors and labor strife. More organizations use me- diation to resolve conflicts than you might think. In fact, in the United States, Canada, Great Britain, Ireland, and India, mediation is growing rapidly as a means to settle em- ployment disputes. We introduced mediation in this chap- ter; let’s look at some examples when it has succeeded and when it has failed. Mediation has often succeeded: ● Many states have experimented with mediation as an alternative to traditional trials to resolve legal disputes. The state of Maryland found in a pilot program that 58 percent of appellate cases could be resolved through mediation and that mediation was both cheaper and faster than a traditional courtroom resolution. ● The Equal Employment Opportunity Commission (EEOC), the federal agency that oversees employment discrimination complaints in the United States, uses mediation extensively. Safeway, the third-largest U.S. supermarket chain, uses the EEOC to mediate numer- ous employment disputes. Says Donna Gwin, Safeway’s Director of Human Resources, “Through mediation, we have had the opportunity to proactively resolve is- sues and avoid potential charges in the future. We have seen the number of charges filed with EEOC against us actually decline. We believe that our participating in mediation and listening to employees’ concerns has contributed to that decline.” However, mediation doesn’t always work: ● In 2008, the Screen Actors Guild (SAG) and the Alliance of Motion Picture and Television Producers (AMPTP), representing some 350 studios and produc- tion companies, engaged in prolonged negotiations over a new labor agreement. The negotiations failed, and the parties agreed to mediation. However, media- tion also failed, and in response SAG asked its members to approve a strike authorization. ● When David Kuchinsky, the former driver for New York Knicks center Eddy Curry, sued Curry for sexual harassment, discrimination, and failure to pay $93,000 in wages and reimbursements, the parties agreed to mediation. However, after the sides failed to reach a settlement during mediation, Kuchinsky reinstated his lawsuit, and Curry filed a $50,000 countersuit. Questions 1. Drawing from these examples, what factors do you think differentiate occasions when mediation was suc- cessful and when it failed? 2. One successful mediator, Boston’s Paul Finn, argues that if the disputing parties are seeking justice, “It’s best to go somewhere else.” Why do you think he says that? 3. Do you think a mediator should find out why the par- ties want what they want? Why or why not? 4. The EEOC reports that whereas 85 percent of em- ployees agree to mediate their charges, employers agree to mediate only 30 percent of the time. Why do you think this disparity exists? Sources: Based on M. Kapko, “Actors Union Seeks Strike Vote After Federal Mediation Fails,” Forbes (November 23, 2008), www.forbes.com ; K. Tyler, “Mediating a Better Outcome,” HR Magazine (November 2007), pp. 63–66; K. O’Brien, “The Closer,” Boston Globe (April 12, 2009), www.boston.com ; and S. Lash, “Appealing for Appellate Mediation in Maryland,” The Daily Record (July 4, 2011), www .thedailyrecord.com . ENDNOTES 1. See, for instance, D. Tjosvold, “Defining Conflict and Making Choices About Its Management: Lighting the Dark Side of Organizational Life,” International Journal of Conflict Management 17, no. 2 (2006), pp. 87–95; and M. A. Korsgaard, S. S. Jeong, D. M. Mahony, and A. H. Pitariu, “A Multilevel View of Intragroup Conflict,” Journal of Management 34, no. 6 (2008), pp. 1222–1252. 2. K. W. Thomas, “Conflict and Negotiation Processes in Organizations,” in M. D. Dunnette and L. M. Hough (eds.), Handbook of Industrial and Organizational Psychology , 2nd ed., vol. 3 (Palo Alto, CA: Consulting Psychologists Press, 1992), pp. 651–717. 3. For a comprehensive review of the interactionist approach, see C. De Dreu and E. Van de Vliert (eds.), Using Conflict in Organizations (London: Sage, 1997). 4. See K. A. Jehn, “A Multimethod Examination of the Benefits and Detriments of Intragroup Conflict,” Administrative Science Quarterly (June 1995), pp. 256–282; K. A. Jehn, “A Qualitative Analysis of Conflict Types and Dimensions in Organizational Groups,” Administrative Science Quarterly (September 1997), pp. 530–557; K. A. Jehn and E. A. Mannix, “The Dynamic Nature of Conflict: A Longitudinal Study of Intragroup www.forbes.com www.boston.com www.thedailyrecord.com www.thedailyrecord.com Endnotes 475 Conflict and Group Performance,” Academy of Management Journal (April 2001), pp. 238–251; and C. K. W. De Dreu and L. R. Weingart, “Task Versus Relationship Conflict, Team Performance, and Team Member Satisfaction: A Meta-Analysis,” Journal of Applied Psychology (August 2003), pp. 741–749. 5. J. Yang and K. W. Mossholder, “Decoupling Task and Relationship Conflict: The Role of Intragroup Emotional Processing,” Journal of Organizational Behavior 25, no. 5 (August 2004), pp. 589–605; and N. Gamero, V. González- Romá, and J. M. Peiró, “The Influence of Intra-Team Conflict on Work Teams’ Affective Climate: A Longitudinal Study,” Journal of Occupational and Organizational Psychology 81, no. 1 (2008), pp. 47–69. 6. “Survey Shows Managers Have Their Hands Full Resolving Staff Personality Conflicts,” IPMA-HR Bulletin (November 3, 2006). 7. De Dreu and Weingart, “Task Versus Relationship Conflict, Team Performance, and Team Member Satisfaction.” 8. J. Farh, C. Lee, and C. I. C. Farh, “Task Conflict and Team Creativity: A Question of How Much and When,” Journal of Applied Psychology 95, no. 6 (2010), pp. 1173–1180. 9. C. K.W. De Dreu and M. A. West, “Minority Dissent and Team Innovation: The Importance of Participation in Decision Making,” Journal of Applied Psychology 86, no. 6 (2001), pp. 1191–1201. 10. B. H. Bradley, B. E. Postlewaite, A. C. Klotz, M. R. Hamdani, and K. G. Brown, “Reaping the Benefits of Task Conflict in Teams: The Critical Role of Team Psychological Safety Climate,” Journal of Applied Psychology, Advance publication, (July 4, 2011), doi: 10.1037/a0024200. 11. C. K. W. De Dreu, “The Virtue and Vice of Workplace Conflict: Food for (Pessimistic) Thought,” Journal of Organizational Behavior 29, no. 1 (2008), pp. 5–18. 12. R. S. Peterson and K. J. Behfar, “The Dynamic Relationship Between Performance Feedback, Trust, and Conflict in Groups: A Longitudinal Study,” Organizational Behavior and Human Decision Process 92, no. 1–2 (2003), pp. 102–112. 13. J. D. Shaw, J. Zhu, M. K. Duffy, K. L. Scott, H. Shih, and E. Susanto, “A Contingency Model of Conflict and Team Effectiveness,” Journal of Applied Psychology 96, no. 2 (2011), pp. 391–400. 14. L. M. Penny and P. E. Spector, “Job Stress, Incivility, and Counterproductive Work Behavior: The Moderating Role of Negative Affectivity,” Journal of Organizational Behavior 26, no. 7 (2005), pp. 777–796. 15. K. A. Jehn, L. Greer, S. Levine, and G. Szulanski, “The Effects of Conflict Types, Dimensions, and Emergent States on Group Outcomes,” Group Decision and Negotiation 17, no. 6 (2008), pp. 465–495. 16. D. A. Shapiro, “Relational Identity Theory: A Systematic Approach for Transforming the Emotional Dimension of Conflict,” American Psychologist (October 2010), pp. 634–645. 17. R. S. Peterson and K. J. Behfar, “The Dynamic Relationship Between Performance Feedback, Trust, and Conflict in Groups: A Longitudinal Study,” Organizational Behavior & Human Decision Processes (September–November 2003), pp. 102–112. 18. T. M. Glomb and H. Liao, “Interpersonal Aggression in Work Groups: Social Influence, Reciprocal, and Individual Effects,” Academy of Management Journal 46, no. 4 (2003), pp. 486–496; and V. Venkataramani and R. S. Dalal, “Who Helps and Harms Whom? Relational Aspects of Interpersonal Helping and Harming in Organizations,” Journal of Applied Psychology 92, no. 4 (2007), pp. 952–966. 19. R. Friedman, C. Anderson, J. Brett, M. Olekalns, N. Goates, and C. C. Lisco, “The Positive and Negative Effects of Anger on Dispute Resolution: Evidence from Electronically Mediated Disputes,” Journal of Applied Psychology (April 2004), pp. 369–376. 20. L. R. Pondy, “Organizational Conflict: Concepts and Models,” Administrative Science Quarterly (September 1967), p. 302. 21. See, for instance, R. L. Pinkley, “Dimensions of Conflict Frame: Disputant Interpretations of Conflict,” Journal of Applied Psychology (April 1990), pp. 117–126; and R. L. Pinkley and G. B. Northcraft, “Conflict Frames of Reference: Implications for Dispute Processes and Outcomes,” Academy of Management Journal (February 1994), pp. 193–205. 22. A. M. Isen, A. A. Labroo, and P. Durlach, “An Influence of Product and Brand Name on Positive Affect: Implicit and Explicit Measures,” Motivation & Emotion (March 2004), pp. 43–63. 23. Ibid. 24. P. J. D. Carnevale and A. M. Isen, “The Influence of Positive Affect and Visual Access on the Discovery of Integrative Solutions in Bilateral Negotiations,” Organizational Behavior and Human Decision Processes (February 1986), pp. 1–13. 25. Thomas, “Conflict and Negotiation Processes in Organizations.” 26. Ibid. 27. See R. A. Baron, “Personality and Organizational Conflict: Effects of the Type A Behavior Pattern and Self-monitoring,” Organizational Behavior and Human Decision Processes (October 1989), pp. 281–296; R. J. Volkema and T. J. Bergmann, “Conflict Styles as Indicators of Behavioral Patterns in Interpersonal Conflicts,” Journal of Social Psychology (February 1995), pp. 5–15; and J. A. Rhoades, J. Arnold, and C. Jay, “The Role of Affective Traits and Affective States in Disputants’ Motivation and Behavior During Episodes of Organizational Conflict,” Journal of Organizational Behavior (May 2001), pp. 329–345. 28. Thomas, “Conflict and Negotiation Processes in Organizations.” 29. See, for instance, K. A. Jehn, “Enhancing Effectiveness: An Investigation of Advantages and Disadvantages of Value-Based Intragroup Conflict,” International Journal of Conflict Management (July 1994), pp. 223–238; R. L. Priem, D. A. Harrison, and N. K. Muir, “Structured Conflict and Consensus Outcomes in Group Decision Making,” Journal of Management 21, no. 4 (1995), pp. 691–710; and K. A. Jehn and E. A. Mannix, “The Dynamic Nature of Conflict: A Longitudinal Study of Intragroup Conflict and Group Performance,” Academy of Management Journal (April 2001), pp. 238–251. 30. B. A. Nijstad and S. C. Kaps, “Taking the Easy Way Out: Preference Diversity, Decision Strategies, and Decision Refusal in Groups,” Journal of Personality and Social Psychology 94, no. 5 (2008), pp. 860–870. 476 CHAPTER 14 Conflict and Negotiation 31. R. L. Hoffman, “Homogeneity of Member Personality and Its Effect on Group Problem-Solving,” Journal of Abnormal and Social Psychology (January 1959), pp. 27–32; R. L. Hoffman and N. R. F. Maier, “Quality and Acceptance of Problem Solutions by Members of Homogeneous and Heterogeneous Groups,” Journal of Abnormal and Social Psychology (March 1961), pp. 401–407; and P. Pitcher and A. D. Smith, “Top Management Team Heterogeneity: Personality, Power, and Proxies,” Organization Science (January–February 2001), pp. 1–18. 32. M. E. Zellmer-Bruhn, M. M. Maloney, A. D. Bhappu, and R. Salvador, “When and How Do Differences Matter? An Exploration of Perceived Similarity in Teams,” Organizational Behavior and Human Decision Processes 107, no. 1 (2008), pp. 41–59. 33. See T. H. Cox, S. A. Lobel, and P. L. McLeod, “Effects of Ethnic Group Cultural Differences on Cooperative Behavior on a Group Task,” Academy of Management Journal (December 1991), pp. 827–847; and D. van Knippenberg, C. K. W. De Dreu, and A. C. Homan, “Work Group Diversity and Group Performance: An Integrative Model and Research Agenda,” Journal of Applied Psychology (December 2004), pp. 1008–1022. 34. For example, see J. A. Wall Jr. and R. R. Callister, “Conflict and Its Management,” Journal of Management 21, no. 3 (1995) pp. 523–526, for evidence supporting the argu- ment that conflict is almost uniformly dysfunctional. See also P. J. Hinds and D. E. Bailey, “Out of Sight, Out of Sync: Understanding Conflict in Distributed Teams,” Organization Science (November–December 2003), pp. 615–632. 35. Jehn, Greer, Levine, and Szulanski, “The Effects of Conflict Types, Dimensions, and Emergent States on Group Outcomes.” 36. Zellmer-Bruhn, Maloney, Bhappu, and Salvador, “When and How Do Differences Matter?” 37. K. B. Dahlin, L. R. Weingart, and P. J. Hinds, “Team Diversity and Information Use,” Academy of Management Journal 48, no. 6 (2005), pp. 1107–1123; and M. J. Pearsall, A. P. J. Ellis, and J. M. Evans, “Unlocking the Effects of Gender Faultlines on Team Creativity: Is Activation the Key?” Journal of Applied Psychology 93, no. 1 (2008), pp. 225–234. 38. M. Geyelin and E. Felsenthal, “Irreconcilable Differences Force Shea & Gould Closure,” The Wall Street Journal (January 31, 1994), p. B1. 39. J. Fried, “I Know You Are, But What Am I?” Inc. (July/August 2010), pp. 39–40. 40. K. J. Behfar, R. S. Peterson, E. A. Mannix, and W. M. K. Trochim, “The Critical Role of Conflict Resolution in Teams: A Close Look at the Links Between Conflict Type, Conflict Management Strategies, and Team Outcomes,” Journal of Applied Psychology 93, no. 1 (2008), pp. 170–188; A. G. Tekleab, N. R. Quigley, and P. E. Tesluk, “A Longitudinal Study of Team Conflict, Conflict Management, Cohesion, and Team Effectiveness,” Group and Organization Management 34, no. 2 (2009), pp. 170–205; and E. Van de Vliert, M. C. Euwema, and S. E. Huismans, “Managing Conflict with a Subordinate or a Superior: Effectiveness of Conglomerated Behavior,” Journal of Applied Psychology 80 (1995), pp. 271–281. 41. A. Somech, H. S. Desivilya, and H. Lidogoster, “Team Conflict Management and Team Effectiveness: The Effects of Task Interdependence and Team Identification,” Journal of Organizational Behavior 30, no. 3 (2009), pp. 359–378. 42. H. R. Markus and S. Kitayama, “Culture and the Self: Implications for Cognition, Emotion, and Motivation,” Psychological Review 98, no. 2 (1991), pp. 224–253; and H. Ren and B. Gray, “Repairing Relationship Conflict: How Violation Types and Culture Influence the Effectiveness of Restoration Rituals,” Academy of Management Review 34, no. 1 (2009), pp. 105–126. 43. M. J. Gelfand, M. Higgins, L. H. Nishii, J. L. Raver, A. Dominguez, F. Murakami, S. Yamaguchi, and M. Toyama, “Culture and Egocentric Perceptions of Fairness in Conflict and Negotiation,” Journal of Applied Psychology (October 2002), pp. 833–845; and Z. Ma, “Chinese Conflict Management Styles and Negotiation Behaviours: An Empirical Test,” International Journal of Cross Cultural Management (April 2007), pp. 101–119. 44. P. P. Fu, X. H. Yan, Y. Li, E. Wang, and S. Peng, “Examining Conflict-Handling Approaches by Chinese Top Management Teams in IT Firms,” International Journal of Conflict Management 19, no. 3 (2008), pp. 188–209. 45. M. H. Bazerman, J. R. Curhan, D. A. Moore, and K. L. Valley, “Negotiation,” Annual Review of Psychology 51 (2000), pp. 279–314. 46. See, for example, D. R. Ames, “Assertiveness Expectancies: How Hard People Push Depends on the Consequences They Predict,” Journal of Personality and Social Psychology 95, no. 6 (2008), pp. 1541–1557; and J. R. Curhan, H. A. Elfenbein, and H. Xu, “What Do People Value When They Negotiate? Mapping the Domain of Subjective Value in Negotiation,” Journal of Personality and Social Psychology 91, no. 3 (2006), pp. 493–512. 47. R. Lewicki, D. Saunders, and B. Barry, Negotiation, 6th ed. (New York: McGraw-Hill/Irwin, 2009). 48. J. C. Magee, A. D. Galinsky, and D. H. Gruenfeld, “Power, Propensity to Negotiate, and Moving First in Competitive Interactions,” Personality and Social Psychology Bulletin (February 2007), pp. 200–212. 49. H. R. Bowles, L. Babcock, and L. Lei, “Social Incentives for Gender Differences in the Propensity to Initiative Negotiations: Sometimes It Does Hurt to Ask,” Organizational Behavior and Human Decision Processes 103 (2007), pp. 84–103. 50. D. A. Moore, “Myopic Prediction, Self-Destructive Secrecy, and the Unexpected Benefits of Revealing Final Deadlines in Negotiation,” Organizational Behavior & Human Decision Processes (July 2004), pp. 125–139. 51. E. Wilson, “The Trouble with Jake,” The New York Times (July 15, 2009), www.nytimes.com . 52. J. R. Curhan, H. A. Elfenbein, and H. Xu, “What Do People Value When They Negotiate? Mapping the Domain of Subjective Value in Negotiation,” Journal of Personality and Social Psychology 91, no. 3 (2006), pp. 493–512. 53. Thomas, “Conflict and Negotiation Processes in Organizations.” 54. P. M. Morgan and R. S. Tindale, “Group vs. Individual Performance in Mixed-Motive Situations: Exploring an Inconsistency,” Organizational Behavior & Human Decision Processes (January 2002), pp. 44–65. www.nytimes.com Endnotes 477 55. C. E. Naquin, “The Agony of Opportunity in Negotiation: Number of Negotiable Issues, Counterfactual Thinking, and Feelings of Satisfaction,” Organizational Behavior & Human Decision Processes (May 2003), pp. 97–107. 56. M. Giacomantonio, C. K. W. De Dreu, and L. Mannetti, “Now You See It, Now You Don’t: Interests, Issues, and Psychological Distance in Integrative Negotiation,” Journal of Personality and Social Psychology 98, no. 5 (2010), pp. 761–774. 57. F. S. Ten Velden, B. Beersma, and C. K. W. De Dreu, “It Takes One to Tango: The Effect of Dyads’ Epistemic Motivation Composition in Negotiation,” Personality and Social Psychology Bulletin 36, no. 11 (2010), pp. 1454–1466. 58. C. K. W. De Dreu, L. R. Weingart, and S. Kwon, “Influence of Social Motives on Integrative Negotiation: A Meta-Analytic Review and Test of Two Theories,” Journal of Personality & Social Psychology (May 2000), pp. 889–905. 59. This model is based on R. J. Lewicki, “Bargaining and Negotiation,” Exchange: The Organizational Behavior Teaching Journal 6, no. 2 (1981), pp. 39–40. 60. J. R. Curhan, H. A. Elfenbein, and G. J. Kilduff, “Getting Off on the Right Foot: Subjective Value Versus Economic Value in Predicting Longitudinal Job Outcomes from Job Offer Negotiations,” Journal of Applied Psychology 94, no. 2 (2009), pp. 524–534. 61. M. H. Bazerman and M. A. Neale, Negotiating Rationally (New York: The Free Press, 1992), pp. 67–68. 62. R. P. Larrick and G. Wu, “Claiming a Large Slice of a Small Pie: Asymmetric Disconfirmation in Negotiation,” Journal of Personality and Social Psychology 93, no. 2 (2007), pp. 212–233. 63. E. T. Amanatullah, M. W. Morris, and J. R. Curhan, “Negotiators Who Give Too Much: Unmitigated Communion, Relational Anxieties, and Economic Costs in Distributive and Integrative Bargaining,” Journal of Personality and Social Psychology 95, no. 3 (2008), pp. 723–738; and D. S. DeRue, D. E. Conlon, H. Moon, and H. W. Willaby, “When Is Straightforwardness a Liability in Negotiations? The Role of Integrative Potential and Structural Power,” Journal of Applied Psychology 94, no. 4 (2009), pp. 1032–1047. 64. B. Barry and R. A. Friedman, “Bargainer Characteristics in Distributive and Integrative Negotiation,” Journal of Personality & Social Psychology (February 1998), pp. 345–359. 65. L. J. Kray and M. P. Haselhuhn, “Implicit Negotiations Beliefs and Performance: Experimental and Longitudinal Evidence,” Journal of Personality and Social Psychology 93, no. 1 (2007), pp. 49–64. 66. G. A. Gan Kleef and S. Côté, “Expressing Anger in Conflict: When It Helps and When It Hurts,” Journal of Applied Psychology 92, no. 6 (2007), pp. 1157–1569; J. M. Brett, M. Olekalns, R. Friedman, N. Goates, C. Anderson, C. C. Lisco, “Sticks and Stones: Language, Face, and Online Dispute Resolution,” Academy of Management Journal 50, no. 1 (2007), pp. 85–99; and J. R. Overbeck, M. A. Neale, and C. L. Govan, “I Feel, Therefore You Act: Intrapersonal and Interpersonal Effects of Emotion on Negotiations as a Function of Social Power,” Organizational Behavior and Human Decision Processes 112, no. 2 (2010), pp. 126–139. 67. G. A. Van Kleef and C. K. W. De Dreu, “Longer-Term Consequences of Anger Expression in Negotiation: Retaliation or Spillover?” Journal of Experimental Social Psychology 46, no. 5 (2010), pp. 753–760. 68. M. Olekalns and P. L Smith, “Mutually Dependent: Power, Trust, Affect, and the Use of Deception in Negotiation,” Journal of Business Ethics 85, no. 3 (2009), pp. 347–365. 69. A. W. Brooks and M. E. Schweitzer, “Can Nervous Nellie Negotiate? How Anxiety Causes Negotiators to Make Low First Offers, Exit Early, and Earn Less Profit,” Organizational Behavior and Human Decision Processes 115, no. 1 (2011), pp. 43–54. 70. S. Kopelman, A. S. Rosette, and L. Thompson, “The Three Faces of Eve: Strategic Displays of Positive, Negative, and Neutral Emotions in Negotiations,” Organizational Behavior and Human Decision Processes 99 (2006), pp. 81–101. 71. W. L. Adair, T. Okumura, and J. M. Brett, “Negotiation Behavior When Cultures Collide: The United States and Japan,” Journal of Applied Psychology (June 2001), pp. 371–385; and W. L. Adair, L. Weingart, and J. Brett, “The Timing and Function of Offers in U.S. and Japanese Negotiations,” Journal of Applied Psychology 92, no. 4 (2007), pp. 1056–1068. 72. S. Kopelman, “The Effect of Culture and Power on Cooperation in Commons Dilemmas: Implications for Global Resource Management,” Organizational Behavior and Human Decision Processes 108, no. 1 (2009), pp. 153–163. 73. B. C. Gunia, J. M. Brett, A. K. Nandkeolyar, and D. Kamdar, “Paying a Price: Culture, Trust, and Negotiation Consequences,” Journal of Applied Psychology 96, no. 4 (2010), pp. 774–789. 74. C. Watson and L. R. Hoffman, “Managers as Negotiators: A Test of Power Versus Gender as Predictors of Feelings, Behavior, and Outcomes,” Leadership Quarterly (Spring 1996), pp. 63–85. 75. A. E. Walters, A. F. Stuhlmacher, and L. L. Meyer, “Gender and Negotiator Competitiveness: A Meta-Analysis,” Organizational Behavior and Human Decision Processes (October 1998), pp. 1–29; and A. F. Stuhlmacher and A. E. Walters, “Gender Differences in Negotiation Outcome: A Meta- Analysis,” Personnel Psychology (Autumn 1999), pp. 653–677. 76. Stuhlmacher and Walters, “Gender Differences in Negotiation Outcome,” p. 655. 77. Bowles, Babcock, and Lei, “Social Incentives for Gender Differences in the Propensity to Initiative Negotiations.” 78. L. J. Kray, A. D. Galinsky, and L. Thompson, “Reversing the Gender Gap in Negotiations: An Exploration of Stereotype Regeneration,” Organizational Behavior & Human Decision Processes (March 2002), pp. 386–409. 79. D. A. Small, M. Gelfand, L. Babcock, and H. Gettman, “Who Goes to the Bargaining Table? The Influence of Gender and Framing on the Initiation of Negotiation,” Journal of Personality and Social Psychology 93, no. 4 (2007), pp. 600–613. 80. E. T. Amanatullah and M. W. Morris, “Negotiating Gender Roles: Gender Differences in Assertive Negotiating Are Mediated by Women’s Fear of Backlash and Attenuated When Negotiating on Behalf of Others,” Journal of Personality and Social Psychology 98, no. 2 (2010), pp. 256–267. 81. K. W. Thomas, “Toward Multidimensional Values in Teaching: The Example of Conflict Behaviors,” Academy of Management Review (July 1977), p. 487. DISMANTLING A BUREAUCRACY 478 T hough at one time it was the largest, most successful, and most admired company in the world, today General Motors (GM) serves as a reminder to many of a staid company caught in a bureaucratic struc- ture and culture of mediocrity that it created. The reasons for GM’s decline into bankruptcy are many. The company was heavily unionized and negotiated uncompetitive wage and pension struc- tures for its union members. It was caught off-guard by the rise of Japanese automakers and their emphasis on quality. It was similarly blindsided by ris- ing fuel costs and the push for fuel-efficient cars. Whenever a shock or in- novation occurred, it seemed GM was poorly prepared and nearly always lagged behind competitors in anticipating, or even reacting to, a rapidly changing environment. As in any story of organizational decline, we can’t trace these missed opportunities to one cause. However, a source as likely as any is GM’s organi- zational structure. That was the point of attack for Terry J. Woychowski. Woychowski is vice president of the Global Vehicle Program Management at GM. He was promoted shortly after GM emerged from bankruptcy in 2009. In thinking strategically about GM and its future, Woychowski kept coming back to GM’s bureaucracy. It led, he felt, to conservative, risk-averse, and ana- lytical reactions rather than to innovative strategic risk taking. “We measured ourselves ten ways from Sunday,” Woychowski says. “But as soon as every- thing is important, nothing is important.” Woychowski was not alone in his perceptions about the stifling effects of GM’s bureaucracy. As far back as 1988, when the firm still dominated the world auto market, a GM senior executive sounded a note of caution about GM’s bureaucracy that fell on deaf ears: “We have not achieved the success that we must because of severe limitations on our organization’s ability to execute in a timely manner.” Woychowski is committed to changing that. In the past, any design al- terations to a car required review by as many as 70 managers, with decisions often taking months and even years to wend their way through the bureau- cracy. An ally of Woychowski, Jon Lauckner, head of Global Product Planning, significantly streamlined that process. Decisions that used to take months now take a few weeks. Other aspects of GM’s structure have been changed. Previously, manag- ers were required to rate their tasks as green, yellow, or red, depending on whether the job had been completed, needed work, or should be frozen un- til a major problem was resolved. Mark Reuss, head of GM’s global engineer- ing group, says, “If you had a red issue and stood up, it was very punitive.” So GM managers developed a risk-averse attitude and carefully sought approval LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Identify the six elements of an organization’s structure. 2 Identify the characteristics of a bureaucracy. 3 Describe a matrix organization. 4 Identify the characteristics of a virtual organization. 5 Show why managers want to create boundaryless organizations. 6 Demonstrate how organizational structures differ, and contrast mechanistic and organic structural models. 7 Analyze the behavioral implications of different organizational designs. MyManagementLab Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com . www.mymanagementlab.com Foundations of Organization Structure 15 Every revolution evaporates and leaves behind only the slime of a new bureaucracy. —Franz Kafka 479Ph ot o: G en er al M ot or s em pl oy ee s ch ee r as th e ni ne -m ill io nt h ve hi cl e ro lls d ow n th e lin e. S ou rc e: P au l M os el ey /M C T/ N ew sc om . 479 480 CHAPTER 15 Foundations of Organization Structure from as many sources as possible before acting. Woychowski, Lauckner, and Reuss are working hard to make GM less bureaucratic, more informal, and less reactive and risk averse. Can GM recover? This is not the first transformation it has attempted. Ironically, Reuss’ father was dismissed as president of GM in a large restructur- ing in 1992. “This is an opportunity my dad never had,” says Reuss. “I don’t want to waste it.” Sources: B. Vlasic, “Culture Shock,” The New York Times (November 13, 2009), pp. BU1, BU4; P. Brown, “According to Bob: How GM Cars Got Better,” AutoWeek (May 23, 2011), downloaded June 30, 2011, from www.autoweek.com/ ; and A. Taylor, “GM vs. Ford: The Hundred-Year War,” Fortune (March 23, 2011), downloaded June 29, 2011, from http://money.cnn.com/ . Structural decisions like the reconfiguration of GM are arguably the most fundamental ones a leader has to make. Before we delve into the elements of an organization’s structure and how they can affect behavior, consider how you might react to one type of organizational structure—the bureaucratic structure—by taking the following self-assessment. S A L SELF-ASSESSMENT LIBRARY Do I Like Bureaucracy? In the Self-Assessment Library (available on CD and online), take assessment IV.F.2 (Do I Like Bureaucracy?) and answer the following questions. 1. Judging from the results, how willing are you to work in a bureaucratic organization? 2. Do you think scores on this measure matter? Why or why not? 3. Do you think people who score very low (or even very high) on this measure should try to adjust their preferences based on where they are working? An organizational structure defines how job tasks are formally divided, grouped, and coordinated. Managers need to address six key elements when they design their organization’s structure: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formal- ization. 1 Exhibit 15-1 presents each of these elements as answers to an impor- tant structural question, and the following sections describe them. Work Specialization Early in the twentieth century, Henry Ford became rich by building automo- biles on an assembly line. Every Ford worker was assigned a specific, repetitive task such as putting on the right-front wheel or installing the right-front door. By dividing jobs into small standardized tasks that could be performed over and over, Ford was able to produce a car every 10 seconds, using employees who had relatively limited skills. 1 Identify the six elements of an organization’s structure. What Is Organizational Structure? www.autoweek.com/ http://money.cnn.com/ What Is Organizational Structure? 481 Ford demonstrated that work can be performed more efficiently if employ- ees are allowed to specialize. Today, we use the term work specialization , or division of labor, to describe the degree to which activities in the organization are subdivided into separate jobs. The essence of work specialization is to divide a job into a number of steps, each completed by a separate individual. In essence, individuals specialize in doing part of an activity rather than the entirety. By the late 1940s, most manufacturing jobs in industrialized countries fea- tured high work specialization. Because not all employees in an organization have the same skills, management saw specialization as a means of making the most efficient use of its employees’ skills and even successfully improving them through repetition. Less time is spent in changing tasks, putting away tools and equipment from a prior step, and getting ready for another. Equally important, it’s easier and less costly to find and train workers to do specific and repetitive tasks, especially in highly sophisticated and complex operations. Could Cessna produce one Citation jet a year if one person had to build the entire plane alone? Not likely! Finally, work specialization increases efficiency and produc- tivity by encouraging the creation of special inventions and machinery. Thus, for much of the first half of the twentieth century, managers viewed work specialization as an unending source of increased productivity. And they were probably right. When specialization was not widely practiced, its intro- duction almost always generated higher productivity. But by the 1960s, it in- creasingly seemed a good thing can be carried too far. Human diseconomies from specialization began to surface in the form of boredom, fatigue, stress, low productivity, poor quality, increased absenteeism, and high turnover, which more than offset the economic advantages (see Exhibit 15-2 ). Managers could increase productivity now by enlarging, rather than narrowing, the scope of job activities. Giving employees a variety of activities to do, allowing them to do a whole and complete job, and putting them into teams with interchange- able skills often achieved significantly higher output, with increased employee satisfaction. The Key Question The Answer Is Provided by 1. To what degree are activities subdivided Work specialization into separate jobs? 2. On what basis will jobs be grouped Departmentalization together? 3. To whom do individuals and groups Chain of command report? 4. How many individuals can a manager Span of control efficiently and effectively direct? 5. Where does decision-making Centralization and decentralization authority lie? 6. To what degree will there be rules and Formalization regulations to direct employees and managers? Key Design Questions and Answers for Designing the Proper Organizational Structure Exhibit 15-1 organizational structure The way in which job tasks are formally divided, grouped, and coordinated. work specialization The degree to which tasks in an organization are subdivided into separate jobs. 482 CHAPTER 15 Foundations of Organization Structure Most managers today recognize the economies specialization provides in certain jobs and the problems when it’s carried too far. High work special- ization helps McDonald’s make and sell hamburgers and fries efficiently and aids medical specialists in most health maintenance organizations. Amazon’s Mechanical Turk program, TopCoder, and others like it have facilitated a new trend in microspecialization in which extremely small pieces of programming, data processing, or evaluation tasks are delegated to a global network of indi- viduals by a program manager who then assembles the results. 2 For example, a manager who has a complex but routine computer program to write might send a request for specific subcomponents of the code to be written and tested by dozens of subcontracted individuals in the network (which spans the entire globe), enabling the project to be completed far more quickly than if a single programmer were writing the parts. This emerging trend suggests there still may be advantages to be had in specialization. Departmentalization Once jobs have been divided through work specialization, they must be grouped so common tasks can be coordinated. The basis by which jobs are grouped is called departmentalization . One of the most popular ways to group activities is by functions performed. A manufacturing manager might organize a plant into engineering, account- ing, manufacturing, personnel, and supply specialists departments. A hospital might have departments devoted to research, surgery, intensive care, account- ing, and so forth. A professional football franchise might have departments en- titled player personnel, ticket sales, and travel and accommodations. The major advantage of this type of functional departmentalization is efficiencies gained from putting like specialists together. We can also departmentalize jobs by the type of product or service the organi- zation produces. Procter & Gamble places each major product—such as Tide, Pampers, Charmin, and Pringles—under an executive who has complete global responsibility for it. The major advantage here is increased accountability for performance, because all activities related to a specific product or service are under the direction of a single manager. When a firm is departmentalized on the basis of geography, or territory, the sales function, for instance, may have western, southern, midwestern, and east- ern regions, each, in effect, a department organized around geography. This form is valuable when an organization’s customers are scattered over a large geographic area and have similar needs based on their location. Economies and Diseconomies of Work Specialization Exhibit 15-2 Im pa ct fro m ec on om ies of sp ec ia liz at io n Impact from human diseconomies (Low) (High)Work specialization P ro d u ct iv it y (High) What Is Organizational Structure? 483 Process departmentalization works for processing customers as well as prod- ucts. If you’ve ever been to a state motor vehicle office to get a driver’s license, you probably went through several departments before receiving your license. In one typical state, applicants go through three steps, each handled by a sepa- rate department: (1) validation by motor vehicles division, (2) processing by the licensing department, and (3) payment collection by the treasury department. A final category of departmentalization uses the particular type of customer the organization seeks to reach. Microsoft, for example, is organized around four customer markets: consumers, large corporations, software developers, and small businesses. Customers in each department have a common set of problems and needs best met by having specialists for each. Chain of Command While the chain of command was once a basic cornerstone in the design of organizations, it has far less importance today. 3 But contemporary managers should still consider its implications. The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. At Microsoft, customer departmen- talization allows the company to better understand customers and respond to their needs. Microsoft is organized by four customer seg- ments: consumers, software devel- opers, small businesses, and large corporations. Products and services the company designs for consumers include Bing, Windows, Windows Phone 7, Xbox 360, and Microsoft retail stores, which give the com- pany direct contact with consumers. This photo shows a boy playing the Kinect for Xbox 360 at a gaming store. Kinect, which has a full-body sensor, allows consumers to play Xbox games without using a con- troller and to interact with games in a real physical sense. So u rc e : A P P h o to /N e ll R e d m o n d . departmentalization The basis by which jobs in an organization are grouped together. chain of command The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. 484 CHAPTER 15 Foundations of Organization Structure We can’t discuss the chain of command without also discussing authority and unity of command. Authority refers to the rights inherent in a managerial posi- tion to give orders and expect them to be obeyed. To facilitate coordination, each managerial position is given a place in the chain of command, and each manager is given a degree of authority in order to meet his or her responsibili- ties. The principle of unity of command helps preserve the concept of an un- broken line of authority. It says a person should have one and only one superior to whom he or she is directly responsible. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several superiors. Times change, and so do the basic tenets of organizational design. A low- level employee today can access information in seconds that was available only to top managers a generation ago. Operating employees are empowered to make decisions previously reserved for management. Add the popularity of self-managed and cross-functional teams and the creation of new structural de- signs that include multiple bosses, and you can see why authority and unity of command hold less relevance. Many organizations still find they can be most productive by enforcing the chain of command. Indeed, one survey of more than 1,000 managers found that 59 percent of them agreed with the statement, “There is an imaginary line in my company’s organizational chart. Strategy is created by people above this line, while strategy is executed by people below the line.” 4 However, this same survey found that buy-in to the organization’s strat- egy by lower-level employees was inhibited by too much reliance on hierarchy for decision making. Span of Control How many employees can a manager efficiently and effectively direct? This question of span of control is important because it largely determines the num- ber of levels and managers an organization has. All things being equal, the wider or larger the span, the more efficient the organization. Assume two organizations each have about 4,100 operative-level employees. One has a uniform span of four and the other a span of eight. As Exhibit  15-3 illustrates, the wider span will have two fewer levels and approximately 800 fewer managers. If the average manager makes $50,000 a year, the wider span will save Contrasting Spans of Control Exhibit 15-3 1 Assuming span of 4 Span of 4: Operatives Managers (Levels 1–6) = 4,096 = 1,365 Span of 8: Operatives Managers (Levels 1–4) O rg an iz at io na lL ev el = 4,096 = 585 Members at each level Assuming span of 8 1 (Highest) 2 3 4 5 6 7 1 8 64 512 4,096 4 16 64 256 1,024 4,096 What Is Organizational Structure? 485 $40 million a year in management salaries! Obviously, wider spans are more ef- ficient in terms of cost. However, at some point when supervisors no longer have time to provide the necessary leadership and support, they reduce effec- tiveness and employee performance suffers. Narrow or small spans have their advocates. By keeping the span of control to five or six employees, a manager can maintain close control. 5 But narrow spans have three major drawbacks. First, they’re expensive because they add lev- els of management. Second, they make vertical communication in the organiza- tion more complex. The added levels of hierarchy slow down decision making and tend to isolate upper management. Third, narrow spans encourage overly tight supervision and discourage employee autonomy. The trend in recent years has been toward wider spans of control. 6 They’re consistent with firms’ efforts to reduce costs, cut overhead, speed decision making, increase flexibility, get closer to customers, and empower employees. However, to ensure performance doesn’t suffer because of these wider spans, organizations have been investing heavily in employee training. Managers rec- ognize they can handle a wider span best when employees know their jobs in- side and out or can turn to co-workers when they have questions. Centralization and Decentralization Centralization refers to the degree to which decision making is concentrated at a single point in the organization. In centralized organizations, top manag- ers make all the decisions, and lower-level managers merely carry out their di- rectives. In organizations at the other extreme, decentralized decision making is pushed down to the managers closest to the action. The concept of centralization includes only formal authority—that is, the rights inherent in a position. An organization characterized by centralization is inherently different structurally from one that’s decentralized. A decentral- ized organization can act more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives. Management efforts to make organizations more flexible and responsive have produced a recent trend toward decentralized decision making by lower- level managers, who are closer to the action and typically have more detailed knowledge about problems than top managers. Sears and JCPenney have given their store managers considerably more discretion in choosing what mer- chandise to stock. This allows those stores to compete more effectively against local merchants. Similarly, when Procter & Gamble empowered small groups of employees to make many decisions about new-product development inde- pendent of the usual hierarchy, it was able to rapidly increase the proportion of new products ready for market. 7 Research investigating a large number of Finnish organizations demonstrates that companies with decentralized re- search and development offices in multiple locations were better at producing innovation than companies that centralized all research and development in a single  office. 8 authority The rights inherent in a managerial position to give orders and to expect the orders to be obeyed. unity of command The idea that a subordinate should have only one superior to whom he or she is directly responsible. centralization The degree to which decision making is concentrated at a single point in an organization. span of control The number of subordinates a manager can efficiently and effectively direct. 486 CHAPTER 15 Foundations of Organization Structure Formalization Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimal amount of discretion over what to do and when and how to do it. Employees can be ex- pected always to handle the same input in exactly the same way, resulting in a consistent and uniform output. There are explicit job descriptions, lots of organizational rules, and clearly defined procedures covering work processes in organizations in which there is high formalization. Where formalization is low, job behaviors are relatively unprogrammed, and employees have a great deal of freedom to exercise discretion in their work. Standardization not only eliminates the possibility of employees engaging in alternative behaviors, but it even removes the need for employees to consider alternatives. The degree of formalization can vary widely between and within organiza- tions. Publishing representatives who call on college professors to inform them of their company’s new publications have a great deal of freedom in their jobs. They have only a general sales pitch, which they tailor as needed, and rules and procedures governing their behavior may be little more than the requirement to submit a weekly sales report and suggestions on what to emphasize about forthcoming titles. At the other extreme, clerical and editorial employees in the same publishing houses may need to be at their desks by 8:00 a.m. and follow a set of precise procedures dictated by management. S A L SELF-ASSESSMENT LIBRARY How Willing Am I to Delegate? In the Self-Assessment Library (available on CD and online), take assessment III.A.2 (How Willing Am I to Delegate?). We now turn to three of the more common organizational designs: the simple structure, the bureaucracy, and the matrix structure. The Simple Structure What do a small retail store, an electronics firm run by a hard-driving entrepre- neur, and an airline’s “war room” in the midst of a pilot’s strike have in com- mon? They probably all use the simple structure . We can think of the simple structure in terms of what it is not rather than what it is. The simple structure is not elaborate. 9 It has a low degree of de- partmentalization, wide spans of control, authority centralized in a single per- son, and little formalization. It is a “flat” organization; it usually has only two or three vertical levels, a loose body of employees, and one individual in whom the decision-making authority is centralized. The simple structure is most widely adopted in small businesses in which the manager and owner are one and the same. Exhibit 15-4 is an organization chart for a retail men’s store owned and managed by Jack Gold. Although he employs five full-time salespeople, a cashier, and extra personnel for weekends and holi- days, Jack “runs the show.” Large companies, in times of crisis, often simplify their structures as a means of focusing their resources. When Anne Mulcahy 2 Identify the characteristics of a bureaucracy. Common Organizational Designs Common Organizational Designs 487 took over Xerox, its product mix and management structure were overly com- plex. She simplified both, cutting corporate overhead by 26 percent. “It’s a case of placing your bets in a few areas” she says. 10 The strength of the simple structure lies in its simplicity. It’s fast, flexible, and inexpensive to operate, and accountability is clear. One major weakness is that it becomes increasingly inadequate as an organization grows, because its low formalization and high centralization tend to create information overload at the top. As size increases, decision making typically becomes slower and can eventually come to a standstill as the single executive tries to continue mak- ing all the decisions. This proves the undoing of many small businesses. If the structure isn’t changed and made more elaborate, the firm often loses momen- tum and can eventually fail. The simple structure’s other weakness is that it’s risky—everything depends on one person. One illness can literally destroy the organization’s information and decision-making center. The Bureaucracy Standardization! That’s the key concept that underlies all bureaucracies. Consider the bank where you keep your checking account; the department store where you buy clothes; or the government offices that collect your taxes, enforce health regulations, or provide local fire protection. They all rely on standardized work processes for coordination and control. The bureaucracy is characterized by highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks grouped into functional departments, centralized authority, narrow spans of control, and de- cision making that follows the chain of command. As the opening quote to this chapter attests, bureaucracy is a dirty word in many people’s minds. However, it does have advantages. Its primary strength is its ability to perform standard- ized activities in a highly efficient manner. Putting like specialties together in functional departments results in economies of scale, minimum duplication of people and equipment, and employees who can speak “the same language” among their peers. Bureaucracies can get by with less talented—and hence less A Simple Structure (Jack Gold’s Men’s Store) Exhibit 15-4 Jack Gold, owner-manager Bob Munson, salesperson Edna Joiner, salesperson Johnny Moore, salesperson Helen Wright, cashier Jerry Plotkin, salesperson Norma Sloman, salesperson formalization The degree to which jobs within an organization are standardized. simple structure An organization structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. bureaucracy An organization structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. 488 CHAPTER 15 Foundations of Organization Structure costly—middle- and lower-level managers because rules and regulations substi- tute for managerial discretion. Standardized operations and high formalization allow decision making to be centralized. There is little need for innovative and experienced decision makers below the level of senior executives. Listen in on a dialogue among four executives in one company: “You know, nothing happens in this place until we produce something,” said the produc- tion executive. “Wrong,” commented the research and development manager. “Nothing happens until we design something!” “What are you talking about?” asked the marketing executive. “Nothing happens here until we sell some- thing!” The exasperated accounting manager responded, “It doesn’t matter what you produce, design, or sell. No one knows what happens until we tally up the results! ” This conversation highlights that bureaucratic specialization can create conflicts in which functional-unit goals override the overall goals of the organization. The other major weakness of a bureaucracy is something we’ve all witnessed: obsessive concern with following the rules. When cases don’t precisely fit the rules, there is no room for modification. The bureaucracy is efficient only as long as employees confront familiar problems with programmed decision rules. The Matrix Structure You’ll find the matrix structure in advertising agencies, aerospace firms, re- search and development laboratories, construction companies, hospitals, government agencies, universities, management consulting firms, and enter- tainment companies. 11 It combines two forms of departmentalization: func- tional and product. Companies that use matrix-like structures include ABB, Boeing, BMW, IBM, and Procter & Gamble. The strength of functional departmentalization is putting like specialists to- gether, which minimizes the number necessary while allowing the pooling and sharing of specialized resources across products. Its major disadvantage is the difficulty of coordinating the tasks of diverse functional specialists on time and within budget. Product departmentalization has exactly the opposite benefits and disadvantages. It facilitates coordination among specialties to achieve on- time completion and meet budget targets. It provides clear responsibility for all 3 Describe a matrix organization. Hospitals benefit from standard- ized work processes and procedures common to a bureaucratic structure because they help employees per- form their jobs efficiently. When faced with financial problems, management at Crouse Hospital in Syracuse, New York, decided that its structure was too bureaucratic and hierarchical. Top managers gath- ered employees from all levels and areas and asked them to find inno- vative solutions needed to improve every aspect of the hospital, from creating a new mission statement to designing new work processes. With more employee involvement, Crouse raised its revenues and qual- ity, provided more community ser- vices, and improved its relationship with employees such as the regis- tered nurse shown here. So u rc e : Sy ra cu se N e w sp a p e rs /H B ra g m a n / T h e I m a g e W o rk s. Common Organizational Designs 489 activities related to a product, but with duplication of activities and costs. The matrix attempts to gain the strengths of each while avoiding their weaknesses. The most obvious structural characteristic of the matrix is that it breaks the unity-of-command concept. Employees in the matrix have two bosses: their functional department managers and their product managers. Exhibit 15-5 shows the matrix form in a college of business administration. The academic departments of accounting, decision and information systems, marketing, and so forth are functional units. Overlaid on them are specific programs (that is, products). Thus, members in a matrix structure have a dual chain of command: to their functional department and to their product groups. A professor of accounting teaching an undergraduate course may report to the director of undergraduate programs as well as to the chairperson of the ac- counting department. The strength of the matrix is its ability to facilitate coordination when the organization has a number of complex and interdependent activities. Direct and frequent contacts between different specialties in the matrix can let in- formation permeate the organization and more quickly reach the people who need it. The matrix reduces “bureaupathologies”—the dual lines of authority reduce people’s tendency to become so busy protecting their little worlds that O ne of the most significant trends in organizational struc- ture is the emergence of truly global organizations with leadership and development functions located all around the world. In organizations that offshore many functions, a central office located in one country sends business processes to facilities in another country, like a U.S. computer company (think of Dell or Apple) that designs computers in California, manufactures all the parts in China, and assembles them in Texas. Such companies are global in the sense that their operations span multiple na- tions, but the central culture of the or- ganization is based in a home country. In a “stateless” corporation, in con- trast, all divisions share a common man- agement culture, and operations are standardized for all locations. Managers are drawn from a variety of national backgrounds and placed wherever their functional expertise will be most valuable. Reckitt Benckiser (maker of Clearasil, Lysol, and Woolite) assigns managers to a variety of global offices to ensure they get a picture of border- spanning trends that might produce in- novations in other countries. As a result, an Italian is running the UK business, an American the German business, an Indian the Chinese operation, and a Dutch executive the U.S. business. Although these international strate- gies may produce advantages like cost savings and centralization of decision making, some observers feel the fu- ture is more likely to belong to truly cosmopolitan organizations that pro- duce and market products and services particular to each country in which they operate. This strategy gives local offices maximal control over their own particular areas and takes the greatest advantage of specialized, local knowl- edge of markets. It’s not yet clear whether it’s better to pursue a strategy based on offshor- ing, stateless corporations, or cosmo- politan organizations, but it’s likely there is no universal best configura- tion. The best structure is likely to de- pend heavily on the type of products and market the company is targeting. Sources: Based on J. Lampel and A.  Bhalla, “Living with Offshoring: The Impact of Offshoring on the Evolution of Organizational Configurations,” Journal of World Business 46, (2011), pp. 346–358; P. Gehmawat, “The Cosmopolitan Corporation,” Harvard Business Review (May 2011), pp. 92–99; and B. Becht, “Building a Company Without Borders,” Harvard Business Review (April 2010), pp. 103–106. glOBalization! The Global Organization matrix structure An organization structure that creates dual lines of authority and combines functional and product departmentalization. 490 CHAPTER 15 Foundations of Organization Structure the organization’s goals become secondary. A matrix also achieves economies of scale and facilitates the allocation of specialists by providing both the best resources and an effective way of ensuring their efficient deployment. The major disadvantages of the matrix lie in the confusion it creates, its tendency to foster power struggles, and the stress it places on individuals. 12 Without the unity-of-command concept, ambiguity about who reports to whom is significantly increased and often leads to conflict. It’s not unusual for product managers to fight over getting the best specialists assigned to their products. Bureaucracy reduces the potential for power grabs by defining the rules of the game. When those rules are “up for grabs” in a matrix, power struggles between functional and product managers result. For individuals who desire security and absence from ambiguity, this work climate can be stressful. Reporting to more than one boss introduces role conflict, and unclear expectations intro- duce role ambiguity. The comfort of bureaucracy’s predictability is replaced by insecurity and stress. Accounting Finance Management Decision and Information Systems Marketing Programs Undergraduate Master’s Ph.D. Research Community Service Executive DevelopmentAcademic Departments Matrix Structure for a College of Business Administration Exhibit 15-5 Senior managers in a number of organizations have been developing new struc- tural options with fewer layers of hierarchy and more emphasis on opening the boundaries of the organization. 13 In this section, we describe two such designs: the virtual organization and the boundaryless organization. We’ll also discuss how efforts to reduce bureaucracy and increase strategic focus have made downsiz- ing routine. The Virtual Organization Why own when you can rent? That question captures the essence of the virtual organization (also sometimes called the network, or modular, organization), typi- cally a small, core organization that outsources its major business functions. 14 In structural terms, the virtual organization is highly centralized, with little or no departmentalization. 4 Identify the characteristics of a virtual organization. New Design Options New Design Options 491 The prototype of the virtual structure is today’s movie-making organization. In Hollywood’s golden era, movies were made by huge, vertically integrated corporations. Studios such as MGM, Warner Brothers, and 20th Century Fox owned large movie lots and employed thousands of full-time specialists—set designers, camera people, film editors, directors, and even actors. Today, most movies are made by a collection of individuals and small companies who come together and make films project by project. 15 This structural form allows each project to be staffed with the talent best suited to its demands, rather than just the people employed by the studio. It minimizes bureaucratic overhead be- cause there is no lasting organization to maintain. And it lessens long-term risks and their costs because there is no long term—a team is assembled for a finite period and then disbanded. Philip Rosedale runs a virtual company called LoveMachine that lets em- ployees send brief electronic messages to one another to acknowledge a job well done that can be then used to facilitate company bonuses. The company has no full-time software development staff—instead, LoveMachine outsources assignments to freelancers who submit bids for projects like debugging software or designing new features. Programmers come from around the world, includ- ing Russia, India, Australia, and the United States. 16 Similarly, Newman’s Own, the food products company founded by Paul Newman, sells hundreds of mil- lions of dollars in food every year yet employs only 28 people. This is possible because it outsources almost everything: manufacturing, procurement, ship- ping, and quality control. Exhibit 15-6 shows a virtual organization in which management outsources all the primary functions of the business. The core of the organization is a small group of executives whose job is to oversee directly any activities done in-house and to coordinate relationships with the other organizations that manufac- ture, distribute, and perform other crucial functions for the virtual organiza- tion. The dotted lines represent the relationships typically maintained under virtual organization A small, core organization that outsources major business functions. A Virtual Organization Exhibit 15-6 Advertising agency Factories in South Korea Executive group Commissioned sales representatives Independent research and development consulting firm 492 CHAPTER 15 Foundations of Organization Structure contracts. In essence, managers in virtual structures spend most of their time coordinating and controlling external relations, typically by way of computer network links. The major advantage of the virtual organization is its flexibility, which allows individuals with an innovative idea and little money to successfully compete against larger, more established organizations. Virtual organizations also save a great deal of money by eliminating permanent offices and hierarchical roles. 17 Virtual organizations’ drawbacks have become increasingly clear as their popularity has grown. 18 They are in a state of perpetual flux and reorganization, which means roles, goals, and responsibilities are unclear, setting the stage for political behavior. Cultural alignment and shared goals can be lost because of the low degree of interaction among members. Team members who are geo- graphically dispersed and communicate infrequently find it difficult to share in- formation and knowledge, which can limit innovation and slow response time. Ironically, some virtual organizations are less adaptable and innovative than those with well-established communication and collaboration networks. A leadership presence that reinforces the organization’s purpose and facilitates communication is thus especially valuable. The Boundaryless Organization General Electric’s former chairman, Jack Welch, coined the term boundaryless organization to describe what he wanted GE to become: a “family gro- cery store.” 19 That is, in spite of GE’s monstrous size (2010 revenues were $150  billion), Welch wanted to eliminate vertical and horizontal boundaries within it and break down external barriers between the company and its custom- ers and suppliers. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with em- powered teams. Although GE has not yet achieved this boundaryless state—and probably never will—it has made significant progress toward that end. So have other companies, such as Hewlett-Packard, AT&T, Motorola, and 3M. Let’s see what a boundaryless organization looks like and what some firms are doing to make it a reality. 20 By removing vertical boundaries, management flattens the hierarchy and minimizes status and rank. Cross-hierarchical teams (which include 5 Show why managers want to create boundaryless organizations. As a network organization, Boeing outsourced the production of about 70 percent of the components for its new 787 Dreamliner passen- ger jet aircraft. Boeing used some 100 suppliers at more than 100 sites in different countries, including Alenia Aeronautica of Italy to produce the plane’s rear fuselage and Mitsubishi Motors of Japan to create the wings. Although global outsourcing helped Boeing reduce the plane’s development and pro- duction costs, the extreme com- plexities of such a structure was also responsible for delays in bringing the cutting-edge aircraft to market. Shown here is the plane’s assembly line surrounded by rows of workers at their computers as the planes are built at Boeing’s plant in Everett, Washington. So u rc e : R o b e rt S o rb o /R e u te rs /L a n d o v M e d ia . New Design Options 493 top  executives, middle managers, supervisors, and operative employees), par- ticipative decision-making practices, and the use of 360-degree performance appraisals (in which peers and others above and below the employee evalu- ate performance) are examples of what GE is doing to break down vertical boundaries. At Oticon A/S, a $160-million-per-year Danish hearing aid manu- facturer, all traces of hierarchy have disappeared. Everyone works at uniform mobile workstations, and project teams, not functions or departments, coordi- nate work. Functional departments create horizontal boundaries that stifle interaction among functions, product lines, and units. The way to reduce them is to replace functional departments with cross-functional teams and organize activities around processes. Xerox now develops new products through multidisciplinary teams that work on a single process instead of on narrow functional tasks. Some AT&T units prepare annual budgets based not on functions or departments but on processes, such as the maintenance of a worldwide telecommunications network. Another way to lower horizontal barriers is to rotate people through different functional areas using lateral transfers. This approach turns specialists into generalists. When fully operational, the boundaryless organization also breaks down geographic barriers. Today, most large U.S. companies see themselves as global corporations; many, like Coca-Cola and McDonald’s, do as much business overseas as in the United States, and some struggle to incorporate geographic regions into their structure. The boundaryless organization provides one solu- tion because it considers geography more of a tactical, logistical issue than a structural one. In short, the goal is to break down cultural barriers. boundaryless organization An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. BMW Group operates as a bound- aryless organization in designing, developing, and producing its BMW, Rolls-Royce, and Mini cars. The automaker uses virtual tools such as computer-aided design and simula- tion models and a flexible global production network to respond quickly to fluctuations in the market and individual customer prefer- ences. BMW’s boundaryless structure drives innovative ideas by eliminat- ing vertical and horizontal barriers among workers and creating an environment of learning and experi- mentation. From their first day on the job, employees are encouraged to build a network of relationships from all functional areas and across all divisions to speed innovation and problem-solving. So u rc e : E ck e h a rd S ch u lz /A P I m a g e s. 494 CHAPTER 15 Foundations of Organization Structure One way to do so is through strategic alliances. 21 Firms such as NEC Corporation, Boeing, and Apple each have strategic alliances or joint partner- ships with dozens of companies. These alliances blur the distinction between one organization and another as employees work on joint projects. And some companies allow customers to perform functions previously done by manage- ment. Some AT&T units receive bonuses based on customer evaluations of the teams that serve them. Finally, telecommuting is blurring organizational boundaries. The security analyst with Merrill Lynch who does her job from her ranch in Montana or the software designer in Boulder, Colorado, who works for a San Francisco firm are just two of the millions of workers operating out- side the physical boundaries of their employers’ premises. The Leaner Organization: Downsizing The goal of the new organizational forms we’ve described is to improve agility by creating a lean, focused, and flexible organization. Downsizing is a systematic effort to make an organization leaner by closing locations, reducing staff, or selling off business units that don’t add value. The radical shrinking of Chrysler and General Motors in recent years was a case of downsizing to survive, due to loss of market share and changes in consumer demand. Other firms, including Research in Motion (makers of the BlackBerry) and Cisco, downsize to direct all their efforts toward their core competencies. After a series of costly acquisitions, VeriSign decided to divest itself of most of its business units and resume its original focus on e-commerce security and online identity protection. 22 Some companies focus on lean man- agement techniques to reduce bureaucracy and speed decision making. Park Nicollet Health Services in Minneapolis eliminated fixed budgets and pushed managers to reduce costs as part of a transformation to lean production; it was able to save at least $15 million per year 23 and adapt to changes in the health care market much more quickly. Despite the advantages of being a lean organization, the impact of down- sizing on organizational performance has been very controversial. 24 Reducing Foursquare transfers its inputs into outputs by using a location- based mobile platform. The social networking Web site provides a service for consumers and busi- nesses. Founded by Dennis Crowley and Naveen Selvadurai, the service allows people to connect with friends and update their location, and it provides businesses with tools to obtain, engage, and retain customers. Nonroutineness charac- terizes the work of employees at Foursquare, an organic organiza- tion that adapts quickly and flexibly to rapid changes. Foursquare co- founder Selvadurai is shown in this photo presenting an address at an annual digital technology forum in Seoul, South Korea. So u rc e : P a rk J in H e e /X in h u a /P h o to sh o t/ N e w sc o m . 2008 48% 2009 52% 2010 Has your organization implemented layoffs in the last six months? 60 50 40 30 20 10 0 43% 2011 36% Source: Based on E. Frauenheim, “The Thought Police?” Workforce Management (March, 2010), pp. 28-31; “Companies Grapple with Viral Vents,” Workforce Management (December, 2010), p. 6. New Design Options 495 the size of the workforce has an immediately positive outcome in the form of lower wage costs. Companies downsizing to improve strategic focus often see positive effects on stock prices after the announcement. On the other hand, among companies that only cut employees but don’t restructure, profits and stock prices usually decline. Part of the problem is the effect of downsizing on employee attitudes. Those who remain often feel worried about future layoffs and may be less committed to the organization. 25 Stress reactions can lead to in- creased sickness absences, lower concentration on the job, and lower creativity. In companies that don’t invest much in their employees, downsizing can also lead to more voluntary turnover, so vital human capital is lost. The result is a company that is more anemic than lean. Companies can reduce negative impacts by preparing in advance, thus alleviating some employee stress and strengthening support for the new direc- tion. 26 Here are some effective strategies for downsizing. Most are closely linked to the principles for organizational justice we’ve discussed previously: ● Investment. Companies that downsize to focus on core competencies are more effective when they invest in high-involvement work practices afterward. ● Communication. When employers make efforts to discuss downsizing with employees early, employees are less worried about the outcomes and feel the company is taking their perspective into account. ● Participation. Employees worry less if they can participate in the process in some way. Voluntary early-retirement programs or severance packages can help achieve leanness without layoffs. ● Assistance. Severance, extended health care benefits, and job search assistance demonstrate a company cares about its employees and honors their contributions. In short, companies that make themselves lean can be more agile, efficient, and productive—but only if they make cuts carefully and help employees through the process. H OB Poll Downsizing Is Downsizing 496 CHAPTER 15 Foundations of Organization Structure E specially during economic down times, organizations may have to reduce headcount. The negative effects on those who remain are well documented and include increased sickness absence, withdrawal from work tasks, intentions to sue the orga- nization, stress, dissatisfaction, and loss of commitment. Do employers have a responsibility to help cushion the blow of downsiz- ing? While ethicists debate how much organizations should help laid-off em- ployees, they generally agree that firms that can afford to do something probably should. Indeed, this assis- tance can work in the organization’s self-interest, by increasing commit- ment among those who remain and reducing stress and strain for all. Managing layoffs with an eye to the organization’s reputation may also be important for hiring new employees when economic prospects improve. Here are some suggestions to mini- mize the negative impact of downsiz- ing on employees: 1. Managers are often reticent to give out information about future com- pany plans, but research clearly suggests that ample advance warn- ing about downsizing can reduce employee distress. Open commu- nication makes it much easier for employees to plan how they will respond. 2. Deliver the news about layoffs in a compassionate, personal manner. Let employees know face-to-face they are being let go. This can be hard for managers who would rather avoid conflict or angry encounters, but most research suggests employ- ees prefer to find out about a job loss in this manner (as opposed to e-mail). 3. Explore ways to help, such as by providing job search assistance or severance pay. This might not al- ways be financially feasible, but it’s ethically responsible to do ev- erything you can to help departing employees land on their feet. Sources: B. Weinstein, “Downsizing 101” Bloomberg Businessweek (September 12, 2008), www.businessweek.com ; S. Randall, “Attracting Layoff-Wary Millennials,” Workforce Management Online (February 2010), www.workforce.com ; and D.  K. Datta, J. P. Guthrie, D. Basuil, and A. Pandey, “Causes and Effects of Employee Downsizing: A Review and Synthesis,” Journal of Management 36, no. 1 (2010), pp. 281–348. An Ethical Choice Downsizing with a Conscience We’ve described organizational designs ranging from the highly structured bu- reaucracy to the amorphous boundaryless organization. The other designs we discussed exist somewhere in between. Exhibit 15-7 recaps our discussions by presenting two extreme models of organizational design. One we’ll call the mechanistic model . It’s generally syn- onymous with the bureaucracy in that it has highly standardized processes for work, high formalization, and more managerial hierarchy. The other extreme, the organic model , looks a lot like the boundaryless organization. It’s flat, has fewer formal procedures for making decisions, has multiple decision makers, and favors flexible practices. 27 With these two models in mind, let’s ask a few questions: Why are some orga- nizations structured along more mechanistic lines whereas others follow organic characteristics? What forces influence the choice of design? In this section, we present the major causes or determinants of an organization’s structure. 28 Organizational Strategy Because structure is a means to achieve objectives, and objectives derive from the organization’s overall strategy, it’s only logical that structure should fol- low strategy. If management significantly changes the organization’s strategy, 6 Demonstrate how organiza- tional structures differ, and contrast mechanistic and organic structural models. Why Do Structures Differ? www.businessweek.com www.workforce.com Why Do Structures Differ? 497 the structure must change to accommodate. 29 Most current strategy frame- works focus on three strategy dimensions—innovation, cost minimization, and imitation—and the structural design that works best with each. 30 To what degree does an organization introduce major new products or services? An innovation strategy strives to achieve meaningful and unique in- novations. Obviously, not all firms pursue innovation. Apple and 3M do, but conservative retailer Marks & Spencer doesn’t. Innovative firms will use com- petitive pay and benefits to attract top candidates and motivate employees to take risks. Some degree of mechanistic structure can actually benefit innova- tion. Well-developed communication channels, policies for enhancing long- term commitment, and clear channels of authority all may make it easier for rapid changes to occur smoothly. An organization pursuing a cost-minimization strategy tightly controls costs, refrains from incurring unnecessary expenses, and cuts prices in selling a basic product. This describes the strategy pursued by Walmart and the makers of generic or store-label grocery products. Cost-minimizing organizations pursue fewer policies meant to develop commitment among their workforce. Organizations following an imitation strategy try to both minimize risk and maximize opportunity for profit, moving new products or entering new markets only after innovators have proven their viability. Mass-market fashion Mechanistic versus Organic Models Exhibit 15-7 The Organic ModelThe Mechanistic Model High specialization Rigid departmentalization Clear chain of command Narrow spans of control Centralization High formalization Cross-functional teams Cross-hierarchical teams Free flow of information Wide spans of control Decentralization Low formalization • • • • • • • • • • • • mechanistic model A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization. innovation strategy A strategy that emphasizes the introduction of major new products and services. cost-minimization strategy A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting. imitation strategy A strategy that seeks to move into new products or new markets only after their viability has already been proven. organic model A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making. MyManagementLab For an interactive application of this topic, check out this chapter’s simulation activity at www.mymanagementlab.com. www.mymanagementlab.com 498 CHAPTER 15 Foundations of Organization Structure manufacturers that copy designer styles follow this strategy, as do firms such as Hewlett-Packard and Caterpillar. They follow smaller and more innovative com- petitors with superior products, but only after competitors have demonstrated the market is there. Exhibit 15-8 describes the structural option that best matches each strategy. Innovators need the flexibility of the organic structure, whereas cost minimizers seek the efficiency and stability of the mechanistic structure. Imitators combine the two structures. They use a mechanistic structure to maintain tight controls and low costs in their current activities but create organic subunits in which to pursue new undertakings. Organization Size An organization’s size significantly affects its structure. 31 Organizations that employ 2,000 or more people tend to have more specialization, more de- partmentalization, more vertical levels, and more rules and regulations than do small organizations. However, size becomes less important as an organi- zation expands. Why? At around 2,000 employees, an organization is already fairly mechanistic; 500 more employees won’t have much impact. But adding 500  employees to an organization of only 300 is likely to significantly shift it toward a more mechanistic structure. Technology Technology describes the way an organization transfers inputs into outputs. Every organization has at least one technology for converting financial, human, and physical resources into products or services. Ford Motor Company uses an assembly-line process to make its products. Colleges may use a number of in- structional technologies—the ever-popular lecture method, case analysis, the experiential exercise, programmed learning, and online instruction and dis- tance learning. Regardless, organizational structures adapt to their technology. Numerous studies have examined the technology–structure relationship. 32 What differentiates technologies is their degree of routineness. Routine activities are characterized by automated and standardized operations. Examples are injection-mold production of plastic knobs, automated transaction processing of sales transactions, and the printing and binding of this book. Nonroutine activities are customized and require frequent revision and updating. They include furniture restoring, custom shoemaking, genetic research, and the writing and editing of this book. In general, organizations engaged in nonrou- tine activities tend to prefer organic structures, while those performing routine activities prefer mechanistic structures. The Strategy–Structure Relationship Exhibit 15-8 Strategy Structural Option Innovation Organic: A loose structure; low specialization, low formalization, decentralized Cost minimization Mechanistic: Tight control; extensive work specialization, high formalization, high centralization Imitation Mechanistic and organic: Mix of loose with tight properties; tight controls over current activities and looser controls for new undertakings Why Do Structures Differ? 499 Environment An organization’s environment includes outside institutions or forces that can affect its performance, such as suppliers, customers, competitors, government regulatory agencies, and public pressure groups. Dynamic environments create significantly more uncertainty for managers than do static ones. To minimize uncertainty, managers may broaden their structure to sense and respond to threats. For example, most companies, including Pepsi and Southwest Airlines, have added social networking departments to counter negative information posted on blogs. Or companies may form strategic alliances, such as when Microsoft and Yahoo! joined forces to better compete with Google. Any organization’s environment has three dimensions: capacity, volatility, and complexity. 33 Capacity refers to the degree to which the environment can support growth. Rich and growing environments generate excess resources, which can buffer the organization in times of relative scarcity. Volatility describes the degree of instability in the environment. A dynamic environment with a high degree of unpredictable change makes it difficult for management to make accurate predictions. Because information technology changes at such a rapid place, for instance, more organizations’ environments are becoming volatile. Finally, complexity is the degree of heterogeneity and concentration among environmental elements. Simple environments—like the tobacco industry—are homogeneous and concentrated. Environments characterized by heterogeneity and dispersion—like the broadband industry—are complex and diverse, with numerous competitors. These employees of a restaurant in Urumqi, China, stand in formation while attending a meeting before they start their jobs. It’s a common practice in China for employers to gather employees before they begin work to give them a pep talk and instructions for their work day. This daily ritual is acceptable to Chinese employees because power distance is high in China and work- ers are much more accepting of mechanistic structures than those from lower power-distance cultures. Research suggests that a nation’s culture and its employees’ prefer- ence for structure will influence worker performance and satisfaction. So u rc e : Li Z ih e n g / N e w sc o m . technology The way in which an organization transfers its inputs into outputs. environment Institutions or forces outside an organization that potentially affect the organization’s performance. 500 CHAPTER 15 Foundations of Organization Structure Exhibit 15-9 summarizes our definition of the environment along its three dimensions. The arrows indicate movement toward higher uncertainty. Thus, organizations that operate in environments characterized as scarce, dynamic, and complex face the greatest degree of uncertainty because they have high unpredictability, little room for error, and a diverse set of elements in the envi- ronment to monitor constantly. Given this three-dimensional definition of environment, we can offer some general conclusions about environmental uncertainty and structural arrange- ments. The more scarce, dynamic, and complex the environment, the more organic a structure should be. The more abundant, stable, and simple the envi- ronment, the more the mechanistic structure will be preferred. S urprisingly, this st atement appears to be false. Two relatively new ways or- ganizations restructure themselves are outsourcing (moving work to another domestic company) and offshoring (moving work to another country). For example, a Denver-based company that contracts with a call center ven- dor in Cleveland is outsourcing those operations. If the same company de- cides to contact with a call center in Bangalore, India, it is offshoring. Like downsizing, outsourcing and offshoring are restructuring efforts primarily pursued for cost-saving reasons; some companies might un- dertake all three. All result in job loss for the organization. Yet, a recent study of 13,683 U.S. employees (all of whom retained their jobs) suggests that employees react differently to these three re- structuring efforts. Predictably, where downsizing and offshoring occurred, employees reacted negatively, report- ing significantly lower job satisfaction and organizational commitment than in matched organizations where they did not occur. Surprisingly, however, this study found no negative effects of out- sourcing on these attitudes. The authors speculate that employ- ees may view outsourcing less nega- tively because they see it as less of a threat to their jobs. Future research is needed to test this explanation. Sources: C. P. Maertz, J. W. Wiley, C. LeRouge, and M. A. Campion, “Downsizing Effects on Survivors: Layoffs, Offshoring, and Outsourcing,” Industrial Relations 49, no. 2 (2010), pp. 275–285; and L. H. Nishii, D. P. Lepak, and B. Schneider, “Employee Attributions of the ‘Why’ of HR Practices: Their Effects on Employee Attitudes and Behaviors, and Customer Satisfaction,” Personnel Psychology 61, no. 3 (2008), pp. 503–545. Myth or Science? “Employees Resent Outsourcing” Three-Dimensional Model of the Environment Exhibit 15-9 Abundant Stable Dynamic ComplexSimple ce Organizational Designs and Employee Behavior 501 Organizational Designs and Employee Behavior We opened this chapter by implying that an organization’s structure can have significant effects on its members. What might those effects be? A review of the evidence leads to a pretty clear conclusion: you can’t gen- eralize! Not everyone prefers the freedom and flexibility of organic structures. Different factors stand out in different structures as well. In highly formalized, heavily structured, mechanistic organizations, the level of fairness in formal policies and procedures is a very important predictor of satisfaction. In more personal, individually adaptive organic organizations, employees value interper- sonal justice more. 34 Some people are most productive and satisfied when work tasks are standardized and ambiguity minimized—that is, in mechanistic struc- tures. So, any discussion of the effect of organizational design on employee be- havior has to address individual differences. To do so, let’s consider employee preferences for work specialization, span of control, and centralization. 35 The evidence generally indicates that work specialization contributes to higher employee productivity—but at the price of reduced job satisfaction. However, work specialization is not an unending source of higher productivity. Problems start to surface, and productivity begins to suffer, when the human disecono- mies of doing repetitive and narrow tasks overtake the economies of specializa- tion. As the workforce has become more highly educated and desirous of jobs that are intrinsically rewarding, we seem to reach the point at which productiv- ity begins to decline more quickly than in the past. There is still a segment of the workforce that prefers the routine and re- petitiveness of highly specialized jobs. Some individuals want work that makes minimal intellectual demands and provides the security of routine; for them, high work specialization is a source of job satisfaction. The question, of course, is whether they represent 2 percent of the workforce or 52 percent. Given that some self-selection operates in the choice of careers, we might conclude that negative behavioral outcomes from high specialization are most likely to sur- face in professional jobs occupied by individuals with high needs for personal growth and diversity. It is probably safe to say no evidence supports a relationship between span of control and employee satisfaction or performance. Although it is intuitively attractive to argue that large spans might lead to higher employee performance because they provide more distant supervision and more opportunity for per- sonal initiative, the research fails to support this notion. Some people like to be left alone; others prefer the security of a boss who is quickly available at all times. Consistent with several of the contingency theories of leadership dis- cussed in Chapter 12 , we would expect factors such as employees’ experiences and abilities and the degree of structure in their tasks to explain when wide or narrow spans of control are likely to contribute to their performance and job satisfaction. However, some evidence indicates that a manager’s job satisfaction increases as the number of employees supervised increases. We find fairly strong evidence linking centralization and job satisfaction. In general, less centralized organizations have a greater amount of autonomy. And autonomy appears positively related to job satisfaction. But, again, while one employee may value freedom, another may find autonomous environments frustratingly ambiguous. Our conclusion: to maximize employee performance and satisfaction, man- agers must take individual differences, such as experience, personality, and the work task, into account. Culture should factor in, too. 7 Analyze the behavioral implications of different organizational designs. 502 CHAPTER 15 Foundations of Organization Structure We can draw one obvious insight: other things equal, people don’t select employers randomly. They are attracted to, are selected by, and stay with or- ganizations that suit their personal characteristics. 36 Job candidates who prefer predictability are likely to seek out and take employment in mechanistic struc- tures, and those who want autonomy are more likely to end up in an organic structure. Thus, the effect of structure on employee behavior is undoubtedly reduced when the selection process facilitates proper matching of individual characteristics with organizational characteristics. Although research is slim, it does suggest national culture influences the preference for structure. 37 Organizations that operate with people from high power-distance cultures, such as Greece, France, and most of Latin America, find their employees are much more accepting of mechanistic structures than are employees from low power-distance countries. So consider cultural dif- ferences along with individual differences when predicting how structure will affect employee performance and satisfaction. The theme of this chapter is that an organization’s internal structure contrib- utes to explaining and predicting behavior. That is, in addition to individual and group factors, the structural relationships in which people work has a bear- ing on employee attitudes and behavior. What’s the basis for this argument? To the degree that an organization’s structure reduces ambiguity for employees and clarifies concerns such as “What am I supposed to do?” “How am I sup- posed to do it?” “To whom do I report?” and “To whom do I go if I have a problem?” it shapes their attitudes and facilitates and motivates them to higher levels of performance. Exhibit 15-10 summarizes what we’ve discussed. There are a few other take-home messages worth considering: ● Although specialization can bring efficiency, excessive specialization also can breed dissatisfaction and reduced motivation. Summary and Implications for Managers MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Organization Structure: Its Determinants and Outcomes Exhibit 15-10 determines Performance and satisfaction Moderated by individual differences and cultural norms associated with Causes • Strategy • Size • Technology • Environment Structural designs • Mechanistic • Organic www.mymanagementlab.com Summary and Implications for Managers 503 The End of Management POINT COUNTERPOINT T here is no “right size fits all” approach to organizational structure. How flat, informal, and collaborative an organi- zation should be depends on many factors. Let’s consider two cases. People lauded how loosely and informally Warren Buffett structured his investment firm, Berkshire Hathaway. Buffett spends most of his day reading and talking informally “with highly gifted people whom he trusts and who trust him.” This all sounded wonderful until it was discovered Buffett’s CFO and heir apparent David Sokol was on the take. Sokol made $3 million when he successfully lobbied for Berkshire Hathaway to acquire a firm in which he had secretly acquired a significant stake. His insider maneuvers discovered, Sokol was forced to resign. Wouldn’t Buffett have known Sokol was compromised if he supervised more closely or had structures in place to check such “freedom”? It’s hard to argue with Berkshire Hathaway’s past successes, but they don’t prove the company is ideally structured. Berkshire Hathaway is a cautionary example of the perils of a structure that’s too flat and informal. For the benefits of a for- mal, complex structure, look no further than Boeing. Boeing’s 787 “Dreamliner”—built of composite materials and 20 percent more fuel efficient than comparable passenger planes—is one of the most innovative products in the history of aviation and the fastest-selling ever. How was the Dreamliner invented and produced? Through an enormously complex planning, design, engineering, production, and testing process. To build the Dreamliner, Boeing has contracted with 40 different suppliers at 135 sites around the world—a feat it could not accomplish with- out an organizational structure to support it. Boeing’s organiza- tional structure is quite formal, complex, and even bureaucratic. The Dreamliner proves innovation does not need to come from radical organizational structures. M anagement—at least as we know it—is dying. Formal organizational structures are giving way to flatter, less bureaucratic, less formal structures. And that’s a good thing. Today, leaders are celebrated for triumphing over structure rather than for working well within it. Innovative companies like Apple, Google, Facebook, Twitter, and Groupon were born and thrive thanks not to a multilayered bureaucracy but to an inno- vative idea that was creatively executed by a flexible group of people freely collaborating. Management in those companies exists to facilitate, rather than control. Only 100 of today’s Fortune 500 companies existed in 1957. Yet management theory and practice continue to hew to a 1957 mode of thinking. As one future-minded expert noted, “The single biggest reason companies fail is that they overinvest in what is, as opposed to what might be.” How does a traditional, formal, bureaucratic structure foster “what might be” thinking? It doesn’t. Inertia can cause even innovative companies to become bu- reaucratized. Google co-founder Larry Page replaced ex-CEO Eric Schmidt when Page’s “desire to move quickly on ambitious ideas was stifled by company bureaucracy.” Page and co- founder Sergey Brin know traditional, bureaucratic structures are Google’s greatest threats. Some enlightened leaders have learned from their mistakes. Early in his career, says Cristóbal Conde, president and CEO of IT company SunGard, “I was very command-and-control, very top-down. I felt I was smart, and that my decisions would be better.” After some of his best people left because they felt con- strained, Conde decided to flatten and loosen the structure. He says: “A CEO needs to focus more on the platform that enables collaboration. . . . By having technologies that allow people to see what others are doing, share information, collaborate, brag about their successes—that is what flattens the organization.” Sources: A. Bryant, “Structure? The Flatter the Better,” The New York Times (January 17, 2010), p. BU2; A. R. Sorkin, “Delegator in Chief,” The New York Times (April 24, 2011), p. B4; A. Murray, “The End of Management,” The Wall Street Journal (August 21, 2010), p. W3; and A. Efrati and S. Morrison, “Chief Seeks More Agile Google,” The Wall Street Journal (January 22, 2011), pp. B1, B4. 504 CHAPTER 15 Foundations of Organization Structure ● Formal hierarchies offer advantages like unification of mission and goals, while employees in excessively rigid hierarchies can feel they have no power or autonomy. As with specialization, the key is striking the right balance. ● Virtual and boundaryless forms are changing the face of many organiza- tions. Contemporary managers should thoroughly understand their im- plications and recognize advantages and potential pitfalls. ● Organizational downsizing can lead to major cost savings and focus orga- nizations around their core competencies, but it can leave workers dissat- isfied and worried about the future of their jobs. ● When determining an appropriate organizational form, managers will need to consider scarcity, dynamism, and complexity of the environment and balance the organic and mechanistic elements appropriate to their organization’s environment. 1 What are the six key elements that define an organization’s structure? 2 What is a bureaucracy, and how does it differ from a simple structure? 3 What is a matrix organization? 4 What are the characteristics of a virtual organization? 5 How can managers create a boundaryless organization? 6 Why do organizational structures differ, and what is the difference between a mechanistic structure and an organic structure? 7 What are the behavioral implications of different organizational designs? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE Dismantling a Bureaucracy Pre-work In order to understand how to improve an organizational structure, it is important to start with a clear understand- ing of how an organization is currently structured. For this exercise, you will perform research on the college or university you are attending or another organization that your professor identifies. Using the organization’s Web site, find out about different administrative units, pay- ing special attention to different noncore functions like finance, information technology, and human resources. While doing this research, assemble a list of five features that resemble a bureaucracy and five features that you think might be successfully managed by an external partner. Create Groups Your instructor will form you into groups of at least four individuals at the start of class. Assess Bureaucracy Your initial task will be to share your assessments of the features of the organization that seem bureaucratic in nature. What are the common functions that tend to be run in a bureaucratic manner? Try to identify standard- ized work practices that enhance coordination and con- trol. In particular, think of systems of rules, regulations, departments, and offices that have highly specific and specialized roles. Collectively, your team will take about 15 minutes to accomplish this task. Dismantle Bureaucracy To dismantle a bureaucracy, it is important to consider both the advantages and disadvantages of the current sys- tem. Thus, the goal of the second part of the exercise is to employ techniques related to boundaryless and virtual organizations to reduce bureaucracy in a debate format, with one person arguing for why changes can be good, Ethical Dilemma 505 while the other person argues for why changes might be disruptive. The team will start by dividing into two subgroups and will work in these groups independently for about 10 minutes. One member will have the responsibility to identify alternative mechanisms that might be able to replace the current bureaucratic structure while still keeping all the same functions “in-house” by creating a boundaryless organization. How can the organizations get the same results but with a different set of control systems? Another member will identify reasons it might be difficult to transition from a bureaucracy to the system you advocated in point #2. What are the potential sources of resistance to change? These two members should work together to arrive at a consensus for how bureaucracy might be minimized without damaging organizational productivity and efficiency. At the same time, the second group of two individuals will work on a different task. One member will consider how each organization can take on elements of a vir- tual organization as a way to become less bureaucratic. Identify elements of the organization that might be down- sized or outsourced. Another member will identify why “going virtual” might be a bad idea, looking to potential loss of control and poor information exchange as possible obstacles. These two members will arrive at a consensus for how the organization can be made as lean as pos- sible without damaging organizational productivity and efficiency. Finally, all four members of the team will come to- gether to arrive at a consensus for how to limit bureau- cracy by either (1) using new systems that are consistent with a boundaryless organization or (2) using elements of a lean, virtual organization to strip off unnecessary bu- reaucratic layers. This final combination process should take about 10 minutes. Debriefing After each group has come to a consensus for how to limit bureaucracy, the instructor will lead an all-class discussion in which each group will describe its eventual approach to minimizing bureaucracy in its organization. Your instructor will provide additional insight into why it may be difficult to change a bureaucracy, as well as sug- gesting areas where bureaucracy can be effectively limited through either boundarylessness or virtuality. ETHICAL DILEMMA Directing the Directors One critical structural element of most corporations is the board of directors. In principle, chief executives report to the directors. In practice, however, boards do not always function as you might expect. Boards were implicated in many corporate scandals of the past decade—either because they actively condoned unethical behavior or be- cause they turned a blind eye to it. Many also blamed lax board oversight for the financial meltdown and ensuing recession. Business media have called boards “absolutely useless” and “a sham.” One of the keys to reforming board behavior is ensur- ing that boards function independently of the CEO. The Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE) have set guidelines for the independence of directors—who should not be otherwise affiliated with, employed by, or connected to the organiza- tion they direct. The more independent the structure and composition of the board, the better the corporation will be governed, and the more effective it will be. One example of nonindependence came to light in 2010. In addition to $225,000 in cash and deferred stock he was paid to function as a member of Citibank’s board, Robert Joss earned $350,000 in consulting fees for advis- ing the bank on projects “from time to time.” When asked to comment, Joss replied, “I’m comfortable that I can handle that.” Such examples seem egregious violations of indepen- dence in board structures. Yet, evidence on the link be- tween board independence and firm performance is surprisingly weak. One recent review concluded, “There is no evidence of systematic relationships between board composition and corporate financial performance.” Another structural issue is how the roles of the CEO and chairperson are filled—for instance, whether these posi- tions are held by different people. Most argue that for the board to function independently, the roles must be sepa- rate, and Bloomberg Businessweek estimates that 37  percent of the 500 largest U.S. corporations do split them. Yet here, too, the evidence is weak: it doesn’t appear that cor- porations with separate CEOs and chairs perform any bet- ter than those where the CEO and chairperson are one and the same. Questions 1. Do you think Citibank’s consulting arrangement with Robert Joss was unethical? Or is it possible to justify the arrangement? 506 CHAPTER 15 Foundations of Organization Structure CASE INCIDENT 1 Creative Deviance: Bucking the Hierarchy? One of the major functions of an organizational hierarchy is to increase standardization and control for top manag- ers. Using the chain of command, managers can direct the activities of subordinates toward a common purpose. If the right person with a creative vision is in charge of a hierar- chy, the results can be phenomenal. Until Steve Jobs’ regret- table passing in October of 2011, Apple had used a strongly top-down creative process in which most major decisions and innovations flowed directly through Jobs and then were delegated to sub-teams as specific assignments to complete. Then there is creative deviance, in which individuals create extremely successful products despite being told by senior management to stop working on them. The electro- static displays used in more than half of Hewlett-Packard’s instruments, the tape slitter that was one of the most im- portant process innovations in 3M’s history, and Nichia’s development of multi-billion-dollar LED bright lighting technology were all officially rejected by the management hierarchy. In all these cases, an approach like Apple’s would have shut down some of the most successful prod- ucts these companies ever produced. Doing “business as usual” can become such an imperative in a hierarchical organization that new ideas are seen as threats rather than opportunities for development. It’s not immediately apparent why top-down decision making works so well for one highly creative company like Apple, while hierarchy nearly ruined innovations at sev- eral other organizations. It may be that Apple’s structure is actually quite simple, with relatively few layers and a great deal of responsibility placed on each individual for his or her own outcomes. Or it may be that Apple simply had a very unique leader who was able to rise above the conven- tional strictures of a CEO to create a culture of constant innovation. Questions 1. Do you think it’s possible for an organization to deliberately create an “anti-hierarchy” to encourage employees to engage in more acts of creative devi- ance? What steps might a company take to encourage creative deviance? 2. What are the dangers of an approach that encourages creative deviance? 3. Why do you think a company like Apple is able to be creative with a strongly hierarchical structure, whereas other companies find hierarchy limiting? 4. Do you think Apple’s success has been entirely dependent upon Steve Jobs’ role as head of the hierarchy? What are the potential liabilities of a company that is so strongly connected to the decision-making of a single Individual? Sources: C. Mainemelis, “Stealing Fire: Creative Deviance in the Evolution of New Ideas,” Academy of Management Review 35, no. 4 (2010), pp. 558–578; and A. Lashinsky, “Inside Apple,” Fortune (May 23, 2011), pp. 125–134. CASE INCIDENT 2 Siemens’ Simple Structure—Not There is perhaps no tougher task for an executive than to restructure a European organization. Ask former Siemens CEO Klaus Kleinfeld. Siemens—with €76 billion in revenue in financial year 2009/2010, some 405,000 employees, and branches in 190 countries—is one of the largest electronics companies 2. Why do you think board structure doesn’t appear to matter to corporate performance? 3. Do you think the roles of CEO and chairperson of the board of directors should always be separate? Why or why not? Sources: D. R. Dalton and C. M. Dalton, “Integration of Micro and Macro Studies in Governance Research: CEO Duality, Board Composition, and Financial Performance,” Journal of Management 37, no. 2 (2011), pp. 404–411; T. J. Neff and R. Charan, “Separating the CEO and Chairman Roles,” Bloomberg Businessweek (January 15, 2010), downloaded July 5, 2011, from www.businessweek.com/ ; B. Keoun, “Citigroup to Pay Director $350,000 for Weeks of Consulting,” Bloomberg News (May 10, 2010), downloaded July 5, 2011, from www.bloomberg.com/news/ . www.businessweek.com/ www.bloomberg.com/news/ Endnotes 507 in the world. Although the company has long been re- spected for its engineering prowess, it’s also derided for its sluggishness and mechanistic structure. So when Kleinfeld took over as CEO, he sought to restructure the company, making the structure less bureaucratic so decisions are made more quickly. He spun off underperforming busi- nesses and simplified the company’s structure. One of the challenges of transforming European orga- nizations is the customary participation of employees in executive decisions. Half the seats on the Seimens board of directors are allocated to labor representatives. Not surprisingly, labor did not react positively to Kleinfeld’s restructuring efforts, and picket lines became a constant presence outside his corporate offices. In his efforts to speed the restructuring, labor groups alleged, Kleinfeld secretly bankrolled a business-friendly workers’ group to try to undermine Germany’s main industrial union. Due to this and other allegations, Kleinfeld was forced out in June 2007 and replaced by Peter Löscher. Löscher has found the same tensions between inertia and the need for restructuring. Only a month after becoming CEO, he faced the decision whether to spin off the firm’s underper- forming €10 billion auto parts unit, VDO. He had to weigh the forces for stability, which want to protect worker inter- ests, against U.S.-style pressures for financial performance. One of VDO’s possible buyers was a U.S. company, TRW, the controlling interest of which is held by Blackstone, a U.S. private equity firm. German labor representatives scorn such firms as “locusts.” When Löscher decided to sell VDO to German tire giant Continental Corporation, Continental promptly began to downsize and restructure the unit’s operations. Löscher has continued to restructure Siemens. In mid- 2008, he announced elimination of nearly 17,000 jobs worldwide. He also announced plans to consolidate more business units and reorganize the company’s operations geographically. “The speed at which business is changing worldwide has increased considerably, and we’re orienting Siemens accordingly,” Löscher said. Under Löscher, Siemens has experienced its ups and downs. In 2008, its stock price fell 26 percent on the European stock exchange and 31 percent on the New York Stock Exchange. In 2009, however, Siemens’ earn- ings were up 32 percent, despite an ongoing global re- cession, and most indicators suggested 2011 would be an equally profitable year. Though Löscher’s restructuring efforts have gener- ated far less controversy than Kleinfeld’s, that doesn’t mean they went over well with all constituents. Of the 2008 job cuts, Werner Neugebauer, regional director for a union representing many Siemens employees, said, “The planned job cuts are incomprehensible nor acceptable for these reasons, and in this extent, completely exaggerated.” Questions 1. What do Kleinfeld’s efforts at Siemens tell you about the difficulties of restructuring organizations? 2. Why do you think Löscher’s restructuring decisions have generated less controversy than did Kleinfeld’s? 3. Assume a colleague read this case and concluded, “This case proves restructuring efforts do not neces- sarily improve a company’s financial performance.” How would you respond? 4. Do you think a CEO who decides to restructure or downsize a company takes the well-being of employ- ees into account? Should he or she do so? Why or why not? Sources: Based on A. Davidson, “Peter Löscher Makes Siemens Less German,” The Sunday Times (June 29, 2008), business.timesonline.co.uk; M. Esterl and D. Crawford, “Siemens CEO Put to Early Test,” The Wall Street Journal (July 23, 2007), p. A8; J. Ewing, “Siemens’ Culture Clash,” BusinessWeek (January 29, 2007), pp. 42–46; and C. C. Williams, “Slimmed-Down Siemens Girds for Growth,” Barron’s (November  29, 2010), pp. 26–27. ENDNOTES 1. See, for instance, R. L. Daft, Organization Theory and Design, 10th ed. (Cincinnati, OH: South-Western Publishing, 2010). 2. T. W. Malone, R. J. Laubacher, and T. Johns, “The Age of Hyperspecialization,” Harvard Business Review (July–August 2011), pp. 56–65. 3. C. Hymowitz, “Managers Suddenly Have to Answer to a Crowd of Bosses,” The Wall Street Journal (August 12, 2003), p. B1. 4. See, for instance, “How Hierarchy Can Hurt Strategy Execution,” Harvard Business Review (July–August 2010), pp. 74–75. 5. See, for instance, J. H. Gittell, “Supervisory Span, Relational Coordination, and Flight Departure Performance: A  Reassessment of Postbureaucracy Theory,” Organization Science (July–August 2001), pp. 468–483. 6. J. Child and R. G. McGrath, “Organizations Unfettered: Organizational Form in an Information-Intensive Economy,” Academy of Management Journal (December 2001), pp. 1135–1148. 7. B. Brown and S. D. Anthony, “How P&G Tripled Its Innovation Success Rate,” Harvard Business Review (June 2011), pp. 64–72. 8. A. Leiponen and C. E. Helfat, “Location, Decentralization, and Knowledge Sources for Innovation,” Organization Science 22, no. 3 (2011), pp. 641–658. 508 CHAPTER 15 Foundations of Organization Structure 9. H. Mintzberg, Structure in Fives: Designing Effective Organizations (Upper Saddle River, NJ: Prentice Hall, 1983), p. 157. 10. W. M. Bulkeley, “Back from the Brink,” The Wall Street Journal (April 24, 2006), pp. B1, B3. 11. L. R. Burns and D. R. Wholey, “Adoption and Abandonment of Matrix Management Programs: Effects of Organizational Characteristics and Interorganizational Networks,” Academy of Management Journal (February 1993), pp. 106–138; J. R. Galbraith, Designing Matrix Organizations that Actually Work: How IBM, Procter & Gamble, and Others Design for Success (San Francisco: Jossey Bass, 2009); and E. Krell, “Managing the Matrix,” HRMagazine (April 2011), pp. 69–71. 12. See, for instance, T. Sy and L. S. D’Annunzio, “Challenges and Strategies of Matrix Organizations: Top-Level and Mid- Level Managers’ Perspectives,” Human Resource Planning 28, no. 1 (2005), pp. 39–48; and T. Sy and S. Cote, “Emotional Intelligence: A Key Ability to Succeed in the Matrix Organization,” Journal of Management Development 23, no. 5 (2004), pp. 437–455. 13. N. Anand and R. L. Daft, “What Is the Right Organization Design?” Organizational Dynamics 36, no. 4 (2007), pp. 329–344. 14. See, for instance, R. E. Miles and C. C. Snow, “The New Network Firm: A Spherical Structure Built on Human Investment Philosophy,” Organizational Dynamics (Spring 1995), pp. 5–18; D. Pescovitz, “The Company Where Everybody’s a Temp,” New York Times Magazine (June 11, 2000), pp. 94–96; B. Hedberg, G. Dahlgren, J. Hansson, and N. Olve, Virtual Organizations and Beyond (New York: Wiley, 2001); N. S. Contractor, S. Wasserman, and K. Faust, “Testing Multitheoretical, Multilevel Hypotheses About Organizational Networks: An Analytic Framework and Empirical Example,” Academy of Management Review 31, no. 3 (2006) pp. 681–703; and Y. Shin, “A Person-Environment Fit Model for Virtual Organizations,” Journal of Management (October 2004), pp. 725–743. 15. J. Bates, “Making Movies and Moving On,” Los Angeles Times (January 19, 1998), p. A1. 16. D. Dahl, “Want a Job? Let the Bidding Begin,” Inc. (March 2011), pp. 94–96. 17. J. Schramm, “At Work in a Virtual World,” HR Magazine (June 2010), p. 152. 18. C. B. Gibson and J. L. Gibbs, “Unpacking the Concept of Virtuality: The Effects of Geographic Dispersion, Electronic Dependence, Dynamic Structure, and National Diversity on Team Innovation,” Administrative Science Quarterly 51, no. 3 (2006), pp. 451–495; H. M. Latapie and V. N. Tran, “Subculture Formation, Evolution, and Conflict Between Regional Teams in Virtual Organizations,” The Business Review (Summer 2007), pp. 189–193; and S. Davenport and U. Daellenbach, “‘Belonging’ to a Virtual Research Center: Exploring the Influence of Social Capital Formation Processes on Member Identification in a Virtual Organization” British Journal of Management 22, no. 1 (2011), pp. 54–76. 19. “GE: Just Your Average Everyday $60 Billion Family Grocery Store,” IndustryWeek (May 2, 1994), pp. 13–18. 20. The following is based on D. D. Davis, “Form, Function and Strategy in Boundaryless Organizations,” in A. Howard (ed.), The Changing Nature of Work (San Francisco: Jossey-Bass, 1995), pp. 112–138; R. L. Cross, A. Yan, and M. R. Louis, “Boundary Activities in ‘Boundaryless’ Organizations: A Case Study of a Transformation to a Team-Based Structure,” Human Relations (June 2000), pp. 841–868; and R. Ashkenas, D. Ulrich, T. Jick, and S. Kerr, The Boundaryless Organization: Breaking the Chains of Organizational Structure , revised and up- dated (San Francisco: Jossey-Bass, 2002). 21. See, for example, U. Wassmer, “Alliance Portfolios: A Review and Research Agenda,” Journal of Management 36, no. 1 (2010), pp 141–171; A. M. Hess and F. T. Rothaemel, “When Are Assets Complementary? Star Scientists, Strategic Alliances, and Innovation in the Pharmaceutical Industry,” Strategic Management Journal 32, no. 8 (2011), pp. 895–909; and J. A. Adegbesan and M. J. Higgins, “The Intra-Alliance Division of Value Created through Collaboration,” Strategic Management Journal 32, no. 2 (2011), pp. 187–211. 22. B. White, “VeriSign to Slim Down, Sharpen Its Focus,” The Wall Street Journal (November 14, 2007), p. A12. 23. S. Player, “Leading the Way to Lean,” Business Finance (May 2007), pp. 13–16. 24. See J. P. Guthrie and D. K. Datta, “Dumb and Dumber: The Impact of Downsizing on Firm Performance as Moderated by Industry Conditions,” Organization Science 19 , no. 1 (2008), pp. 108–123; and K. P. De Meuse, T. J. Bergmann, P. A. Vanderheiden, and C. E. Roraff, “New Evidence Regarding Organizational Downsizing and a Firm’s Financial Performance: A Long-Term Analysis,” Journal of Managerial Issues 16, no. 2 (2004), pp. 155–177. 25. See, for example, C. O. Trevor and A. J. Nyberg, “Keeping Your Headcount When All About You Are Losing Theirs: Downsizing, Voluntary Turnover Rates, and the Moderating Role of HR Practices,” Academy of Management Journal 51, no. 2 (2008), pp. 259–276; T. M. Probst, S. M. Stewart, M. L. Gruys, and B. W. Tierney, “Productivity, Counterproductivity and Creativity: The Ups and Downs of Job Insecurity,” Journal of Occupational and Organizational Psychology 80, no. 3 (2007), pp. 479–497; and C. P. Maertz, J. W. Wiley, C. LeRouge, and M. A. Campion, “Downsizing Effects on Survivors: Layoffs, Offshoring, and Outsourcing,” Industrial Relations 49, no. 2 (2010), pp. 275–285. 26. C. D. Zatzick, and R. D. Iverson, “High-Involvement Management and Workforce Reduction: Competitive Advantage or Disadvantage?” Academy of Management Journal 49, no. 5 (2006), pp. 999–1015; A. Travaglione, and B. Cross, “Diminishing the Social Network in Organizations: Does There Need to Be Such a Phenomenon as ‘Survivor Syndrome’ After Downsizing?” Strategic Change 15, no. 1 (2006), pp. 1–13; and J. D. Kammeyer-Mueller, H. Liao, and R. D. Arvey, “Downsizing and Organizational Performance: A Review of the Literature from a Stakeholder Perspective,” Research in Personnel and Human Resources Management 20 (2001), pp. 269–329. 27. T. Burns and G. M. Stalker, The Management of Innovation (London: Tavistock, 1961); and J. A. Courtright, G. T. Fairhurst, and L. E. Rogers, “Interaction Patterns in Organic and Mechanistic Systems,” Academy of Management Journal (December 1989), pp. 773–802. 28. This analysis is referred to as a contingency approach to orga- nization design. See, for instance, J. M. Pennings, “Structural Endnotes 509 Contingency Theory: A Reappraisal,” in B. M. Staw and L.  L. Cummings (eds.), Research in Organizational Behavior, vol. 14 (Greenwich, CT: JAI Press, 1992), pp. 267–309; J. R. Hollenbeck, H. Moon, A. P. J. Ellis, B. J. West, D. R. Ilgen, L. Sheppard, C. O. L. H. Porter, and J. A. Wagner III, “Structural Contingency Theory and Individual Differences: Examination of External and Internal Person-Team Fit,” Journal of Applied Psychology (June 2002), pp. 599–606; and A. Drach-Zahavy and A. Freund, “Team Effectiveness Under Stress: A Structural Contingency Approach,” Journal of Organizational Behavior 28, no. 4 (2007), pp. 423–450. 29. The strategy–structure thesis was originally proposed in A.  D. Chandler Jr., Strategy and Structure: Chapters in the History of the Industrial Enterprise (Cambridge, MA: MIT Press, 1962).  For an updated analysis, see T. L. Amburgey and T. Dacin, “As the Left Foot Follows the Right? The Dynamics of Strategic and Structural Change,” Academy of Management Journal (December 1994), pp. 1427–1452. 30. See R. E. Miles and C. C. Snow, Organizational Strategy, Structure, and Process (New York: McGraw-Hill, 1978); D. C. Galunic and K. M. Eisenhardt, “Renewing the Strategy– Structure–Performance Paradigm,” in B. M. Staw and L. L. Cummings (eds.), Research in Organizational Behavior, vol. 16 (Greenwich, CT: JAI Press, 1994), pp. 215–255; and S. M. Toh, F. P. Morgeson, and M. A. Campion, “Human Resource Configurations: Investigating Fit with the Organizational Context,” Journal of Applied Psychology 93, no. 4 (2008), pp. 864–882. 31. See, for instance, P. M. Blau and R. A. Schoenherr, The Structure of Organizations (New York: Basic Books, 1971); D. S. Pugh, “The Aston Program of Research: Retrospect and Prospect,” in A. H. Van de Ven and W. F. Joyce (eds.), Perspectives on Organization Design and Behavior (New York: Wiley, 1981), pp. 135–166; R. Z. Gooding and J. A. Wagner III, “A Meta-Analytic Review of the Relationship Between Size and Performance: The Productivity and Efficiency of Organizations and Their Subunits,” Administrative Science Quarterly (December 1985), pp. 462–481; and A. C. Bluedorn, “Pilgrim’s Progress: Trends and Convergence in Research on Organizational Size and Environments,” Journal of Management (Summer 1993), pp. 163–192. 32. See C. Perrow, “A Framework for the Comparative Analysis of Organizations,” American Sociological Review (April 1967), pp. 194–208; J. Hage and M. Aiken, “Routine Technology, Social Structure, and Organizational Goals,” Administrative Science Quarterly (September 1969), pp. 366–377; C. C. Miller, W. H. Glick, Y. Wang, and G. P. Huber, “Understanding Technology-Structure Relationships: Theory Development and Meta-Analytic Theory Testing,” Academy of Management Journal (June 1991), pp. 370–399; and W. D. Sine, H.  Mitsuhashi, and D. A. Kirsch, “Revisiting Burns and Stalker: Formal Structure and New Venture Performance in Emerging Economic Sectors,” Academy of Management Journal 49, no. 1 (2006), pp. 121–132. 33. G. G. Dess and D. W. Beard, “Dimensions of Organizational Task Environments,” Administrative Science Quarterly (March 1984), pp. 52–73; E. A. Gerloff, N. K. Muir, and W. D. Bodensteiner, “Three Components of Perceived Environmental Uncertainty: An Exploratory Analysis of the Effects of Aggregation,” Journal of Management (December 1991), pp. 749–768; and O. Shenkar, N. Aranya, and T. Almor, “Construct Dimensions in the Contingency Model: An Analysis Comparing Metric and Non-metric Multivariate Instruments,” Human Relations (May 1995), pp. 559–580. 34. C. S. Spell and T. J. Arnold, “A Multi-Level Analysis of Organizational Justice and Climate, Structure, and Employee Mental Health,” Journal of Management 33, no. 5 (2007), pp. 724–751; and M. L. Ambrose and M. Schminke, “Organization Structure as a Moderator of the Relationship Between Procedural Justice, Interactional Justice, Perceived Organizational Support, and Supervisory Trust,” Journal of Applied Psychology 88, no. 2 (2003), pp. 295–305. 35. See, for instance, Spell and Arnold, “A Multi-Level Analysis of Organizational Justice Climate, Structure, and Employee Mental Health”; J. D. Shaw and N. Gupta, “Job Complexity, Performance, and Well-Being: When Does Supplies-Values Fit Matter? Personnel Psychology 57, no. 4 (2004), 847–879; and C. Anderson and C. E. Brown, “The Functions and Dysfunctions of Hierarchy,” Research in Organizational Behavior 30 (2010), pp. 55–89. 36. See, for instance, R. E. Ployhart, J. A. Weekley, and K. Baughman, “The Structure and Function of Human Capital Emergence: A Multilevel Examination of the Attraction-Selection-Attrition Model,” Academy of Management Journal 49, no. 4 (2006), pp. 661–677. 37. See, for example, P. R. Harris and R. T. Moran, Managing Cultural Differences, 5th ed. (Houston, TX: Gulf Publishing, 1999). URSULA M. BURNS AND THE CULTURE OF XEROX 510 U rsula M. Burns is not your typical CEO. She is unusually low key, avoiding the limelight many of her fellow CEOs—from Apple’s for- mer CEO Steve Jobs to GE’s Jeffrey Immelt—seem to relish. When asked what first surprised her about being CEO, she mentioned the flood of at- tention. “The accolades I get for doing absolutely nothing are amazing. What have I done?” she asked. “The real story is not Ursula Burns. I just happen to be the person standing up at this point representing Xerox.” We respectfully disagree. Burns is indeed notable as the first African American female CEO of an S&P 100 company. But the real story is the way she is quietly reshaping the culture of the industrial giant. Historically, Xerox was a photocopying company, so successful that its name became a verb. However, in the 1980s and 1990s, as that business model declined, so did Xerox’s profits. When Anne Mulcahy took over Xerox in 2001, some said she won the job no one else wanted. She and Burns planned a bold transformation that included job cuts, but also investing in new technologies. Since Burns took over in 2009, she has pushed forward two major initia- tives. One is product focused: getting Xerox into information technology ser- vices. In 2011, Xerox rolled out Xerox Cloud, a set of business services that includes mobile printing and business process management. Burns’ other initiative is cultural: she thinks Xerox’s culture is getting in its way. Burns wants Xerox’s 130,000 employees to embrace risk-taking, initia- tive, and frankness. “Terminal niceness” is how Burns describes a key tenet of Xerox’s old culture, one she thinks is often counterproductive to growth and innovation. Maybe, says Burns, Xerox needs to function more like a real family. “When we’re in the family, you don’t have to be as nice as when you’re outside of the family,” she says. “I want us to stay civil and kind, but we have to be frank— and the reason we can be frank is because we are all in the same family.” This delicate balance between civility and frankness requires humility. After all, one of the key ways to lead others to be frank is to be honest about your own limits. Burns does that. “I cannot be viewed as the solution to all problems in this company,” she notes. She does not expect perfection in her- self, or in others. “People actually believe that before they come to you that they have to have perfection,” Burns laments. She would much prefer people be honest, open, and decisive. “Decide,” she implores. “Do things.” Burns grew up in a gang-infested area of New York City without a father in her life and credits her mother with raising her aspirations and inspiring her humility. Her mother would often bluntly tell Burns to try to be better. LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Define organizational culture, and describe its common characteristics. 2 Compare the functional and dysfunctional effects of organizational culture on people and the organization. 3 Identify the factors that create and sustain an organization’s culture. 4 Show how culture is transmitted to employees. 5 Demonstrate how an ethical culture can be created. 6 Describe a positive organizational culture. 7 Identify characteristics of a spiritual culture. 8 Show how national culture may affect the way organizational culture is transported to a different country. MyManagementLab Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com. www.mymanagementlab.com Organizational Culture 16 When I hear the word culture, I reach for my Browning. —Hanns Johst 511 Ph ot o: P re si de nt a nd D el eg at ed A dv is or o f X er ox . S ou rc e: S am ue l S an ch ez E l P ai s Ph ot os /N ew sc om . 511 512 CHAPTER 16 Organizational Culture Like every major CEO, Burns is a millionaire. Yet she still shops for groceries. She drives herself to work. She cleans her own house. “Where you are is not who you are,” her mother often told her. Burns appears to have lived that credo. With quiet determination, she’s trying to make Xerox’s culture, in some ways, reflect who she is. Sources: A. Bryant, “We’re Family, So We Can Disagree,” The New York Times (February 21, 2010), pp. BU1, BU9; K. Damore, “Burns: Blazing A New Trail,” CRN (May 23, 2011), downloaded on July 15, 2011, from www.crn.com/ ; and D. Mattioli, “Xerox Makes Push for Faster Services Growth,” The Wall Street Journal (May 11, 2011), downloaded on July 15, 2011, from http://online.wsj.com/ . A strong organizational culture provides stability to an organization. But as the chapter-opening example shows, it’s not for everyone. And for some organizations, it can also be a major barrier to change. In this chapter, we show that every organization has a culture that, depending on its strength, can have a significant influence on the attitudes and behaviors of organization members. First let’s figure out what kind of organizational culture you prefer. Take the self-assessment to find out. S A L SELF-ASSESSMENT LIBRARY What’s the Right Organizational Culture for Me? In the Self-Assessment Library (available on CD and online), take assessment III.B.1 (What’s the Right Organizational Culture for Me?) and answer the follow- ing questions. 1. Judging from your results, do you fit better in a more formal and structured culture or in a more informal and unstructured culture? 2. Did your results surprise you? Why do you think you scored as you did? 3. How might your results affect your career path? An executive once was asked what he thought organizational culture meant. He gave essentially the same answer a U.S. Supreme Court justice once gave in attempting to define pornography: “I can’t define it, but I know it when I see it.” We, however, need a basic definition of organizational culture to better understand the phe- nomenon. In this section we propose one and review several related ideas. A Definition of Organizational Culture Organizational culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations. 1 Seven primary characteristics seem to capture the essence of an organization’s culture: 2 1. Innovation and risk taking. The degree to which employees are encour- aged to be innovative and take risks. 2. Attention to detail. The degree to which employees are expected to exhibit precision, analysis, and attention to detail. 1 Define organizational culture and describe its common characteristics. What Is Organizational Culture? www.crn.com/ http://online.wsj.com/ 3. Outcome orientation. The degree to which management focuses on re- sults or outcomes rather than on the techniques and processes used to achieve them. 4. People orientation. The degree to which management decisions take into consideration the effect of outcomes on people within the organization. 5. Team orientation. The degree to which work activities are organized around teams rather than individuals. 6. Aggressiveness. The degree to which people are aggressive and  competitive rather than easygoing. 7. Stability. The degree to which organizational activities emphasize maintain- ing the status quo in contrast to growth. Each of these characteristics exists on a continuum from low to high. Appraising the organization on them, then, gives a composite picture of its culture and a basis for the shared understanding members have about the organization, how things are done in it, and the way they are supposed to behave. Exhibit 16-1 What Is Organizational Culture? 513 organizational culture A system of shared meaning held by members that distinguishes the organization from other organizations. Organization A This organization is a manufacturing firm. Managers are expected to fully document all deci- sions, and “good managers” are those who can provide detailed data to support their rec- ommendations. Creative decisions that incur significant change or risk are not encouraged. Because managers of failed projects are openly criticized and penalized, managers try not to implement ideas that deviate much from the status quo. One lower-level manager quoted an often-used phrase in the company: “If it ain’t broke, don’t fix it.” There are extensive rules and regulations in this firm that employees are required to fol- low. Managers supervise employees closely to ensure there are no deviations. Management is concerned with high productivity, regardless of the impact on employee morale or turnover. Work activities are designed around individuals. There are distinct departments and lines of authority, and employees are expected to minimize formal contact with other employees outside their functional area or line of command. Performance evaluations and rewards emphasize individual effort, although seniority tends to be the primary factor in the deter- mination of pay raises and promotions. Organization B This organization is also a manufacturing firm. Here, however, management encourages and rewards risk taking and change. Decisions based on intuition are valued as much as those that are well rationalized. Management prides itself on its history of experimenting with new technologies and its success in regularly introducing innovative products. Managers or employees who have a good idea are encouraged to “run with it.” And failures are treated as “learning experiences.” The company prides itself on being market driven and rapidly responsive to the changing needs of its customers. There are few rules and regulations for employees to follow, and supervision is loose because management believes that its employees are hardworking and trustworthy. Management is concerned with high productivity but believes that this comes through treating its people right. The company is proud of its reputation as being a good place to work. Job activities are designed around work teams, and team members are encouraged to interact with people across functions and authority levels. Employees talk positively about the competition between teams. Individuals and teams have goals, and bonuses are based on achievement of these outcomes. Employees are given considerable autonomy in choosing the means by which the goals are attained. Contrasting Organizational Cultures Exhibit 16-1 514 CHAPTER 16 Organizational Culture demonstrates how these characteristics can be mixed to create highly diverse organizations. Other research has conceptualized culture into four different types based on competing values: 3 the collaborative and cohesive clan, the innovative and adaptable adhocracy, the controlled and consistent hierarchy, and the competi- tive and customer focused market. A review of 94 studies found that job attitudes were especially positive in clan-based cultures, innovation was especially strong in market cultures, and financial performance was especially good in market cultures. 4 Although the competing values framework received some support in this review, the authors noted that further theoretical work needs to ensure it is consistent with the actual cultural values found in organizations. Culture Is a Descriptive Term Organizational culture shows how employees perceive the characteristics of an or- ganization’s culture, not whether they like them—that is, it’s a descriptive term. This is important because it differentiates culture from job satisfaction. Research on organizational culture has sought to measure how employees see their organization: Does it encourage teamwork? Does it reward innova- tion? Does it stifle initiative? In contrast, job satisfaction seeks to measure how employees feel about the organization’s expectations, reward practices, and the like. Although the two terms have overlapping characteristics, keep in mind that organizational culture is descriptive, whereas job satisfaction is evaluative. Do Organizations Have Uniform Cultures? Organizational culture represents a common perception the organization’s mem- bers hold. We should therefore expect individuals with different backgrounds or at different levels in the organization to describe its culture in similar terms. 5 That doesn’t mean, however, that there are no subcultures. Most large or- ganizations have a dominant culture and numerous subcultures. 6 A dominant culture expresses the core values a majority of members share and that give the organization its distinct personality. 7 Subcultures tend to develop in large organizations to reflect common problems or experiences members face in the same department or location. The purchasing department can have a subcul- ture that includes the core values of the dominant culture plus additional val- ues unique to members of that department. If organizations were composed only of numerous subcultures, organizational culture as an independent variable would be significantly less powerful. It is the “shared meaning” aspect of culture that makes it such a potent device for guid- ing and shaping behavior. That’s what allows us to say, for example, that the Zappos culture values customer care and dedication over speed and efficiency and to use that information to better understand the behavior of Zappos execu- tives and employees. 8 But subcultures can influence members’ behavior too. Strong versus Weak Cultures It’s possible to differentiate between strong and weak cultures. 9 If most employ- ees (responding to management surveys) have the same opinions about the organization’s mission and values, the culture is strong; if opinions vary widely, the culture is weak. In a strong culture , the organization’s core values are both intensely held and widely shared. 10 The more members who accept the core values and the greater their commitment, the stronger the culture and the greater its influ- ence on member behavior, because the high degree of sharedness and intensity creates a climate of high behavioral control. Nordstrom employees know in no What Is Organizational Culture? 515 uncertain terms what is expected of them, and these expectations go a long way in shaping their behavior. In contrast, Nordstrom competitor Macy’s, which has struggled through an identity crisis, is working to remake its culture. A strong culture should reduce employee turnover because it demonstrates high agreement about what the organization represents. Such unanimity of purpose builds cohesiveness, loyalty, and organizational commitment. These qualities, in turn, lessen employees’ propensity to leave. 11 One study found that the more employees agreed on customer orientation in a service organization, the higher the profitability of the business unit. 12 Another study found that when team managers and team members disagree about perceptions of orga- nizational support, there were more negative moods among team members, and the performance of teams was lower. 13 These negative effects are especially strong when managers believe the organization provides more support than employees think it does. Culture versus Formalization We’ve seen that high formalization creates predictability, orderliness, and con- sistency. A strong culture achieves the same end without the need for written documentation. 14 Therefore, we should view formalization and culture as two dominant culture A culture that expresses the core values that are shared by a majority of the organization’s members. subcultures Minicultures within an organization, typically defined by department designations and geographical separation. strong culture A culture in which the core values are intensely held and widely shared. core values The primary or dominant values that are accepted throughout the organization. A s we have discussed through- out the book, culture can be represented at either the national or the organizational level. Global organizations need to carefully consider the differences in culture across countries to determine which management practices are likely to be most effective with different popula- tions of employees. Recently, social psychologists have begun to explore the difference be- tween “face” and “dignity” national cultures. In a face culture, individuals use information from others in order to determine who they are, allowing themselves to be defined by social opinions. In a dignity culture, on the other hand, individuals are more eager to define themselves based on their own internal judgments and may be more resistant to outside efforts to de- fine them. Although more research is needed to specify which cultures put more emphasis on social face versus personal dignity in self-definition, most has focused on East Asian countries as face cultures and European countries and the United States and Canada as dignity cultures. What are the implications of these differences? Individuals from face cul- tures will be more concerned with the implications of hierarchical judgments on their worth. Thus, organizational cultures in face countries are likely to emphasize roles and titles to give definition to em- ployees and provide them with a secure sense of self. Organizational cultures in dignity countries will be more flexible in providing role definitions, allowing indi- viduals to use self-expression to deter- mine who they are. Sources: Based on Y. Kim, D. Cohen, and W. Au, “The Jury and Abjury of My Peers: The Self in Face and Dignity Cultures,” Journal of Personality and Social Psychology 98, no. 6 (2010), pp. 904–916; and Y. Liao and M. H. Bond, “The Dynamics of Face Loss Following Interpersonal Harm for Chinese and Americans,” Journal of Cross-Cultural Psychology 42, no. 1 (2011), pp. 25–38. glOBalization! Face Culture, Dignity Culture, and Organizational Culture 516 CHAPTER 16 Organizational Culture different roads to a common destination. The stronger an organization’s cul- ture, the less management need be concerned with developing formal rules and regulations to guide employee behavior. Those guides will be internalized in employees when they accept the organization’s culture. Let’s review the role culture performs and whether it can ever be a liability for an organization. Culture’s Functions First, culture has a boundary-defining role: it creates distinctions between one organization and others. Second, it conveys a sense of identity for organization members. Third, culture facilitates commitment to something larger than indi- vidual self-interest. Fourth, it enhances the stability of the social system. Culture is the social glue that helps hold the organization together by providing standards for what employees should say and do. Finally, it is a sense-making and control mechanism that guides and shapes employees’ attitudes and behavior. This last function is of particular interest to us. 15 Culture defines the rules of the game. Today’s trend toward decentralized organizations makes culture more im- portant than ever, but ironically it also makes establishing a strong culture more difficult. When formal authority and control systems are reduced, cul- ture’s shared meaning can point everyone in the same direction. However, em- ployees organized in teams may show greater allegiance to their team and its values than to the organization as a whole. In virtual organizations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult. Strong leadership that communicates frequently about common goals and priorities is especially important in innovative organizations. 16 Individual–organization “fit”—that is, whether the applicant’s or employee’s attitudes and behavior are compatible with the culture—strongly influences who gets a job offer, a favorable performance review, or a promotion. It’s no coincidence that Disney theme park employees appear almost universally at- tractive, clean, and wholesome with bright smiles. The company selects employ- ees who will maintain that image. On the job, a strong culture supported by formal rules and regulations ensures they will act in a relatively uniform and predictable way. Culture Creates Climate If you’ve worked with someone whose positive attitude inspired you to do your best, or with a lackluster team that drained your motivation, you’ve ex- perienced the effects of climate. Organizational climate refers to the shared perceptions organizational members have about their organization and work environment. 17 This aspect of culture is like team spirit at the organizational level. When everyone has the same general feelings about what’s important or how well things are working, the effect of these attitudes will be more than the sum of the individual parts. One meta-analysis found that across dozens of different samples, psychological climate was strongly related to individuals’ level of job satisfaction, involvement, commitment, and motivation. 18 A positive overall workplace climate has been linked to higher customer satisfaction and financial performance as well. 19 2 Compare the functional and dysfunctional effects of organizational culture on people and the organization. What Do Cultures Do? Facebook describes itself as “a cutting-edge technology company, constantly taking on new chal- lenges in the worlds of milliseconds and terabytes.” The vast majority of the company’s employees are under 40 and enjoy the excitement of working in a fast-paced environ- ment with considerable change and ambiguity. Facebook encourages employees to interact in a creative climate that encourages experimen- tation and tolerates conflict and risk. The company fosters a fun- loving, casual, and collegial identity in its employees. So u rc e : Jo n a th a n S p ra g u e /R e d u x. What Do Cultures Do? 517 Dozens of dimensions of climate have been studied, including safety, justice, diversity, and customer service. 20 A person who encounters a positive climate for performance will think about doing a good job more often and will believe others support his or her success. Someone who encounters a positive climate for diversity will feel more comfortable collaborating with co-workers regardless of their demographic background. Climates can interact with one another to produce behavior. For example, a positive climate for worker empowerment can lead to higher levels of performance in organizations that also have a cli- mate for personal accountability. 21 Climate also influences the habits people adopt. If the climate for safety is positive, everyone wears safety gear and follows safety procedures even if individually they wouldn’t normally think very often about being safe—indeed, many studies have shown that a positive safety cli- mate decreases the number of documented injuries on the job. 22 Culture as a Liability Culture can enhance organizational commitment and increase the consistency of employee behavior, clearly benefits to an organization. Culture is valuable to employees too, because it spells out how things are done and what’s important. But we shouldn’t ignore the potentially dysfunctional aspects of culture, espe- cially a strong one, on an organization’s effectiveness. Institutionalization When an organization undergoes institutionalization and becomes institutionalized —that is, it is valued for itself and not for the goods or services it produces—it takes on a life of its own, apart from its founders or members. 23 It doesn’t go out of business even if its original goals are no longer relevant. Acceptable modes of behavior become largely self-evident to members, How Leaders See Their Company’s Culture My company . . . is a meritocracy 59% 41% understands what motivates employees 55% 45% excels at collaboration 49% 51% moves more quickly than our competition 46% 54% Survey of 479 senior managers in Asia, North America, Europe, Latin America, and Africa. OB Poll Note: Survey of 479 senior managers in Asia, North America, Europe, Latin America, and Africa. Source: Based on Global Firms in 2020 (Economist Intelligence Unit, 2010). Downloaded on July 2, 2011, from www.shrm.org/ . organizational climate The shared perceptions organizational members have about their organization and work environment. institutionalization A condition that occurs when an organization takes on a life of its own, apart from any of its members, and acquires immortality. www.shrm.org/ 518 CHAPTER 16 Organizational Culture and although this isn’t entirely negative, it does mean behaviors and habits that should be questioned and analyzed become taken for granted, which can stifle innovation and make maintaining the organization’s culture an end in itself. Barriers to Change Culture is a liability when the shared values don’t agree with those that further the organization’s effectiveness. This is most likely when an organization’s environment is undergoing rapid change, and its entrenched culture may no longer be appropriate. 24 Consistency of behavior, an asset in a stable environment, may then burden the organization and make it difficult to respond to changes. Barriers to Diversity Hiring new employees who differ from the majority in race, age, gender, disability, or other characteristics creates a paradox: 25 man- agement wants to demonstrate support for the differences these employees bring to the workplace, but newcomers who wish to fit in must accept the orga- nization’s core cultural values. Because diverse behaviors and unique strengths are likely to diminish as people attempt to assimilate, strong cultures can be- come liabilities when they effectively eliminate these advantages. A strong cul- ture that condones prejudice, supports bias, or becomes insensitive to people who are different can even undermine formal corporate diversity policies. Barriers to Acquisitions and Mergers Historically, when management looked at acquisition or merger decisions, the key factors were financial advantage and product synergy. In recent years, cultural compatibility has become the primary T his statement is true to a signifi- cant degree. Two studies using different methods for operation- alizing organizational treatment have shown that when employees are treated well, they are likely to treat customers well, but when employees are treated poorly, they treat custom- ers poorly. Thus, a culture that shows positive treatment for employees is likely to create a positive culture for treatment of customers. The first study collected data from 292 managers, 830 employ- ees, and 1,772 bank customers in Japan. The researchers examined whether companies that provided high-performance work practices like service training, information sharing, self-management teams, and em- ployee autonomy had a superior climate for customer service and whether this climate for service was related to higher levels of organiza- tional performance. The employee- benefiting practices did indeed lead to higher performance through a better climate for customer service. The second study looked at “in- ternal service,” the extent to which employees believe their work unit is treated well by the organization as a whole. More than 600 employees of a Caribbean financial services firm de- scribed their internal service, and then quality data were collected from nearly 2,000 customers. The results showed that service climate was more posi- tively related to customer satisfaction when internal service was high, mean- ing that having a positive climate for service leads to higher levels of cus- tomer satisfaction especially when a company provides positive internal service to its employees. Sources: H. Liao, K. Toya, D. Lepak, and Y. Hong, “Do They See Eye to Eye? Management and Employee Perspectives of High-Performance Work Systems and Influence Processes on Service Quality,” Journal of Applied Psychology 94, no. 2 (2009), pp. 371–391; and K. H. Ehrhart, L. A. Witt, B. Schneider, and S. J. Perry, “Service Employees Give as They Get: Internal Service as a Moderator of the Service Climate-Service Outcomes Link,” Journal of Applied Psychology 96, no. 2 (2011), pp. 423–431. Myth or Science? “Employees Treat Customers the Same Way the Organization Treats Them” Creating and Sustaining Culture 519 concern. 26 All things being equal, whether the acquisition actually works seems to have more to do with how well the two organizations’ cultures match up. A survey by consulting firm A. T. Kearney revealed that 58 percent of merg- ers failed to reach their financial goals. 27 As one expert commented, “Mergers have an unusually high failure rate, and it’s always because of people issues”— in other words, conflicting organizational cultures. The $183 billion merger between America Online (AOL) and Time Warner in 2001 was the largest in U.S. corporate history. It was also a disaster. Only 2 years later, the stock had fallen an astounding 90 percent, and the new company reported what was then the largest financial loss in U.S. history. To this day, Time Warner stock— trading around $32 per share in late 2011—remains at a fraction of its former price (around $200 per share before the merger). Culture clash is commonly argued to be one of the causes of AOL Time Warner’s problems. As one expert noted, “In some ways the merger of AOL and Time Warner was like the marriage of a teenager to a middle-aged banker. The cultures were vastly different. There were open collars and jeans at AOL. Time Warner was more buttoned-down.” 28 An organization’s culture doesn’t pop out of thin air, and once established it rarely fades away. What influences the creation of a culture? What reinforces and sustains it once it’s in place? How a Culture Begins An organization’s current customs, traditions, and general way of doing things are largely due to what it has done before and how successful it was in doing it. This leads us to the ultimate source of an organization’s culture: its founders. 29 Free of previous customs or ideologies, founders have a vision of what the orga- nization should be, and the firm’s small size makes it easy to impose that vision on all members. Culture creation occurs in three ways. 30 First, founders hire and keep only employees who think and feel the same way they do. Second, they indoctrinate and socialize these employees to their way of thinking and feeling. And finally, the founders’ own behavior encourages employees to identify with them and internalize their beliefs, values, and assumptions. When the organization suc- ceeds, the founders’ personality becomes embedded in the culture. The fierce, competitive style and disciplined, authoritarian nature of Hyundai, the giant Korean conglomerate, exhibits the same characteristics often used to describe founder Chung Ju-Yung. Other founders with immea- surable impact on their organization’s culture include Bill Gates at Microsoft, Ingvar Kamprad at IKEA, Herb Kelleher at Southwest Airlines, Fred Smith at FedEx, and Richard Branson at the Virgin Group. Keeping a Culture Alive Once a culture is in place, practices within the organization maintain it by giving employees a set of similar experiences. 31 The selection process, performance evaluation criteria, training and development activities, and promotion proce- dures (all discussed in Chapter 17 ) ensure those hired fit in with the culture, reward those who support it, and penalize (or even expel) those who challenge Creating and Sustaining Culture 3 Identify the factors that create and sustain an organization’s culture. MyManagementLab For an interactive application of this topic, check out this chapter’s simulation activity at www.mymanagementlab.com. www.mymanagementlab.com 520 CHAPTER 16 Organizational Culture it. Three forces play a particularly important part in sustaining a culture: selec- tion practices, the actions of top management, and socialization methods. Let’s look at each. Selection The explicit goal of the selection process is to identify and hire indi- viduals with the knowledge, skills, and abilities to perform successfully. The final decision, because it’s significantly influenced by the decision maker’s judgment of how well the candidates will fit into the organization, identifies people whose values are essentially consistent with at least a good portion of the organiza- tion’s. 32 Selection also provides information to applicants. Those who perceive a conflict between their values and those of the organization can remove them- selves from the applicant pool. Selection thus becomes a two-way street, allow- ing employer or applicant to avoid a mismatch and sustaining an organization’s culture by selecting out those who might attack or undermine its core values. W. L. Gore & Associates, the maker of Gore-Tex fabric used in outerwear, prides itself on its democratic culture and teamwork. There are no job titles at Gore, nor bosses or chains of command. All work is done in teams. In Gore’s selection process, teams of employees put job applicants through extensive interviews to ensure they can deal with the level of uncertainty, flexibility, and teamwork that’s normal in Gore plants. Not surprisingly, W. L. Gore appears regularly on Fortune ’s list of “100 Best Companies to Work For” (number 31 in 2011). 33 Top Management The actions of top management also have a major impact on the organization’s culture. 34 Through words and behavior, senior execu- tives establish norms that filter through the organization about, for instance, whether risk taking is desirable, how much freedom managers give employees, what is appropriate dress, and what actions earn pay raises, promotions, and other rewards. The culture of supermarket chain Wegmans—which believes driven, happy, and loyal employees are more eager to help one another and provide exem- plary customer service—is a direct result of the beliefs of the Wegman family. The chain began in 1930 when brothers John and Walter Wegman opened their first grocery store in Rochester, New York. Its focus on fine foods quickly sepa- rated it from other grocers—a focus maintained by the company’s employees, many of whom are hired based on their interest in food. In 1950, Walter’s son Robert became president and added generous employee benefits such as profit sharing and fully paid medical coverage. Now Robert’s son Danny is president, and he has continued the Wegmans tradition of taking care of employees. To date, Wegmans has paid more than $54 million in college scholarships for its employees, both full-time and part-time. Pay is well above market average, mak- ing annual turnover for full-time employees a mere 6 percent, according to the Food Marketing Institute. (The industry average is 24 percent). Wegman’s regularly appears on Fortune ’s list as well (number 3 in 2011). Socialization No matter how good a job the organization does in recruiting and selection, new employees need help adapting to the prevailing culture. That help is socialization . 35 For example, all Marines must go through boot camp, where they prove their commitment and learn the “Marine way.” The consulting firm Booz Allen Hamilton begins its process of bringing new em- ployees onboard even before they start their first day of work. New recruits go to an internal Web portal to learn about the company and engage in some activi- ties that help them understand the culture of the organization. After they start work, they continue to learn about the organization through an ongoing social Tony Hsieh, CEO of Zappos.com , is also the architect of the company’s culture. Hsieh invited all employ- ees to participate in creating ten core values that define the culture of Zappos and serve as the frame- work from which all decisions are made. The core values are: deliver WOW through service; embrace and drive change; create fun and a little weirdness; be adventurous, creative, and open minded; pursue growth and learning; build open and honest relationships with com- munication; build a positive team and family spirit; do more with less; be passionate and determined; and be humble. Hsieh maintains the cul- ture through the company’s hiring process and training programs to ensure that employees are commit- ted to the core values. So u rc e : B ra d S w o n e tz / R e d u x. Creating and Sustaining Culture 521 networking application that links new workers with more established members of the firm and helps ensure that culture is transmitted over time. 36 We can think of socialization as a process with three stages: prearrival, en- counter, and metamorphosis. 37 This process, shown in Exhibit 16-2 , has an impact on the new employee’s work productivity, commitment to the organiza- tion’s objectives, and eventual decision to stay with the organization. The prearrival stage recognizes that each individual arrives with a set of values, attitudes, and expectations about both the work and the organization. One major purpose of a business school, for example, is to socialize business students to the attitudes and behaviors business firms want. Newcomers to high- profile organizations with a strong market position will make their own assump- tions about what it must be like to work there. 38 Most new recruits will expect Nike to be dynamic and exciting, a prestigious law firm to be high in pressure and rewards, and the Marine Corps to require both discipline and courage. No matter how well managers think they can socialize newcomers, however, the most important predictor of future behavior is past behavior. What people know before they join the organization, and how proactive their personality is, are critical predictors of how well they adjust to a new culture. 39 One way to capitalize on prehire characteristics in socialization is to use the selection process to inform prospective employees about the organization as a whole. We’ve also seen how the selection process ensures the inclusion of the “right type”—those who will fit in. “Indeed, the ability of the individual to pre- sent the appropriate face during the selection process determines his ability to move into the organization in the first place. Thus, success depends on the de- gree to which the aspiring member has correctly anticipated the expectations and desires of those in the organization in charge of selection.” 40 On entry into the organization, the new member enters the encounter stage and confronts the possibility that expectations—about the job, co-workers, the boss, and the organization in general—may differ from reality. If expectations were fairly accurate, the encounter stage merely cements earlier perceptions. However, this is often not the case. At the extreme, a new member may become disillusioned enough to resign. Proper recruiting and selection should sig- nificantly reduce that outcome, along with encouraging friendship ties in the socialization A process that adapts employees to the organization’s culture. prearrival stage The period of learning in the socialization process that occurs before a new employee joins the organization. encounter stage The stage in the socialization process in which a new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge. A Socialization Model Exhibit 16-2 Prearrival Encounter Metamorphosis Commitment Socialization process Outcomes Turnover Productivity 522 CHAPTER 16 Organizational Culture organization—newcomers are more committed when friends and co- workers help them “learn the ropes.” 41 Finally, to work out any problems discovered during the encounter stage, the new member changes or goes through the metamorphosis stage . The op- tions presented in Exhibit 16-3 are alternatives designed to bring about the desired metamorphosis. Most research suggests there are two major “bundles” of socialization practices. The more management relies on formal, collective, sequential, fixed, and serial socialization programs and emphasize divestiture, the more likely newcomers’ differences will be stripped away and replaced by standardized predictable behaviors. These institutional practices are common in police departments, fire departments, and other organizations that value rule following and order. Programs that are informal, individual, random, variable, and disjunctive and emphasize investiture are more likely to give newcomers an innovative sense of their role and methods of working. Creative fields, such as research and development, advertising, and filmmaking, rely on these in- dividual practices. Most research suggests high levels of institutional practices encourage person–organization fit and high levels of commitment, whereas in- dividual practices produce more role innovation. 42 The three-part entry socialization process is complete when new members have internalized and accepted the norms of the organization and their work group, are confident in their competence, and feel trusted and valued by their peers. They understand the system—not only their own tasks but the rules, pro- cedures, and informally accepted practices as well. Finally, they know what is expected of them and what criteria will be used to measure and evaluate their work. As Exhibit 16-2 showed, successful metamorphosis should have a positive impact on new employees’ productivity and their commitment to the organiza- tion and reduce their propensity to leave the organization. Formal vs. Informal The more a new employee is segregated from the ongoing work setting and differentiated in some way to make explicit his or her newcomer’s role, the more socialization is formal. Specific orientation and training programs are examples. Informal socialization puts the new employee directly into the job, with little or no special attention. Individual vs. Collective New members can be socialized individually. This describes how it’s done in many professional offices. They can also be grouped together and processed through an identical set of experiences, as in military boot camp. Fixed vs. Variable This refers to the time schedule in which newcomers make the transition from outsider to insider. A fixed schedule establishes standardized stages of transition. This characterizes rotational training programs. It also includes probationary periods, such as the 8- to 10-year “associate” status used by accounting and law firms before deciding on whether or not a candidate is made a partner. Variable schedules give no advance notice of their transition timetable. Variable schedules describe the typical promotion system, in which one is not advanced to the next stage until one is “ready.” Serial vs. Random Serial socialization is characterized by the use of role models who train and encourage the newcomer. Apprenticeship and mentoring programs are examples. In random socialization, role models are deliberately withheld. New employees are left on their own to figure things out. Investiture vs. Divestiture Investiture socialization assumes that the newcomer’s qualities and qualifications are the necessary ingredients for job success, so these qualities and qualifications are confirmed and supported. Divestiture socialization tries to strip away certain characteristics of the recruit. Fraternity and sorority “pledges” go through divestiture socialization to shape them into the proper role. Entry Socialization Options Exhibit 16-3 How Employees Learn Culture 523 Researchers have begun to examine how employee attitudes change during socialization by measuring at several points over the first few months. One study has documented patterns of “honeymoons” and “hangovers” for new workers, showing that the period of initial adjustment is often marked by decreases in job satisfaction as their idealized hopes come into contact with the reality of or- ganizational life. 43 Other research suggests that role conflict and role overload for newcomers rise over time, and that workers with the largest increases in these role problems experience the largest decreases in commitment and sat- isfaction. 44 It may be that the initial adjustment period for newcomers presents increasing demands and difficulties, at least in the short term. Summary: How Cultures Form Exhibit 16-4 summarizes how an organization’s culture is established and sus- tained. The original culture derives from the founder’s philosophy and strongly influences hiring criteria as the firm grows. Top managers’ actions set the gen- eral climate, including what is acceptable behavior and what is not. The way employees are socialized will depend both on the degree of success achieved in matching new employees’ values to those of the organization in the selection process, and on top management’s preference for socialization methods. metamorphosis stage The stage in the socialization process in which a new employee changes and adjusts to the job, work group, and organization. How Organization Cultures Form Exhibit 16-4 Philosophy of organization’s founders Selection criteria Organization culture Socialization Top management How Employees Learn Culture Culture is transmitted to employees in a number of forms, the most potent being stories, rituals, material symbols, and language. Stories When Henry Ford II was chairman of Ford Motor Company, you would have been hard pressed to find a manager who hadn’t heard how he reminded his executives, when they got too arrogant, “It’s my name that’s on the building.” The message was clear: Henry Ford II ran the company. 4 Show how culture is transmitted to employees. 524 CHAPTER 16 Organizational Culture A number of senior Nike executives spend much of their time serving as corporate storytellers. 45 When they tell how co-founder (and Oregon track coach) Bill Bowerman went to his workshop and poured rubber into his wife’s waffle iron to create a better running shoe, they’re talking about Nike’s spirit of innovation. When new hires hear tales of Oregon running star Steve Prefontaine’s battles to make running a professional sport and attain better performance equipment, they learn of Nike’s commitment to helping athletes. Stories such as these circulate through many organizations, anchoring the present in the past and legitimating current practices. They typically include narratives about the organization’s founders, rule breaking, rags-to- riches successes, reductions in the workforce, relocation of employees, reac- tions to past mistakes, and organizational coping. 46 Employees also create their own narratives about how they came to either fit or not fit with the organization during the process of socialization, including first days on the job, early interactions with others, and first impressions of organizational life. 47 Rituals Rituals are repetitive sequences of activities that express and reinforce the key values of the organization—what goals are most important and which people are important and which are expendable. 48 One of the best known rituals is Walmart’s company chant. Begun by the company’s founder, the late Sam Walton, as a way to motivate and unite his workforce, “Gimme a W, gimme an A, gimme an L, gimme a squiggle, give me an M, A, R, T!” has become a ritual that bonds workers and reinforces Walton’s belief in the contribution his employees made to the company’s success. Similar cor- porate chants are used by IBM, Ericsson, Novell, Deutsche Bank, and PricewaterhouseCoopers. 49 Material Symbols Alcoa headquarters doesn’t look like your typical head-office operation. There are few individual offices, even for senior executives. The space is essentially made up of cubicles, common areas, and meeting rooms. This informality con- veys to employees that Alcoa values openness, equality, creativity, and flexibility. Some corporations provide their top executives with chauffeur-driven limou- sines and a corporate jet. Other CEOs drive the company car themselves and travel in the economy section. The layout of corporate headquarters, the types of automobiles top execu- tives are given, and the presence or absence of corporate aircraft are a few ex- amples of material symbols . Others include the size of offices, the elegance of furnishings, executive perks, and attire. 50 These convey to employees who is im- portant, the degree of egalitarianism top management desires, and the kinds of behavior that are appropriate, such as risk taking, conservative, authoritarian, participative, individualistic, or social. Language Many organizations and subunits within them use language to help members identify with the culture, attest to their acceptance of it, and help preserve it. Unique terms describe equipment, officers, key individuals, suppliers, cus- tomers, or products that relate to the business. New employees may at first be overwhelmed by acronyms and jargon, that, once assimilated, act as a common denominator to unite members of a given culture or subculture. Creating an Ethical Organizational Culture 525 rituals Repetitive sequences of activities that express and reinforce the key values of the organization, which goals are most important, which people are important, and which are expendable. material symbols What conveys to employees who is important, the degree of egalitarianism top management desires, and the kinds of behavior that are appropriate. At Sermo, it’s okay for employees to bring their dogs to work and to include them in company meet- ings, as shown in this photo. Sermo is an online community for physi- cians where they can collaborate and improve patient care. Sermo’s culture derives from the com- pany’s founder and CEO Dr. Daniel Palestrant, who wants employees to love coming to work, to be comfortable, to have fun, and to just be themselves in a space that suits them. Sermo’s informal work environment and open office plan conveys to employees that the com- pany values openness, individuality, creativity, and flexibility. So u rc e : M e la n ie S te ts o n F re e m a n /C SM /N e w sc o m . Creating an Ethical Organizational Culture The organizational culture most likely to shape high ethical standards among its members is high in risk tolerance, low to moderate in aggressiveness, and focused on means as well as outcomes. 51 This type of culture takes a long-term perspective and balances the rights of multiple stakeholders, including employ- ees, stockholders, and the community. Managers are supported for taking risks and innovating, discouraged from engaging in unbridled competition, and guided to heed not just to what goals are achieved but also how. If the culture is strong and supports high ethical standards, it should have a very powerful and positive influence on employee behavior. Examples of or- ganizations that have failed to establish proper codes of ethical conduct can be found in the media nearly every day. Some actively deceive customers or clients. Others produce products that harm consumers or the environment, or they harass or discriminate against certain groups of employees. Others are more subtle and cover up or fail to report wrongdoing. The negative consequences of a systematic culture of unethical behavior can be severe and include cus- tomer boycotts, fines, lawsuits, and government regulation of an organization’s practices. 5 Demonstrate how an ethical culture can be created. 526 CHAPTER 16 Organizational Culture What can managers do to create a more ethical culture? They can adhere to the following principles: 52 ● Be a visible role model. Employees will look to the actions of top management as a benchmark for appropriate behavior. Send a positive message. ● Communicate ethical expectations. Minimize ethical ambiguities by sharing an organizational code of ethics that states the organization’s pri- mary values and ethical rules employees must follow. ● Provide ethical training. Set up seminars, workshops, and training pro- grams to reinforce the organization’s standards of conduct, clarify what practices are permissible, and address potential ethical dilemmas. ● Visibly reward ethical acts and punish unethical ones. Appraise manag- ers on how their decisions measure up against the organization’s code of ethics. Review the means as well as the ends. Visibly reward those who act ethically and conspicuously punish those who don’t. ● Provide protective mechanisms. Provide formal mechanisms so employ- ees can discuss ethical dilemmas and report unethical behavior without fear of reprimand. These might include ethical counselors, ombudsmen, or ethical officers. The work of setting a positive ethical climate has to start at the top of the organization. 53 A study of 195 managers demonstrated that when top manage- ment emphasizes strong ethical values, supervisors are more likely to practice ethical leadership. Positive ethical attitudes transfer down to line employees, who show lower levels of deviant behavior and higher levels of cooperation and assistance. A study involving auditors found perceived pressure from organiza- tional leaders to behave unethically was associated with increased intentions to engage in unethical practices. 54 Clearly the wrong type of organizational M uch research has empha- sized how organizations establish ethical principles that employees are supposed to fol- low. More recent work examines how organizations can harness employees’ inherent sense of right and wrong, so employees will speak up when they feel organizational actions are inconsistent with their own ethical principles. Saying organizations should estab- lish a culture for ethical behavior is easy enough, but developing a culture where employees feel empowered to speak up is considerably trickier. Here are a few suggestions: 1. Overcome the silence. Employees who know something is wrong may still fail to speak up because they fear reprisals. Both official and un- official measures must encourage people to bring ethical lapses to the attention of upper management and reward them for doing so. 2. Encourage employees to con- tinually investigate whether their behavior is consistent with organi- zational values. Many ethical lapses are not so much dishonest or mali- cious acts but failure to even recog- nize the moral issue at stake. 3. Develop formal roles for ethical compliance officers, who provide oversight and training to ensure employees are aware of the com- pany’s core values and can discuss ethical behavior in practice. Sources: M. Kaptein, “Ethics Programs and Ethical Culture: A Next Step in Unraveling Their Multi-Faceted Relationship,” Journal of Business Ethics 89, no. 2 (2009), pp. 261–281; P. Verhezen, “Giving Voice in a Culture of Silence. From a Culture of Compliance to a Culture of Integrity,” Journal of Business Ethics 96, no. 2 (2010), pp. 187–206; and M. Kaptein, “From Inaction to External Whistleblowing: The Influence of Ethical Culture of Organizations on Employee Responses to Observed Wrongdoing,” Journal of Business Ethics 98, no. 3 (2011), pp. 513–530. An Ethical Choice Designing a Culture of Ethical Voice Creating a Positive Organizational Culture 527 culture can negatively influence employee ethical behavior. Finally, employees whose ethical values are similar to those of their department are more likely to be promoted, so we can think of ethical culture as flowing from the bottom up as well. 55 Creating a Positive Organizational Culture At first blush, creating a positive culture may sound hopelessly naïve or like a Dilbert-style conspiracy. The one thing that makes us believe this trend is here to stay, however, are signs that management practice and OB research are converging. A positive organizational culture emphasizes building on employee strengths, rewards more than it punishes, and emphasizes individual vitality and growth. 56 Let’s consider each of these areas. Building on Employee Strengths Although a positive organizational culture does not ignore problems, it does emphasize showing workers how they can capitalize on their strengths. As management guru Peter Drucker said, “Most Americans do not know what their strengths are. When you ask them, they look at you with a blank stare, or they respond in terms of subject knowledge, which is the wrong answer.” Wouldn’t it be better to be in an organizational culture that helped you discover your strengths and learn how to make the most of them? Larry Hammond used this approach when you’d least expect it: during his firm’s darkest days. Hammond is CEO of Auglaize Provico, an agribusiness com- pany based in Ohio. In the midst of the firm’s worst financial struggles, when it had to lay off one-quarter of its workforce, Hammond decided to try a different approach. Rather than dwell on what was wrong, he took advantage of what was right. “If you really want to [excel], you have to know yourself—you have to know what you’re good at, and you have to know what you’re not so good at,” says Hammond. With the help of Gallup consultant Barry Conchie, Hammond focused on discovering and using employee strengths and helped the company turn itself around. “You ask Larry [Hammond] what the difference is, and he’ll say that it’s individuals using their natural talents,” says Conchie. 57 Rewarding More Than Punishing Although most organizations are sufficiently focused on extrinsic rewards such as pay and promotions, they often forget about the power of smaller (and cheaper) rewards such as praise. Part of creat- ing a positive organizational culture is “catching employees doing something right.” Many managers withhold praise because they’re afraid employees will coast or because they think praise is not valued. Employees generally don’t ask for praise, and managers usually don’t realize the costs of failing to give it. 6 Describe a positive organizational culture. positive organizational culture A culture that emphasizes building on employee strengths, rewards more than punishes, and emphasizes individual vitality and growth. 528 CHAPTER 16 Organizational Culture Consider El´zbieta Górska-Kolodziejczyk, a plant manager for International Paper’s facility in Kwidzyn, Poland. Employees work in a bleak windowless base- ment. Staffing is roughly one-third its prior level, while production has tripled. These challenges had done in the previous three managers. So when Górska- Kolodziejczyk took over, although she had many ideas about transforming the organization, at the top were recognition and praise. She initially found it dif- ficult to give praise to those who weren’t used to it, especially men. “They were like cement at the beginning,” she said. “Like cement.” Over time, however, she found they valued and even reciprocated praise. One day a department supervi- sor pulled her over to tell her she was doing a good job. “This I do remember, yes,” she said. 58 Emphasizing Vitality and Growth No organization will get the best from em- ployees who see themselves as mere cogs in the machine. A positive culture recognizes the difference between a job and a career. It supports not only what the employee contributes to organizational effectiveness but also how the orga- nization can make the employee more effective—personally and professionally. Although it may take more creativity to encourage employee growth in some types of industries, consider the food industry. At Masterfoods in Belgium, Philippe Lescornez leads a team of employees including Didier Brynaert, who works in Luxembourg, nearly 150 miles away. Brynaert was considered a good sales promoter who was meeting expectations when Lescornez decided Brynaert’s job could be made more important if he were seen less as just an- other sales promoter and more as an expert on the unique features of the Luxembourg market. So Lescornez asked Brynaert for information he could share with the home office. He hoped that by raising Brynaert’s profile in Brussels, he could create in him a greater sense of ownership for his remote sales territory. “I started to communicate much more what he did to other peo- ple [within the company], because there’s quite some distance between the Brussels office and the section he’s working in. So I started to communicate, communicate, communicate. The more I communicated, the more he started to provide material,” says Lescornez. As a result, “Now he’s recognized as the Employees of Pricewaterhouse Coopers work within a posi- tive organizational culture that emphasizes individuals’ vitality and growth. One of the largest global accounting firms, PwC offers employees professional and indi- vidual learning opportunities on the job, at clients’ workplaces, and in formal training programs. PwC’s Learning and Education Group pro- vides access to the latest informa- tion on industry standards and best practices, and offers classes to help employees develop their technical skills. Company coaches and men- tors guide employees in designing a personalized career path. The PwC team, shown here, counts the Oscars ballots for the Academy of Motion Picture Arts and Sciences, a company client for more than 75 years. So u rc e : R e e d S a xo n /A P I m a g e s. Spirituality and Organizational Culture 529 specialist for Luxembourg—the guy who is able to build a strong relationship with the Luxembourg clients,” says Lescornez. What’s good for Brynaert is, of course, also good for Lescornez, who gets credit for helping Brynaert grow and develop. 59 Limits of Positive Culture Is a positive culture a cure-all? Though companies such as GE, Xerox, Boeing, and 3M have embraced aspects of a positive organi- zational culture, it is a new enough idea for us to be uncertain about how and when it works best. Not all cultures value being positive as much as U.S. culture does, and, even within U.S. culture, there surely are limits to how far we should go to preserve a positive culture. For example, Admiral, a British insurance company, has estab- lished a Ministry of Fun in its call centers to organize poem writings, foosball, conker (a British game involving chestnuts), and fancy-dress days. When does the pursuit of a positive culture start to seem coercive or even Orwellian? As one critic notes, “Promoting a social orthodoxy of positiveness focuses on a par- ticular constellation of desirable states and traits but, in so doing, can stigmatize those who fail to fit the template.” 60 There may be benefits to establishing a positive culture, but an organization also needs to be objective and not pursue it past the point of effectiveness. Spirituality and Organizational Culture What do Southwest Airlines, Hewlett-Packard, Ford, The Men’s Wearhouse, Tyson Foods, Wetherill Associates, and Tom’s of Maine have in common? They’re among a growing number of organizations that have embraced work- place spirituality. What Is Spirituality? Workplace spirituality is not about organized religious practices. It’s not about God or theology. Workplace spirituality recognizes that people have an in- ner life that nourishes and is nourished by meaningful work in the context of community. 61 Organizations that promote a spiritual culture recognize that people seek to find meaning and purpose in their work and desire to connect with other human beings as part of a community. Many of the topics we have discussed—ranging from job design (designing work that is meaningful to employees) to transformational leadership (leadership practices that empha- size a higher-order purpose and self-transcendent goals) are well matched to the concept of organizational spirituality. When a company emphasizes its com- mitment to paying Third World suppliers a fair (above-market) price for their coffee to facilitate community development—as did Starbucks—or encourages employees to share prayers or inspirational messages through e-mail—as did Interstate Batteries—it is encouraging a more spiritual culture. 62 workplace spirituality The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community. 530 CHAPTER 16 Organizational Culture Why Spirituality Now? As we noted in our discussion of emotions in Chapter 4 , the myth of rationality assumed the well-run organization eliminated feelings. Concern about an em- ployee’s inner life had no role in the perfectly rational model. But just as we’ve now come to realize that the study of emotions improves our understanding of organizational behavior, an awareness of spirituality can help us better under- stand employee behavior in the twenty-first century. Of course, employees have always had an inner life. So why has the search for meaning and purposefulness in work surfaced now? We summarize the rea- sons in Exhibit 16-5 . Characteristics of a Spiritual Organization The concept of workplace spirituality draws on our previous discussions of values, ethics, motivation, and leadership. What differentiates spiritual orga- nizations from their nonspiritual counterparts? Although research remains Spirituality can counterbalance the pressures and stress of a turbulent pace of life. Contemporary lifestyles—single-parent families, geographic mobility, the temporary nature of jobs, new technologies that create distance between people—underscore the lack of community many people feel and increase the need for involvement and connection. • • Formalized religion hasn’t worked for many people, and they continue to look for anchors to replace lack of faith and to fill a growing feeling of emptiness. • Job demands have made the workplace dominant in many people’s lives, yet they continue to question the meaning of work. • People want to integrate personal life values with their professional life. • An increasing number of people are finding that the pursuit of more material acquisitions leaves them unfulfilled. Reasons for the Growing Interest in Spirituality Exhibit 16-5 Steve Baxter, a Target Corporation employee, tries to comfort a child while serving as a volunteer for Project Homeless Connect, a com- munity program that provides housing, dental, medical, employ- ment, child care, and other services for homeless people and others in need. Baxter and other Target employees are inspired by a strong sense of purpose in showing kind- ness to, promoting the happiness of, and serving customers, fellow workers, and people in the com- munity. Employees experience the joy and satisfaction that comes from helping others by volunteering in social services programs that feed the hungry, prevent family violence, give shelter to the homeless, and provide disaster relief. So u rc e : m 4 2 /Z U M A P re ss /N e w sc o m . Spirituality and Organizational Culture 531 preliminary, several cultural characteristics tend to be evident in spiritual organizations: 63 ● Benevolence. Spiritual organizations value showing kindness toward others and promoting the happiness of employees and other organiza- tional stakeholders. ● Strong sense of purpose. Spiritual organizations build their cultures around a meaningful purpose. Although profits may be important, they’re not the primary value of the organization. ● Trust and respect. Spiritual organizations are characterized by mutual trust, honesty, and openness. Employees are treated with esteem and value, consistent with the dignity of each individual. ● Open-mindedness. Spiritual organizations value flexible thinking and creativity among employees. S A L SELF-ASSESSMENT LIBRARY How Spiritual Am I? In the Self-Assessment Library (available on CD and online), take assessment IV.A.4 (How Spiritual Am I?). Note: People’s scores on this measure vary from time to time, so take that into account when interpreting the results. 7 Identify characteristics of a spiritual culture. Achieving a Spiritual Organization Many organizations have grown interested in spirituality but have had difficulty putting its principles into practice. Several types of practices can facilitate a spiritual workplace, 64 including those that support work–life balance. Leaders can demonstrate values, attitudes, and behaviors that trigger intrinsic motiva- tion and a sense of calling through work. Encouraging employees to consider how their work provides a sense of purpose through community building also can help achieve a spiritual workplace; often this is achieved through group counseling and organizational development, a topic we take up in Chapter 18 . Criticisms of Spirituality Critics of the spirituality movement in organizations have focused on three issues. First is the question of scientific foundation. What really is workplace spirituality? Is it just a new management buzzword? Second, are spiritual or- ganizations legitimate? Specifically, do organizations have the right to impose spiritual values on their employees? Third is the question of economics: are spirituality and profits compatible? First, as you might imagine, there is comparatively little research on workplace spirituality. We don’t know whether the concept will have staying power. Do the cultural characteristics we just identified really separate spiritual organizations? Spirituality has been defined so broadly in some sources that practices from job rotation to corporate retreats at meditation centers have been identified as spiri- tual. Questions need to be answered before the concept gains full credibility. On the second point, an emphasis on spirituality can clearly make some em- ployees uneasy. Critics have argued that secular institutions, especially business firms, have no business imposing spiritual values on employees. 65 This criticism is undoubtedly valid when spirituality is defined as bringing religion and God into the workplace. However, it seems less stinging when the goal is limited to helping employees find meaning and purpose in their work lives. If the con- cerns listed in Exhibit 16-5 truly characterize a large segment of the workforce, then perhaps organizations can do so. 532 CHAPTER 16 Organizational Culture Finally, whether spirituality and profits are compatible objectives is certainly relevant for managers and investors in business. The evidence, although limited, indicates they are. Organizations that provided their employees with opportuni- ties for spiritual development have outperformed those that didn’t. 66 Other stud- ies a report that spirituality in organizations was positively related to creativity, employee satisfaction, job involvement, and organizational commitment. 67 We considered global cultural values (collectivism–individualism, power dis- tance, and so on) in Chapter 5 . Here our focus is a bit narrower: how is or- ganizational culture affected by a global context? Organizational culture is so powerful it often transcends national boundaries. But that doesn’t mean orga- nizations should, or could, ignore local culture. Organizational cultures often reflect national culture. The culture at AirAsia, a Malaysian-based airline, emphasizes informal dress so as not to create status differences. The carrier has lots of parties, participative management, and no private offices, reflecting Malaysia’s relatively collectivistic culture. The culture of US Airways does not reflect the same degree of informality. If US Airways were to set up operations in Malaysia or merge with AirAsia, it would need to take these cultural differences into account. One of the primary things U.S. managers can do is to be culturally sensi- tive. The United States is a dominant force in business and in culture—and with that influence comes a reputation. “We are broadly seen throughout the world as arrogant people, totally self-absorbed and loud,” says one U.S. execu- tive. Companies such as American Airlines, Lowe’s, Novell, ExxonMobil, and Microsoft have implemented training programs to sensitize their managers to cultural differences. Some ways in which U.S. managers can be culturally sensi- tive include talking in a low tone of voice, speaking slowly, listening more, and avoiding discussions of religion and politics. The management of ethical behavior is one area where national culture can rub up against corporate culture. 68 U.S. managers endorse the supremacy of anonymous market forces and implicitly or explicitly view profit maximization as a moral obligation for business organizations. This worldview sees bribery, nepotism, and favoring personal contacts as highly unethical. Any action that deviates from profit maximization may indicate that inappropriate or corrupt behavior may be occurring. In contrast, managers in developing economies are more likely to see ethical decisions as embedded in a social environment. That means doing special favors for family and friends is not only appropriate but possibly even an ethical responsibility. Managers in many nations also view capi- talism skeptically and believe the interests of workers should be put on a par with the interests of shareholders. U.S. employees are not the only ones who need to be culturally sensitive. Three times a week, employees at the Canadian unit of Japanese videogame maker Koei begin the day by standing next to their desks, facing their boss, and saying “Good morning” in unison. Employees then deliver short speeches on topics that range from corporate principles to 3D game engines. Koei also has employees punch a time clock and asks women to serve tea to top execu- tive guests. Although these practices are consistent with Koei’s culture, they do not fit Canadian culture very well. “It’s kind of like school,” says one Canadian employee. 69 8 Show how national culture may affect the way organizational culture is transported to a different country. Global Implications Summary and Implications for Managers 533 MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. Summary and Implications for Managers Exhibit 16-6 depicts organizational culture as an intervening variable. Employ- ees form an overall subjective perception of the organization based on factors such as degree of risk tolerance, team emphasis, and support of people. This overall perception becomes, in effect, the organization’s culture or personal- ity and affects employee performance and satisfaction, with stronger cultures having greater impact. ● Just as people’s personalities tend to be stable over time, so too do strong cultures. This makes a strong culture difficult for managers to change if it becomes mismatched to its environment. Changing an organization’s culture is a long and difficult process. Thus, at least in the short term, managers should treat their organization’s culture as relatively fixed. ● One of the most important managerial implications of organizational cul- ture relates to selection decisions. Hiring individuals whose values don’t align with those of the organization is likely to yield employees who lack motivation and commitment and are dissatisfied with their jobs and the organization. 70 Not surprisingly, “misfits” have considerably higher turn- over rates. ● An employee’s performance also depends to a considerable degree on knowing what to do and not do. Understanding the right way to do a job indicates proper socialization. ● As a manager, you can shape the culture of your work environment, sometimes as much as it shapes you. All managers can especially do their part to create an ethical culture and to consider spirituality and its role in creating a positive organizational culture. How Organizational Cultures Have an Impact on Employee Performance and Satisfaction Exhibit 16-6 • Innovation and risk taking • Attention to detail • Outcome orientation • People orientation • Team orientation • Aggressiveness • Stability Organizational culture Performance Satisfaction High Low Strength Perceived as Objective factors How Organizational Cultures Have an Impact on Employee Performance and Satisfaction Exhibit 16-6 • Innovation and risk taking • Attention to detail • Outcome orientation • People orientation • Team orientation • Aggressiveness • Stability Organizational culture Performance Satisfaction High Low Strength Perceived as Objective factors www.mymanagementlab.com 534 CHAPTER 16 Organizational Culture Organizations Should Strive to Create a Positive Organizational Culture POINT COUNTERPOINT T here are many unanswered questions about the merits of using positive organizational scholarship to build positive organizational cultures. Let’s focus on three. What is a positive culture? The employment relationship can be amicable and even mutually beneficial. However, glossing over natural differences in interests with the frosting of posi- tive culture is intellectually dishonest and potentially harmful. From time to time, any organization needs to undertake unpopu- lar actions. Can anyone terminate an employee positively (and honestly), or explain to someone why others received a raise? There’s a danger in trying to sugarcoat. Positive relationships will develop—or not—on their own. We’d be better off preach- ing that people, and organizational cultures, should be honest and fair, rather than unabashedly positive. Is practice ahead of science? Before we start beseeching organizations to build positive cultures, we should make sure these interventions work as we think they do. Many have un- intended consequences, and we simply don’t have enough re- search to support the claims put forth. As one reviewer noted, “Everyone wants to believe they could have greater control over their lives by simply changing the way they think. Research that supports this idea gets promoted loudly and widely.” But it’s not based on a mountain of evidence. Is building a positive culture manipulative? Psychologist Lisa Aspinwall writes of “saccharine terrorism,” where em- ployees are coerced into positive mindsets by Happiness Coaches. You may think this an exaggeration, but companies like UBS, American Express, KPMG, FedEx, Adobe, and IBM use Happiness Coaches to do exactly that. As one critic noted, “Encouraging people to maintain a happy outlook in the face of less-than-ideal conditions is a good way of keeping citizens under control in spite of severe societal problems, or keeping employees productive while keeping pay and benefits low.” O rganizations should do everything they can to establish a positive culture, because it works. Scores of recent studies have shown that individuals who are in positive states of mind at work and in life lead happier, more productive, and more fulfilling lives. Given the accumulating evidence, re- searchers are now studying ways to make that happen. In a recent Harvard Business Review article, Wharton fac- ulty member Adam Grant discusses an interesting concept: out- sourcing inspiration . What does he mean by that? Grant writes: “A growing body of research shows that end users—customers, clients, patients, and others who benefit from a company’s products and services—are surprisingly effective in motivating people to work harder, smarter, and more productively.” Some tangible examples of how this can work: ● Northwestern University’s “buddy program” introduces Alzheimer’s patients to scientists working to develop treat- ments for the disease. ● At a Merrill Lynch branch, weekly team meetings begin with stories about how the team has made a difference in cus- tomers’ lives. ● “All Medtronic employees have a ’defining moment’ in which they come face-to-face with a patient whose story deeply touches them,” writes former CEO Bill George. ● At Wells Fargo, managers show bankers videos of people describing how low-interest loans rescued them from se- vere debt—a vivid reminder to the bankers that they are striving to serve their customers, not their managers. Of course, there are other ways of creating a positive organi- zational culture, including building on strengths and rewarding more than punishing. Creating a positive organizational culture is not magic, but it tends to have extremely positive benefits for organizations which embrace it. Outsourcing inspiration is a great way for em- ployees to feel appreciated, to experience empathy, and to see the impact of their work—all motivating outcomes that will lead organizations to be more effective and individuals more fulfilled in their work. Sources: B. Azar, “Positive Psychology Advances, with Growing Pains,” Monitor on Psychology (April 2011), pp. 32–36; A. Grant, “How Customers Can Rally Your Troops,” Harvard Business Review (June 2011), downloaded on July 12, 2011, from http://hbr.org/ ; and J. McCarthy, “5 Big Problems with Positive Thinking (And Why You Should Do It Anyway),” Positive Psychology (October 2010), downloaded on July 10, 2011, from http://psychologyofwellbeing.com/ . http://hbr.org/ http://psychologyofwellbeing.com/ Experiential Exercise 535 1 What is organizational culture, and what are its common characteristics? 2 What are the functional and dysfunctional effects of organizational culture? 3 What factors create and sustain an organization’s culture? 4 How is culture transmitted to employees? 5 How can an ethical culture be created? 6 What is a positive organizational culture? 7 What are the characteristics of a spiritual culture? 8 How does national culture affect how organizational culture is transported to a different country? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE Rate Your Classroom Culture Listed here are 14 statements. Using the 5-item scale (from strongly agree to strongly disagree), respond to each state- ment by circling the number that best represents your opinion.   Strongly Agree Agree Neutral Disagree Strongly Disagree 1. I feel comfortable challenging statements made by my instructor. 1 2 3 4 5 2. My instructor heavily penalizes assignments that are not turned in on time. 1 2 3 4 5 3. My instructor believes that “It’s fi nal results that count.” 1 2 3 4 5 4. My instructor is sensitive to my personal needs and problems. 1 2 3 4 5 5. A large portion of my grade depends on how well I work with others in the class. 1 2 3 4 5 6. I often feel nervous and tense when I come to class. 1 2 3 4 5 7. My instructor seems to prefer stability over change. 1 2 3 4 5 8. My instructor encourages me to develop new and different ideas. 1 2 3 4 5 9. My instructor has little tolerance for sloppy thinking. 1 2 3 4 5 10. My instructor is more concerned with how I came to a conclusion than with the conclusion itself. 1 2 3 4 5 11. My instructor treats all students alike. 1 2 3 4 5 12. My instructor frowns on class members helping each other with assignments. 1 2 3 4 5 13. Aggressive and competitive people have a distinct advantage in this class. 1 2 3 4 5 14. My instructor encourages me to see the world differently. 1 2 3 4 5 536 CHAPTER 16 Organizational Culture Calculate your total score by adding up the numbers you circled. Your score will fall between 14 and 70. A high score (49 or above) describes an open, risk- taking, supportive, humanistic, team-oriented, easygoing, growth-oriented culture. A low score (35 or below) de- scribes a closed, structured, task-oriented, individualistic, tense, and stability-oriented culture. Note that differences count, so a score of 60 is a more open culture than one that scores 50. Also, realize that one culture isn’t prefer- able over another. The “right” culture depends on you and your preferences for a learning environment. Form teams of five to seven members each. Compare your scores. How closely do they align? Discuss and re- solve any discrepancies. Based on your team’s analysis, what type of student do you think would perform best in this class? ETHICAL DILEMMA A Bankrupt Culture Like many newspapers, the Chicago Tribune is in trouble. The 165-year-old paper was bought by real estate mogul Sam Zell in 2007, who promptly filed for bankruptcy. That didn’t surprise experts. What Zell did next did. Zell hired Randy Michaels as the Tribune Company’s CEO. Soon after Michaels arrived, he launched an attack on the Tribune’s culture. In an informal meeting with a group of fellow Tribune executives, Michaels said, “Watch this” and offered the waitress $100 to show her breasts. The group was dumbfounded. But Michaels hardly stopped there. Michaels was fond of a culture that included “sexual innuendo, poisonous workplace banter, and profane invective.” One press release announced the hiring of Kim Johnson, who, it was said, was “a former waitress at ‘Knockers—The Place for Hot Racks and Cold Brews.’” Another executive reporting to Michaels sent links to raunchy Web sites in e-mail messages. Michaels was heard loudly discussing with other executives he had brought with him the “sexual suitability of various employees.” When some complained about the change in the cul- ture, Michaels rewrote the employee handbook. “Working at Tribune means accepting that you might hear a word that you, personally, might not use,” the new manual stated. “You might experience an attitude you don’t share. You might hear a joke that you don’t consider funny. That is because a loose, fun, nonlinear atmosphere is important to the creative process.” It then concluded, “This should be understood, should not be a surprise, and not consid- ered harassment.” Eventually Michaels was forced out, but the damage had been done. The Tribune continues to operate in bankruptcy and more than 5,000 employees have lost their jobs. In retrospect, Zell has called his purchase “the deal from hell.” It appears he appointed a CEO to match the deal. Questions 1. What does this story tell you about the effect of top management on organizational culture? 2. Denise Brown, a former member of the Tribune’s management, said, “If you spoke up, you were por- trayed as a sissy.” How would you have reacted if you witnessed some of these behaviors? 3. How can you determine when a line has been crossed between a fun and informal culture, and one that is offensive and inappropriate? Sources: D. Carr, “At Debt-Ridden Tribune, a Culture Run Amok,” The New York Times (October 6, 2010), pp. A1, A22; M. Oneal and P. Rosenthal, “Tribune Co. CEO Randy Michaels Resigns Amid Accusations of Crass Behavior,” Chicago Tribune (October 22, 2010), downloaded July 12, 2011, from http://articles.chicagotribune .com/ ; and P. Whoriskey, “Former Tribune, Times Mirror Executives, Editors Sue Shareholders,” Washington Post (June 2, 2011), downloaded on July 11, 2011, from www.washingtonpost.com/ . CASE INCIDENT 1 Mergers Don’t Always Lead to Culture Clashes A lot of mergers lead to culture clashes and, ultimately, failure. So in 2005 when banking giant Bank of America (BOA) announced its $35 billion acquisition of credit card giant MBNA, many thought that in a few years this merger would join the heap of those done in by cultural differences. MBNA’s culture was characterized by a free-wheeling, entrepreneurial spirit that was also quite secretive. MBNA employees also were accustomed to the high life. Their corporate headquarters in Wilmington, Delaware, could be described as lavish, and employees throughout the company enjoyed high salaries and generous perks—from www.washingtonpost.com/ http://articles.chicagotribune.com/ http://articles.chicagotribune.com/ Case Incident 2 537 the private golf course at its headquarters to its fleet of corporate jets and private yachts. Bank of America, in contrast, grew by thrift. It was a low- cost, no-nonsense operation. Unlike MBNA, it believed that size and smarts were more important than speed. It was an acquisition machine that some likened to Star Trek ’s relentless Borg collective. In short, the cultures in the two companies were very, very different. Although these cultural differences seemed a recipe for disaster, it appears, judging from the reactions of BOA and MBNA employees, that the merger has worked. How can this be? BOA had the foresight to know which MBNA prac- tices to attempt to change and which to keep in place. Especially critical was BOA’s appreciation and respect for MBNA’s culture. “On Day 1, I was directed that this was not like the ones you are used to,” said Clifford Skelton, who had helped manage BOA’s acquisition of FleetBoston Financial before moving on to MBNA. To try to manage the cultural transition, executives of both companies began by comparing thousands of prac- tices covering everything from hiring to call-center opera- tions. In many cases, BOA chose to keep MBNA’s cultural practices in place. In other cases, BOA did impose its will on MBNA. For example, because MBNA’s pay rates were well above market, many MBNA managers were forced to swallow a steep pay cut. Some MBNA employees left, but most remained. In other cases, the cultures co-adapted. For example, MBNA’s dress code was much more formal than BOA’s business-casual approach. In the end, a hybrid code was adopted, where business suits were expected in the credit- card division’s corporate offices and in front of clients, but business causal was the norm otherwise. While most believe the merger has been successful, there are tensions. Some BOA managers see MBNA man- agers as arrogant and autocratic. Some MBNA managers see their BOA counterparts as bureaucratic. Of course, BOA made another, more recent and much larger acquisition: Merrill Lynch. After a rough start, most evidence suggests this mega-merger saved Merrill from bankruptcy and appears to be working well, which might suggest that BOA has found the secret to successful mega-mergers. Questions 1. In what ways were the cultures of Bank of America and MBNA incompatible? 2. Why do you think their cultures appeared to mesh rather than clash? 3. Do you think culture is important to the success of a merger/acquisition? Why or why not? 4. How much of the smooth transition, if any, do you think comes from both companies glossing over real differences in an effort to make the merger work? Sources: Based on E. Dash, “A Clash of Cultures, Averted,” The New York Times (February 20, 2007), pp. B1, B3; L. Moyer, “Bank of America Lewis Must Wait on His Fate,” Forbes (April 29, 2009), www.forbes.com ; and K. MacFadyen, “From the People Who Brought You BofA,” Mergers and Acquisitions (October, 2009), pp. 38–40. CASE INCIDENT 2 Did Toyota’s Culture Cause Its Problems? You may be familiar with the problems that have recently plagued Toyota. However, you may not know the whole story. First the facts. In 2010 Toyota issued a series of recalls for various models. The most serious was for a defect called “unintended acceleration,” which occurs when a car accelerates with no apparent input from the driver. Investigations revealed that unintended accelera- tion in Toyota cars has been the cause of 37 deaths since 2000. When the problems first surfaced, however, Toyota denied it was the cause. Eventually, Toyota apologized and recalled more than 9 million cars. To many, the root cause of Toyota’s problems was its insular, arrogant culture. Fortune argued: “Like GM before it, Toyota has gotten smug. It believes the Toyota Way is the only way.” Time reported “a Toyota management team that had fallen in love with itself and become too insu- lar to properly handle something like the current crisis.” Transportation Secretary Ray LaHood described Toyota’s culture as “safety-deaf.” But is this the reality? Increasingly, evidence suggests that Toyota’s culture—or even the cars it produces—is not the source of the problem. A 2011 report released by the U.S. National Highway Traffic Safety Administration (NHTSA) concluded that unintended acceleration was not caused by problems in the electronic circuitry. The Wall Street Journal wrote that “safety regulators, human-error experts and auto makers say driver error is the primary cause of sudden accelera- tion.” Forbes and The Atlantic commented that most of the incidents of sudden acceleration in Toyota cars occurred www.forbes.com 538 CHAPTER 16 Organizational Culture with elderly drivers, and elderly drivers are known to be more prone to confusing pedals. Many other independent investigations, including ones conducted by automobile experts at Popular Mechanics and Car and Driver , reached the same conclusion: the main cause of unintended accel- eration was drivers mistaking the gas pedal for the brake pedal. There’s a long history of misreporting on this issue. Audi was nearly driven into bankruptcy when 60 Minutes aired a report, “Out of Control,” purportedly proving that defects in the car were behind six fatal sudden-accelera- tion accidents. As it turns out, 60 Minutes paid sometime to tamper with the car—filling a canister of compressed air linked to the transmission—to cause the sudden accelera- tion shown in the segment. Further investigations never uncovered evidence that defects in Audi’s cars were be- hind the incidents. Does Toyota have an insular and inbred corporate cul- ture? Probably. But it’s been that way for a long time, and it’s far from clear that the culture, or even the company’s cars, is responsible for the sudden acceleration problems. Questions 1. If Toyota is not the cause of unintended acceleration, why was it blamed for it? 2. Investigations have shown that after stories of un- intended acceleration are publicized, report of in- cidents increase for all automakers. Why is this the case? 3. Is it possible to have a strong—even arrogant— culture and still produce safe and high-quality vehicles? 4. If you were the CEO of Toyota when the story was first publicized, how would you have reacted? Sources: A. Taylor, “How Toyota Lost Its Way,” Fortune (July 26, 2010), pp. 108–117; P. Allen, “Anatomy of Toyota’s Problem Pedal: Mechanic’s Diary,” Popular Mechanics (March 3, 2010), downloaded July 11, 2011 from www.popularmechanics.com/ ; B. Saporito, “Behind the Troubles at Toyota,” Time (February  11, 2010), downloaded July 11, 2011, from www.time.com/ ; and B. Simon, “LaHood Voices Concerns Over Toyota Culture,” Financial Times (February 24, 2010), downloaded July 11, 2011, from www.ft.com/ . ENDNOTES 1. See, for example, E. H. Schein, “Culture: The Missing Concept in Organization Studies,” Administrative Science Quarterly 41, no. 2 (1996), pp. 229–240. 2. This seven-item description is based on 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 (September 1991), pp. 487–516; and J. A. Chatman and K. A. Jehn, “Assessing the Relationship Between Industry Characteristics and Organizational Culture: How Different Can You Be?” Academy of Management Journal (June 1994), pp. 522–553. 3. K. S. Cameron, R. E. Quinn, J. DeGraff, and A. V. Thakor, Competing Values Leadership: Creating Value in Organizations (Cheltenham, UK and Northampton, MA: Edward Elgar, 2006). 4. C. A. Hartnell, A. Y. Ou, and A. Kinicki, “Organizational Culture and Organizational Effectiveness: A Meta-Analytic Investigation of the Competing Values Framework’s Theoretical Suppositions,” Journal of Applied Psychology, Online first publication (January 17, 2011), doi: 10.1037/ a0021987. 5. The view that there will be consistency among perceptions of organizational culture has been called the “integration” perspective. For a review of this perspective and conflict- ing approaches, see D. Meyerson and J. Martin, “Cultural Change: An Integration of Three Different Views,” Journal of Management Studies (November 1987), pp. 623–647; and P. J. Frost, L. F. Moore, M. R. Louis, C. C. Lundberg, and J. Martin (eds.), Reframing Organizational Culture (Newbury Park, CA: Sage, 1991). 6. See J. M. Jermier, J. W. Slocum Jr., L. W. Fry, and J. Gaines, “Organizational Subcultures in a Soft Bureaucracy: Resistance Behind the Myth and Facade of an Official Culture,” Organization Science (May 1991), pp. 170–194; and P. Lok, R. Westwood, and J. Crawford, ’Perceptions of Organisational Subculture and their Significance for Organisational Commitment,” Applied Psychology: An International Review 54, no. 4 (2005), pp. 490–514. 7. D. A. Hoffman and L. M. Jones, “Leadership, Collective Personality, and Performance,” Journal of Applied Psychology 90, no. 3 (2005), pp. 509–522. 8. T. Hsieh, “Zappos’s CEO on Going to Extremes for Customers.” Harvard Business Review (July/August 2010), pp. 41–45. 9. See, for example, G. G. Gordon and N. DiTomaso, “Predicting Corporate Performance from Organizational Culture,” Journal of Management Studies (November 1992), pp.  793–798; J. B. Sorensen, “The Strength of Corporate Culture and the Reliability of Firm Performance,” Administrative Science Quarterly (March 2002), pp. 70–91; and J. Rosenthal and M. A. Masarech, “High-Performance Cultures: How Values Can Drive Business Results,” Journal of Organizational Excellence (Spring 2003), pp. 3–18. 10. Y. Wiener, “Forms of Value Systems: A Focus on Orga- nizational Effectiveness and Cultural Change and Maintenance,” Academy of Management Review (October 1988), p. 536; and B. Schneider, A. N. Salvaggio, and M. Subirats, “Climate Strength: A New Direction for Climate Research,” Journal of Applied Psychology 87 (2002), pp. 220–229. www.popularmechanics.com/ www.ft.com/ www.time.com/ Endnotes 539 11. R. T. Mowday, L. W. Porter, and R. M. Steers, Employee Linkages: The Psychology of Commitment, Absenteeism, and Turnover (New York: Academic Press, 1982); C. Vandenberghe, “Organizational Culture, Person-Culture Fit, and Turnover: A Replication in the Health Care Industry,” Journal of Organizational Behavior (March 1999), pp. 175–184; and M. Schulte, C. Ostroff, S. Shmulyian, and A. Kinicki, “Organizational Climate Configurations: Relationships to Collective Attitudes, Customer Satisfaction, and Financial Performance,” Journal of Applied Psychology 94, no. 3 (2009), pp. 618–634. 12. J. W. Grizzle, A. R. Zablah, T. J. Brown, J. C. Mowen, and J.  M. Lee, “Employee Customer Orientation in Context: How the Environment Moderates the Influence of Customer Orientation on Performance Outcomes,” Journal of Applied Psychology 94, no. 5 (2009), pp. 1227–1242. 13. M. R. Bashshur, A. Hernández, and V. González-Romá, “When Managers and Their Teams Disagree: A Longitudinal Look at the Consequences of Differences in Perceptions of Organizational Support,” Journal of Applied Psychology 96, no. 3 (2011), pp. 558–573. 14. S. L. Dolan and S. Garcia, “Managing by Values: Cultural Redesign for Strategic Organizational Change at the Dawn of the Twenty-First Century,” Journal of Management Development 21, no. 2 (2002), pp. 101–117. 15. See C. A. O’Reilly and J. A. Chatman, “Culture as Social Control: Corporations, Cults, and Commitment,” in B. M. Staw and L. L. Cummings (eds.), Research in Organizational Behavior, vol. 18 (Greenwich, CT: JAI Press, 1996), pp. 157–200. See also M. Pinae Cunha, “The ’Best Place to Be’: Managing Control and Employee Loyalty in a Knowledge-Intensive Company,” Journal of Applied Behavioral Science (December 2002), pp. 481–495. 16. Y. Ling, Z. Simsek, M. H. Lubatkin, and J. F. Veiga, “Transformational Leadership’s Role in Promoting Corporate Entrepreneurship: Examining the CEO-TMT Interface,” Academy of Management Journal 51, no. 3 (2008), pp. 557–576; and A. Malhotra, A. Majchrzak, and B. Rosen, Benson, “Leading Virtual Teams,” Academy of Management Perspectives 21, no. 1 (2007), pp. 60–70. 17. D. Denison, “What Is the Difference Between Organizational Culture and Organizational Climate? A Native’s Point of View on a Decade of Paradigm Wars,” Academy of Management Review 21 (1996) pp. 519–654; and L. R. James, C. C. Choi, C. E. Ko, P. K. McNeil, M. K. Minton, M. A. Wright, and K.  Kim, “Organizational and Psychological Climate: A Review of Theory and Research,” European Journal of Work and Organizational Psychology 17, no. 1 (2008), pp. 5–32. 18. J. Z. Carr, A. M. Schmidt, J. K. Ford, and R. P. DeShon, “Climate Perceptions Matter: A Meta-Analytic Path Analysis Relating Molar Climate, Cognitive and Affective States, and Individual Level Work Outcomes,” Journal of Applied Psychology 88, no. (2003), pp. 605–619. 19. Schulte, Ostroff, Shmulyian, and Kinicki, “Organizational Climate Configurations: Relationships to Collective Attitudes, Customer Satisfaction, and Financial Performance.” 20. See, for example, Z. S. Byrne, J. Stoner, K. R. Thompson, and W. Hochwarter, “The Interactive Effects of Conscientiousness, Work Effort, and Psychological Climate on Job Performance,” Journal of Vocational Behavior 66, no. 2 (2005), pp. 326–338; D. S. Pugh, J. Dietz, A. P. Brief, and J. W. Wiley, “Looking Inside and Out: The Impact of Employee and Community Demographic Composition on Organizational Diversity Climate,” Journal of Applied Psychology 93, no. 6 (2008), pp. 1422–1428; J. C. Wallace, E. Popp, and S. Mondore, “Safety Climate as a Mediator Between Foundation Climates and Occupational Accidents: A Group-Level Investigation,” Journal of Applied Psychology 91, no. 3 (2006), pp. 681–688; and K. H. Ehrhart, L. A. Witt, B. Schneider, and S. J. Perry, “Service Employees Give as They Get: Internal Service as a Moderator of the Service Climate- Service Outcomes Link,” Journal of Applied Psychology 96, no. 2 (2011), pp. 423–431. 21. J C. Wallace, P. D. Johnson, K. Mathe, and J. Paul, “Structural and Psychological Empowerment Climates, Performance, and the Moderating Role of Shared Felt Accountability: A  Managerial Perspective,” Journal of Applied Psychology 96, no. 3 (2011), pp. 840–850. 22. J. M. Beus, S. C. Payne, M. E. Bergman, and W. Arthur, “Safety Climate and Injuries: An Examination of Theoretical and Empirical Relationships,” Journal of Applied Psychology 95, no. 4 (2010), pp. 713–727. 23. R. L. Jepperson, “Institutions, Institutional Effects, and Institutionalism,” in W. W. 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Locander, “Critical Role of Leadership on Ethical Climate and Salesperson Behaviors,” Journal of Business Ethics 86, no. 2 (2009), pp.  125–141; M.  Schminke, M. L. Ambrose, and D. O. Neubaum, “The Effect of Leader Moral Development on Ethical Climate and Employee Attitudes,” Organizational Behavior and Human Decision Processes 97, no. 2 (2005), pp. 135–151; and M. E. Brown, L. K. Treviño, and D. A. Harrison, “Ethical Leadership: A Social Learning Perspective for Construct Development and Testing,” Organizational Behavior and Human Decision Processes 97, no. 2 (2005), pp. 117–134. 53. D. M. Mayer, M. Kuenzi, R. Greenbaum, M. Bardes, and S.  Salvador, “How Low Does Ethical Leadership Flow? Test of a Trickle-Down Model,” Organizational Behavior and Human Decision Processes 108, no. 1 (2009), pp. 1–13. 54. B. Sweeney, D. Arnold, and B. Pierce, “The Impact of Perceived Ethical Culture of the Firm and Demographic Variables on Auditors’ Ethical Evaluation and Intention to Act Decisions,” Journal of Business Ethics 93, no. 4 (2010), pp. 531–551. 55. M. L. Gruys, S. M. Stewart, J. Goodstein, M. N. Bing, and A. C. Wicks, “Values Enactment in Organizations: A Multi- Level Examination,” Journal of Management 34, no. 4 (2008), pp. 806–843. 56. D. L. Nelson and C. L. Cooper (eds.), Positive Organizational Behavior (London: Sage, 2007); K. S. Cameron, J. E. Dutton, and R. E. Quinn (eds.), Positive Organizational Scholarship: Foundations of a New Discipline (San Francisco: Berrett-Koehler, 2003); and F. Luthans and C. M. Youssef, “Emerging Positive Organizational Behavior,” Journal of Management (June 2007), pp. 321–349. 57. J. Robison, “Great Leadership Under Fire,” Gallup Leadership Journal (March 8, 2007), pp. 1–3. 58. R. Wagner and J. K. Harter, 12: The Elements of Great Managing (New York: Gallup Press, 2006). 59. R. Wagner and J. K. Harter, “Performance Reviews Without the Anxiety,” Gallup Leadership Journal (July 12, 2007), pp. 1–4; and Wagner and Harter, 12: The Elements of Great Managing . 60. S. Fineman, “On Being Positive: Concerns and Counterpoints,” Academy of Management Review 31, no. 2 (2006), pp. 270–291. 61. D. P. Ashmos and D. Duchon, “Spirituality at Work: A Conceptualization and Measure,” Journal of Management Inquiry (June 2000), p. 139; and E. Poole, “Organisational Spirituality: A Literature Review,” Journal of Business Ethics 84, no. 4 (2009), pp. 577–588. 62. L. W. Fry and J. W. Slocum, “Managing the Triple Bottom Line Through Spiritual Leadership,” Organizational Dynamics 37, no. 1 (2008), pp. 86–96. 63. This section is based on I. A. Mitroff and E. A. Denton, A Spiritual Audit of Corporate America: A Hard Look at Spirituality, Religion, and Values in the Workplace (San Francisco: Jossey- Bass, 1999); E. H. Burack, “Spirituality in the Workplace,” Journal of Organizational Change Management 12, no. 3 (1999), pp. 280–291; and C. L. Jurkiewicz and R. A. Giacalone, “A Values Framework for Measuring the Impact of Workplace Spirituality on Organizational Performance,” Journal of Business Ethics 49, no. 2 (2004), pp. 129–142. 64. See, for example, B. S. Pawar, “Workplace Spirituality Facilitation: A Comprehensive Model,” Journal of Business Ethics 90, no. 3 (2009), pp. 375–386; and L. Lambert, Spirituality Inc.: Religion in the American Workplace (New York: New York University Press, 2009). 65. M. Lips-Miersma, K. L. Dean, and C. J. Fornaciari, “Theorizing the Dark Side of the Workplace Spirituality Movement,” Journal of Management Inquiry 18, no. 4 (2009), pp. 288–300. 66. J.-C. Garcia-Zamor, “Workplace Spirituality and Organizational Performance,” Public Administration Review (May–June 2003), pp. 355–363; and L. W. Fry, S. T. Hannah, M. Noel, and F. O. Walumbwa, “Impact of Spiritual Leadership on Unit Performance,” Leadership Quarterly 22, no. 2 (2011), pp. 259–270. 67. A. Rego and M. Pina e Cunha, “Workplace Spirituality and Organizational Commitment: An Empirical Study,” Journal of Organizational Change Management 21, no. 1 (2008), pp.  53–75; and R. W. Kolodinsky, R. A. Giacalone, and C. L. Jurkiewicz, “Workplace Values and Outcomes: Exploring Personal, Organizational, and Interactive Workplace Spirituality,” Journal of Business Ethics 81, no. 2 (2008), pp. 465–480. 68. D. J. McCarthy and S. M. Puffer, “Interpreting the Ethicality of Corporate Governance Decision in Russia: Utilizing Integrative Social Contracts Theory to Evaluate the Relevance of Agency Theory Norms,” Academy of Management Review 33, no. 1 (2008), pp. 11–31. 69. P. Dvorak, “A Firm’s Culture Can Get Lost in Translation,” The Wall Street Journal (April 3, 2006), pp. B1, B3; K.  Kranhold, “The Immelt Era, Five Years Old, Transforms GE,” The Wall Street Journal (September 11, 2006), pp. B1, B3; and S. McCartney, “Teaching Americans How to Behave Abroad,” The Wall Street Journal (April 11, 2006), pp. D1, D4. 70. J. A. Chatman, “Matching People and Organizations: Selection and Socialization in Public Accounting Firms,” Administrative Science Quarterly (September 1991), pp. 459–484; and A. E. M. Van Vianen, “Person-Organization Fit: The Match Between Newcomers’ and Recruiters’ Preferences for Organizational Cultures,” Personnel Psychology (Spring 2000), pp. 113–149. TESTING NFL QUARTERBACKS I t’s often said that the entire human resources function in organizations is meant to fix mistakes made at the time of hiring. There is an element of truth in that, but it’s also true that making accurate hiring decisions is itself the most important aspect of human resources. And perhaps no aspect of selection is more interesting or surprising than this: a 12-minute paper-and- pencil test may well be the single best method for selecting employees in most occupations, including, perhaps, National Football League (NFL) quarterbacks. We’re talking about the Wonderlic Cognitive Ability Test, one of the most extensively validated tests ever. (We first discussed it in Chapter 2 .) The Wonderlic has been applied to hundreds of occupations, but nowhere is its use more intriguing than in the NFL. As NFL fans know, prior to the football draft every year, potential draftees go through a “combine” where their skills are tested: they run, they bench-press, they scrimmage—and they also take the Wonderlic. Although players and members of the media often express skepticism about the validity of the test, evidence suggests it works. Scores range from 0 to 50. The average chemist scores 31, compared to 26 for a journalist, 22 for a bank teller, and 15 for a warehouse worker. Among football players, scores vary by position. Offensive linemen and quarterbacks generally have much higher scores than running backs, cornerbacks, or mid- dle linebackers. Here’s a select sample of how some NFL quarterbacks scored on the Wonderlic (scores for others like Matt Cassel, Troy Smith, and Jon Kitna were unavailable): 30 and higher (very intelligent) Ryan Fitzpatrick: 48, Alex Smith: 40, Eli Manning: 39, Matthew Stafford: 38, Tony Romo: 37, Sam Bradford: 36, Aaron Rodgers: 35, Christian Ponder: 35, Tom Brady: 33, Matt Ryan: 32, Brian Brohm: 32, Matt Schaub: 30, Philip Rivers: 30 25–29 (intelligent) Matt Hasselbeck: 29, Marc Bulger: 29, Peyton Manning: 28, Drew Brees: 28, Mark Sanchez: 28, Joe Flacco: 27, Jason Campbell: 27, Josh Freeman: 27, Jay Cutler: 26, Carson Palmer: 26, Kyle Orton: 26, Colt McCoy: 25, Shaun Hill: 25, Ben Roethlisberger: 25 20–24 (above average) Jimmy Clausen: 23, Chad Henne: 22, Brett Favre: 22, Tim Tebow: 22, Cam Newton: 21, Michael Vick: 20, Jake Locker: 20 Less than 20 (average to below average) Derek Anderson: 19, Bruce Gradkowski: 19, Vince Young: 16, Donovan McNabb: 16, David Garrard: 14, Seneca Wallace: 12 It’s clear NFL quarterbacks are smart—most score well above average rel- ative to the U.S. population (the population average is 19). But do differences among the quarterbacks predict success? It’s not clear. In the past several LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Define initial selection, and identify the most useful methods. 2 Define substantive selection, and identify the most useful methods. 3 Define contingent selection, and contrast the arguments for and against drug testing. 4 Compare the four main types of training. 5 Contrast formal and informal training methods. 6 Contrast on-the-job and off-the-job training. 7 Describe the purposes of performance evaluation, and list the methods by which it can be done. 8 Show how managers can improve performance evaluations. 9 Describe how organizations can manage work–family conflicts. Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com. MyManagementLab 542 www.mymanagementlab.com Human Resource Policies and Practices 17 To manage people well, companies should . . . elevate HR to a position of power and primacy in the organization. —Jack Welch Ph ot o: G re en B ay P ac ke rs q ua rt er ba ck A ar on R od ge rs . S ou rc e: q 7 8 /Z U M A P re ss /N ew sc om . 543 544 CHAPTER 17 Human Resource Policies and Practices seasons, there has not been a strong correlation between Wonderlic scores and quarterback ratings (a composite index assessing quarterback performance). One reporter looking at these results called it a “useless exam.” On the other hand, if you take an average of the Wonderlic scores of the quarterbacks for the past eight Super Bowl winners, you get a rather lofty aver- age of 31. Sources: M. Mirabile, “NFL Quarterback Wonderlic Scores,” www.macmirabile.com/Wonderlic .htm ; E. Thompson, “Wonderlic Scores of 2010 NFL Starting Quarterbacks and NFL Draft QB Prospects,” Palm Beach Post (March 10, 2010), www.palmbeachpost.com/sports/ ; J. Saraceno, “Who Knows if This Longhorn Is Short on IQ,” USA Today (March 1, 2006), p. 2C; and S. Smith, “Wonderlic Test: NFL Should Sack Useless Exam,” CBS News Sports (February 28, 2011), down- loaded on July 3, 2011, from www.cbsnews.com/ . T he message of this chapter is that human resource (HR) policies and practices—such as employee selection, training, and performance management—influence an organization’s effectiveness. 1 However, stud- ies show managers—even HR managers—often don’t know which HR practices work and which don’t. To see how much you know (before learning the right answers in this chapter), take the self-assessment. We just suggested that the most important HR function is hiring the right people. How do you figure out who they are? Identifying the right people is the objective of the selection process, which matches individual characteristics (ability, experi- ence, and so on) with the requirements of the job. 2 When management fails to get a proper match, employee performance and satisfaction both suffer. As a result of the Great Recession and the continued high unemployment rate, there are now many applicants for almost every open job position. This makes it more important than ever to ensure that your organization has an effective method for separating the most qualified candidates from the large number of applicants. How the Selection Process Works Exhibit 17-1 shows how the selection process works in most organizations. Having decided to apply for a job, applicants go through several stages—three Selection Practices S A L SELF-ASSESSMENT LIBRARY How Much Do I Know About Human Resource Management (HRM)? In the Self-Assessment Library (available on CD and online), take assessment IV.G.2 (How Much Do I Know About HRM?) and answer the following questions: 1. How did you score compared to your classmates’? Did the results surprise you? 2. How much of effective HRM is common sense? 3. Do you think your score will improve after you read this chapter? www.macmirabile.com/Wonderlic.htm www.macmirabile.com/Wonderlic.htm www.cbsnews.com/ www.palmbeachpost.com/sports/ Selection Practices 545 are shown in the exhibit—during which they can be rejected at any time. In practice, some organizations forgo some of these steps in the interests of time. (A meat-packing plant may hire someone who walks in the door, but there is not a long line of people who want to “thread” a pig’s intestines for a living.) But most organizations follow a process that looks something like this exhibit. Let’s go into a bit more detail about each stage. Initial Selection Initial selection devices are the first information applicants submit and are used for preliminary rough cuts to decide whether the applicant meets the basic qualifications for a job. Application forms (including letters of recommenda- tion) are initial selection devices. We list background checks as either an initial selection device or a contingent selection device, depending on how the orga- nization handles them. Some organizations prefer to look into an applicant’s background right away. Others wait until the applicant is about ready to be hired, contingent on everything else checking out. Application Forms You’ve no doubt submitted your fair share of applications. By itself, the information submitted on an application form is not a very useful Initial Selection Goal: Use for preliminary ”rough cuts” to decide whether an applicant meets the basic qualifications for a job. Examples: Application forms, background checks Substantive Selection Goal: Determine the most qualified applicants from among those who meet basic qualifications. Examples: Written tests, performance tests, interviews Applicant receives job offer. Applicant applies for job. Applicant meets basic qualifications. Applicant is among best qualified. Contingent Selection Goal: Make final check before making offer to applicants. Examples: Drug tests, background check Applicants who don‘t meet basic qualifications are rejected. Applicants who meet basic qualifications, but are less qualified than others, are rejected. Applicants who are among best qualified, but who fail contingent selection (positive drug test, unfavorable background check), are rejected. Model of Selection Process in Organizations Exhibit 17-1 1 Define initial selection, and identify the most useful methods. 546 CHAPTER 17 Human Resource Policies and Practices predictor of performance. However, it can be a good initial screen. For exam- ple, there’s no sense spending time interviewing an applicant for a registered nurse position if he doesn’t have the proper credentials (education, certifica- tion, experience). Many organizations encourage applicants to apply online. It takes only a few minutes, and the form can be forwarded to the people respon- sible for making the hiring decision. Most major corporations have a career page on their Web site where prospective employees can search for available positions by location or job type and then apply online. Managers must be careful about the questions they ask on applications. It’s pretty obvious that questions about race, gender, and nationality are disallowed. However, it might surprise you that other questions also put companies in legal jeopardy. For example, it generally is not permissible to ask about prior arrest records or even convictions unless the answer is job related. Background Checks More than 80 percent of employers conduct reference checks on applicants at some point in the hiring process. The reason is obvi- ous: they want to know how an applicant did in past jobs and whether former employers would recommend hiring the person. The problem is that rarely do former employers provide useful information. In fact, nearly two-thirds refuse to provide detailed references because they are afraid of being sued for say- ing something bad about a former employee. Although this concern is often unfounded (employers are safe as long as they stick to documented facts, and several states have passed laws protecting truthful information provided in ref- erence checks), in our litigious society most employers play it safe. The result is a paradox: most employers want reference information, but few will give it out. Letters of recommendation are another form of background check. These also aren’t as useful as they may seem. Applicants select those who will write good things about them, so almost all letters of recommendation are positive. In the end, readers either ignore them or read “between the lines” to try to find hidden meaning there. Many employers will now search for candidates online through a general Internet search or through a targeted search on social networking sites. The legality of this practice has come into question, but there is no doubt that many employers include an electronic search to see whether candidates have any his- tory that might make them a dubious choice for employment. For some po- tential employees, an embarrassing or incriminating photo circulated through Facebook may make it hard to get a job. Finally, some employers check credit histories or criminal records. A bank hiring tellers, for example, would probably want to know about an applicant’s criminal and credit histories. Increasingly, credit checks are being used for nonbanking jobs. Kevin Palmer’s offer of a job with a property management company evaporated after the company performed a credit check on him that revealed a bankruptcy in his past. 3 Despite the trend, because of the invasive nature of such checks, employers need to be sure there is a need for them. To further complicate matters, however, not checking can carry a legal cost. Manor Park Nursing Home in Texas failed to do a criminal background check of an employee who later sexually assaulted a resident of the home. The jury awarded the plaintiff $1.1 million, concluding the nursing home was negligent for fail- ing to conduct a background check. 4 Substantive Selection If an applicant passes the initial screens, next are substantive selection meth- ods. These are the heart of the selection process and include written tests, performance tests, and interviews. 2 Define substantive selection, and identify the most useful methods. Selection Practices 547 Written Tests Long popular as selection devices, written tests—called “paper- and-pencil” tests, though most are now available online—declined in use be- tween the late 1960s and mid-1980s, especially in the United States. They were frequently characterized as discriminatory, and many organizations had not validated them as job related. The past 20 years, however, have seen a resur- gence, and today more than 60 percent of all U.S. organizations and most of the Fortune 1,000 use some type of employment test. 5 Managers recognize that valid tests can help predict who will be successful on the job. 6 Applicants, however, tend to view written tests as less valid and fair than interviews or performance tests. 7 Typical written tests include (1) intelligence or cognitive ability tests, (2) personality tests, (3) integrity tests, and (4) interest inventories. Tests of intellectual ability, spatial and mechanical ability, perceptual accu- racy, and motor ability have long proven valid predictors for many skilled, semi- skilled, and unskilled operative jobs organizations. 8 Intelligence tests have proven to be particularly good predictors for jobs that include cognitively complex tasks (like learning the ever-more-complex playbooks in the NFL). 9 Many experts say intelligence tests are the single best selection measure across jobs, and that they are at least as valid in the European Union (EU) nations as in the United States. 10 Personality tests are inexpensive and simple to administer, and in the past decade, their use has grown. The traits that best predict job performance are conscientiousness and positive self-concept. 11 This makes sense in that consci- entious people tend to be motivated and dependable, and positive people are “can-do” oriented and persistent. However, concerns about applicant faking re- main, because it’s fairly easy for applicants to claim they are hard-working, moti- vated, and dependable when asked in a job application setting. 12 Two reviews of studies comparing self-reported personality to observer-rated personality found that observer ratings are better predictors of job performance and other behav- iors. 13 Thus, employers might want to consider asking employment references about applicant personality as part of the screening process. As ethical problems have increased in organizations, integrity tests have gained popularity. These paper-and-pencil tests measure factors such as Written tests are the heart of the selection process at Cabela’s, a spe- cialty retailer of hunting, fishing, camping, and other outdoor merchandise. Job applicants for Cabela’s contact center and retail stores are given a difficult 150-question test that measures the depth of their knowledge of outdoor sports. Cabela’s manage- ment believes that the written tests are helpful in determining who will succeed in providing customers with exceptional service and product knowledge. So u rc e : W il li a m T h o m a s C a in /G e tt y Im a g e s. 548 CHAPTER 17 Human Resource Policies and Practices dependability, carefulness, responsibility, and honesty; they have proven to be powerful predictors of supervisory ratings of job performance and of theft, dis- cipline problems, and excessive absenteeism. 14 Performance-Simulation Tests What better way to find out whether applicants can do a job successfully than by having them do it? That’s precisely the logic of performance-simulation tests. Although they are more complicated to develop and administer than writ- ten tests, performance-simulation tests have higher face validity (which measures whether applicants perceive the measures to be accurate), and their popularity has increased. The three best-known are work samples, assessment centers, and situational judgment tests. Work sample tests are hands-on simulations of part or all of the work that ap- plicants for routine jobs must perform. Each work sample element is matched with a job-performance element to measure applicants’ knowledge, skills, and abilities with more validity than written aptitude and personality tests. 15 Work samples are widely used in the hiring of skilled workers, such as welders, ma- chinists, carpenters, and electricians. Job candidates for production jobs often have a limited period of time to perform a variety of typical work tasks on a specially built simulated assembly line. 16 A more elaborate set of performance-simulation tests, specifically designed to evaluate a candidate’s managerial potential, is administered in assessment centers . Line executives, supervisors, and/or trained psychologists evaluate candidates as they go through one to several days of exercises that simulate real problems they would confront on the job. 17 A candidate might be required to play the role of a manager who must decide how to respond to ten memos in an in-basket within a 2-hour period. To reduce the costs of job simulations, many organizations have started to use situational judgment tests, which ask applicants how they would perform in a variety of job situations and compare their answers to those of high-performing employees. 18 One study comparing situational judgment tests to assessment centers found the assessment center was a better predictor of job performance, although the difference was not large. 19 Ultimately, the lower cost of the situ- ational judgment test may make it a better choice for some organizations than a more elaborate work sample or assessment center. Interviews Of all the selection devices organizations around the globe use to differentiate candidates, the interview remains the most common. 20 It also tends to have a disproportionate amount of influence. Over-reliance on interviews is problematic, because extensive evidence shows that impression management techniques like self-promotion have a strong effect on interviewer preferences even when unrelated to the job. 21 Conversely, the candidate who performs poorly in the employment interview is likely to be cut from the applicant pool regardless of experience, test scores, or letters of recommendation. These findings are relevant because of the interview’s typical nature. 22 The popular unstructured interview—short, casual, and made up of random questions—is simply not a very effective selection device. 23 The data it gath- ers are typically biased and often only modestly related to future job perfor- mance. Still, managers are reluctant to use structured interviews in place of their favorite questions, such as “If you could be any animal, what would you be, and why?” 24 Without structure, interviewers tend to favor applicants who share their atti- tudes, give undue weight to negative information, and allow the order in which applicants are interviewed to influence their evaluations. 25 To reduce such bias Selection Practices 549 and improve the validity of interviews, managers should adopt a standardized set of questions, a uniform method of recording information, and standardized ratings of applicants’ qualifications. Training interviewers to focus on specific dimensions of job performance, practicing evaluation of sample candidates, and giving interviewers feedback on how well they were focused on job-relevant characteristics significantly improves the accuracy of their ratings. 26 Interview effectiveness also improves when employers use behavioral structured interviews, probably because these assessments are less influenced by interviewer biases. 27 They require applicants to describe how they handled specific problems and situations in previous jobs, based on the assumption that past behavior offers the best predictor of future behavior. Panel interviews also minimize the influ- ence of individual biases and have higher validity. In practice, most organizations use interviews as more than a prediction- of-performance device. 28 Companies as diverse as Southwest Airlines, Disney, Bank of America, Microsoft, Procter & Gamble, and Harrah’s Entertainment use them to assess applicant–organization fit. So, in addition to evaluating specific, job-related skills, managers are looking at personality characteris- tics and personal values to find individuals who fit the organization’s culture and image. Contingent Selection If applicants pass the substantive selection methods, they are ready to be hired, contingent on a final check. One common contingent method is a drug test. Publix grocery stores make a tentative offer to applicants contingent on their passing such a test and checking out as drug-free. work sample tests Hands-on simulations of part or all of the work that applicants for routine jobs must perform. assessment centers A set of performance-simulation tests designed to evaluate a candidate’s managerial potential. Most People Expect Multiple CareersOB Poll How many careers do you expect to have in your life? None 1–2 3–4 5+ 2% 20% 37% 41% 3 Define contingent selection, and contrast the arguments for and against drug testing. Source: Based on J. Yang and A. Gonzalez, “Charles Schwab Survey of 1,000 Adults,” USA Today (March 9, 2011), p. 1B. 550 CHAPTER 17 Human Resource Policies and Practices Drug testing is controversial. Many applicants think testing without rea- sonable suspicion is invasive or unfair and say they should be tested on job- performance factors, not lifestyle choices that may not be relevant. Employers might counter that drug use and abuse are extremely costly, not just in financial terms but also in terms of people’s safety. They have the law on their side. The U.S. Supreme Court has concluded that drug tests are “minimally invasive” se- lection procedures that as a rule do not violate individuals’ rights. Under the Americans with Disabilities Act, firms may not require employees to pass a medical exam before a job offer is made. However, they can conduct medical exams after making a contingent offer—to determine whether an appli- cant is physically or mentally able to do the job. Employers also sometimes use medical exams to find out whether and how they can accommodate employees with disabilities. For jobs requiring exposure to heavy physical or psychological demands, such as air traffic controllers or firefighters, medical exams are obvi- ously an important indicator of ability to perform. International Variations in Selection Processes A study of 300 large organizations in 22 countries demonstrated that selection practices differ by nation. 29 The use of educational qualifications in screen- ing candidates seems to be a universal practice, but aside from this, different countries emphasize different selection techniques. Structured interviews were popular in some countries and nonexistent in others. The study authors sug- gested that “certain cultures may find structured interviews antithetical to be- liefs about how one should conduct an interpersonal interaction or the extent to which one should trust the judgment of the interviewer.” 30 Other research shows that across the Netherlands, the United States, France, Spain, Portugal, and Singapore, most applicants prefer interviews and work sample tests and dislike use of personal contacts and integrity tests. 31 There was little variation in preferences across these countries. Executives of ImageNet Company (in red jackets), a Japanese Internet retailer, conducted job interviews atop Mount Fuji, Japan’s highest mountain. Of the 20 candidates who applied for one of four job openings, 11 succeeded in reach- ing the summit of the 12,388- foot mountain for the interview. ImageNet said that the unique interview was to ensure that job applicants “have what it takes to scale the heights of business” and would identify candidates who are highly motivated, determined to succeed, and prepared for unusual challenges. Requiring applicants to climb a mountain to attend an interview would run afoul of equal employment laws in the United States and most European nations. So ur ce : Y u ri k o N a k a o /R e u te rs /L a n d o v M e d ia . Training and Development Programs 551 Training and Development Programs Competent employees don’t remain competent forever. Skills deteriorate and can become obsolete, and new skills need to be learned. That’s why U.S. cor- porations with a hundred or more employees spent more than $125 billion on formal training in a recent year. 32 Types of Training Training can include everything from teaching employees basic reading skills to conducting advanced courses in executive leadership. Here we discuss four general skill categories—basic literacy, technical skills, interpersonal skills, and problem-solving skills—and ethics training. Basic Skills One survey of more than 400 human resources professionals found that 40 percent of employers believe high school graduates lack basic skills in reading comprehension, writing, and math. 33 As work has become more sophisticated, the need for these basic skills has grown significantly, leading to a gap between employer demands for skills and the available skills in the workforce. 34 The challenge isn’t unique to the United States. It’s a worldwide problem—from the most developed countries to the least. 35 For many undevel- oped countries, widespread illiteracy means there is almost no hope of compet- ing in a global economy. Organizations increasingly have to teach employees basic reading and math skills. A literacy audit showed that employees at gun manufacturer Smith & Wesson needed at least an eighth-grade reading level to do typical workplace tasks. 36 Yet 30 percent of the company’s 676 workers with no degree scored below eighth-grade levels in either reading or math. After the first round of basic-skills classes, company-paid and on company time, 70 percent of attend- ees brought their skills up to the target level, allowing them to do a better job. They displayed increased abilities to use fractions and decimals, better overall communication, greater ease in writing and reading charts, graphs, and bulle- tin boards—and a significant increase in confidence. Technical Skills Most training is directed at upgrading and improving an em- ployee’s technical skills, increasingly important for two reasons: new technology and new structural designs in the organization. Indian companies have faced a dramatic increase in demand for skilled workers in areas like engineering for emerging technologies, but many recent engineering graduates lack up-to-date knowledge required to perform these technical tasks. 37 Companies like Tata and Wipro provide new hires with up to 3 months of training to ensure they have the knowledge to perform the techni- cal work demanded. In addition, these organizations are attempting to form partnerships with engineering schools to ensure their curricula meet the needs of contemporary employers. As organizations flatten their structures, expand their use of teams, and break down traditional departmental barriers, employees need mastery of a wider variety of tasks and increased knowledge of how their organization oper- ates. The restructuring of jobs around empowered teams at Miller Brewing led management to introduce a comprehensive business literacy program to help employees better understand competition, the state of the beer industry, where 4 Compare the four main types of training. 552 CHAPTER 17 Human Resource Policies and Practices the company’s revenues come from, how costs are calculated, and where em- ployees fit into the company’s value chain. 38 Problem-Solving Skills Problem-solving training for managers and other em- ployees can include activities to sharpen their logic, reasoning, and problem- defining skills as well as their abilities to assess causation, develop and analyze alternatives, and select solutions. Problem-solving training has become a part of almost every organizational effort to introduce self-managed teams or imple- ment quality-management programs. Interpersonal Skills Almost all employees belong to a work unit, and their work performance depends on their ability to effectively interact with their co- workers and boss. Some employees have excellent interpersonal abilities, but others require training to improve listening, communicating, and team-building skills. Although professionals are greatly interested in interpersonal skills train- ing, most evidence suggests that skills learned in such training do not readily transfer back to the workplace. 39 Civility Training As human resource managers have become increasingly aware of the effects of social behavior in the workplace, they have paid more attention to the problems of incivility, bullying, and abusive supervision in organizations. Examples of incivility include being ignored, being excluded from social situa- tions, having your reputation undermined in front of others, and experiencing other actions meant to demean or disparage. Researchers have shown that these forms of negative behavior can decrease satisfaction, reduce job performance, increase perceptions of unfair treatment, increase depression, and lead to psy- chological withdrawal from the workplace. 40 Is there anything managers can do to minimize incivility, bullying, and abu- sive supervision? One possibility is training specifically targeted to building ci- vility by having directed conversations about it and supporting the reduction of incivility on an ongoing process. Following a training intervention based on these principles, co-worker civility, respect, job satisfaction, and manage- ment trust have increased, while supervisor incivility, cynicism, and absences There’s a heavy focus on teamwork and unit cohesion for this squad of midshipmen during their 18-hour- long Sea Trials training at the U.S. Naval Academy. Learning how to become a team player and recog- nizing the value of teamwork are part of the interpersonal skills train- ing for cadets who are finishing their freshman year at the academy. Working together to complete a challenge, such as transporting the log shown here, is the objective of the training, because the tasks can- not be completed alone. The train- ing also teaches cadets the skills of encouraging and motivating peers to succeed as part of building unity among squad members. So ur ce : D a m o n J . M o ri tz / M A I /L a n d o v M e d ia . Training and Development Programs 553 decreased. 41 Thus, the evidence suggests that deliberate interventions to im- prove the workplace climate for positive behavior can indeed minimize the problems of incivility. Ethics Training A large percentage of employees working in the 1,000 largest U.S. corporations receive ethics training 42 either during new-employee orienta- tion, as part of ongoing developmental programs, or as periodic reinforcement of ethical principles. 43 But the jury is still out on whether you can actually teach ethics. 44 Critics argue that ethics are based on values, and value systems are learned by example at an early age. By the time employees are hired, their ethical values are fixed. Some research does suggest ethics training does not have a significant long-term effect on participants’ values and even that exposure to business and law school programs decreases students’ level of prosocial ethical values. 45 Supporters of ethics training say values can be learned and changed after early childhood. And even if they couldn’t, ethics training helps employees rec- ognize ethical dilemmas and become more aware of the ethical issues underly- ing their actions. It also reaffirms an organization’s expectations that members will act ethically. Individuals who have greater exposure to organizational eth- ics codes and ethics training do tend to be more satisfied and perceive their organizations as more socially responsible, so ethics training does have some positive effects. 46 Training Methods Historically, training meant “formal training,” planned in advance and hav- ing a structured format. However, evidence indicates 70 percent of workplace learning takes place in informal training —unstructured, unplanned, and easily adapted to situations and individuals—for teaching skills and keeping employ- ees current. 47 In reality, most informal training is nothing other than employ- ees helping each other out, sharing information, and solving work-related problems together. Thus, many managers are now supportive of what used to be considered “idle chatter.” On-the-job training methods include job rotation, apprenticeships, un- derstudy assignments, and formal mentoring programs. But because they often disrupt the workplace, organizations also invest in off-the-job training. The $125 billion figure we cited for training was largely spent on the formal off- the-job variety, the most popular method being live classroom lectures. But it also encompasses public seminars, self-study programs, Internet courses, Webinars, podcasts, and group activities that use role-plays and case studies. The fastest-growing training medium is probably computer-based training, or e-training. 48 E-learning systems emphasize learner control over the pace and content of instruction, allow e-learners to interact through online communities, and incorporate other techniques such as simulations and group discussions. Computer-based training that lets learners actively participate in exercises and quizzes was more effective than traditional classroom instruction. 49 Recent re- search has also highlighted the ways in which computer-based training can be improved by providing learners with regular prompts to set goals for learning, use effective study strategies, and measure progress toward their learning goals. 50 On the positive side, e-training increases flexibility because organizations can deliver materials anywhere, any time. It also seems fast and efficient. On the other hand, it’s expensive to design self-paced online materials, employees miss the social interaction of a classroom, online learners are more susceptible to distractions, and “clicking through” training without engaging in practice ac- tivities provides no assurance that employees have actually learned anything. 51 5 Contrast formal and informal training methods. 6 Contrast on-the-job and off-the-job training. MyManagementLab For an interactive application of this topic, check out this chapter’s simulation activity at www.mymanagementlab.com. www.mymanagementlab.com 554 CHAPTER 17 Human Resource Policies and Practices Evaluating Effectiveness The effectiveness of a training program can refer to the level of student satisfac- tion, the amount students learn, the extent to which they transfer the material from training to their jobs, or the financial return on investments in training. 52 These results are not always related. Some people who have a positive experi- ence in an upbeat, fun class learn very little; some who learn a great deal have difficulty figuring out how to use their knowledge at work; and changes in em- ployee behavior are often not large enough to justify the expense of training. This means rigorous measurement of multiple training outcomes should be a part of every training effort. The success of training also depends on the individual. If individuals are unmotivated, they will learn very little. What creates training motivation? Personality is important: those with an internal locus of control, high conscien- tiousness, high cognitive ability, and high self-efficacy learn more. The climate also is important: when trainees believe there are opportunities and resources to let them apply their newly learned skills, they are more motivated and do bet- ter in training programs. 53 Finally, after-training support from supervisors and co-workers has a strong influence on whether employees transfer their learn- ing into new behavior. 54 For a training program to be effective requires not just teaching the skills but also changing the work environment to support the trainees. Videogame training is widely used in the technology industry and is gaining popularity in low-tech firms. Cold Stone Creamery, for example, has developed a propri- etary game called “Stone City” to help new employees like the young man shown here learn about prod- ucts, portion sizes, and customer service. As one element of comput- erized training, Internet games are intrinsically motivating and result in employees choosing to repeatedly engage in game play and mastering skills. Computer-based training is fast and efficient and gives learners control over the pace and content of instruction. So ur ce : A b e l U ri b e /M C T /N e w sc o m . Would you study differently or exert a different level of effort for a college course graded on a pass–fail basis than for one that awarded letter grades A to F? Students typically tell us they study harder when letter grades are at stake. When they take a course on a pass–fail basis, they tend to do just enough to ensure a passing grade. 7 Describe the purposes of performance evaluation, and list the methods by which it can be done. Performance Evaluation Performance Evaluation 555 What applies in the college context also applies to employees at work. In this section, we show how the choice of a performance evaluation system and the way it’s administered can be an important force influencing employee behavior. What Is Performance? In the past, most organizations assessed only how well employees performed the tasks listed on a job description, but today’s less hierarchical and more service- oriented organizations require more. Researchers now recognize three major types of behavior that constitute performance at work: 1. Task performance. Performing the duties and responsibilities that con- tribute to the production of a good or service or to administrative tasks. This includes most of the tasks in a conventional job description. 2. Citizenship . Actions that contribute to the psychological environment of the organization, such as helping others when not required, supporting or- ganizational objectives, treating co-workers with respect, making construc- tive suggestions, and saying positive things about the workplace. 3. Counterproductivity. Actions that actively damage the organization. These behaviors include stealing, damaging company property, behaving aggres- sively toward co-workers, and taking avoidable absences. Most managers believe good performance means doing well on the first two dimensions and avoiding the third. 55 A person who does core job tasks very well but is rude and aggressive toward co-workers is not going to be considered a good employee in most organizations, and even the most pleasant and upbeat worker who can’t do the main job tasks well is not going to be a good employee. Purposes of Performance Evaluation Performance evaluation serves a number of purposes. 56 One is to help manage- ment make general human resource decisions about promotions, transfers, and terminations. Evaluations also identify training and development needs. They pin- point employee skills and competencies for which remedial programs can be devel- oped. Finally, they provide feedback to employees on how the organization views their performance and are often the basis for reward allocations, including merit pay increases. Because our interest is in organizational behavior, here we emphasize per- formance evaluation as a mechanism for providing feedback and determining reward allocations. What Do We Evaluate? The criteria management choose to evaluate will have a major influence on what employees do. The three most popular sets of criteria are individual task outcomes, behaviors, and traits. Individual Task Outcomes If ends count rather than means, management should evaluate an employee’s task on outcomes such as quantity produced, scrap generated, and cost per unit of production for a plant manager or on task performance The combination of effectiveness and efficiency at doing your core job tasks. citizenship Actions that contribute to the psychological environment of the organization, such as helping others when not required counterproductivity Actions that actively damage the organization, including stealing, behaving aggressively toward co-workers, or being late or absent 556 CHAPTER 17 Human Resource Policies and Practices overall sales volume in the territory, dollar increase in sales, and number of new accounts established for a salesperson. Behaviors It is difficult to attribute specific outcomes to the actions of employ- ees in advisory or support positions or employees whose work assignments are part of a group effort. We may readily evaluate the group’s performance, but if it is hard to identify the contribution of each group member, management will often evaluate the employee’s behavior. A plant manager might be evaluated on promptness in submitting monthly reports or leadership style, and a salesper- son on average number of contact calls made per day or sick days used per year. Measured behaviors needn’t be limited to those directly related to indi- vidual productivity. As we pointed out in discussing organizational citizenship behavior (see Chapters 1 and 3 ), helping others, making suggestions for im- provements, and volunteering for extra duties make work groups and organiza- tions more effective and often are incorporated into evaluations of employee performance. Traits The weakest criteria, because they’re furthest removed from actual job performance, are individual traits. 57 Having a good attitude, showing confidence, being dependable, looking busy, or possessing a wealth of experience may or may not be highly correlated with positive task outcomes, but it’s naïve to ignore the reality that organizations still use such traits to assess job performance. Who Should Do the Evaluating? Who should evaluate an employee’s performance? By tradition, the task has fallen to managers, because they are held responsible for their employees’ performance. But others may do the job better. Behavior is an important element in evaluating the performance of caregivers in nursing homes and retirement facilities. In addition to individual task outcomes, the care- giver shown here attending to a resident at a nursing home for the elderly in Yokohama, Japan, is eval- uated on behaviors such as helping others and building caring and trusting relationships with residents and their family members. These subjective factors contribute to the effectiveness of the nursing home and its reputation as a place where older people are treated with love and respect. So u rc e : K yo d o v ia A P I m a g e s. Performance Evaluation 557 With many of today’s organizations using self-managed teams, telecom- muting, and other organizing devices that distance bosses from employees, the immediate superior may not be the most reliable judge of an employee’s performance. Peers and even subordinates are being asked to take part in the process, and employees are participating in their own evaluation. One survey found about half of executives and 53 percent of employees now have input into their performance evaluations. 58 As you might expect, self-evaluations of- ten suffer from overinflated assessment and self-serving bias, and they seldom agree with superiors’ ratings. 59 They are probably better suited to developmen- tal than evaluative purposes and should be combined with other sources of in- formation to reduce rating errors. In most situations, in fact, it is highly advisable to use multiple sources of ratings. Any individual performance rating may say as much about the rater as about the person being evaluated. By averaging across raters, we can obtain a more reliable, unbiased, and accurate performance evaluation. Another popular approach to performance evaluation is 360-degree evalu- ations. 60 These provide performance feedback from the employee’s full circle of daily contacts, from mailroom workers to customers to bosses to peers (see Exhibit 17-2 ). The number of appraisals can be as few as 3 or 4 or as many as 25; most organizations collect 5 to 10 per employee. What’s the appeal of the 360-degree appraisal? By relying on feedback from co-workers, customers, and subordinates, organizations are hoping to give ev- eryone a sense of participation in the review process and gain more accurate readings on employee performance. Evidence on the effectiveness of the 360-degree evaluation is mixed. 61 It provides employees with a wider perspective on their performance, but many organizations don’t spend the time to train evaluators in giving constructive The primary objective of the 360-degree performance evaluation is to pool feedback from all of the employee’s customers. Top management (Internal customer) Suppliers (External customer) Manager (Internal customer) Clients (External customer) Subordinates (Internal customer) Co-workers or team members (Internal customer) Other department representatives (Internal customer) Employee Source: Adapted from Personnel Journal (November 1994), p. 100. 360-Degree Evaluations Exhibit 17-2 558 CHAPTER 17 Human Resource Policies and Practices criticism. Some allow employees to choose the peers and subordinates who eval- uate them, which can artificially inflate feedback. It’s also difficult to reconcile disagreements between rater groups. There is clear evidence that peers tend to give much more lenient ratings that supervisors or subordinates, and peers also tend to make more errors in appraising performance. Methods of Performance Evaluation We’ve discussed what we evaluate and who should do the evaluating. Now we ask: How do we evaluate an employee’s performance? What are the specific techniques for evaluation? Written Essays Probably the simplest method is to write a narrative describ- ing an employee’s strengths, weaknesses, past performance, potential, and suggestions for improvement. The written essay requires no complex forms or extensive training to complete. But, in this method, a useful appraisal may be determined as much by the evaluator’s writing skill as by the employee’s actual level of performance. It’s also difficult to compare essays for different employ- ees (or for the same employees written by different managers) because there is no standardized scoring key. Critical Incidents Critical incidents focus the evaluator’s attention on the dif- ference between executing a job effectively and executing it ineffectively. The appraiser describes what the employee did that was especially effective or inef- fective in a situation, citing only specific behaviors. A list of such critical inci- dents provides a rich set of examples to show the employee desirable behaviors and those that call for improvement. T he process of appraising per- formance is complicated and requires both assessing what employees are doing and communicat- ing this information back to the employ- ees. These are two highly social, context-dependent processes, so we might expect performance appraisal to vary dramatically depending on the country. Preliminary research suggests that management practices related to performance appraisal do indeed vary across borders. A structured interview study ex- amined Chinese managers’ beliefs about performance appraisal. Most respondents found it a good way to build communication and believed per- formance levels are a function of each person’s individual attributes. These attitudes were fairly similar to those of managers in the United States, where most research on performance ap- praisal has been performed. However, the Chinese managers believed a per- son in a position of power and control should run the appraisal meeting, un- like the more informal preferences of U.S. managers. One larger-scale study compared appraisal practices in the United States, Canada, the United Kingdom, Finland, Sweden, Hong Kong, and Singapore using the dimensions of culture identified in the GLOBE survey. Appraisals were more fre- quently used for communication and development in countries like Sweden and Finland that were low in asser- tiveness and power distance. Formal feedback was more frequent in highly assertive, low collectivist, and uncer- tainty avoidant cultures like the United States, the United Kingdom, and Canada. Finally, appraisals were more collaborative in nature in the United States and Canada, and more for- mal and top-down in Hong Kong and Singapore. Source: Based on K. H. C. Cheng and W. Cascio, “Performance-Appraisal Beliefs of Chinese Employees in Hong Kong and the Pearl River Delta,” International Journal of Selection and Assessment 17, no. 3 (2009), pp. 329–333; and F. F. T. Chiang and T. A. Birtch, “Appraising Performance across Borders: An Empirical Examination of the Purposes and Practices of Performance Appraisal in a Multi-Country Context,” Journal of Management Studies 47, no. 7 (2010), pp. 1365–1393. glOBalization! Performance Appraisal Around the World Performance Evaluation 559 Graphic Rating Scales One of the oldest and most popular methods of evalu- ation is graphic rating scales . The evaluator goes through a set of performance factors—such as quantity and quality of work, depth of knowledge, cooperation, attendance, and initiative—and rates each on incremental scales. The scales may specify, say, five points, so job knowledge might be rated 1 (“is poorly in- formed about work duties”) to 5 (“has complete mastery of all phases of the job”). Although they don’t provide the depth of information that essays or criti- cal incidents do, graphic rating scales are less time consuming to develop and administer and allow for quantitative analysis and comparison. Behaviorally Anchored Rating Scales Behaviorally anchored rating scales (BARS) combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates employees on items along a continuum, but the items are examples of actual behavior on the job rather than general descriptions or traits. To develop the BARS, participants first contribute specific illustrations of effective and ineffective behavior, which are translated into a set of performance dimensions with varying levels of quality. Forced Comparisons Forced comparisons evaluate one individual’s perfor- mance against the performance of another or others. It is a relative rather than an absolute measuring device. The two most popular comparisons are group order ranking and individual ranking. Group order ranking requires the evaluator to place employees into a partic- ular classification, such as top one-fifth or second one-fifth. If a rater has 20 em- ployees, only 4 can be in the top fifth and, of course, 4 must also be relegated to the bottom fifth. This method is often used in recommending students to graduate schools. The individual ranking approach rank-orders employees from best to worst. If the manager is required to appraise 30 employees, the difference between the 1st and 2nd employee is assumed to be the same as that between the 21st and 22nd. Some employees may be closely grouped, but no ties are permitted. The result is a clear ordering from the highest performer to the lowest. One parallel to forced ranking is forced distribution of college grades. Why would universities do this? As shown in Exhibit 17-3 , average GPAs have gotten much higher over time. 62 In recent years, nearly 43 percent of all letter grades given were A’s, whereas there was a decrease in the number of C’s. Although it is not exactly clear why this increase has occurred over time, many attri- bute the rise in high letter grades to the popularity of student evaluations as a means of assessing professor performance. Generous grades might produce critical incidents A way of evaluating the behaviors that are key in making the difference between executing a job effectively and executing it ineffectively. behaviorally anchored rating scales (BARS) Scales that combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates the employees based on items along a continuum, but the points are examples of actual behavior on the given job rather than general descriptions or traits. group order ranking An evaluation method that places employees into a particular classification, such as quartiles. individual ranking An evaluation method that rank-orders employees from best to worst. graphic rating scales An evaluation method in which the evaluator rates performance factors on an incremental scale. forced comparison Method of performance evaluation where an employee’s performance is made in explicit comparison to others (e.g., an employee may rank third out of 10 employees in her work unit. 560 CHAPTER 17 Human Resource Policies and Practices higher student evaluations. It’s also the case that giving higher grades can help students become more competitive candidates for graduate school and jobs. In response to grade inflation, some colleges have instituted forced grade distributions, whereby professors must give a certain percentage of A’s, B’s, and C’s. This is exactly what Princeton recently did; each department can now give A’s to no more than 35 percent of its students. Natasha Gopaul, a Princeton senior, commented, “You do feel you might be one of the ones they just cut off.” Suggestions for Improving Performance Evaluations The performance evaluation process is a potential minefield. Evaluators can unconsciously inflate evaluations (positive leniency), understate performance (negative leniency), or allow the assessment of one characteristic to unduly in- fluence the assessment of others (the halo error). Some appraisers bias their evaluations by unconsciously favoring people who have qualities and traits simi- lar to their own (the similarity error). And, of course, some evaluators see the evaluation process as a political opportunity to overtly reward or punish em- ployees they like or dislike. A review of the literature and several studies on performance appraisals demonstrates that many managers deliberately distort performance ratings in order to maintain a positive relationship with their sub- ordinates or to achieve a positive image of themselves by showing that all their 0 1 9 4 0 1 9 6 0 1 9 6 2 1 9 6 4 1 9 6 6 1 9 6 8 1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 0 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 0 1 9 9 2 1 9 9 4 1 9 9 6 1 9 9 8 2 0 0 0 2 0 0 2 2 0 0 4 2 0 0 6 2 0 0 8 5 10 P e rc e n t le tt e r g ra d e Year A B C D F 15 20 25 30 35 40 Distribution of grades at American colleges and universities as a function of time 45 Source: Stuart Rojstaczer, Gradeinflation.com . Reprinted with permission. Distribution of Grades at American Colleges and Universities as a Function of Time Exhibit 17-3 8 Show how managers can improve performance evaluations. Performance Evaluation 561 employees are performing well. 63 Although no protections guarantee accurate performance evaluations, the following suggestions can make the process more objective and fair. Use Multiple Evaluators As the number of evaluators increases, the probabil- ity of attaining more accurate information increases, as does the likelihood that the employee will accept the feedback as valid. 64 We often see multiple evaluators in competitions in such sports as diving and gymnastics. A set of evaluators judges a performance, the highest and lowest scores are dropped, and the final evaluation is made up of those remaining. The logic of multiple evaluators applies to organizations as well. If an employee has had ten supervi- sors, nine having rated her excellent and one poor, we can safely discount the one poor evaluation. By moving employees around within the organization to gain a number of evaluations, or by using multiple assessors (as in 360-degree appraisals), we increase the probability of achieving more valid and reliable evaluations. Evaluate Selectively To increase agreement among them, appraisers should evaluate only where they have some expertise. 65 They should thus be as close as possible, in organizational level, to the individual being evaluated. The more levels that separate them, the less opportunity the evaluator has to observe A s the economy has continued to perform poorly since the start of the Great Recession, a large number of individuals have joined the ranks of the long-term unemployed. The difficulties of unem- ployment are compounded because many employers either overtly or covertly prefer candidates who do not have gaps in their work his- tory. For example, New York Times reporter Catherine Rampell found in hundreds of job postings on Monster .com , CareerBuilder, and Craigslist that employers prefer people who are either currently employed or only recently laid off. This makes it extremely difficult for qualified indi- viduals to find work because it consti- tutes a bias against the unemployed. Although federal regulators in the Equal Employment Opportunity Commission have voiced concerns about the practice, unemployment is not a protected status like age, race, or gender. Due to gaps in the law, some states like New Jersey, New York, and Michigan have considered or imple- mented laws prohibiting advertise- ments that discourage unemployed workers from applying. What can employers do to ensure they are giving qualified individuals who have been unemployed a fair shot at open positions? A few principles can help ensure they are recruiting ethically: 1. Always try to evaluate the whole candidate, including prior experience, ability, and personal- ity. Don’t get overly focused on a single detail of their employment history. 2. If you are concerned about an em- ployment gap in the résumé, ask about it directly. Don’t assume it re- flects a lack of initiative or interest in work. 3. Consider offering additional training to those who may have missed out on certain developments in the field during their spell of unemployment. Although it can add expense, your organization might benefit from se- curing someone other employers would overlook. Sources: Based on C. Rampell, “The Help- Wanted Sign Comes with a Frustrating Asterisk,” The New York Times (July 25, 2011), www.nytimes.com ; and S. Kelly, “Unemployed Not Wanted? The EEOC Scrutinizes Whether Companies’ Recruiting Only Already Employed Applications Could Be Discrimination.” Treasury and Risk (April 2011), www.treasuryandrisk.com . An Ethical Choice Recruiting the Unemployed www.nytimes.com www.treasuryandrisk.com 562 CHAPTER 17 Human Resource Policies and Practices the individual’s behavior and, not surprisingly, the greater the possibility for inaccuracies. Train Evaluators If you can’t find good evaluators, make them. Training evalua- tors can produce more accurate raters. 66 Most rater training courses emphasize changing the raters’ frame of reference by teaching them what to look for, so everyone in the organization defines good performance in the same way. Another effective training technique is to encourage raters to describe the employee’s behavior in as much detail as possible. Providing more detail encourages raters to remember more about the employee’s performance, rather than just acting on their feelings about the employee at the moment. Provide Employees with Due Process The concept of due process can be ap- plied to appraisals to increase the perception that employees are being treated fairly. 67 Three features characterize due process systems: (1) Individuals are provided with adequate notice of what is expected of them; (2) all evidence relevant to a proposed violation is aired in a fair hearing so the individuals af- fected can respond; and (3) the final decision is based on the evidence and free of bias. One technique organizations might consider to enhance due process is posting appraisals online so employees can see their own performance scores exactly as the supervisor enters them. One company that did so found em- ployees believed rater accountability and employee participation were higher when appraisal information was available online prior to appraisal inter- views. 68 It might be that raters were more sensitive to providing accurate rat- ings when they knew employees would be able to see their own information directly. Providing Performance Feedback Few activities are more unpleasant for many managers than providing perfor- mance feedback to employees. In fact, unless pressured by organizational poli- cies and controls, managers are likely to ignore this responsibility. Why? First, even though almost every employee could stand to improve in some areas, managers fear confrontation when presenting negative feedback. Second, many employees do tend to become defensive when their weaknesses are pointed out. Instead of accepting the feedback as constructive and a basis for improving performance, some criticize the manager or redirect blame to someone else. Finally, employees tend to have an inflated assessment of their own performance. Statistically speaking, half of all employees must be below- average performers. But the average employee’s estimate of his or her own performance level generally falls around the 75th percentile. 69 So even when managers are providing good news, employees are likely to perceive it as not good enough. The solution to the problem is not to ignore it but to train managers to conduct constructive feedback sessions. An effective review—in which the em- ployee perceives the appraisal as fair, the manager as sincere, and the climate as constructive—can leave the employee feeling upbeat, informed about areas needing improvement, and determined to correct them. 70 It probably won’t surprise you that employees in a bad mood are much less likely to take advice than employees in a good mood. 71 Appraisals should also be as specific as pos- sible. People are most likely to overrate their own performance when asked about overall job performance, but they can be more objective when feed- back is about a specific area. 72 It’s also hard to figure out how to improve your Managing Work–Life Conflicts in Organizations 563 performance globally—it’s much easier to improve in specific areas. In addi- tion, the performance review should be a counseling activity more than a judg- ment process, best accomplished by allowing it to evolve from the employee’s own self-evaluation. International Variations in Performance Appraisal Let’s examine performance evaluation globally in the context of four cultural dimensions: individualism/collectivism, a person’s relationship to the environ- ment, time orientation, and focus of responsibility. Individual-oriented cultures such as the United States emphasize formal performance evaluation systems more than informal systems. They advocate written evaluations performed at regular intervals, the results of which manag- ers share with employees and use in the determination of rewards. On the other hand, the collectivist cultures that dominate Asia and much of Latin America are characterized by more informal systems—downplaying formal feedback and disconnecting reward allocations from performance ratings. Some of these differences may be narrowing, however. In Korea, Singapore, and even Japan, the use of performance evaluation has increased dramatically in the past de- cade, though not always smoothly or without controversy. One survey of Korean employees revealed that a majority questioned the validity of their performance evaluation results. 73 One recent study focused on the banking industry found significant dif- ferences across countries in performance appraisal practices. 74 Formal per- formance appraisals were used more frequently in countries that were high in assertiveness, high in uncertainty avoidance, and low in in-group collectiv- ism. In other words, assertive countries that see performance as an individual responsibility, and that desire certainty about where people stand, were more likely to use formal performance appraisals. On the other hand, in high un- certainty avoidance cultures performance appraisals were also used more fre- quently for communication and development purposes (as opposed to being used for rewards and promotion). Another study found that individuals who were high in power distance and high in collectivism tend to give more lenient performance appraisals. 75 S A L SELF-ASSESSMENT LIBRARY How Good Am I at Giving Performance Feedback? In the Self-Assessment Library (available on CD and online), take assessment III.A.3 (How Good Am I at Giving Performance Feedback?). Managing Work–Life Conflicts in Organizations We introduced work–life balance in Chapter 1 and discussed the blurring lines between work life and personal life. Here, we specifically focus on what organi- zations can do to help employees reduce conflicts. Work–life conflicts grabbed management’s attention in the 1980s, largely as a result of the increased entry into the workforce of women with dependent 9 Describe how organizations can manage work–family conflicts. 564 CHAPTER 17 Human Resource Policies and Practices children. In response, most major organizations took actions to make their workplaces more family-friendly. 76 They introduced on-site child care, sum- mer day camps, flextime, job sharing, leaves for school functions, telecommut- ing, and part-time employment. But organizations quickly realized work–life conflicts were not limited to female employees with children. Male workers and women without children were also facing this problem. Heavy workloads and increased travel demands, for instance, made it increasingly hard for many employees to meet both work and personal responsibilities. A Boston College survey of nearly 1,000 fathers who have professional careers showed that the participants put more importance on job security and flexible, family- friendly working schedules than on high income and advancement opportu- nities. 77 Organizations are modifying their workplaces with scheduling options and benefits to accommodate the varied needs of a diverse workforce. Employees at NestléPurina can bring their dogs into the office, SAS Institute has on-site childcare, a health care center, and a fitness center; and other firms offer perks ranging from on-site laundry to food services and free child care. 78 Exhibit 17-4 lists some initiatives to help employees reduce work–life conflicts. Time pressures aren’t the primary problem underlying these conflicts. 79 It’s the psychological incursion of work into the family domain—and vice versa— when people are worrying about personal problems at work and thinking about work problems at home. So, dad may make it home in time for dinner, but his mind is elsewhere. This suggests organizations should spend less effort helping employees with time-management issues and more helping them clearly seg- ment their lives. Keeping workloads reasonable, reducing work-related travel, T his statement is true. Let’s explain. Two-thirds of U.S. adults are overweight or even obese, and the changing nature of work is a major rea- son. Indeed, it might be the main ex- planation for why obesity has become the number-one public health problem in the United States and many other advanced economies. Our work has evolved to be more mental than physical. That tends to make it more interesting, but also more sedentary. Why is that a problem? The changes in work are estimated to mean that, on average, workers burn 120 to 150 fewer calories a day than they did 50 years ago. That may not seem like a lot, but it equates to 25 pounds of po- tential weight gain per year. Interestingly, research indicates that our physical activity in leisure time hasn’t changed much in the past 50 years. So we burn as many calories in nonwork activities as before—it’s work that is killing us. Fifty years ago, about half of all private-sector jobs included some kind of physical labor (farming, mining, construction, manufacturing). Today, fewer than 20 percent do, thanks to the growth of jobs in retailing, infor- mation technology, education, and business. What is the implication? “We need to encourage physical activity even more, especially given that we sit more during the day than we did 100 years ago,” said Keri Gans, a spokesperson for the American Dietetic Association. Some ways to do that are taking the stairs when you can, parking your car a good distance from work, and going for a walk at lunchtime. And, of course, exercising more off the job. As one expert noted when commenting on the increasingly sedentary nature of work, “We just have to make time for it.” Sources: T. Parker-Hope, “Sedentary Work Cited as Factor in Rising Obesity,” The New York Times (May 26, 2011), pp. A1, A3; A. Gardner, “Sedentary Jobs Helping to Drive Obesity Epidemic,” US News & World Report (May 26, 2011), downloaded July 11, 2011, from http://health.usnews.com/ ; and T. S. Church et al., “Trends Over 5 Decades in U.S. Occupation-Related Physical Activity and Their Associations with Obesity,” PLoS ONE 6, no. 5 (2011), doi:10.1371/journal .pone.0019657. Myth or Science? “Work Is Making Us Fat” http://health.usnews.com/ Managing Work–Life Conflicts in Organizations 565 Time based strategies ● Flextime ● Job sharing ● Leave for new parents ● Transportation ● Telecommuting ● Paid time off At Abbott, 89% of employees held jobs that permitted them to fl ex their schedules; at Lego 90% of employees do. Cisco provides job-sharing and videoconferencing facilities to minimize needs for travel away from family. Deloitte offers employees 4 unpaid weeks sabbatical, or 3 to 6 partially paid months off to volunteer. Deutsche Bank offers parents 20 days of free backup care per child per year, which they can redeem at local child care centers. At DuPont, 15% of employees telecommute; at Eli Lilly 30% of employees telecommute. Information based strategies ● Work–life support ● Relocation assistance ● Elder care resources ● Counseling services Blue Cross Blue Shield of North Carolina provides ParentLife classes and seminars. Capital One provides a networking and counseling group for parents of children with autism. Genetech offers a CareerLab, which provides career counseling, skills workshops, and networking sessions. Hallmark offers employees monthly meetings to talk about career management for women. Johnson and Johnson offers work–life Webinars covering topics like single parenting, fatherhood, and elder care. Money-based strategies ● Insurance subsidies ● Flexible benefi ts ● Adoption assistance ● Discounts for child care tuition ● Direct fi nancial assistance ● Domestic partner benefi ts ● Scholarships, tuition reimbursement Accenture offers a $5,000 adoption assistance benefi t. Carlson companies offers employees scholarships of up to $20,000 to attend the University of Minnesota’s Carlson School of Management. Citi employees can save up to $5,000 per year in pretax dependent care accounts, with a match of up to 30% from the company. Colgate-Palmolive provides up to $10,000 per year in annual tuition aid for job-related courses. IBM provides medical testing and therapy for children with special needs, up to a lifetime maximum of $50,000. Prudential employees can receive up to 15% off child care discounts. Direct services ● On-site child care ● Fitness center ● Summer child care ● On-site conveniences ● Concierge services ● Free or discounted company products Allstate and SAS provide on-site child care center at company headquarters. Companies like AOL and Verizon have on-site fi tness centers and discounts at gyms nationwide. Bristol-Myers Squibb offers full-time, part-time, and backup care for kids up to age 5, and summer camps for older children. Discovery Communications provides low-cost concierge services to help with to-do lists. Turner Broadcasting has a wellness center at headquarters that provides free exams, vaccinations, allergy shots, and health coaching. REI employees can participate in a program that offers large discounts on company products. Culture-change strategies ● Establishing work–life balanced culture; training managers to help employees deal with work–life confl icts ● Tie manager pay to employee satisfaction ● Focus on employees’ actual performance, not “face time” At American Express, 80% of managers received training on how to supervise employees with fl exible work arrangements. Bank of America’s My Work program allows mothers to log in from home or a satellite offi ce. General Mills has a fl exibility manager to enhance work–life balance. Pearson developed a Flexible Work Options. Accountability Guide that trains managers in the use of fl extime for their employees. Sources: “2010 100 Best Companies” Working Mother (August 17, 2011), www.workingmother.com ; “100 Best Companies to Work For,” CNNMoney, (August 17, 2011), www.money.cnn.com ; and J. Goudreau, “Top Companies for Work-Life Balance,” Forbes (May 13, 2011), www.forbes.com . Work–Life Initiatives Exhibit 17-4 www.workingmother.com www.money.cnn.com www.forbes.com 566 CHAPTER 17 Human Resource Policies and Practices MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. An organization’s human resource policies and practices create important forces that shape employee behavior and attitudes. In this chapter, we specifi- cally discussed the influence of selection practices, training and development programs, and performance evaluation systems. ● If properly designed, an organization’s selection practices will identify competent candidates and accurately match them to the job and the or- ganization. Although employee selection is far from a science, some or- ganizations fail to design a selection system that can achieve the right person–job fit. ● The most obvious effect of training programs is direct improvement in the skills necessary to successfully complete the job. Increased ability thus improves potential, but whether that potential becomes realized is largely an issue of motivation. ● A second benefit of training is that it increases an employee’s self- efficacy—that is, a person’s expectation that he or she can successfully execute the behaviors required to produce an outcome (see Chapter 7 ). Employees with high self-efficacy have strong expectations about their abilities to perform in new situations. They’re confident and expect to be successful. Training, then, is a means to positively affect self-efficacy because employees may be more willing to undertake job tasks and exert a high level of effort. ● A major goal of performance evaluation is to assess an individual’s performance accurately as a basis for allocating rewards. If evalua- tion is inaccurate or emphasizes the wrong criteria, employees will be over- or underrewarded. As demonstrated in Chapter 7 in our discus- sion of equity theory, evaluations perceived as unfair can result in re- duced effort, increases in absenteeism, or a search for alternative job opportunities. Summary and Implications for Managers and offering on-site quality child care are examples of practices that can help in this endeavor. Not surprisingly, people differ in their preference for scheduling options and benefits. 80 Some prefer organizational initiatives that better segment work from their personal lives, as flextime, job sharing, and part-time hours do by allowing employees to schedule work hours less likely to conflict with personal responsibilities. Others prefer ways to integrate work and personal life, such as on-site child care, gym facilities, and company-sponsored family picnics. On average, though, most people do prefer an organization that provides more support for work–life balance. One study even found that potential employees, particularly women, are more attracted to organizations that have a reputation for supporting employee work–life balance. 81 www.mymanagementlab.com Summary and Implications for Managers 567 Social Media Is a Great Source of New Hires POINT COUNTERPOINT A lot of employers are scaling back their presence on on- line job boards like Monster.com and social media sites like Facebook and LinkedIn, because there is just too much chaff for the wheat. For example, McLean, Virginia–based Science Applications International Corporate (SAIC) reduced the number of job boards it uses from 15 to 6. SAIC found that it simply wasn’t getting to enough of the right candidates early enough to staff its engineering and analyst positions. “We need to reach candidates earlier, before they’re being pursued by competitors,” the company said. Paris-owned food services company Sodexo has slashed its online presence in half. Why? Because while recruiting via social media increased the number of applications, nearly all the increase was in unqualified applicants. “Recruiters had to put in all this extra time to read applications but we didn’t get benefit from it,” said Arie Ball, the company’s talent acquisition vice president. PNC also is scaling back due to the low signal-to-noise ratio. “We used to post everything,” said the online banking company. “But you have to think strategically.” There is also the nontrivial issue of mistaken identity. A lot of mistaken hiring decisions have been made because a company used the wrong Facebook or LinkedIn profile. Applicants can post false information on social media sites, too. Perhaps the biggest issue of all is objectivity. Says one em- ployment expert, “Once an HR recruiter or administrator has been exposed to an applicant’s social networking profile, it’s difficult to remain objective and consider only the information that is relevant to the job.” Another recruiting manager voiced his skepticism regard- ing social media: “I’d love to drink the Kool-Aid if it did anything for me.” S ocial media sites such as Facebook, LinkedIn, and Twitter, and job boards like Monster.com , are indispensable in to- day’s marketplace for top talent. It’s true that an online presence with social media sites is a good way to sniff out fraud. Studies reveal that 45 percent of today’s résumés contain at least one piece of false information. Mining social media sites is great at gaining a fuller—and more accurate—picture of a candidate. One survey found that today 63 percent of employers use social media sites in recruitment and hiring decisions. Another revealed that 80 percent of employers plan to increase their presence on Facebook and LinkedIn in the future. Not only can social media sites help you make a more in- formed selection decisions, they can be a great help in recruit- ing more and better candidates to apply in the first place. Dawn Mitchell, a recruiter for business software company Red Hat, says it’s about “living where the candidates are.” She says that nearly all her recent hires have come from social media contacts. Increasingly, recruiting firms that link applicants to com- panies are finding social media critical for their business too. “Social media is the heart of everything we do,” said Bill Peppler of Kavaliro Staffing Services. “We make numerous job placements that we never would have been able to do without Facebook,” he said. Accenture—the New York–based consulting firm— has mastered the art of using social media in hiring. John Campagnino, Accenture’s global director of recruitment, says it has become “a centerpiece of our talent acquisition strategy.” Campagnino says that Accenture interacts with potential hires on Facebook, LinkedIn, and Twitter; posts jobs on these sites daily; and creates “talent communities” by joining professional groups. Hiring without heavy reliance on social media is backward- looking, and a missed opportunity. Sources: J. Light, “Recruiters Rethink Online Playbook,” The Wall Street Journal (January 18, 2011), p. B7; R. Pyrillis, “The Bait Debate,” Workforce Management (February 2011), pp. 16–22; and J. Bos, “Five Trends in Employee Screening: Is Your Company Prepared?” Workforce Management (March 2010), pp. 28–30. 568 CHAPTER 17 Human Resource Policies and Practices ● The content of the performance evaluation also influences employee per- formance and satisfaction. Specifically, performance and satisfaction are increased when the evaluation is based on behavioral and results-oriented criteria, when career issues as well as performance issues are discussed, and when the employee has an opportunity to participate in the evaluation. 1 What is initial selection? What are the most useful methods? 2 What is substantive selection? What are the most useful methods? 3 What is contingent selection? What are the arguments for and against drug testing? 4 What are the similarities and differences among the four main types of training? 5 What are the similarities and differences between for- mal and informal training methods? 6 What are the similarities and differences between on- the-job and off-the-job training? 7 What are the purposes of performance evaluation? What are the methods by which it can be done? 8 How can managers improve performance evaluations? 9 How can organizations manage work -family conflicts? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE Evaluating Performance and Providing Feedback Objective To experience the assessment of performance and ob- serve the provision of performance feedback. Time Approximately 30 minutes. Procedure Select a class leader—either a volunteer or someone cho- sen by your instructor. The class leader will preside over the class discussion and perform the role of manager in the evaluation review. Your instructor will leave the room. The class leader is then to spend up to 15 minutes helping the class to evalu- ate your instructor. Your instructor understands that this is only a class exercise and is prepared to accept criticism (and, of course, any praise you may want to convey). Your instructor also recognizes that the leader’s evaluation is actually a composite of many students’ input. So, be open and honest in your evaluation and have confidence that your instructor will not be vindictive. Research has identified seven performance dimen- sions to the college instructor’s job: (1) instructor knowledge, (2) testing procedures, (3) student–teacher relations, (4) organizational skills, (5) communica- tion skills, (6) subject relevance, and (7) utility of assignments. The discussion of your instructor’s per- formance should focus on these seven dimensions. The leader may want to take notes for personal use but will not be required to give your instructor any written documentation. When the 15-minute class discussion is complete, the leader will invite the instructor back into the room. The performance review will begin as soon as the instructor walks through the door, with the class leader becom- ing the manager and the instructor playing himself or herself. When completed, class discussion will focus on perfor- mance evaluation criteria and how well your class leader did in providing performance feedback. ETHICAL DILEMMA Credit Checking Is it unethical—or illegal—for a hiring organiza- tion to check an applicant’s credit history? The Equal Employment Opportunity Commission (EEOC) seems to think so. It is suing Kaplan Higher Education Case Incident 1 569 Corporation for its use of credit checks, alleging that relying on poor credit histories to reject applicants has adverse impact on minority applicants, with no legiti- mate purpose justifying its use. Justine Lisser, an EEOC spokesperson, said, “Credit histories were not compiled to show responsibility. They were compiled to show whether or not someone was paying the bills, which is not always the same thing.” In its defense, Kaplan maintained that it typically con- ducted credit checks: “The checks are job-related and necessary for our organization to ensure that staffing han- dling financial matters, including financial aid, are prop- erly screened.” A 2011 survey of employers revealed that 21 percent conducted credit checks on all applicants. That was up from 15 percent the year before. Two-thirds conduct credit checks on some applicants, up from 61 percent in 2010. Joey Price, with BL Seamon, thought she had found the perfect candidate for a conference planner position. The candidate was fresh out of college but had experience planning conferences and a good academic record. But when Price found out that the candidate had multiple car repossessions, extremely high credit card bills, and collec- tion agencies after her, she rejected her. “A credit report doesn’t lie,” Price said. Questions 1. Do you think organizations should be allowed to investigate applicants’ credit histories in the hiring process? Why or why not? 2. Do you think Seamon’s Joey Price was within her rights to reject the applicant with the poor credit history? Do you think this candidate’s financial prob- lems might be job relevant? 3. Some employers chose to disclose their reasoning to applicants rejected for poor credit. Says one hiring manager, “If a credit check comes back poor, the potential employee has a week to dispute and correct the errors.” What are the advantages and disadvan- tages of such a policy? Sources: J. Zappe, “Survey Finds More Companies Credit-Checking Candidates,” ERE.net (May 16, 2011), downloaded on July 11, 2011, from www.ere.net/2011/ ; S. Greenhouse, “Hiring Suit Takes on Bias Based on Credit,” The New York Times (December 22, 2010), pp. B1, B4; J. Fairley, “Employers Face Challenges in Screening Candidates,” Workforce Management (November 2010), pp. 7–9; and B. Roberts, “Close-Up on Screening,” HR Magazine (February 2011), p. 23–29. CASE INCIDENT 1 The End of the Performance Appraisal? As we discussed in the chapter, organizations measure employee performance for a variety of reasons, includ- ing determining which employees need training, who is performing well enough to earn a performance reward, and who deserves a promotion. Performance appraisal information can also help determine where problems lie in the company’s overall training and selection sys- tems and defend HR decisions such as firings in court. In light of these multiple uses, it might surprise you to learn that some companies are moving away from for- mal appraisal processes. Business scholar Jeffery Pfeffer describes how HR managers at companies like Apple had to bribe managers to complete assigned reviews with free tickets to San Francisco Giants games, and the head of HR at SAS received cheers from employees when he had a bonfire to burn performance appraisal forms. Clearly, appraisals are not popular with the managers asked to perform them. Pfeffer notes that the subjective nature of these reviews is troubling to many managers, leading employees to spend much of their time ingrati- ating themselves with the boss rather than doing their jobs. Moreover, appraisals put the focus on individual performance rather than on the performance of whole teams. Research conducted by Globoforce found that more than half the 631 survey respondents believed ap- praisals did not accurately reflect their performance on the job. So what is the alternative? Zappos now rates employ- ees not on how well they accomplish tasks but rather on how well they embody the company’s core values. This feedback is delivered much more frequently during the year than the traditional annual performance meet- ing. Nor are the ratings used for disciplinary actions or promotions, though employees who get low scores are invited to take developmental classes to improve the fit between their behavior and the company culture. Apple has also eliminated annual performance reviews as nei- ther timely nor helpful. Other companies have devel- oped performance management software that automates and streamlines a more continuous performance review, allowing employees to track their performance in real time. www.ere.net/2011/ 570 CHAPTER 17 Human Resource Policies and Practices CASE INCIDENT 2 Job Candidates Without Strong SAT Scores Need Not Apply Many high school students probably believe that once they get into college, their SAT scores are a thing of the past. However, many job seekers are discovering their would-be employers are asking for their SAT scores as part of the selection process. Donna Chan, a 23-year-old graduate of New York’s Wagner College, learned that one of the minimum requirements for many of the entry-level financial services jobs she was seeking was a combined SAT score of 1300. According to the College Board, the organization that administers the exam, the average com- bined math and verbal score of the freshman class of 2005 (the last class to take the old version of the SAT) was 1028. Donna Chan’s score was “in the 1200s”—a good score to be sure, but not good enough to obtain any of the positions she was seeking, even though she earned a 3.9 GPA in college. “I think it’s asking a bit much,” says Chan. “That’s something high school kids have to worry about. After four years of working hard, I think you’ve paid your dues, and unless you’re applying to Princeton Review or some math-related, analytical job, I don’t see the relevance.” Apparently, however, some recruiters do. Alan Sage, a vice president at systems management software company Configuresoft Inc., says SAT scores are a good predictor of success in his company, and he regularly has applicants submit their scores when applying for sales positions. He set the mark at a combined score of 1200—lower than Donna Chan faced but nonetheless well above average. Says Sage, “In my experience, people with high SAT scores tend to do better.” He adds, however, that “we wouldn’t exclude someone from an interview if he or she didn’t score high.” Similarly, Google has used SAT scores to identify individuals with higher levels of cognitive ability in the hiring process, but it also does not use an absolute cutoff. Some individuals, such as Kristin Carnahan, a spokesperson for the College Board, feel companies should use other measures of cognitive ability, such as college grades, which are also more recent indicators than SAT scores. Google uses grades in addition to SAT scores because it believes grades reflect motivation and discipline as well as intellectual ability. However, grades aren’t standardized across institutions, so they can’t be compared like SAT scores can. Grade inflation also may make it more difficult for recruiters to assess an appli- cant’s GPA. Because OB research has shown cognitive ability is a strong predictor of job performance—and the SAT is supposedly a measure of cognitive ability—many companies may continue to use it as a benchmark for job applicants. Questions 1. Is it fair for hiring organizations to require minimum scores on standardized tests such as the SAT? Why or why not? 2. As a recruiter choosing between two individuals with different SAT scores, would you have difficulty giv- ing the job to the applicant with the lower score? On what additional factors might your choice depend? 3. What other indicators of job performance, besides SAT scores, could you use to screen job applicants? What are the advantages and disadvantages of each? Sources: Based on R. Pyrillis, “Is Your Performance Review Underperforming?” Workforce Management (May 2011), pp. 20–25; S. A. Culbert and L. Rout, Get Rid of the Performance Review! (New York: Business Plus, 2010); and J. Pfeffer, “Low Grades for Performance Reviews,” BusinessWeek (August 3, 2009), p. 68. Questions 1. Have you ever been through a performance appraisal? Do the reactions to appraisal systems described here match your experience? Why or why not? 2. What are some potential advantages of providing em- ployees with more regular developmental feedback than an annual meeting? 3. Are there potential drawbacks to eliminating conven- tional performance appraisal systems? What systems would need to be put in place to replace formal appraisals? 4. Would you feel comfortable providing others with performance feedback? What are some of the possible reasons managers often prefer not to give employees critiques of their performance? Endnotes 571 ENDNOTES 1. See B. Becker and B. Gerhart, “The Impact of Human Resource Management on Organizational Performance: Progress and Prospects,” Academy of Management Journal (August 1996), pp. 779–801; M. A. Huselid, S. E. Jackson, and R. S. Schuler, “Technical and Strategic Human Resource Management Effectiveness as Determinants of Firm Performance,” Academy of Management Journal (February 1997), pp. 171–188; C. J. Collins, and K. D. Clark, “Strategic Human Resource Practices, Top Management Team Social Networks, and Firm Performance: The Role of Human Resource Practices in Creating Organizational Competitive Advantage,” Academy of Management Journal (December 2003), pp. 740–751; D. E. Bowen and C. Ostroff, “Understanding HRM–Firm Performance Linkages: The Role of the ‘Strength’ of the HRM System,” Academy of Management Review (April 2004), pp. 203–221; and K. Birdi, C. Clegg, M. Patterson, A. Robinson, C. B. Stride, T. D. Wall, and S. J. Wood, “The Impact of Human Resource and Operational Management Practices on Company Productivity: A Longitudinal Study,” Personnel Psychology 61, no. 3 (2008), pp. 467–501. 2. See, for instance, A. L. Kristof-Brown, R. D. Zimmerman, and E. C. Johnson, “Consequences of Individual’s Fit at Work: A Meta-Analysis of Person-Job, Person-Organization, Person- Group, and Person-Supervisor Fit,” Personnel Psychology 58, no. 2 (2005), pp. 281–342; and D. S. DeRue and F. P. Morgeson, “Stability and Change in Person-Team and Person-Role Fit over Time: The Effects of Growth Satisfaction, Performance, and General Self-Efficacy,” Journal of Applied Psychology 92, no. 5 (2007), pp. 1242–1253. 3. J. D. Glater, “Another Hurdle for the Jobless: Credit Inquiries,” The New York Times (August 6, 2009), www. nytimes.com . 4. C. Lachnit, “The Cost of Not Doing Background Checks,” Workforce Management, www.workforce.com . 5. Cited in J. H. Prager, “Nasty or Nice: 56-Question Quiz,” The Wall Street Journal (February 22, 2000), p. A4; see also H. Wessel, “Personality Tests Grow Popular,” Seattle Post– Intelligencer (August 3, 2003), p. G1; and E. Frauenheim, “Personality Tests Adapt to the Times,” Workforce Management (February 2010), p. 4. 6. E. Maltby, “To Find Best Hires, Firms Become Creative,” The Wall Street Journal (November 17, 2009), p. B6. Sources: Based on S. Foss, “Background Check—Background Search,” American Chronicle (July 12, 2007); K. J. Dunham, “Career Journal: More Employers Ask Job Seekers for SAT Scores,” The Wall Street Journal (October 28, 2003), p. B1; and M. LaChapelle, “Do You Hire People the Google Way?” Times Union (July 13, 2011), www.timesunion.com . 7. J. P. Hausknecht, D. V. Day, and S. C. Thomas, “Applicant Reactions to Selection Procedures: An Updated Model and Meta-Analysis,” Personnel Psychology (September 2004), pp. 639–683. 8. E. E. Ghiselli, “The Validity of Aptitude Tests in Personnel Selection,” Personnel Psychology (Winter 1973), p. 475; J. E. Hunter, “Cognitive Ability, Cognitive Aptitudes, Job Knowledge, and Job Performance,” Journal of Vocational Behavior 29, no. 3 (1986), pp. 340–362. 9. F. L. Schmidt, and J. Hunter, “General Mental Ability in the World of Work: Occupational Attainment and Job Performance,” Journal of Personality and Social Psychology 86, no. 1 (2004), pp. 162–173; and F. L. Schmidt, J. A. Shaffer, and I. Oh, “Increased Accuracy for Range Restriction Corrections: Implications for the Role of Personality and General Mental Ability in Job and Training Performance,” Personnel Psychology 61, no. 4 (2008), pp. 827–868. 10. J. F. Salgado, N. Anderson, S. Moscoso, C. Bertua, F. de Fruyt, and J. P. Rolland, “A Meta-Analytic Study of General Mental Ability Validity for Different Occupations in the European Community,” Journal of Applied Psychology (December 2003), pp. 1068–1081. 11. M. R. Barrick, M. K. Mount, and T. A. Judge, “Personality and Performance at the Beginning of the New Millennium: What Do We Know and Where Do We Go Next?” International Journal of Selection & Assessment (March– June 2001), pp. 9–30; M. R. Barrick, G. L. Stewart, and M. Piotrowski, “Personality and Job Performance: Test of the Mediating Effects of Motivation Among Sales Representatives,” Journal of Applied Psychology (February 2002), pp. 43–51; and C. J. Thoresen, J. C. Bradley, P. D. Bliese, and J. D. Thoresen, “The Big Five Personality Traits and Individual Job Performance and Growth Trajectories in Maintenance and Transitional Job Stages,” Journal of Applied Psychology (October 2004), pp. 835–853. 12. R. N. Landers, P. R. Sackett, and K. A. Tuzinski, “Retesting after Initial Failure, Coaching Rumors, and Warnings against Faking in Online Personality Measures for Selection,” Journal of Applied Psychology 96, no. 1 (2011), pp. 202–210; and J. P. Hausknecht, “Candidate Persistence and Personality Test Practice Effects: Implications for Staffing System Management,” Personnel Psychology 63, no. 2 (2010), pp. 299–324. 4. Suppose you worked at a company that used SAT scores for hiring purposes. How would you handle diverse applicants, such as those from a foreign coun- try who may not have taken the SAT? www.timesunion.com www.nytimes.com www.workforce.com 572 CHAPTER 17 Human Resource Policies and Practices 13. I. Oh, G. Wang, and M. K. Mount, “Validity of Observer Ratings of the Five-Factor Model of Personality Traits: A Meta-Analysis,” Journal of Applied Psychology 96, no. 4 (2011), pp. 762–773; and B. S. Connelly and D. S. Ones, “An Other Perspective on Personality: Meta-Analytic Integration of Observers’ Accuracy and Predictive Validity,” Psychological Bulletin 136, no. 6 (2010), pp. 1092–1122. 14. D. S. Ones, C. Viswesvaran, and F. L. Schmidt, “Comprehensive Meta-Analysis of Integrity Test Validities: Findings and Implications for Personnel Selection and Theories of Job Performance,” Journal of Applied Psychology (August 1993), pp. 679–703; D. S. Ones, C. Viswesvaran, and F. L. Schmidt, “Personality and Absenteeism: A Meta- Analysis of Integrity Tests,” European Journal of Personality (March–April 2003), Supplement 1, pp. S19–S38; and C. M. Berry, P. R. Sackett, and S. Wiemann, “A Review of Recent Developments in Integrity Test Research,” Personnel Psychology 60, no. 2 (2007), pp. 271–301. 15. P. L. Roth, P. Bobko, and L. A. McFarland, “A Meta-Analysis of Work Sample Test Validity: Updating and Integrating Some Classic Literature,” Personnel Psychology 58, no. 4 (2005), pp. 1009–1037. 16. P. Carbonara, “Hire for Attitude, Train for Skill,” Fast Company, Greatest Hits, vol. 1 (1997), p. 68. 17. See, for instance, A. C. Spychalski, M. A. Quinones, B. B. Gaugler, and K. Pohley, “A Survey of Assessment Center Practices in Organizations in the United States, Personnel Psychology (Spring 1997), pp. 71–90; C. Woodruffe, Development and Assessment Centres: Identifying and Assessing Competence (London: Institute of Personnel and Development, 2000); and J. Schettler, “Building Bench Strength,” Training (June 2002), pp. 55–58. 18. F. Lievens, H. Peeters, and E. Schollaert, “Situational Judgment Tests: A Review of Recent Research,” Personnel Review 37, no. 4 (2008), pp. 426–441. 19. F. Lievens, and F. Patterson, “The Validity and Incremental Validity of Knowledge Tests, Low-Fidelity Simulations, and High-Fidelity Simulations for Predicting Job Performance in Advanced-Level High-Stakes Selection,” Journal of Applied Psychology, Online First Publication (April 11, 2011), doi: 10.1037/a0023496. 20. R. A. Posthuma, F. P. Moregeson, and M. A. Campion, “Beyond Employment Interview Validity: A Comprehensive Narrative Review of Recent Research and Trend Over Time,” Personnel Psychology (Spring 2002), p. 1; and S. L. Wilk and P. Cappelli, “Understanding the Determinants of Employer Use of Selection Methods,” Personnel Psychology (Spring 2003), p. 111. 21. B. W. Swider, M. R. Barrick, T. B. Harris, and A. C. Stoverink, “Managing and Creating an Image in the Interview; The Role of Interviewee Initial Impressions,” Journal of Applied Psychology, Online First Publication, (May 30, 2011), doi: 10.1037/a0024005. 22. K. I. van der Zee, A. B. Bakker, and P. Bakker, “Why Are Structured Interviews So Rarely Used in Personnel Selection?” Journal of Applied Psychology (February 2002), pp. 176–184. 23. See M. A. McDaniel, D. L. Whetzel, F. L. Schmidt, and S. D. Maurer, “The Validity of Employment Interviews: A Comprehensive Review and Meta-Analysis,” Journal of Applied Psychology (August 1994), pp. 599–616; M. A. Campion, D. K. Palmer, and J. E. Campion, “A Review of Structure in the Selection Interview,” Personnel Psychology (Autumn 1997), pp. 655–702; A. I. Huffcutt and D. J. Woehr, “Further Analysis of Employment Interview Validity: A Quantitative Evaluation of Interviewer-Related Structuring Methods,” Journal of Organizational Behavior (July 1999), pp. 549–560; and M. Ziegler, E. Dietl, E. Danay, M. Vogel, and M. Bühner, “Predicting Training Success with General Mental Ability, Specific Ability Tests, and (Un)Structured Interviews: A Meta-Analysis with Unique Samples,” International Journal of Selection and Assessment 19, no. 2 (2011), pp. 170–182. 24. van der Zee, Bakker, and Bakker, “Why Are Structured Interviews So Rarely Used in Personnel Selection?” 25. T. W. Dougherty, D. B. Turban, and J. C. Callender, “Confirming First Impressions in the Employment Interview: A Field Study of Interviewer Behavior,” Journal of Applied Psychology (October 1994), pp. 659–665; and M. R. Barrick, B. W. Swider, and G. L. Stewart, “Initial Evaluations in the Interview: Relationships with Subsequent Interviewer Evaluations and Employment Offers,” Journal of Applied Psychology 95, no. 6 (2010), pp. 1163–1172. 26. K. G. Melchers, N. Lienhardt, M. von Aarburg, and M. Kleinmann, “Is More Structure Really Better? A Comparison of Frame-of-Reference Training and Descriptively Anchored Rating Scales to Improve Interviewers’ Rating Quality,” Personnel Psychology 64, no. 1 (2011), pp. 53–87. 27. F. L. Schmidt and R. D. Zimmerman, “A Counterintuitive Hypothesis About Employment Interview Validity and Some Supporting Evidence,” Journal of Applied Psychology 89, no. 3 (2004), pp. 553–561. 28. See G. A. Adams, T. C. Elacqua, and S. M. Colarelli, “The Employment Interview as a Sociometric Selection Technique,” Journal of Group Psychotherapy (Fall 1994), pp. 99–113; R. L. Dipboye, “Structured and Unstructured Selection Interviews: Beyond the Job-Fit Model,” Research in Personnel Human Resource Management 12 (1994), pp. 79–123; B. Schneider, D. B. Smith, S. Taylor, and J. Fleenor, “Personality and Organizations: A Test of the Homogeneity of Personality Hypothesis,” Journal of Applied Psychology (June 1998), pp. 462–470; and M. Burke, “Funny Business,” Forbes (June 9, 2003), p. 173. 29. A. M. Ryan, L. McFarland, H. Baron, and R. Page, “An International Look at Selection Practices: Nation and Culture as Explanations for Variability in Practice,” Personnel Psychology (Summer 1999), pp. 359–392. 30. Ibid., p. 386. 31. N. Anderson and C. Witvliet, “Fairness Reactions to Personnel Selection Methods: An International Comparison Between the Netherlands, the United States, France, Spain, Portugal, and Singapore,” International Journal of Selection and Assessment 16, no. 1 (2008), pp. 1–13. 32. American Society for Training and Development, 2010 State of the Industry Report, www.astd.org/content/research . 33. T. Minton-Eversole and K. Gurchiek, “New Workers Not Ready for Prime Time,” HR Magazine (December 2006), pp. 28–34. www.astd.org/content/research Endnotes 573 34. P. Galagan, “Bridging the Skills Gap: New Factors Compound the Growing Skills Shortage,” T�D , (February 2010), pp. 44–49. 35. M. Smulian, “England Fails on Numeracy and Literacy,” Public Finance (February 6, 2009), p. 13; E. K. Sharma, “Growing a New Crop of Talent: India Inc. Is Increasingly Going Rural,” Business Today (June 28, 2009), http:// businesstoday.intoday.in/ ; and G. Paton, “Almost Half of Employers Forced to Teach Teenagers Basic Literacy and Numeracy Skills,” Telegraph (May 9, 2011), www.telegraph.com . 36. D. Baynton, “America’s $60 Billion Problem,” Training, (May 2001) p. 52. 37. G. Anand, “India Graduates Millions, But Few Are Fit to Hire,” The Wall Street Journal (April 5, 2011), www.online.wsj.com . 38. J. Barbarian, “Mark Spear: Director of Management and Organizational Development, Miller Brewing Co.,” Training (October 2001), pp. 34–38. 39. See, for example, P. J. Taylor, D. F. Russ-Eft, and H. Taylor, “Transfer of Management Training from Alternative Perspectives,” Journal of Applied Psychology 94, no. 1 (2009), pp. 104–121. 40. See, for example, S. Lim and A. Lee, “Work and Nonwork Outcomes of Workplace Incivility: Does Family Support Help?” Journal of Occupational Health Psychology 16, no. 1 (2011), pp. 95–111; C. L. Porath and C. M. Pearson, “The Cost of Bad Behavior,” Organizational Dynamics 39, no. 1 (2010), pp. 64–71; and B. Estes and J. Wang, “Workplace Incivility: Impacts on Individual and Organizational Performance,” Human Resource Development Review 7, no. 2 (2008), pp. 218–240. 41. M. P. Leiter, H. K. S. Laschinger, A. Day, and D. G. Oore, “The Impact of Civility Interventions on Employee Social Behavior, Distress, and Attitudes,” Journal of Applied Psychology, Advance online publication (July 11, 2011), doi: 10.1037/a0024442. 42. G. R. Weaver, L. K. Trevino, and P. L. Cochran, “Corporate Ethics Practices in the Mid-1990’s: An Empirical Study of the Fortune 1000,” Journal of Business Ethics (February 1999), pp. 283–294. 43. M. B. Wood, Business Ethics in Uncertain Times (Upper Saddle River, NJ: Prentice Hall, 2004), p. 61. 44. See, for example, D. Seligman, “Oxymoron 101,” Forbes (October 28, 2002), pp. 160–164; and R. B. Schmitt, “Companies Add Ethics Training; Will It Work?” The Wall Street Journal (November 4, 2002), p. B1; A. Becker, “Can You Teach Ethics to MBAs?” BNet (October 19, 2009), www.bnet.com . 45. W. R. Allen, P. Bacdayan, K. B. Kowalski, and M. H. Roy, “Examining the Impact of Ethics Training on Business Student Values,” Education and Training 47, no. 3 (2005), pp. 170–182; A. Lämsä, M. Vehkaperä, T. Puttonen, and H. Pesonen, “Effect of Business Education on Women and Men Students’ Attitudes on Corporate Responsibility in Society,” Journal of Business Ethics 82, no. 1 (2008), pp. 45–58; and K. M. Sheldon and L. S. Krieger, “Understanding the Negative Effects of Legal Education on Law Students: A Longitudinal Test of Self-Determination Theory,” Personality and Social Psychology Bulletin 33, no. 6 (2007), pp. 883–897. 46. S. Valentine and G. Fleischman, “Ethics Programs, Perceived Corporate Social Responsibility, and Job Satisfaction,” Journal of Business Ethics 77, no. 2 (2008), pp. 159–172. 47. K. Dobbs, “The U.S. Department of Labor Estimates That 70 Percent of Workplace Learning Occurs Informally,” Sales & Marketing Management (November 2000), pp. 94–98. 48. See, for instance, R. E. Derouin, B. A. Fritzsche, and E. Salas, “E-Learning in Organizations,” Journal of Management 31, no. 3 (2005), pp. 920–940; and K. A. Orvis, S. L. Fisher, and M. E. Wasserman, “Power to the People: Using Learner Control to Improve Trainee Reactions and Learning in Web-Based Instructional Environments,” Journal of Applied Psychology 94, no 4 (2009), pp. 960–971. 49. T. Sitzman, K. Kraiger, D. Stewart, and R. Wisher, “The Comparative Effectiveness of Web-Based and Classroom Instruction: A Meta-Analysis,” Personnel Psychology 59, no. 3 (2006), pp. 623–664. 50. T. Sitzmann, B. S. Bell, K. Kraiger, and A. M. Kanar, “A Multilevel Analysis of the Effect of Prompting Self-Regulation in Technology-Delivered Instruction,” Personnel Psychology 62 no. 4 (2009), pp. 697–734. 51. E. A. Ensher, T. R. Nielson, and E. Grant-Vallone, “Tales from the Hiring Line: Effects of the Internet and Technology on HR Processes,” Organizational Dynamics 31, no. 3 (2002), pp. 232–233; and J. B. Arbaugh, “Do Undergraduates and MBAs Differ Online? Initial Conclusions from the Literature,” Journal of Leadership and Organizational Studies 17, no. 2 (2010), pp. 129–142. 52. G. M. Alliger, S. I. Tannenbaum, W. Bennett, H. Traver, and A. Shotland, “A Meta-Analysis of the Relations Among Training Criteria,” Personnel Psychology 50, no. 2 (1997), pp. 341–358; and T. Sitzmann, K. G. Brown, W. J. Casper, K. Ely, and R. D. Zimmerman, “A Review and Meta-Analysis of the Nomological Network of Trainee Reactions,” Journal of Applied Psychology 93, no. 2 (2008), pp. 280–295. 53. J. A. Colquitt, J. A. LePine, and R. A. Noe, “Toward an Integrative Theory of Training Motivation: A Meta-Analytic Path Analysis of 20 Years of Research,” Journal of Applied Psychology (October 2000), pp. 678–707. 54. See L. A. Burke and H. S. Hutchins, “Training Transfer: An Integrative Literature Review,” Human Resource Development Review 6 (2007), pp. 263–296; and D. S. Chiaburu and S. V. Marinova, “What Predicts Skill Transfer? An Exploratory Study of Goal Orientation, Training Self-Efficacy, and Organizational Supports,” International Journal of Training and Development 9, no. 2 (2005), pp. 110–123. 55. M. Rotundo and P. R. Sackett, “The Relative Importance of Task, Citizenship, and Counterproductive Performance to Global Ratings of Job Performance: A Policy Capturing Approach,” Journal of Applied Psychology 87, no. 1 (2002), pp. 66–80; and S. W. Whiting, P. M. Podsakoff, and J. R. Pierce, “Effects of Task Performance, Helping, Voice, and Organizational Loyalty on Performance Appraisal Ratings,” Journal of Applied Psychology 93, no. 1 (2008), pp. 125–139. 56. W. F. Cascio and H. Aguinis, Applied Psychology in Human Resource Management, 7th ed. (Upper Saddle River, NJ: Prentice Hall, 2010). www.telegraph.com www.online.wsj.com www.bnet.com http://businesstoday.intoday.in/ http://businesstoday.intoday.in/ 574 CHAPTER 17 Human Resource Policies and Practices 57. A. H. Locher and K. S. Teel, “Appraisal Trends,” Personnel Journal (September 1988), pp. 139–145. 58. Cited in S. Armour, “Job Reviews Take on Added Significance in Down Times,” USA Today (July 23, 2003), p. 4B. 59. D. J. Woehr, M. K. Sheehan, and W. Bennett, “Assessing Measurement Equivalence Across Rating Sources: A Multitrait-Multirater Approach,” Journal of Applied Psychology 90, no. 3 (2005), pp. 592–600; and H. Heidemeier and K. Moser, “Self–Other Agreement in Job Performance Ratings: A Meta-Analytic Test of a Process Model,” Journal of Applied Psychology 94, no. 2 (March 2009), pp. 353–370. 60. See, for instance, J. D. Facteau and S. B. Craig, “Are Performance Appraisal Ratings from Different Rating Sources Compatible?” Journal of Applied Psychology (April 2001), pp. 215–227; J. F. Brett and L. E. Atwater, “360-Degree Feedback: Accuracy, Reactions, and Perceptions of Usefulness,” Journal of Applied Psychology (October 2001), pp. 930–942; F. Luthans and S. J. Peterson, “360 Degree Feedback with Systematic Coaching: Empirical Analysis Suggests a Winning Combination,” Human Resource Management (Fall 2003), pp. 243–256; and B. I. J. M. van der Heijden and A. H. J. Nijhof, “The Value of Subjectivity: Problems and Prospects for 360-Degree Appraisal Systems,” International Journal of Human Resource Management (May 2004), pp. 493–511. 61. M. K. Mount and S. E. Scullen, “Multisource Feedback Ratings: What Do They Really Measure?” in M. London (Ed.), How People Evaluate Others in Organizations (Mahwah, NJ: Lawrence Erlbaum, 2001), pp. 155–176; and K. Ng, C. Koh, S. Ang, J. C. Kennedy, and K. Chan, “Rating Leniency and Halo in Multisource Feedback Ratings: Testing Cultural Assumptions of Power Distance and Individualism- Collectivism,” Journal of Applied Psychology, Online First Publication (April 11, 2011), doi: 10.1037/a0023368. 62. Catherine Rampell, “A History of College Grade Inflation,” The New York Times, July 14, 2011, accessed at http://econo- mix.blogs.nytimes.com/2011/07/14/the-history-of-college- grade-inflation/?scp�1&sq�grade%20inflation&st�cse . 63. X. M. Wang, K. F. E. Wong, and J. Y. Y. Kwong, “The Roles of Rater Goals and Ratee Performance Levels in the Distortion of Performance Ratings,” Journal of Applied Psychology 95, no. 3 (2010), pp. 546–561; J. R. Spence and L. M. Keeping, “The Impact of Non-Performance Information on Ratings of Job Performance: A Policy-Capturing Approach,” Journal of Organizational Behavior 31 (2010), pp. 587–608; and J. R Spence and L. Keeping, “Conscious Rating Distortion in Performance Appraisal: A Review, Commentary, and Proposed Framework for Research,” Human Resource Management Review 21, no. 2 (2011), pp. 85–95. 64. L. E. Atwater, J. F. Brett, and A. C. Charles, “Multisource Feedback: Lessons Learned and Implications for Practice,” Human Resource Management 46, no. 2 (2007), pp. 285–307; and R. Hensel, F. Meijers, R. van der Leeden, and J. Kessels, “360 Degree Feedback: How Many Raters Are Needed for Reliable Ratings on the Capacity to Develop Competences, with Personal Qualities as Developmental Goals?” International Journal of Human Resource Management 21, no. 15 (2010), pp. 2813–2830. 65. See, for instance, J. W. Hedge and W. C. Borman, “Changing Conceptions and Practices in Performance Appraisal,” in A. Howard (ed.), The Changing Nature of Work (San Francisco, CA: Jossey-Bass, 1995), pp. 453–459. 66. See, for instance, K. L. Uggerslev and L. M. Sulsky, “Using Frame-of-Reference Training to Understand the Implications of Rater Idiosyncrasy for Rating Accuracy,” Journal of Applied Psychology 93, no. 3 (2008), pp. 711–719; and R. F. Martell and D. P. Evans, “Source-Monitoring Training: Toward Reducing Rater Expectancy Effects in Behavioral Measurement,” Journal of Applied Psychology 90, no. 5 (2005), pp. 956–963. 67. B. Erdogan, “Antecedents and Consequences of Justice Perceptions in Performance Appraisals,” Human Resource Management Review 12, no. 4 (2002), pp. 555–578; and I M. Jawahar, “The Mediating Role of Appraisal Feedback Reactions on the Relationship Between Rater Feedback- Related Behaviors and Ratee Performance,” Group and Organization Management 35, no. 4 (2010), pp. 494–526. 68. S. C. Payne, M. T. Horner, W. R. Boswell, A. N. Schroeder, and K. J. Stine-Cheyne, “Comparison of Online and Traditional Performance Appraisal Systems,” Journal of Managerial Psychology 24, no. 6 (2009), pp. 526–544. 69. R. J. Burke, “Why Performance Appraisal Systems Fail,” Personnel Administration (June 1972), pp. 32–40. 70. B. D. Cawley, L. M. Keeping, and P. E. Levy, “Participation in the Performance Appraisal Process and Employee Reactions: A Meta-Analytic Review of Field Investigations,” Journal of Applied Psychology (August 1998), pp. 615–633; and P. E. Levy and J. R. Williams, “The Social Context of Performance Appraisal: A Review and Framework for the Future,” Journal of Management 30, no. 6 (2004), pp. 881–905. 71. F. Gino and M. E. Schweitzer, “Blinded by Anger or Feeling the Love: How Emotions Influence Advice Taking,” Journal of Applied Psychology 93, no. 3 (2008), pp. 1165–1173. 72. Heidemeier and Moser, “Self–Other Agreement in Job Performance Ratings.” 73. J. Han, “Does Performance-Based Salary System Suit Korea?” The Korea Times (January 15, 2008), www.koreatimes.co.kr . 74. F. F. T. Chiang and T. A. Birtch, “Appraising Performance across Borders: An Empirical Examination of the Purposes and Practices of Performance Appraisal in a Multi-Country Context,” Journal of Management Studies 47, no. 7 (2010), pp. 1365–1393. 75. K. Ng, C. Koh, S. Ang, J. C. Kennedy, and K. Chan, “Rating Leniency and Halo in Multisource Feedback Ratings: Testing Cultural Assumptions of Power Distance and Individualism-Collectivism,” Journal of Applied Psychology, Online First Publication (April 11, 2011), doi: 10.1037/ a0023368. 76. See, for instance, Harvard Business Review on Work and Life Balance (Boston: Harvard Business School Press, 2000); R. Rapoport, L. Bailyn, J. K. Fletcher, and B. H. Pruitt, Beyond Work-Family Balance (San Francisco: Jossey-Bass, 2002); and E. E. Kossek, S. Pichler, T. Bodner, and L. B. Hammer, “Workplace Social Support and Work- Family Conflict: A Meta-Analysis Clarifying the Influence of General and Work-Family Specific Supervisor and Organizational Support,” Personnel Psychology 64, no. 2 (2011), pp. 289–313. www.koreatimes.co.kr http://economix.blogs.nytimes.com/2011/07/14/the-history-of-college-grade-inflation/?scp=1&sq=grade%20inflation&st=cse http://economix.blogs.nytimes.com/2011/07/14/the-history-of-college-grade-inflation/?scp=1&sq=grade%20inflation&st=cse http://economix.blogs.nytimes.com/2011/07/14/the-history-of-college-grade-inflation/?scp=1&sq=grade%20inflation&st=cse Endnotes 575 G. E. Kreiner, “Consequences of Work-Home Segmentation or Integration: A Person-Environment Fit Perspective,” Journal of Organizational Behavior 27, no. 4 (2006), pp. 485–507; and C. A. Bulger, R. A. Matthews, and M. E. Hoffman, “Work and Personal Life Boundary Management: Boundary Strength, Work/Personal Life Balance, and the Segmentation-Integration Continuum,” Journal of Occupational Health Psychology 12, no. 4 (2007), pp. 365–375. 81. D. Catanzaro, H. Moore, and T. R. Marshall, “The Impact of Organizational Culture on Attraction and Recruitment of Job Applicants,” Journal of Business and Psychology 25, (2010), pp. 649–662. 77. B. Harrington, F. Van Deusen, and B. Humberd, The New Dad: Caring Committed and Conflicted . (Boston: Boston College Center for Work and Family, 2011). 78. A. Grant, “Top 25 Companies for Work-Life Balance,” US News and World Report (May 11, 2011), www.money.usnews .com . 79. C. P. Maertz and S. L. Boyar, “Work-Family Conflict, Enrichment, and Balance Under ‘Levels’ and ‘Episodes’ Approaches,” Journal of Management 37, no. 1 (2011), pp. 68–98. 80. J. S. Michel and M. B. Hargis, “Linking Mechanisms of Work-Family Conflict and Segmentation,” Journal of Vocational Behavior 73, no. 3 (2008), pp. 509–522; www.money.usnews.com www.money.usnews.com SWEET CHANGES AT CADBURY? 576 H ostile takeovers are never easy, especially for those in the company being acquired. But some takeovers are more hostile than others. Kraft’s acquisition of Cadbury is a case in point. After its initial offer to acquire the UK confectioner was deemed “derisory,” Kraft sweetened the deal, and Cadbury’s CEO declared it “good value for Cadbury sharehold- ers.” Cadbury managers and employees, however, continue to have difficulty adjusting to the change. One problem was the way Kraft handled the acquisition. Shortly after signing the deal, Kraft reneged on its pledge to keep Cadbury’s Somerdale, England, plant open. The British, infuriated, demanded that Kraft CEO Irene Rosenfeld appear before Parliament. Rosenfeld refused, saying, it “was not the best use of my personal time.” Members of Parliament, in turn, threat- ened to bring charges of contempt. Rosenfeld retorted: “The continued assault has been somewhat surprising.” The public relations aspect of the plant closing will probably blow over with time. However, a deeper and potentially more serious issue is the differ- ence in cultures between the two organizations. Kraft, by far the larger, is known for its formal and relatively hierarchical culture. Its meetings tend to be lengthy, with most decisions requiring the approval of top-level executives. Cadbury was known for its more informal and more egalitarian culture. Its former CEO was often seen on the shop floor talking informally with workers. Its managers felt they were given the autonomy to be creative. Its market- ing team won awards for producing the “Cadbury Gorilla” ad (available on YouTube). Some employees who had been part of Cadbury have complained of Kraft’s “Orwellian” management. Cadbury managers complain that Kraft “runs the show with military precision . . . directives or proposals pass through a hierarchy of layers.” Says another anonymous manager: “That more entre- preneurial side of things got quashed because there are so many more layers of input and discussion.” And according to a former employee, “Cadbury has a cutting edge understanding of the shopper and its retail customers. We spent years building that at Cadbury, and that’s been lost.” The Financial Times commented: “The tension reaches all levels of former Cadbury staff, from the commercial division to the factory floor.” On the other hand, some argue that Cadbury has reacted in a childish manner. Bloomberg Businessweek commented, “For many Brits, complaining is a national sport.” Is this a story of culture clash where a sympathetic, entrepreneurial company is devoured by an arrogant, bureaucratic one? Or is it a case of LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Identify forces that act as stimulants to change, and contrast planned and unplanned change. 2 Describe the sources of resistance to change. 3 Compare the four main approaches to managing organizational change. 4 Demonstrate two ways of creating a culture for change. 5 Define stress, and identify its potential sources. 6 Identify the consequences of stress. 7 Contrast the individual and organizational approaches to managing stress. MyManagementLab Access a host of interactive learning aids to help strengthen your understanding of the chapter concepts at www.mymanagementlab.com. www.mymanagementlab.com Organizational Change and Stress Management 18 It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change. —Charles Darwin Ph ot o: C ad bu ry w or ke rs p ro te st in g at W es tm in st er . S ou rc e: J ef f M oo re /S pl as h N ew s/ N ew sc om . 577 578 CHAPTER 18 Organizational Change and Stress Management employees of a proud, smaller company refusing to adapt to new business con- ditions and a new culture? The answer you favor appears to depend upon which side of the Atlantic you reside on. Sources: L. Lucas, “Cadbury People Still Chewing on Kraft Culture,” Financial Times (January 15, 2011), p. 13; L. Lucas and A. Rappeport, “Mergers and Acquisitions: A Bitter Taste,” Financial Times (May 23, 2011), downloaded on July 19, 2011, from www.ft.com/ ; and M. Scott, “Why Britain Will Survive Kraft’s Takeover of Cadbury,” Bloomberg Businessweek (January 21, 2010), downloaded on July 8, 2011, from www.businessweek.com/ . T his chapter is about change and stress. We describe environmental forces that require firms to change, why people and organizations often resist change, and how this resistance can be overcome. We review processes for managing organizational change. Then we move to the topic of stress and its sources and consequences. In closing, we discuss what individuals and organiza- tions can do to better manage stress levels. First, see how well you handle change by taking the following self-assessment. S A L SELF-ASSESSMENT LIBRARY How Well Do I Respond to Turbulent Change? In the Self-Assessment Library (available on CD and online), take assessment III.C.1 (How Well Do I Respond to Turbulent Change?) and answer the following questions. 1. How did you score? Are you surprised by your score? 2. During what time of your life have you experienced the most change? How did you deal with it? Would you handle these changes in the same way to- day? Why or why not? 3. Are there ways you might reduce your resistance to change? No company today is in a particularly stable environment. Even those with dom- inant market share must change, sometimes radically. Even though Apple has been successful with its iPad, the growing number of competitors in the field of tablet computers suggests that Apple will need to continually update and in- novate to keep ahead of the market. “Change or die!” is thus the rallying cry among today’s managers worldwide. Exhibit 18-1 summarizes six specific forces stimulating change. In a number of places in this book, we’ve discussed the changing nature of the workforce. Almost every organization must adjust to a multicultural environ- ment, demographic changes, immigration, and outsourcing. Technology is con- tinually changing jobs and organizations. It is not hard to imagine the very idea of an office becoming an antiquated concept in the near future. The housing and financial sectors recently have experienced extraordinary economic shocks, leading to the elimination, bankruptcy, or acquisition of some of 1 Identify forces that act as stimulants to change, and contrast planned and unplanned change. Forces for Change www.ft.com/ www.businessweek.com/ Forces for Change 579 the best-known U.S. companies, including Bear Stearns, Merrill Lynch, Lehman Brothers, Countrywide Financial, Washington Mutual, and Ameriquest. Tens of thousands of jobs were lost and may never return. After years of declining num- bers of bankruptcies, the global recession caused the bankruptcy of auto manu- facturers General Motors and Chrysler, retailers Borders and Sharper Image, and myriad other organizations. Competition is changing. Competitors are as likely to come from across the ocean as from across town. Successful organizations will be fast on their feet, capable of developing new products rapidly and getting them to market quickly. In other words, they’ll be flexible and will require an equally flexible and responsive workforce. Increasingly, in the United States and Europe, the government regulates business practices, including executive pay. Social trends don’t remain static either. Consumers who are otherwise strangers now meet and share product information in chat rooms and blogs. Companies must continually adjust product and marketing strategies to be sensitive to changing social trends, as Liz Claiborne did when it sold off fashion brands (such as Ellen Tracy), deemphasized large vendors such as Macy’s, and streamlined operations and cut staff. Consumers, employees, and organizational leaders are more sensitive to environmental concerns. “Green” practices are quickly becoming expected rather than optional. Not even globalization’s strongest proponents could have imagined how world politics would change in recent years. We’ve seen a major set of financial crises that have rocked global markets, a dramatic rise in the power and influ- ence of China, and dramatic shakeups in government across the Arab world. Throughout the industrialized world, businesses—particularly in the banking and financial sectors—have come under new scrutiny. Forces for Change Exhibit 18-1 Force Examples Nature of the workforce More cultural diversity Aging population Increased immigration and outsourcing Technology Faster, cheaper, and more mobile computers and handheld devices Emergence and growth of social networking sites Deciphering of the human genetic code Economic shocks Rise and fall of global housing market Financial sector collapse Global recession Competition Global competitors Mergers and consolidations Increased government regulation of commerce Social trends Increased environmental awareness Liberalization of attitudes toward gay, lesbian, and transgender employees More multitasking and connectivity World politics Rising health care costs Negative social attitudes toward business and executives Opening of markets in China 580 CHAPTER 18 Organizational Change and Stress Management A group of housekeeping employees who work for a small hotel confronted the owner: “It’s very hard for most of us to maintain rigid 7-to-4 work hours,” said their spokeswoman. “Each of us has significant family and personal responsibili- ties. And rigid hours don’t work for us. We’re going to begin looking for some- place else to work if you don’t set up flexible work hours.” The owner listened thoughtfully to the group’s ultimatum and agreed to its request. The next day, a flextime plan for these employees was introduced. A major automobile manufacturer spent several billion dollars to install state-of-the-art robotics. One area that would receive the new equipment was quality control, where sophisticated computers would significantly improve the company’s ability to find and correct defects. Because the new equipment would dramatically change the jobs in the quality-control area, and because management anticipated considerable employee resistance to it, executives were developing a program to help people become familiar with it and deal with any anxieties they might be feeling. Both these scenarios are examples of change , or making things different. However, only the second scenario describes a planned change . Many changes are like the one that occurred at the hotel: they just happen. Some organiza- tions treat all change as an accidental occurrence. In this chapter, we address change as an intentional, goal-oriented activity. What are the goals of planned change? First, it seeks to improve the ability of the organization to adapt to changes in its environment. Second, it seeks to change employee behavior. Who in organizations is responsible for managing change activities? The an- swer is change agents . 1 They see a future for the organization that others have not identified, and they are able to motivate, invent, and implement this vision. Change agents can be managers or nonmanagers, current or new employees, or outside consultants. DuPont has two primary change agents in CEO Ellen Kullman and Chief Innovation Officer Thomas Connelly. 2 Taking the reins of the company in 2010, Kullman has pushed the organization toward a higher level of achievement by focusing on a principle Connelly calls “launch hard and ramp fast.” This means the organization will seek to derive as much of its revenues from new products as possible. The goal is to move DuPont from a comparatively placid culture to one that focuses on market-driven science and delivers products customers need. The process has not always been easy, but it is necessary to keep DuPont ahead of the competitive marketplace. Many change agents fail because organizational members resist change. In the next section, we discuss resistance to change and what managers can do about it. Planned Change Jeff Bezos is the change agent at Amazon.com . He founded the company as an online bookstore in 1994 and then built it into the larg- est retailer on the Web that sells everything from groceries to elec- tronics. Amazon changed from a seller of electronics to also become a product developer when it cre- ated the Kindle reading device and the Kindle service for downloading books in less than 60 seconds. In his drive for change at Amazon, Bezos combines a long-term orientation with identifying a customer need. Bezos is shown here unveiling the Kindle DX, a large-screen version of the original Kindle designed for reading newspapers, magazines, and textbooks. So u rc e : E m m a n u e l D u n a n d /A FP /G e tt y Im a g e s/ N e w sc o m . Our egos are fragile, and we often see change as threatening. One recent study showed that even when employees are shown data that suggest they need to change, they latch onto whatever data they can find that suggests they are okay and don’t need to change. 3 Employees who have negative feelings about a 2 Describe the sources of resistance to change. Resistance to Change Resistance to Change 581 change cope by not thinking about it, increasing their use of sick time, and quitting. All these reactions can sap the organization of vital energy when it is most needed. 4 Resistance to change can be positive if it leads to open discussion and de- bate. 5 These responses are usually preferable to apathy or silence and can in- dicate that members of the organization are engaged in the process, providing change agents an opportunity to explain the change effort. Change agents can also use resistance to modify the change to fit the preferences of other mem- bers of the organization. When they treat resistance only as a threat, rather than a point of view to be discussed, they may increase dysfunctional conflict. Resistance doesn’t necessarily surface in standardized ways. It can be overt, implicit, immediate, or deferred. It’s easiest for management to deal with overt and immediate resistance, such as complaints, a work slowdown, or a strike threat. The greater challenge is managing resistance that is implicit or deferred. These responses—loss of loyalty or motivation, increased errors or absenteeism—are more subtle and more difficult to recognize for what they are. Deferred actions also cloud the link between the change and the reaction to it and may surface weeks, months, or even years later. Or a single change of little inherent impact may be the straw that breaks the camel’s back because resistance to earlier changes has been deferred and stockpiled. Exhibit 18-2 summarizes major forces for resistance to change, categorized by their sources. Individual sources reside in human characteristics such as per- ceptions, personalities, and needs. Organizational sources reside in the struc- tural makeup of organizations themselves. It’s worth noting that not all change is good. Speed can lead to bad deci- sions, and sometimes those initiating change fail to realize the full magnitude of the effects or their true costs. Rapid, transformational change is risky, and change Making things different. planned change Change activities that are intentional and goal oriented. change agents Persons who act as catalysts and assume the responsibility for managing change activities. Rising Risks of Social Networking at WorkOB Poll 2009 10% 2010 20% 2011 Percentage of organizations that have disciplined an employee for activities on Facebook, LinkedIn, or Twitter 30 25 20 15 10 5 0 24% Source: Based on J. Yang and P. Trap, “Society for Human Resource Management Survey,” USA Today (June 2, 2011), p. 1B. MyManagementLab For an interactive application of this topic, check out this chapter’s simulation activity at www.mymanagementlab.com. www.mymanagementlab.com 582 CHAPTER 18 Organizational Change and Stress Management Sources of Resistance to Change Exhibit 18-2 Individual Sources Habit—To cope with life’s complexities, we rely on habits or programmed responses. But when confronted with change, this tendency to respond in our accustomed ways becomes a source of resistance. Security—People with a high need for security are likely to resist change because it threatens their feelings of safety. Economic factors—Changes in job tasks or established work routines can arouse economic fears if people are concerned that they won’t be able to perform the new tasks or routines to their previous standards, especially when pay is closely tied to productivity. Fear of the unknown—Change substitutes ambiguity and uncertainty for the unknown. Selective information processing—Individuals are guilty of selectively processing information in order to keep their perceptions intact. They hear what they want to hear, and they ignore information that challenges the world they’ve created. Organizational Sources Structural inertia—Organizations have built-in mechanisms—such as their selection processes and formalized regulations—to produce stability. When an organization is confronted with change, this structural inertia acts as a counterbalance to sustain stability. Limited focus of change—Organizations consist of a number of interdependent subsystems. One can’t be changed without affecting the others. So limited changes in subsystems tend to be nullified by the larger system. Group inertia—Even if individuals want to change their behavior, group norms may act as a constraint. Threat to expertise—Changes in organizational patterns may threaten the expertise of specialized groups. Threat to established power relationships—Any redistribution of decision-making authority can threaten long-established power relationships within the organization. some organizations have collapsed for this reason. 6 Change agents need to carefully think through the full implications. Overcoming Resistance to Change Eight tactics can help change agents deal with resistance to change. 7 Let’s review them briefly. Education and Communication Communicating the logic of a change can re- duce employee resistance on two levels. First, it fights the effects of misinfor- mation and poor communication: if employees receive the full facts and clear up misunderstandings, resistance should subside. Second, communication can help “sell” the need for change by packaging it properly. 8 A study of German companies revealed changes are most effective when a company communicates a rationale that balances the interests of various stakeholders (shareholders, employees, community, customers) rather than those of shareholders only. 9 Another study of a changing organization in the Philippines found that formal change information sessions decreased employee anxiety about the change, while providing high-quality information about the change increased commit- ment to it. 10 Participation It’s difficult to resist a change decision in which we’ve par- ticipated. Assuming participants have the expertise to make a meaningful Resistance to Change 583 contribution, their involvement can reduce resistance, obtain commitment, and increase the quality of the change decision. However, against these advantages are the negatives: potential for a poor solution and great consumption of time. Building Support and Commitment When employees’ fear and anxiety are high, counseling and therapy, new-skills training, or a short paid leave of absence may facilitate adjustment. When managers or employees have low emotional commitment to change, they favor the status quo and resist it. 11 Employees are also more accepting of changes when they are committed to the organization as a whole. 12 So, firing up employees and emphasizing their commitment to the organization overall can also help them emotionally commit to the change rather than embrace the status quo. Develop Positive Relationships People are more willing to accept changes if they trust the managers implementing them. 13 One study surveyed 235 employ- ees from a large housing corporation in the Netherlands that was experiencing a merger. Those who had a more positive relationship with their supervisors, and who felt that the work environment supported development, were much more positive about the change process. 14 Another set of studies found that individuals who were dispositionally resistant to change felt more positive about the change if they trusted the change agent. 15 This research suggests that if managers are able to facilitate positive relationships, they may be able to over- come resistance to change even among those who ordinarily don’t like changes. Implementing Changes Fairly One way organizations can minimize negative impact is to make sure change is implemented fairly. As we saw in Chapter 7 , procedural fairness is especially important when employees perceive an out- come as negative, so it’s crucial that employees see the reason for the change and perceive its implementation as consistent and fair. 16 Manipulation and Cooptation Manipulation refers to covert influence at- tempts. Twisting facts to make them more attractive, withholding information, and creating false rumors to get employees to accept change are all examples of manipulation. If management threatens to close a manufacturing plant whose employees are resisting an across-the-board pay cut, and if the threat is actu- ally untrue, management is using manipulation. Cooptation, on the other hand, combines manipulation and participation. It seeks to “buy off” the leaders of a resistance group by giving them a key role, seeking their advice not to find a bet- ter solution but to get their endorsement. Both manipulation and cooptation are relatively inexpensive ways to gain the support of adversaries, but they can backfire if the targets become aware they are being tricked or used. Once that’s discovered, the change agent’s credibility may drop to zero. Selecting People Who Accept Change Research suggests the ability to eas- ily accept and adapt to change is related to personality—some people simply have more positive attitudes about change than others. 17 Such individuals are open to experience, take a positive attitude toward change, are willing to take risks, and are flexible in their behavior. One study of managers in the United States, Europe, and Asia found those with a positive self-concept and high risk tolerance coped better with organizational change. A study of 258 police of- ficers found those higher in growth-needs strength, internal locus of control, and internal work motivation had more positive attitudes about organizational change efforts. 18 Individuals higher in general mental ability are also better able 584 CHAPTER 18 Organizational Change and Stress Management to learn and adapt to changes in the workplace. 19 In sum, an impressive body of evidence shows organizations can facilitate change by selecting people predis- posed to accept it. Besides selecting individuals who are willing to accept changes, it is also pos- sible to select teams that are more adaptable. Studies have shown that teams that are strongly motivated by learning about and mastering tasks are better able to adapt to changing environments. 20 This research suggests that it may be necessary to consider not just individual motivation, but also group motivation when trying to implement changes. Coercion Last on the list of tactics is coercion, the application of direct threats or force on the resisters. If management really is determined to close a manufac- turing plant whose employees don’t acquiesce to a pay cut, the company is using coercion. Other examples are threats of transfer, loss of promotions, negative performance evaluations, and a poor letter of recommendation. The advantages and drawbacks of coercion are approximately the same as for manipulation and cooptation. The Politics of Change No discussion of resistance would be complete without a brief mention of the politics of change. Because change invariably threatens the status quo, it inher- ently implies political activity. Politics suggests the impetus for change is more likely to come from outside change agents, employees new to the organization (who have less invested in the status quo), or managers slightly removed from the main power structure. Managers who have spent their entire careers with a single organization and achieved a senior position in the hierarchy are often major impediments to change. It is a very real threat to their status and position. Yet they may be ex- pected to implement changes to demonstrate they’re not merely caretakers. By acting as change agents, they can convey to stockholders, suppliers, employees, and customers that they are addressing problems and adapting to a dynamic environment. Of course, as you might guess, when forced to introduce change, these longtime power holders tend to implement incremental changes. Radical change is too threatening. This explains why boards of directors that recognize the imperative for rapid and radical change frequently turn to outside candi- dates for new leadership. 21 Now we turn to several approaches to managing change: Lewin’s classic three- step model of the change process, Kotter’s eight-step plan, action research, and organizational development. Lewin’s Three-Step Model Kurt Lewin argued that successful change in organizations should follow three steps: unfreezing the status quo, movement to a desired end state, and refreezing the new change to make it permanent. 22 (See Exhibit 18-3 .) The status quo is an equilibrium state. To move from equilibrium—to overcome the pressures of both individual resistance and group conformity— unfreezing 3 Compare the four main approaches to managing organizational change. Approaches to Managing Organizational Change Approaches to Managing Organizational Change 585 must happen in one of three ways (see Exhibit 18-4 .) The driving forces , which direct behavior away from the status quo, can be increased. The restraining forces , which hinder movement away from equilibrium, can be decreased. A third alternative is to combine the first two approaches. Companies that have been successful in the past are likely to encounter restraining forces because people question the need for change. 23 Similarly, research shows that com- panies with strong cultures excel at incremental change but are overcome by restraining forces against radical change. 24 Consider a large oil company that decided to consolidate its three divisional marketing offices in Seattle, San Francisco, and Los Angeles into a single re- gional San Francisco office. The decision was made in New York and the people affected had no say whatsoever in the choice. The reorganization meant trans- ferring more than 150 employees, eliminating some duplicate managerial posi- tions, and instituting a new hierarchy of command. The oil company’s management could expect employee resistance to the consolidation. Those in Seattle or Los Angeles may not want to transfer to an- other city, pull youngsters out of school, make new friends, adapt to new co- workers, or undergo the reassignment of responsibilities. Positive incentives such as pay increases, liberal moving expenses, and low-cost mortgage funds for new homes in San Francisco might encourage employees to accept the change. Management might also unfreeze acceptance of the status quo by removing restraining forces. It could counsel employees individually, hearing and clarify- ing each employee’s specific concerns and apprehensions. Assuming most are unfreezing Changing to overcome the pressures of both individual resistance and group conformity. refreezing Stabilizing a change intervention by balancing driving and restraining forces. restraining forces Forces that hinder movement from the existing equilibrium. Lewin’s Three-Step Change Model Exhibit 18-3 Unfreezing Movement Refreezing Unfreezing the Status Quo Exhibit 18-4 Restraining forces Desired state Status quo Time Driving forces movement A change process that transforms the organization from the status quo to a desired end state. driving forces Forces that direct behavior away from the status quo. 586 CHAPTER 18 Organizational Change and Stress Management 1. Establish a sense of urgency by creating a compelling reason for why change is needed. 2. Form a coalition with enough power to lead the change. 3. Create a new vision to direct the change and strategies for achieving the vision. 4. Communicate the vision throughout the organization. 5. Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving. 6. Plan for,rr create, and reward short-term “wins” that move the organization toward the new vision. 7. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs. 8. Reinforce the changes by demonstrating the relationship between new behaviors and organizational success. unjustified, the counselor could assure employees there was nothing to fear and offer tangible evidence that restraining forces are unwarranted. If resis- tance is extremely high, management may have to resort to both reducing re- sistance and increasing the attractiveness of the alternative if the unfreezing is to be successful. Research on organizational change has shown that, to be effective, the ac- tual change has to happen quickly. 25 Organizations that build up to change do less well than those that get to and through the movement stage quickly. Once change has been implemented, to be successful the new situation must be refrozen so it can be sustained over time. Without this last step, change will likely be short-lived and employees will attempt to revert to the previous equilibrium state. The objective of refreezing, then, is to stabilize the new situa- tion by balancing the driving and restraining forces. How could the oil company’s management refreeze its consolidation change? By systematically replacing temporary forces with permanent ones. Management might impose a permanent upward adjustment of salaries. The formal rules and regulations governing behavior of those affected by the change should also be revised to reinforce the new situation. Over time, of course, the work group’s own norms will evolve to sustain the new equilibrium. But until that point is reached, management will have to rely on more formal mechanisms. Kotter’s Eight-Step Plan for Implementing Change John Kotter of the Harvard Business School built on Lewin’s three-step model to create a more detailed approach for implementing change. 26 Kotter began by listing common mistakes managers make when trying to initiate change. They may fail to create a sense of urgency about the need for change, to create a coalition for managing the change process, to have a vision for change and effectively communicate it, to remove obstacles that could impede the vision’s achievement, to provide short-term and achievable goals, and to anchor the changes into the organization’s culture. They may also declare victory too soon. Kotter then established eight sequential steps to overcome these problems. They’re listed in Exhibit 18-5 . Notice how Kotter’s first four steps essentially extrapolate Lewin’s “unfreez- ing” stage. Steps 5, 6 and 7 represent “movement,” and the final step works on Source: Based on J. P. Kotter, Leading Change (Boston: Harvard Business School Press, 1996). Kotter’s Eight-Step Plan for Implementing Change Exhibit 18-5 Approaches to Managing Organizational Change 587 “refreezing.” So Kotter’s contribution lies in providing managers and change agents with a more detailed guide for successfully implementing change. Action Research Action research is a change process based on the systematic collection of data and selection of a change action based on what the analyzed data indicate. 27 Its value is in providing a scientific methodology for managing planned change. Action research consists of five steps (note how they closely parallel the scien- tific method): diagnosis, analysis, feedback, action, and evaluation. The change agent, often an outside consultant in action research, begins by gathering information about problems, concerns, and needed changes from members of the organization. This diagnosis is analogous to the physician’s search to find specifically what ails a patient. In action research, the change agent asks questions, reviews records, and interviews employees and listens to their concerns. Diagnosis is followed by analysis. What problems do people key in on? What patterns do these problems seem to take? The change agent synthesizes this information into primary concerns, problem areas, and possible actions. Action research requires the people who will participate in any change pro- gram to help identify the problem and determine the solution. So the third step— feedback —requires sharing with employees what has been found from the first and second steps. The employees, with the help of the change agent, de- velop action plans for bringing about any needed change. Now the action part of action research is set in motion. The employees and the change agent carry out the specific actions they have identified to correct the problem. The final step, consistent with the scientific underpinnings of action re- search, is evaluation of the action plan’s effectiveness, using the initial data gath- ered as a benchmark. Action research provides at least two specific benefits. First, it’s problem fo- cused. The change agent objectively looks for problems, and the type of prob- lem determines the type of change action. Although this may seem intuitively obvious, many change activities are not handled this way. Rather, they’re solu- tion centered. The change agent has a favorite solution—for example, imple- menting flextime, teams, or a process reengineering program—and then seeks out problems that the solution fits. Second, because action research engages employees so thoroughly in the process, it reduces resistance to change. Once employees have actively partici- pated in the feedback stage, the change process typically takes on a momentum of its own under their sustained pressure to bring it about. Organizational Development Organizational development (OD) is a collection of change methods that try to improve organizational effectiveness and employee well-being. 28 OD methods value human and organizational growth, collaborative and participative processes, and a spirit of inquiry. 29 Contemporary OD borrows action research A change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicate. organizational development (OD) A collection of planned change interventions, built on humanistic– democratic values, that seeks to improve organizational effectiveness and employee well-being. 588 CHAPTER 18 Organizational Change and Stress Management heavily from postmodern philosophy in placing heavy emphasis on the subjec- tive ways in which people see their environment. The focus is on how individu- als make sense of their work environment. The change agent may take the lead in OD, but there is a strong emphasis on collaboration. These are the underly- ing values in most OD efforts: 1. Respect for people. Individuals are perceived as responsible, conscien- tious, and caring. They should be treated with dignity and respect. 2. Trust and support. An effective and healthy organization is characterized by trust, authenticity, openness, and a supportive climate. 3. Power equalization. Effective organizations deemphasize hierarchical au- thority and control. 4. Confrontation. Problems should be openly confronted, not swept under the rug. 5. Participation. The more engaged in the decisions they are, the more peo- ple affected by a change will be committed to implementing them. What are some OD techniques or interventions for bringing about change? Here are six. Sensitivity Training A variety of names— sensitivity training , laboratory train- ing, encounter groups, and T-groups (training groups)—all refer to an early method of changing behavior through unstructured group interaction. 30 Mem- bers were brought together in a free and open environment in which partici- pants discuss themselves and their interactive processes, loosely directed by a professional behavioral scientist who created the opportunity to express ideas, beliefs, and attitudes without taking any leadership role. The group was process- oriented, which means individuals learned through observing and participating rather than being told. Many participants found these unstructured groups intimidating, chaotic, and damaging to work relationships. Although extremely popular in the 1960s, they diminished in use during the 1970s and have essentially disappeared. However, organizational interventions such as diversity training, executive coaching, and team-building exercises are descendants of this early OD intervention technique. These retirement center employees participate in a simulated training program to help them understand the diminishing abilities of the older population that is growing in developing nations worldwide. While wearing glasses that blurred their vision, they collaborated in an activity of devising a driving route. Called Xtreme Aging, the train- ing program has become a regular part of many nursing and medical school curricula and corporate training programs and is designed to help participants grow in their understanding of and sensitivity to the needs of older customers and fellow workers. So u rc e : K ir k I rw in /T h e N e w Y o rk T im e s/ R e d u x P ic tu re s. Approaches to Managing Organizational Change 589 Survey Feedback One tool for assessing attitudes held by organizational mem- bers, identifying discrepancies among member perceptions, and solving these differences is the survey feedback approach. 31 Everyone in an organization can participate in survey feedback, but of key importance is the organizational “family”—the manager of any given unit and the employees who report directly to him or her. All usually complete a questionnaire about their perceptions and attitudes on a range of topics, including decision-making practices; communication effectiveness; coordination among units; and satisfaction with the organization, job, peers, and immediate supervisor. Data from this questionnaire are tabulated with data pertaining to an indi- vidual’s specific “family” and to the entire organization and then distributed to employees. These data become the springboard for identifying problems and clarifying issues that may be creating difficulties for people. Particular attention is given to encouraging discussion and ensuring it focuses on issues and ideas and not on attacking individuals. For instance, are people listening? Are new ideas being generated? Can decision making, interpersonal relations, or job assignments be improved? Answers should lead the group to commit to various remedies for the problems identified. Process Consultation Managers often sense their unit’s performance can be improved but are unable to identify what to improve and how. The purpose of process consultation (PC) is for an outside consultant to assist a client, usually a manager, “to perceive, understand, and act upon process events” with which the manager must deal. 32 These events might include work flow, informal relation- ships among unit members, and formal communication channels. PC is similar to sensitivity training in assuming we can improve organiza- tional effectiveness by dealing with interpersonal problems and in emphasizing involvement. But PC is more task directed, and consultants are there to “give the client ‘insight’ into what is going on around him, within him, and between him and other people.” 33 They do not solve the organization’s problems but rather guide or coach the client to solve his or her own problems after jointly diagnosing what needs improvement. The client develops the skill to analyze processes within his or her unit and can continue to call on it long after the consultant is gone. Because the client actively participates in both the diagnosis and the development of alternatives, he or she arrives at greater understanding of the process and the remedy and is less resistant to the action plan chosen. Team Building We’ve noted throughout this book that organizations increas- ingly rely on teams to accomplish work tasks. Team building uses high-interaction group activities to increase trust and openness among team members, improve coordinative efforts, and increase team performance. 34 Here, we emphasize the intragroup level, meaning organizational families (command groups) as well as committees, project teams, self-managed teams, and task groups. sensitivity training Training groups that seek to change behavior through unstructured group interaction. process consultation (PC) A meeting in which a consultant assists a client in understanding process events with which he or she must deal and identifying processes that need improvement. team building High interaction among team members to increase trust and openness. survey feedback The use of questionnaires to identify discrepancies among member perceptions; discussion follows, and remedies are suggested. 590 CHAPTER 18 Organizational Change and Stress Management Team building typically includes goal-setting, development of interpersonal relations among team members, role analysis to clarify each member’s role and responsibilities, and team process analysis. It may emphasize or exclude certain activities, depending on the purpose of the development effort and the specific problems with which the team is confronted. Basically, however, team building uses high interaction among members to increase trust and openness. Intergroup Development A major area of concern in OD is dysfunctional con- flict among groups. Intergroup development seeks to change groups’ attitudes, stereotypes, and perceptions about each other. Here, training sessions closely resemble diversity training (in fact, diversity training largely evolved from in- tergroup development in OD), except rather than focusing on demographic differences, they focus on differences among occupations, departments, or divi- sions within an organization. In one company, the engineers saw the accounting department as composed of shy and conservative types and the human resources department as having a bunch of “ultra-liberals more concerned that some protected group of employ- ees might get their feelings hurt than with the company making a profit.” Such stereotypes can have an obvious negative impact on coordination efforts among departments. Among several approaches for improving intergroup relations, a popular one emphasizes problem solving. 35 Each group meets independently to list its perceptions of itself and of the other group and how it believes the other group perceives it. The groups share their lists, discuss similarities and differ- ences, and look for the causes of disparities. Are the groups’ goals at odds? Were perceptions distorted? On what basis were stereotypes formulated? Have some differences been caused by misunderstanding of intentions? Have words and concepts been defined differently by each group? Answers to questions like these clarify the exact nature of the conflict. Once they have identified the causes of the difficulty, the groups move to the integration phase—developing solutions to improve relations between them. ServiceMaster, a provider of lawn care, cleaning, disaster restoration, and other services, is a sponsoring company of Habitat for Humanity. As a sponsor, ServiceMaster pro- vides employee volunteers and the funds to buy building materials for constructing homes for families in need. For ServiceMaster, the build- ing project also serves as a team- building activity, with employees spending their workdays at the building site rather than on their regular jobs. Serving as a high- interaction group activity, the Habitat build increases trust and openness among employees and translates into better communica- tion and greater cooperation in the workplace. So ur ce : c5 1 /Z U M A P re ss /N e w sc o m . Creating a Culture for Change 591 Subgroups can be formed of members from each of the conflicting groups to conduct further diagnosis and formulate alternative solutions. Appreciative Inquiry Most OD approaches are problem centered. They iden- tify a problem or set of problems, then look for a solution. Appreciative inquiry (AI) instead accentuates the positive. 36 Rather than looking for problems to fix, it seeks to identify the unique qualities and special strengths of an organization, which members can build on to improve performance. That is, AI focuses on an organization’s successes rather than its problems. The AI process consists of four steps—discovery, dreaming, design, and discovery—often played out in a large-group meeting over a 2- or 3-day time period and overseen by a trained change agent. Discovery sets out to identify what people think are the organization’s strengths. Employees recount times they felt the organization worked best or when they specifically felt most satisfied with their jobs. In dreaming, employees use information from the discovery phase to speculate on possible futures, such as what the organization will be like in 5 years. In design, participants find a common vision of how the organization will look in the future and agree on its unique qualities. For the fourth step, par- ticipants seek to define the organization’s destiny or how to fulfill their dream, and they typically write action plans and develop implementation strategies. AI has proven an effective change strategy in organizations such as GTE, Roadway Express, and the U.S. Navy. American Express used AI to revitalize its culture during a lean economy. In workshops, employees described how they already felt proud of working at American Express and were encouraged to create a change vision by describing how it could be better in the future. The efforts led to some very concrete improvements. Senior managers were able to use employees’ information to better their methods of making financial forecasts, improve IT investments, and create new performance-management tools for managers. The end result was a renewed culture focused on winning attitudes and behaviors. 37 intergroup development OD efforts to change the attitudes, stereotypes, and perceptions that groups have of each other. appreciative inquiry (AI) An approach that seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance. Creating a Culture for Change We’ve considered how organizations can adapt to change. But recently, some OB scholars have focused on a more proactive approach—how organizations can embrace change by transforming their cultures. In this section, we review two such approaches: stimulating an innovative culture and creating a learning organization. Stimulating a Culture of Innovation How can an organization become more innovative? An excellent model is W. L. Gore, the $2.6-billion-per-year company best known as the maker of Gore- Tex fabric. 38 Gore has developed a reputation as one of the most innovative 4 Demonstrate two ways of creating a culture for change. 592 CHAPTER 18 Organizational Change and Stress Management U.S. companies by developing a stream of diverse products—including guitar strings, dental floss, medical devices, and fuel cells. What’s the secret of Gore’s success? What can other organizations do to duplicate its track record for innovation? Although there is no guaranteed formula, certain characteristics surface repeatedly when researchers study inno- vative organizations. We’ve grouped them into structural, cultural, and human resource categories. Change agents should consider introducing these charac- teristics into their organization to create an innovative climate. Before we look at these characteristics, however, let’s clarify what we mean by innovation. Definition of Innovation We said change refers to making things different. In- novation , a more specialized kind of change, is a new idea applied to initiating or improving a product, process, or service. 39 So all innovations imply change, but not all changes necessarily introduce new ideas or lead to significant improve- ments. Innovations can range from small incremental improvements, such as netbook computers, to radical breakthroughs, such as Nissan’s electric Leaf car. Sources of Innovation Structural variables have been the most studied potential source of innovation. 40 A comprehensive review of the structure–innovation re- lationship leads to the following conclusions: 41 1. Organic structures positively influence innovation. Because they’re lower in vertical differentiation, formalization, and centralization, organic organiza- tions facilitate the flexibility, adaptation, and cross-fertilization that make the adoption of innovations easier. 2. Long tenure in management is associated with innovation. Managerial ten- ure apparently provides legitimacy and knowledge of how to accomplish tasks and obtain desired outcomes. 3. Innovation is nurtured when there are slack resources. Having an abun- dance of resources allows an organization to afford to purchase innovations, bear the cost of instituting them, and absorb failures. Innovation is a specialized kind of change whereby a new idea is applied to initiating or improving a product, process, or service. Twitter, for example, is an innovation in the distribution of information. Twitter’s founders Evan Williams (left) and Biz Stone shown in this photo along with Jack Dorsey launched their new communication tool for sending 140-character mes- sages, or tweets, from a computer or mobile device. As a social net- work, Twitter allows users to have live digital conversations. By using Twitter’s search feature, users can have a real-time view into other people’s conversations. So u rc e : P e te r D a Si lv a /T h e N e w Y o rk T im e s/ R e d u x. Creating a Culture for Change 593 4. Interunit communication is high in innovative organizations. 42 These orga- nizations are high users of committees, task forces, cross-functional teams, and other mechanisms that facilitate interaction across departmental lines. Innovative organizations tend to have similar cultures. They encourage ex- perimentation. They reward both successes and failures. They celebrate mis- takes. Unfortunately, in too many organizations, people are rewarded for the absence of failures rather than for the presence of successes. Such cultures ex- tinguish risk taking and innovation. People will suggest and try new ideas only when they feel such behaviors exact no penalties. Managers in innovative orga- nizations recognize that failures are a natural by-product of venturing into the unknown. Within the human resources category, innovative organizations actively pro- mote the training and development of their members so they keep current, offer high job security so employees don’t fear getting fired for making mis- takes, and encourage individuals to become champions of change. Once a new idea is developed, idea champions actively and enthusiastically promote it, build support, overcome resistance, and ensure it’s implemented. 43 Champions have common personality characteristics: extremely high self-confidence, per- sistence, energy, and a tendency to take risks. They also display characteristics associated with transformational leadership—they inspire and energize others with their vision of an innovation’s potential and their strong personal convic- tion about their mission. Idea champions are good at gaining the commitment of others, and their jobs provide considerable decision-making discretion; this autonomy helps them introduce and implement innovations. 44 Do successful idea champions do things differently in different cultures? Yes. 45 People in collectivist cultures prefer appeals for cross-functional support for innovation efforts; people in high power distance cultures prefer champi- ons to work closely with those in authority to approve innovative activities be- fore work is begun; and the higher the uncertainty avoidance of a society, the more champions should work within the organization’s rules and procedures to develop the innovation. These findings suggest that effective managers will alter their organization’s championing strategies to reflect cultural values. So, for instance, although idea champions in Russia might succeed by ignoring budgetary limitations and working around confining procedures, champions in Austria, Denmark, Germany, or other cultures high in uncertainty avoidance will be more effective by closely following budgets and procedures. Sergio Marcchione, CEO of Fiat-Chrysler, has acted as idea champion for the single objective of updating the pipeline of vehicles for Chrysler. To facilitate this change, he has radically dismantled the bureaucracy, tearing up Chrysler’s organization chart and introducing a flatter structure with himself at the lead. As a result, the company introduced a more innovative line of vehicles and planned to redesign or significantly refresh 75 percent of its lineup in 2010 alone. 46 Creating a Learning Organization Another way an organization can proactively manage change is to make continuous growth part of its culture—to become a learning organization. 47 innovation A new idea applied to initiating or improving a product, process, or service. idea champions Individuals who take an innovation and actively and enthusiastically promote the idea, build support, overcome resistance, and ensure that the idea is implemented. 594 CHAPTER 18 Organizational Change and Stress Management What’s a Learning Organization? Just as individuals learn, so too do organiza- tions. A learning organization has developed the continuous capacity to adapt and change. “All organizations learn, whether they consciously choose to or not—it is a fundamental requirement for their sustained existence.” 48 Some organizations just do it better than others. Most organizations engage in single-loop learning . 49 When they detect er- rors, their correction process relies on past routines and present policies. In contrast, learning organizations use double-loop learning . They correct errors by modifying objectives, policies, and standard routines. Double-loop learning challenges deeply rooted assumptions and norms. It provides opportunities for radically different solutions to problems and dramatic jumps in improvement. Exhibit 18-6 summarizes the five basic characteristics of a learning organiza- tion. It’s one in which people put aside their old ways of thinking, learn to be open with each other, understand how their organization really works, form a plan or vision everyone can agree on, and work together to achieve that vision. 50 Proponents of the learning organization envision it as a remedy for three fundamental problems of traditional organizations: fragmentation, competi- tion, and reactiveness. 51 First, fragmentation based on specialization creates “walls” and “chimneys” that separate different functions into independent and often warring fiefdoms. Second, an overemphasis on competition often under- mines collaboration. Managers compete to show who is right, who knows more, or who is more persuasive. Divisions compete when they ought to cooperate and share knowledge. Team leaders compete to show who the best manager is. And third, reactiveness misdirects management’s attention to problem solv- ing rather than creation. The problem solver tries to make something go away, while a creator tries to bring something new into being. An emphasis on reac- tiveness pushes out innovation and continuous improvement and, in its place, encourages people to run around “putting out fires.” Managing Learning What can managers do to make their firms learning organizations? Here are some suggestions: ● Establish a strategy. Management needs to make explicit its commit- ment to change, innovation, and continuous improvement. ● Redesign the organization’s structure. The formal structure can be a serious impediment to learning. Flattening the structure, eliminating or combining departments, and increasing the use of cross-functional teams reinforces interdependence and reduces boundaries. 1. There exists a shared vision that everyone agrees on. 2. People discard their old ways of thinking and the standard routines they use for solving problems or doing their jobs. 3. Members think of all organizational processes, activities, functions, and interactions with the environment as part of a system of interrelationships. 4. People openly communicate with each other (across vertical and horizontal boundaries) without fear of criticism or punishment. 5. People sublimate their personal self-interest and fragmented departmental interests to work together to achieve the organization’s shared vision. Source: Based on P. M. Senge, The Fifth Discipline (New York: Doubleday, 1990). Characteristics of a Learning Organization Exhibit 18-6 Work Stress and Its Management 595 ● Reshape the organization’s culture. To become a learning organiza- tion, managers must demonstrate by their actions that taking risks and admitting failures are desirable. That means rewarding people who take chances and make mistakes. And management needs to encourage func- tional conflict. “The key to unlocking real openness at work,” says one expert on learning organizations, “is to teach people to give up having to be in agreement. We think agreement is so important. Who cares? You have to bring paradoxes, conflicts, and dilemmas out in the open, so collectively we can be more intelligent than we can be individually.” 52 learning organization An organization that has developed the continuous capacity to adapt and change. double-loop learning A process of correcting errors by modifying the organization’s objectives, policies, and standard routines. stress An unpleasant psychological process that occurs in response to environmental pressures. Work Stress and Its Management Friends say they’re stressed from greater workloads and longer hours because of downsizing at their companies. Parents worry about the lack of job stabil- ity and reminisce about a time when a job with a large company implied life- time security. We read surveys in which employees complain about the stress of trying to balance work and family responsibilities. 53 Indeed, as Exhibit 18-7 shows, work is, for most people, the most important source of stress in life. What are the causes and consequences of stress, and what can individuals and organizations do to reduce it? What Is Stress? Stress is a dynamic condition in which an individual is confronted with an op- portunity, demand, or resource related to what the individual desires and for which the outcome is perceived to be both uncertain and important. 54 This is a complicated definition. Let’s look at its components more closely. 5 Define stress and identify its potential sources. Work Is the Biggest Source of Stress for Most Exhibit 18-7 “What area of your life causes you the most stress on a regular basis?” Area Causes Most Stress My job 26% My finances 20% My relationships 21% My children 10% School 8% Fear of a disaster/terror attack 3% Other 8% Source: 2009 Stress Management poll of 7,807 individuals, stress.about.com/gi/pages/poll.htm?linkback5&poll_id52213421040&poll 151&poll351&submit15Submit1Vote . single-loop learning A process of correcting errors using past routines and present policies. 596 CHAPTER 18 Organizational Change and Stress Management Although stress is typically discussed in a negative context, it is not necessar- ily bad in and of itself; it also has a positive value. 55 It’s an opportunity when it offers potential gain. Consider, for example, the superior performance an ath- lete or stage performer gives in a “clutch” situation. Such individuals often use stress positively to rise to the occasion and perform at their maximum. Similarly, many professionals see the pressures of heavy workloads and deadlines as posi- tive challenges that enhance the quality of their work and the satisfaction they get from their job. Recently, researchers have argued that challenge stressors —or stressors associated with workload, pressure to complete tasks, and time urgency— operate quite differently from hindrance stressors —or stressors that keep you from reaching your goals (for example, red tape, office politics, confusion over job responsibilities). Although research is just starting to accumulate, early evidence suggests challenge stressors produce less strain than hindrance stressors. 56 Researchers have sought to clarify the conditions under which each type of stress exists. It appears that employees who have a stronger affective commit- ment to their organization can transfer psychological stress into greater focus and higher sales performance, whereas employees with low levels of commit- ment perform worse under stress. 57 And when challenge stress increases, those with high levels of organizational support have higher role-based performance, but those with low levels of organizational support do not. 58 More typically, stress is associated with demands and resources . Demands are responsibilities, pressures, obligations, and uncertainties individuals face in the workplace. Resources are things within an individual’s control that he or she can use to resolve the demands. Let’s discuss what this demands–resources model means. 59 When you take a test at school or undergo your annual performance review at work, you feel stress because you confront opportunities and performance pressures. A good performance review may lead to a promotion, greater re- sponsibilities, and a higher salary. A poor review may prevent you from get- ting a promotion. An extremely poor review might even result in your being fired. To the extent you can apply resources to the demands on you—such as T his statement is false. One re- cent review of the literature con- cluded, “Few, if any, differences exist between the respective amount of occupational stress men and women experience.” Another review of 183 studies found that men and women differed to a very small degree on the burnout they experience. While it doesn’t appear that men and women differ in the work stress they report, there is more to the story. Working women tend to report more life stress than men. The reason may be that, as surveys reliably show, when a husband and wife both work full-time outside the home, the wife carries considerably greater household responsibilities (cleaning, shopping, keeping finances). So if both spouses work the same number of hours, it’s likely the wife’s total load of paid work and household/family work is greater—and thus more stressful gen- erally, even if her work stress alone is not greater. Says one expert, “A wom- an’s major stressors come from both the work she’s paid for and the work she isn’t.” The former doesn’t differ between the genders, but the latter clearly does. Sources: S. B. Watson, Y. W. Goh, and S. Sawang, “Gender Influences on the Work-Related Stress Coping Process,” Journal of Individual Differences 32, no. 1 (2011), pp.  39–46; R. K. Purvanova, and J. P. Muros, “Gender Differences in Burnout: A Meta-Analysis,” Journal of Vocational Behavior 77, no. 2 (2010), pp. 168–185; and M.  Casserly, “Summer Burnout: Avoiding Overload This Season,” Forbes (May 26, 2011), downloaded on July 20, 2011, from http://blogs.forbes.com/meghancasserly/ . Myth or Science? “Men Experience More Job Stress Than Women” http://blogs.forbes.com/meghancasserly/ Work Stress and Its Management 597 challenge stressors Stressors associated with workload, pressure to complete tasks, and time urgency. demands Responsibilities, pressures, obligations, and even uncertainties that individuals face in the workplace. resources Things within an individual’s control that can be used to resolve demands. Physiological symptoms • Headaches • High blood pressure • Heart disease • Anxiety • Depression • Decrease in job satisfaction Psychological symptoms Behavioral symptoms • Productivity • Absenteeism • Turnover Potential sources Consequences Experienced stress• Task demands • Role demands • Interpersonal demands Environmental factors • Economic uncertainty • Political uncertainty • Technological change Personal factors • Family problems • Economic problems • Personality Individual differences • Perception • Job experience • Social support • Belief in locus of control • Self-efficacy • Hostility Organizational factors A Model of Stress Exhibit 18-8 hindrance stressors Stressors that keep you from reaching your goals (for example, red tape, office politics, confusion over job responsibilities). being prepared, placing the exam or review in perspective, or obtaining social support—you will feel less stress. Research suggests adequate resources help reduce the stressful nature of demands when demands and resources match. If emotional demands are stress- ing you, having emotional resources in the form of social support is especially important. If the demands are cognitive—say, information overload—then job resources in the form of computer support or information are more important. Thus, under the demands–resources perspective, having resources to cope with stress is just as important in offsetting it as demands are in increasing it. 60 Potential Sources of Stress What causes stress? As the model in Exhibit 18-8 shows, there are three catego- ries of potential stressors: environmental, organizational, and personal. Let’s take a look at each. 61 Environmental Factors Just as environmental uncertainty influences the de- sign of an organization’s structure, it also influences stress levels among employ- ees in that organization. Indeed, uncertainty is the biggest reason people have trouble coping with organizational changes. 62 There are three main types of environmental uncertainty: economic, political, and technological. Changes in the business cycle create economic uncertainties. When the econ- omy is contracting, for example, people become increasingly anxious about 598 CHAPTER 18 Organizational Change and Stress Management their job security. Political uncertainties don’t tend to create stress among North Americans as they do for employees in countries such as Haiti or Venezuela. The obvious reason is that the United States and Canada have stable political systems, in which change is typically implemented in an orderly manner. Yet political threats and changes, even in countries such as the United States and Canada, can induce stress. Threats of terrorism in developed and developing nations, or the difficulties of East Germany reintegrating with West Germany, lead to political uncertainty that becomes stressful to people in these coun- tries. 63 Because innovations can make an employee’s skills and experience ob- solete in a very short time, computers, robotics, automation, and similar forms of technological change are also a threat to many people and cause them stress. Organizational Factors There is no shortage of factors within an organization that can cause stress. Pressures to avoid errors or complete tasks in a limited time, work overload, a demanding and insensitive boss, and unpleasant co-workers are a few examples. We’ve categorized these factors around task, role, and interper- sonal demands. 64 Task demands relate to a person’s job. They include the design of the job (its degrees of autonomy, task variety, degree of automation), working condi- tions, and the physical work layout. Assembly lines can put pressure on people when they perceive the line’s speed to be excessive. Working in an overcrowded room or a visible location where noise and interruptions are constant can in- crease anxiety and stress. 65 As customer service grows ever more important, emotional labor becomes a source of stress. 66 Imagine being a flight attendant for Southwest Airlines or a cashier at Starbucks. Do you think you could put on a happy face when you’re having a bad day? Role demands relate to pressures placed on a person as a function of the par- ticular role he or she plays in the organization. Role conflicts create expecta- tions that may be hard to reconcile or satisfy. Role overload occurs when the employee is expected to do more than time permits. Role ambiguity means role expectations are not clearly understood and the employee is not sure what to do. Individuals who face high situational constraints (such as fixed work hours or demanding job responsibilities) are also less able to engage in the proactive coping behaviors that reduce stress levels. 67 When faced with hassles at work, Task demands are organizational factors that can cause stress. These call center employees of Encore Capital Group in Gurgaon, India, have the difficult job of collecting mostly credit card and auto debts of Americans. The nature of their job can cause stress, as the people they call may be abusive, emotional, frustrated, sad, or angry. Encore strives to reduce the on-the-job stress of its call center workers by teaching them how to empathize with the delinquent borrowers and how to handle verbal abuse. Collectors learn that the debtors respond to them when they are very polite and respectful and never raise their voice. So u rc e : Z a ck C a n e p a ri / T h e N e w Y o rk T im e s /R e d u x P ic tu re s. Work Stress and Its Management 599 they will not only have higher levels of distress at the time, but they’ll also be less likely to take steps to eliminate stressors in the future. Interpersonal demands are pressures created by other employees. Lack of social support from colleagues and poor interpersonal relationships can cause stress, especially among employees with a high social need. A rapidly growing body of research has also shown that negative co-worker and supervisor behaviors, including fights, bullying, incivility, racial harassment, and sexual harassment, are especially strongly related to stress at work. 68 Personal Factors The typical individual works about 40 to 50 hours a week. But the experiences and problems people encounter in the other 120-plus can spill over to the job. Our final category, then, is factors in the employee’s per- sonal life: family issues, personal economic problems, and inherent personality characteristics. National surveys consistently show people hold family and personal relation- ships dear. Marital difficulties, the breaking of a close relationship, and disci- pline troubles with children create stresses employees often can’t leave at the front door when they arrive at work. 69 Regardless of income level—people who make $100,000 per year seem to have as much trouble handling their finances as those who earn $20,000— some people are poor money managers or have wants that exceed their earning capacity. The economic problems of overextended financial resources create stress and siphon attention away from work. Studies in three diverse organizations found that participants who reported stress symptoms before beginning a job accounted for most of the variance in stress symptoms reported 9 months later. 70 The researchers concluded that some people may have an inherent tendency to accentuate negative aspects of the world. If this is true, then a significant individual factor that influences stress is a person’s basic disposition. That is, stress symptoms expressed on the job may actually originate in the person’s personality. Stressors Are Additive When we review stressors individually, it’s easy to over- look that stress is an additive phenomenon—it builds up. 71 Each new and per- sistent stressor adds to an individual’s stress level. So a single stressor may be relatively unimportant in and of itself, but if added to an already high level of stress, it can be the straw that breaks the camel’s back. To appraise the total amount of stress an individual is under, we have to sum up his or her opportu- nity stresses, constraint stresses, and demand stresses. Individual Differences Some people thrive on stressful situations, while others are overwhelmed by them. What differentiates people in terms of their ability to handle stress? What individual variables moderate the relationship between potential stressors and experienced stress? At least four—perception, job experience, social support, and personality—are relevant. In Chapter 6 , we demonstrated that employees react in response to their perception of reality, rather than to reality itself. Perception, therefore, will mod- erate the relationship between a potential stress condition and an employee’s reaction to it. Layoffs may cause one person to fear losing his job, while another sees an opportunity to get a large severance allowance and start her own busi- ness. So stress potential doesn’t lie in objective conditions; rather, it lies in an employee’s interpretation of those conditions. Experience on the job tends to be negatively related to work stress. Why? Two explanations have been offered. 72 First is selective withdrawal. Voluntary 600 CHAPTER 18 Organizational Change and Stress Management turnover is more probable among people who experience more stress. Therefore, people who remain with an organization longer are those with more stress-resistant traits or those more resistant to the stress characteristics of their organization. Second, people eventually develop coping mechanisms to deal with stress. Because this takes time, senior members of the organization are more likely to be fully adapted and should experience less stress. Social support —collegial relationships with co-workers or supervisors—can buffer the impact of stress. 73 This is among the best-documented relationships in the stress literature. Social support acts as a palliative, mitigating the negative effects of even high-strain jobs. Perhaps the most widely studied personality trait in stress is neuroticism, which we discussed in Chapter 5 . As you might expect, neurotic individuals are more prone to experience psychological strain. 74 Evidence suggests that neu- rotic individuals are more prone to believe there are stressors in their work en- vironments, so part of the problem is that they believe their environments are more threatening. They also tend to select less adaptive coping mechanisms, relying on avoidance as a way of dealing with problems rather than attempting to resolve them. 75 Workaholism is another personal characteristic related to stress levels. Workaholics are people obsessed with their work; they put in an enormous number of hours, think about work even when not working, and create ad- ditional work responsibilities to satisfy an inner compulsion to work more. In some ways, they might seem like ideal employees. That’s probably why when most people are asked in interviews what their greatest weakness is, they reflex- ively say, “I just work too hard.” However, there is a difference between working hard and working compulsively. Workaholics are not necessarily more produc- tive than other employees, despite their extreme efforts. The strain of putting in such a high level of work effort eventually begins to wear on the workaholic, leading to higher levels of work–life conflict and psychological burnout. 76 Cultural Differences Research suggests the job conditions that cause stress show some differences across cultures. One study revealed that whereas U.S. employees were stressed by a lack of control, Chinese employees were stressed by job evaluations and lack of training. It doesn’t appear that personality effects on stress are different across cultures, however. One study of employees in Hungary, Italy, the United Kingdom, Israel, and the United States found Type A personality traits (see Chapter 5 ) predicted stress equally well across countries. 77 A study of 5,270 man- agers from 20 countries found individuals from individualistic countries such as the United States, Canada, and the United Kingdom experienced higher levels of stress due to work interfering with family than did individuals from collectiv- ist countries in Asia and Latin America. 78 The authors proposed that this may occur because, in collectivist cultures, working extra hours is seen as a sacrifice to help the family, whereas in individualistic cultures, work is seen as a means to personal achievement that takes away from the family. Evidence suggests that stressors are associated with perceived stress and strains among employees in different countries. In other words, stress is equally bad for employees of all cultures. 79 S A L SELF-ASSESSMENT LIBRARY How Stressful Is My Life? In the Self-Assessment Library (available on CD and online), take assessment III.C.2 (How Stressful Is My Life?). Work Stress and Its Management 601 Consequences of Stress Stress shows itself in a number of ways, such as high blood pressure, ulcers, irri- tability, difficulty making routine decisions, loss of appetite, accident proneness, and the like. These symptoms fit under three general categories: physiological, psychological, and behavioral symptoms. Physiological Symptoms Most early concern with stress was directed at physi- ological symptoms because most researchers were specialists in the health and medical sciences. Their work led to the conclusion that stress could create changes in metabolism, increase heart and breathing rates and blood pressure, bring on headaches, and induce heart attacks. Evidence now clearly suggests stress may have harmful physiological effects. One study linked stressful job demands to increased susceptibility to upper- respiratory illnesses and poor immune system functioning, especially for individ- uals with low self-efficacy. 80 A long-term study conducted in the United Kingdom found that job strain was associated with higher levels of coronary heart dis- ease. 81 Still another study conducted with Danish human services workers found that higher levels of psychological burnout at the work-unit level were related to significantly higher levels of sickness absence. 82 Many other studies have shown similar results linking work stress to a variety of indicators of poor health. Psychological Symptoms Job dissatisfaction is “the simplest and most obvious psychological effect” of stress. 83 But stress shows itself in other psychological states—for instance, tension, anxiety, irritability, boredom, and procrastination. For example, a study that tracked physiological responses of employees over time found that stress due to high workloads was related to higher blood pres- sure and lower emotional well-being. 84 6 Identify the consequences of stress. A lthough much of the research we’ve reviewed in this chap- ter discusses how organiza- tions and managers can relieve stress for employees, employees also have a certain degree of responsibility for managing their own stress. Beyond the fact that high levels of stress are unpleasant, employees who experi- ence them have difficulty concentrat- ing at work, make more mistakes, miss more days of work, and use more health insurance. This suggests that it may be your ethical responsibility as an employee to ensure your stress levels are not high enough to interfere with your ability to work effectively for clients, customers, and co-workers. A few examples of strategies you might want to employ to reduce your level of stress from work include the following: 1. Take breaks. If you’re feeling de- pleted or exhausted at work, taking some time away from your tasks can significantly reduce your level of psychological strain. 2. Let your supervisor know you’re stressed. In many cases, manag- ers will want to provide assistance to workers who are experienc- ing stress, but if they don’t know there’s a problem, they can’t help to address it. 3. Detach yourself from work in your off-time. Try not to take work home with you, and make your time off a period when you can truly recover from the strains of the day. Research shows that workers who can detach themselves from their work in their off-time experience significantly less stress than those who do not. Sources: Based on M. M. Krischer, L.  M. Penney, and E. M. Hunter, “Can Counterproductive Work Behaviors Be Productive? CWB as Emotion-Focused Coping,” Journal of Occupational Health Psychology 15, no 2 (2010), pp. 154–166; V. C. Hahn, C. Binnewies, S. Sonnentag, and E. J. Mojza, “Learning How to Recover from Job Stress: Effects of a Recovery Training Program on Recovery, Recovery Related Self-Efficacy, and Well-Being,” Journal of Occupational Health Psychology 16, no.  2 (2011), pp. 202–216; and S. Sonnentag, C. Binnewies, and E. J. Mojza, “Staying Well and Engaged when Demands are High: The Role of Psychological Detachment,” Journal of Applied Psychology 95, no. 5 (2010), pp. 965–976. An Ethical Choice Responsibly Managing Your Own Stress 602 CHAPTER 18 Organizational Change and Stress Management The Proposed Inverted-U Relationship Between Stress and Job Performance Exhibit 18-9 P e rf o rm a n ce StressLow Low High High 7 Contrast the individual and organizational approaches to managing stress. Jobs that make multiple and conflicting demands or that lack clarity about the incumbent’s duties, authority, and responsibilities increase both stress and dis- satisfaction. 85 Similarly, the less control people have over the pace of their work, the greater their stress and dissatisfaction. Jobs that provide a low level of variety, significance, autonomy, feedback, and identity appear to create stress and reduce satisfaction and involvement in the job. 86 Not everyone reacts to autonomy in the same way, however. For those with an external locus of control, increased job con- trol increases the tendency to experience stress and exhaustion. 87 Behavioral Symptoms Research on behavior and stress has been conducted across several countries and over time, and the relationships appear relatively consistent. Behavior-related stress symptoms include reductions in productivity, absence, and turnover, as well as changes in eating habits, increased smoking or consumption of alcohol, rapid speech, fidgeting, and sleep disorders. 88 A significant amount of research has investigated the stress–performance relationship. The most widely studied pattern of this relationship is the inverted U shown in Exhibit 18-9 . 89 The logic underlying the figure is that low to moder- ate levels of stress stimulate the body and increase its ability to react. Individuals then often perform their tasks better, more intensely, or more rapidly. But too much stress places unattainable demands on a person, which result in lower performance. In spite of the popularity and intuitive appeal of the inverted-U model, it doesn’t get a lot of empirical support. 90 So we should be careful of as- suming it accurately depicts the stress–performance relationship. As we mentioned earlier, researchers have begun to differentiate challenge and hindrance stressors, showing that these two forms of stress have opposite effects on job behaviors, especially job performance. A meta-analysis of responses from more than 35,000 individuals showed role ambiguity, role conflict, role overload, job insecurity, environmental uncertainty, and situational constraints were all con- sistently negatively related to job performance. 91 There is also evidence that chal- lenge stress improves job performance in a supportive work environment, whereas hindrance stress reduces job performance in all work environments. 92 Managing Stress Because low to moderate levels of stress can be functional and lead to higher performance, management may not be concerned when employees experience Work Stress and Its Management 603 them. Employees, however, are likely to perceive even low levels of stress as undesirable. It’s not unlikely, therefore, for employees and management to have different notions of what constitutes an acceptable level of stress on the job. What management may consider to be “a positive stimulus that keeps the adrenaline running” is very likely to be seen as “excessive pressure” by the employee. Keep this in mind as we discuss individual and organizational ap- proaches toward managing stress. 93 Individual Approaches An employee can take personal responsibility for re- ducing stress levels. Individual strategies that have proven effective include time-management techniques, increased physical exercise, relaxation training, and expanded social support networks. Also see the Ethical Choice box in this chapter for additional suggestions. Many people manage their time poorly. The well-organized employee, like the well-organized student, can often accomplish twice as much as the person who is poorly organized. So an understanding and utilization of basic time-management principles can help individuals better cope with tensions created by job demands. 94 A few of the best-known time-management principles are (1) making daily lists of activities to be accomplished, (2) prioritizing activities by importance and urgency, (3) scheduling activities according to the priorities set, (4) knowing your daily cycle and handling the most demanding parts of your job when you are most alert and productive, and (5) avoiding electronic distractions like frequently checking e-mail, which can limit attention and reduce efficiency. 95 These time-management skills can help minimize procrastination by focusing efforts on immediate goals and boosting motivation even in the face of tasks that are less desirable. 96 Physicians have recommended noncompetitive physical exercise , such as aero- bics, walking, jogging, swimming, and riding a bicycle, as a way to deal with excessive stress levels. These activities increase lung capacity, lower the at-rest heart rate, and provide a mental diversion from work pressures, effectively re- ducing work-related levels of stress. 97 Individuals can also teach themselves to reduce tension through relaxation tech- niques such as meditation, hypnosis, and deep breathing. The objective is to reach a state of deep physical relaxation, in which you focus all your energy on release This group of Chinese working women participate in a yoga class in Beijing as a way to deal with exces- sive stress levels caused by long working hours and trying to achieve a work/life balance. Working women in China have high levels of stress because in Chinese culture women are expected to take more responsibility for family matters than in other cultures. As an indi- vidual approach to managing stress, yoga is a noncompetitive physical exercise that combines stretching, mental imagery, breathing control, physical postures, and meditation. Yoga reduces stress, anxiety, and muscle tension, provides a mental diversion from work pressures, and promotes physical well-being by lowering blood pressure and heart rate. So u rc e : A FP P h o to /G e tt y Im a g e s/ N e w sc o m . 604 CHAPTER 18 Organizational Change and Stress Management S tudies repeatedly show that conflicts between work life and nonwork life, especially conflicts between work and family responsibili- ties, are significant stressors. Examples of work–life conflicts include nights and weekends spent at work rather than with family, work schedules so full that vacations cannot happen, and work obligations that require arranging for child care at the last minute. As we noted in Chapter 17 , many organiza- tions have experimented with policies like flexible scheduling or working from home to reduce work–life conflicts and help employees reduce their levels of stress. The question is, do these poli- cies have the same effects in different cultures, which have different values and norms regarding family and life responsibilities? Reviewers have critiqued the lit- erature on strain related to work–life conflict for failing to take culture into account. And, in fact, the great major- ity of studies on stress due to work–life conflict have been conducted entirely within the United States. Research that included multiple cultures sug- gests that collectivist cultures have lower levels of work–life conflict be- cause collectivists are more likely to obtain social support from others. Differences in cultural expectations for men and women in different cultures also mean that women in some coun- tries will experience greater work–life conflict because they have more re- sponsibilities in the family domain, whereas in more egalitarian cultures men and women will experience simi- lar levels of work–life conflict. Do these cultural differences mean organizations should use different policies to combat work–life conflicts? One study of nearly 25,000 IBM em- ployees in 75 countries investigated how policies like flexibility about where and when work is performed were related to employee stress lev- els. The results clearly showed that both forms of flexibility (such as work- at-home arrangements and flexible schedules) were linked to lower levels of work–life conflict in affluent and de- veloping countries in the East and the West. In other words, it appears that flexible scheduling can help reduce employee stress levels around the world. This is good news for organiza- tions attempting to develop policies and procedures that apply equally to all their employees. Sources: Based on E. J. Hill, J. J. Erickson, E. K. Holmes, and M. Ferris, “Workplace Flexibility, Work Hours, and Work-Life Conflict: Finding an Extra Day or Two,” Journal of Family Psychology 24, no. 3 (2010), pp. 349–358; and G. N. Powell, A. M. Francesco, and Y. Ling, “Toward Culture-Sensitive Theories of the Work- Family Interface,” Journal of Organizational Behavior 30, no. 5 (2009), pp. 597–616. glOBalization! Work–Family Stress in Different Cultures of muscle tension. 98 Deep relaxation for 15 or 20 minutes a day releases strain and provides a pronounced sense of peacefulness, as well as significant changes in heart rate, blood pressure, and other physiological factors. A growing body of re- search shows that simply taking breaks from work at routine intervals can facilitate psychological recovery and reduce stress significantly and may improve job perfor- mance, and these effects are even greater if relaxation techniques are employed. 99 As we have noted, friends, family, or work colleagues can provide an outlet when stress levels become excessive. Expanding your social support network pro- vides someone to hear your problems and offer a more objective perspective on a stressful situation than your own. Organizational Approaches Several organizational factors that cause stress— particularly task and role demands—are controlled by management and thus can be modified or changed. Strategies to consider include improved employee selection and job placement, training, realistic goal-setting, redesign of jobs, increased employee involvement, improved organizational communication, employee sabbaticals, and corporate wellness programs. Certain jobs are more stressful than others but, as we’ve seen, individuals dif- fer in their response to stressful situations. We know individuals with little expe- rience or an external locus of control tend to be more prone to stress. Selection and placement decisions should take these facts into consideration. Obviously, management shouldn’t restrict hiring to only experienced individuals with an Work Stress and Its Management 605 internal locus, but such individuals may adapt better to high-stress jobs and per- form those jobs more effectively. Similarly, training can increase an individual’s self-efficacy and thus lessen job strain. We discussed goal-setting in Chapter 7 . Individuals perform better when they have specific and challenging goals and receive feedback on their progress toward these goals. Goals can reduce stress as well as provide motivation. 100 Employees who are highly committed to their goals and see purpose in their jobs experience less stress because they are more likely to perceive stressors as challenges rather than hindrances. Specific goals perceived as attainable clarify performance ex- pectations. In addition, goal feedback reduces uncertainties about actual job performance. The result is less employee frustration, role ambiguity, and stress. Redesigning jobs to give employees more responsibility, more meaningful work, more autonomy, and increased feedback can reduce stress because these factors give employees greater control over work activities and lessen dependence on oth- ers. But as we noted in our discussion of work design, not all employees want en- riched jobs. The right redesign for employees with a low need for growth might be less responsibility and increased specialization. If individuals prefer structure and routine, reducing skill variety should also reduce uncertainties and stress levels. Role stress is detrimental to a large extent because employees feel uncertain about goals, expectations, how they’ll be evaluated, and the like. By giving these employees a voice in the decisions that directly affect their job performance, management can increase employee control and reduce role stress. Thus, man- agers should consider increasing employee involvement in decision making, be- cause evidence clearly shows that increases in employee empowerment reduce psychological strain. 101 Increasing formal organizational communication with employees reduces un- certainty by lessening role ambiguity and role conflict. Given the importance that perceptions play in moderating the stress–response relationship, manage- ment can also use effective communications as a means to shape employee per- ceptions. Remember that what employees categorize as demands, threats, or opportunities at work is an interpretation and that interpretation can be af- fected by the symbols and actions communicated by management. Some employees need an occasional escape from the frenetic pace of their work. Companies including Genentech, American Express, Intel, General Mills, Microsoft, Morningstar, DreamWorks Animation, and Adobe Systems have begun to provide extended voluntary leaves. 102 These sabbaticals —ranging in length from a few weeks to several months—allow employees to travel, relax, or pursue per- sonal projects that consume time beyond normal vacations. Proponents say they can revive and rejuvenate workers who might otherwise be headed for burnout. Our final suggestion is organizationally supported wellness programs . These typically provide workshops to help people quit smoking, control alcohol use, lose weight, eat better, and develop a regular exercise program; they focus on the employee’s total physical and mental condition. 103 Some help employees improve their psychological health as well. A meta-analysis of 36 programs de- signed to reduce stress (including wellness programs) showed that interventions to help employees reframe stressful situations and use active coping strategies appreciably reduced stress levels. 104 Most wellness programs assume employees need to take personal responsibility for their physical and mental health and that the organization is merely a means to that end. wellness programs Organizationally supported programs that focus on the employee’s total physical and mental condition. 606 CHAPTER 18 Organizational Change and Stress Management Most firms that have introduced wellness programs have found significant benefits. A study of eight Canadian organizations found that every dollar spent on comprehensive wellness programs generated a return of $1.64, and for high-risk employees, such as smokers, the return was nearly $4.00. 105 Cindy Russell poses with her assembled gear in preparation for a one-month sabbatical to go fly fish- ing in the South Pacific. Russell is a paralegal with the law firm Alters, Boldt, Brown, Rash, and Culmo in Miami. Like many small companies, the law firm does not have a formal sabbatical program. But Russell approached her boss with the idea, saying that she worked long hours in preparing for trials and desired a longer time away from work than her vacation time allowed. She explained how the fishing trip would help her to decompress and return to work energized and refreshed. Russell was granted the leave, some of it unpaid, after con- vincing her boss how it would ben- efit both her and the firm. So u rc e : C .W . G ri ff in /M ia m i H e ra ld /M C T /N e w sc o m . MyManagementLab Now that you have finished this chapter, go back to www.mymanagementlab.com to continue practicing and applying the concepts you’ve learned. The need for change has been implied throughout this text. “A casual reflec- tion on change should indicate that it encompasses almost all of our concepts in the organizational behavior literature.” 106 For instance, think about attitudes, motivation, work teams, communication, leadership, organizational structures, human resource practices, and organizational cultures. Change was an integral part in our discussion of each. If environments were perfectly static, if employ- ees’ skills and abilities were always up to date and incapable of deteriorating, and if tomorrow were always exactly the same as today, organizational change would have little or no relevance to managers. But the real world is turbulent, requiring organizations and their members to undergo dynamic change if they are to perform at competitive levels. ● Managers are the primary change agents in most organizations. By the decisions they make and their role-modeling behaviors, they shape the organization’s change culture. Summary and Implications for Managers www.mymanagementlab.com Summary and Implications for Managers 607 Responsible Managers Relieve Stress on Their Employees POINT COUNTERPOINT I t is not hard to find employees who think they’re overworked and underpaid. If a company managed according to worker complaints, the squeakiest wheel would always get the grease. Sure, people might work fewer hours and feel less stressed, but that would compromise an organization’s ability to be competitive and to reward its hardest-working and most productive employees. Labor is often the largest single cost for an employer, which means that if it is to be competitive, the firm needs to earn more revenue per employee. It doesn’t take a math genius to realize that one way of accomplishing that is to pay attention to the denominator. It’s that magical thing we call “productivity,” a central metric by which we can measure the organization’s per- formance. Organizations that are productive today enjoy higher earnings later. Take Deutsche Bank as an example. The number of front- office employees in Deutsche Bank’s investment banking di- vision has fallen 12 percent from pre-crisis levels, while net revenue per employee has increased 20 percent. That sounds like a well-managed company, doesn’t it? Yet Deutsche Bank employees probably do feel they’re working harder. They are. What would you think of a company if the story instead was, “Net revenue per employee has fallen 20 percent, but employ- ees feel much less stressed at work”? We don’t live in a world where companies have the luxury of doing less with more. Managers shouldn’t go out of their way to stress out their employees. Nor should they turn a blind eye toward burnout. But realistically, in today’s globally competitive business environment, the organizations that will survive are those that can do more with less. If that means employees are stressed by higher workloads, well, it beats the unemployment line, doesn’t it? O ne of the reasons the economic recovery has been sluggish is that employers have been reluctant to re- place those they laid off. If you can produce the same amount or provide the same service with fewer employees, that’s efficient, of course. But is it a short-sighted way to man- age? Evidence suggests that employees are at their breaking point—and employers will pay a price just like the employees they are stressing. Employees are really stressed. More work is being done with fewer people. Workers wonder whether they will be the “next shoe to fall” in layoffs. In a recent survey of managers, 81 percent agreed worker stress and fatigue is a greater prob- lem than in the past. Says one Sacramento, California, employee, “I can’t remem- ber the last time I went out for lunch. I bring my lunch and eat at my desk,” she says. She can’t even complain to her husband, since he’s the same boat—working 10-hour days and “coming home late and exhausted.” Some employers are long-sighted enough to address the problem. Tony Schwartz, CEO of a consulting firm, decided to institute a program he called “Take Back Your Lunch.” He encourages his employees to take a lunch break and even urges them to organize midday gatherings with social networking site Meetup .com . Another company with progressive management is the ac- counting firm Ernst & Young. Of the company’s 23,000 employ- ees, about 10 percent work under flexible arrangements where they can work less or adopt a more flexible schedule during nonpeak times. These companies have found that taking the long view and emphasizing balance helps good employees be more produc- tive over the long-term—and more likely to stick around. “We listen to our people and they tell us very consistently that flex- ibility in incredibly important to them and to their family,” said James Turley, Ernst & Young’s CEO. Sources: S. Greenhouse, “The Retention Bonus? Time,” The New York Times (January 8, 2011), pp. B1, B7; M. V. Rafter, “The Yawning of a New Era,” Workforce Management (December 2010), pp. 3–4; and M. Turner, “Deutsche Says It Does More with Less,” Financial News (June 2, 2011), downloaded on July 19, 2011, from www.efinancialnews.com/ . www.efinancialnews.com/ 608 CHAPTER 18 Organizational Change and Stress Management ● Management decisions related to structural design, cultural factors, and human resource policies largely determine the level of innovation within the organization. ● Management policies and practices will determine the degree to which the organization learns and adapts to changing environmental factors. ● The existence of work stress, in and of itself, need not imply lower per- formance. The evidence indicates that stress can be either a positive or a negative influence on employee performance. ● Low to moderate amounts of stress enable many people to perform their jobs better by increasing their work intensity, alertness, and ability to react. This is especially true if stress arises due to challenges on the job rather than hindrances that prevent employees from doing their jobs effectively. ● However, a high level of stress, or even a moderate amount sustained over a long period, eventually takes its toll, and performance declines. 1 What forces act as stimulants to change, and what is the difference between planned and unplanned change? 2 What forces act as sources of resistance to change? 3 What are the four main approaches to managing orga- nizational change? 4 How can managers create a culture for change? 5 What is stress, and what are the possible sources of stress? 6 What are the consequences of stress? 7 What are the individual and organizational approaches to managing stress? QUESTIONS FOR REVIEW EXPERIENTIAL EXERCISE Power and the Changing Environment Objectives 1. To describe the forces for change influencing power differentials in organizational and interpersonal relationships. 2. To understand the effect of technological, legal/ political, economic, and social changes on the power of individuals within an organization. The Situation Your organization manufactures golf carts and sells them to country clubs, golf courses, and consumers. Your team is faced with the task of assessing how environmental changes will affect individuals’ organizational power. Read each of the five scenarios and then, for each, identify the five members in the organization whose power will in- crease most in light of the environmental condition(s). [ Note: m = male, (f) = female.] Accountant/CPA (m) Advertising expert (m) Chemist (m) Chief financial officer (f) Computer programmer (f) Corporate trainer (m) General manager (m) Human resource manager (f) Industrial engineer (m) In-house counsel (m) Marketing manager (f) Operations manager (f) Product designer (m) Public relations expert (m) Securities analyst (m) 1. New computer-aided manufacturing technologies are being introduced in the workplace during the next 2 to 18 months. 2. New federal emission standards are being legislated by the government that will essentially make gas- powered golf carts (40 percent of your current business) obsolete. 3. Sales are way down for two reasons: (a) a decline in the number of individuals playing golf and (b) your com- petitor was faster to embrace lithium batteries, which allow golf carts to run longer without another charge. Ethical Dilemma 609 4. Given the growth of golf courses in other places (especially India, China, and Southeast Asia), the company is planning to go international in the next 12 to 18 months. 5. The U.S. Equal Employment Opportunity Commission is applying pressure to balance the male–female population in the organization’s upper hierarchy by threatening to publicize the predomi- nance of men in upper management. The Procedure 1. Divide the class into teams of three to four students each. 2. Teams should read each scenario and identify the five members whose power will increase most in light of the external environmental conditions described. 3. Teams should then address this question: assuming that the five environmental changes are taking place at once, which five members of the organization will now have the most power? 4. After 20 to 30 minutes, representatives of each team will be selected to present and justify their conclu- sions to the entire class. Discussion will begin with scenario 1 and proceed through scenario 5 and the “all at once” scenario. Source: Adapted from J. E. Barbuto Jr., “Power and the Changing Environment,” Journal of Management Education (April 2000), pp. 288–296. ETHICAL DILEMMA Changes at WPAC WPAC—a television station based in Yuma, Arizona—had been experiencing a ratings decline for several years. In 2009, the station switched from a CBS to NBC affiliate. That has explained some of the ratings decline. However, in recent months, the ratings have continued to slide. Eventually, the station manager, Lucien Stone, decided he had to make a change to the local newscast. After meeting with the programming manager, Stone called a meeting of WPAC employees and announced his intention to “spice things up” during the 5 p.m. and 10 p.m. local news. The 30-minute broadcasts would still in- clude the traditional “top stories,” “sports,” and “weather” segments. However, on slow news days, more attention- getting material would be used. Stone also indicated some programming decisions would probably be revisited. “The days of Little House on the Prairie are over,” he said. Madison Devereaux, 29, had been the chief meteorolo- gist for WPAC since 2010. After receiving her degree in meteorology from the University of Oklahoma in 2007, she joined WPAC and quickly worked her way up the ranks, impressing viewers and WPAC management alike with her extension knowledge and articulate, professional, mistake-free delivery. Though she was Christian, Devereaux never was one to go around “thumping Bibles in the newsroom,” as she put it. Most of those at WPAC weren’t even aware of Madison’s religious views. Devereaux was troubled by the announced changes to WPAC’s programming but didn’t speak up at the time. One Monday during a pre-production meeting, she learned that on Thursday of that week, WPAC re- porter Sam Berkshow would present a segment called “Dancing Around the Economy,” which would focus on how local strip clubs were doing well despite the slug- gish economy. Devereaux didn’t think it was appropriate to air the segment during the 5 p.m. newcast and asked both her producer and Stone to reconsider the piece, or at least air it in the 10 p.m. time slot. When they refused, she asked whether she could take the day off when the segment aired. Stone again refused. This was “sweeps week” (when ratings are calculated), Stone wanted to air the story now, and Devereaux’s contract prohibited her from taking time off during sweeps week. When Devereaux didn’t show up for work that Thursday, WPAC fired her, arguing she had breached her contract. For her part, Devereaux said, “I’m not angry with the sta- tion, but I am sorry about the changes that have taken place.” Questions 1. Do you think either party behaved unethically in this case? 2. If you shared Devereaux’s views, would you have han- dled the situation differently? How? 3. Drawing on Kotter’s eight-step plan for implementing change, how might WPAC have handled its planned change differently? Sources: Based on C. Edelhart, “Weatherman’s Stand Against Story Costs Job,” Californian (May 16, 2011), downloaded July 7, 2011, from www.bakersfield.com/ ; and K. T. Phan, “ABC Affiliate Fires Christian over Strip Club Segment,” Fox News (May 10, 2011), www.nation.foxnews.com . www.bakersfield.com/ www.nation.foxnews.com 610 CHAPTER 18 Organizational Change and Stress Management CASE INCIDENT 1 Starbucks Returns to Its Roots You are probably so used to seeing Starbucks coffee shops everywhere that you might not realize the company went from just 11 stores in 1987 to 2,600 in the year 2000. This incredibly rapid growth sprang from the company’s ability to create a unique experience for customers who wanted to buy its distinct brand of lattes and mochas wherever they found themselves. At Starbucks’ core, there was also a culture of treating each customer as a valued guest who should feel comfortable relaxing and taking in the am- bience of the store. Whether you were in the company’s founding location in Seattle, Washington, or at the other end of the country in Miami, Florida, you knew what to expect when you went to a Starbucks. This uniform culture was truly put to the test in the face of massive expansion, however, and by 2006 Starbucks’ chairman and former CEO Howard Schultz knew some- thing had gone wrong. He noted that “As I visited hun- dreds of Starbucks stores in cities around the world, the entrepreneurial merchant in me sensed that something intrinsic to Starbucks’ brand was missing. An aura. A spirit. The stores were lacking a certain soul.” Starbucks’ perfor- mance had become lackluster, with hundreds of planned store openings being canceled and hundreds more stores being closed. So, Schultz took the dramatic step of coming back as CEO and engaging in a companywide effort to change the corporate culture back to what it had been before its expansion. All 7,000 Starbucks stores were closed for a single afternoon as part of a training effort of 135,000 baristas. Quality control was a primary mission; baristas were instructed to pour every glass of espresso like honey from a spoon, to preserve the flavor. This em- phasis on quality over speed ran counter to the principles of mass production, but it was just what the company needed to ensure it could retain its culture. Espresso ma- chines that obscured the customers’ view were replaced with lower-profile machines that allowed baristas to look directly at guests while making beverages. And “assembly- line production,” like making several drinks at once, was discouraged in favor of slowly making each drink for each customer. Schultz is convinced his efforts to take the culture back to its roots as a neighborhood coffee shop—one en- tranced with the “romance of coffee” and treating every customer as an old friend—has saved the company. Today, Starbucks earns more than $10 billion in annual revenue and serves more than 50 million customers a week around the globe. Questions 1. What factors are most likely to change when a company grows very rapidly, as Starbucks did? How can these changes threaten the culture of an organization? 2. Why might this type of radical change process be easier for Starbucks to implement than it would be for other companies? 3. A great deal of the return to an original culture has been credited to Howard Schultz, who acted as an idea champion. Explain how Schultz’s efforts to change the Starbucks culture fit with our discussion of culture change earlier in the chapter. 4. Schultz’s change initiative might succeed at another company that values customization and high levels of customer service, but how would it need to differ at a firm that emphasizes speed and efficiency of service? Sources: Based on H. Schultz, “How Starbucks Got Its Mojo Back,” Newsweek, (March 21, 2011), www .newsweek.com ; A. Ignatius, “We Had to Own the Mistakes,” Harvard Business Review (July/August 2010), pp. 108–115; and R. Baker, “Starbucks Demonstrates Power of Brand,” Marketing Week (April 28, 2011), www.marketingweek.co.uk . CASE INCIDENT 2 The Rise of Extreme Jobs Before Barbara Agoglia left her job at American Express, she was spending 13 hours a day working and commut- ing. She also had to be available via cell phone 24/7. The last straw came when she didn’t have time to wait with her school-age son at his bus stop. Carolyn Buck also has an extreme job. She usually works more than 60 hours a week for Ernst & Young and often has to travel to India and China. Agoglia and Buck are not alone. Most U.S. adults are working more hours than ever, but one group in par- ticular stands out: those with extreme jobs—people who spend more than half their time working and commuting to and from work. More than 1.7 million people consider their jobs too extreme, according to a recent study. What accounts for the rise in extreme jobs? It’s not entirely clear, but the usual suspects of globalization, www.newsweek.com www.newsweek.com www.marketingweek.co.uk Endnotes 611 Sources: Based on T. Weiss, “How Extreme Is Your Job?” Forbes (February 1, 2007), p. 1; S. A. Hewlett and C. B. Luce, “Extreme Jobs,” Harvard Business Review (December 2006), pp. 49–58; S. Armour, “Hi, I’m Joan, and I’m a Workaholic,” USA Today (May 23, 2007), pp. 1B, 2B; and C. Oliver, “Workaholics Forced to Take Time Off,” Financial Times (July 5, 2011), www.ft.com . ENDNOTES 1. See, for instance, J. Birkinshaw, G. Hamel, and M. J. Mol, “Management Innovation,” Academy of Management Review 33, no. 4 (2008), pp. 825–845; and J. Welch and S. Welch, “What Change Agents Are Made Of,” BusinessWeek (October  20, 2008), p. 96. 2. C. J. Loomis and D. Burke, “Can Ellen Kullman Make DuPont Great Again?” Fortune (May 3, 2010), pp. 156–163. 3. P. G. Audia and S. Brion, “Reluctant to Change: Self- Enhancing Responses to Diverging Performance Measures,” Organizational Behavior and Human Decision Processes 102 (2007), pp. 255–269. 4. M. Fugate, A. J. Kinicki, and G. E. Prussia, “Employee Coping with Organizational Change: An Examination of Alternative Theoretical Perspectives and Models,” Personnel Psychology 61, no. 1 (2008), pp. 1–36. 5. J. D. Ford, L. W. Ford, and A. D’Amelio, “Resistance to Change: The Rest of the Story,” Academy of Management Review 33, no. 2 (2008), pp. 362–377. 6. M. T. Hannan, L. Pólos, and G. R. Carroll, “The Fog of Change: Opacity and Asperity in Organizations,” Administrative Science Quarterly (September 2003), pp. 399–432. 7. J. P. Kotter and L. A. Schlesinger, “Choosing Strategies for Change,” Harvard Business Review (March–April 1979), pp. 106–114. 8. J. E. Dutton, S. J. Ashford, R. M. O’Neill, and K. A. Lawrence, “Moves That Matter: Issue Selling and Organizational Change,” Academy of Management Journal (August 2001), pp. 716–736. 9. P. C. Fiss and E. J. Zajac, “The Symbolic Management of Strategic Change: Sensegiving via Framing and Decoupling,” Academy of Management Journal 49, no. 6 (2006), pp. 1173–1193. 10. A. E. Rafferty and S. L. D. Restubog, “The Impact of Change Process and Context on Change Reactions and Turnover technology, and competitiveness are high on every- one’s lists. As extreme as Agoglia and Buck’s jobs may seem, U.S. workers may have it comparatively easy. Most surveys in- dicate extreme jobs are worse in developing counties. A 2006 Harvard Business Review study of managers in 33 global companies indicated that compared to U.S. managers, managers in developing countries were more than twice as likely to have extreme jobs. For those who hold extreme jobs, personal life often takes a back seat. Forty-four percent take fewer than 10  vacation days per year. Many individuals with extreme jobs see soci- ety changing into a “winner takes all” mode, where those who are willing to go the extra mile will reap a dispropor- tionate share of the intrinsic and extrinsic rewards. Why do people take extreme jobs (or allow their jobs to become extreme)? A 2006 study suggested that for both men and women, the number-one reason for working long, stressful hours is not pay. Rather, it’s the rush they get from doing stimulating or challenging work. As one Asian manager said, “Building this business in markets where no one has done anything like this before is enor- mously exciting. And important. We’ve built distribution centers that are vital to China’s growth—they contribute to the overall prospects of our economy.” Although this sounds all good, the situation is more complicated when you ask holders of extreme jobs about what their jobs cost them. Among them, 66 percent of men and 77 percent of women say their job interferes with their ability to maintain a home. For those with extreme jobs who have children, 65 percent of men and 33 percent of women say it keeps them from having a relationship with their chil- dren. And 46 percent of male and female extreme job hold- ers say their jobs interfere with having a strong relationship with their spouse. About half the members of each group say it interferes with their sex life. “I can’t even fathom hav- ing a boyfriend,” says one extreme job holder. Another, Chris Cicchinelli, was so concerned about being out of touch with work during his honeymoon that he got a satel- lite phone. Even that didn’t help. He ended up cutting his 10-day honeymoon to 5 days. “I had major anxiety,” he said. The problem of overwork has become so pronounced in South Korea that many employers are forcing employ- ees to take time off and locking them out of their com- puter systems during scheduled vacation times. Managers complain that Korean workers have become comparatively unproductive during their work hours, in part because they are so exhausted they cannot perform effectively. One authority on Korean society opines that employees are worried that if they do not work extreme hours, their employers will see them as expendable. Questions 1. Do you think you will ever have an extreme job? Are you sure? Explain. 2. Why do you think the number of extreme jobs has risen? 3. Do you think organizations should encourage extreme jobs, discourage them, or completely leave them to an employee’s discretion? 4. Why do you think people take extreme jobs in the first place? www.ft.com 612 CHAPTER 18 Organizational Change and Stress Management During a Merger,” Journal of Management 36, no. 5 (2010), pp. 1309–1338. 11. Q. N. Huy, “Emotional Balancing of Organizational Continuity and Radical Change: The Contribution of Middle Managers,” Administrative Science Quarterly (March 2002), pp. 31–69; D. M. Herold, D. B. Fedor, and S. D. Caldwell, “Beyond Change Management: A Multilevel Investigation of Contextual and Personal Influences on Employees’ Commitment to Change,” Journal of Applied Psychology 92, no. 4 (2007), pp. 942–951; and G. B. Cunningham, “The Relationships Among Commitment to Change, Coping with Change, and Turnover Intentions,” European Journal of Work and Organizational Psychology 15, no. 1 (2006), pp. 29–45. 12. R. Peccei, A. Giangreco, and A. Sebastiano, “The Role of Organizational Commitment in the Analysis of Resistance to Change: Co-predictor and Moderator Effects,” Personnel Review 40, no. 2 (2011), pp. 185–204. 13. J. P. Kotter, “Leading Change: Why Transformational Efforts Fail,” Harvard Business Review 85 (January 2007), p. 96–103. 14. K. van Dam, S. Oreg, and B. Schyns, “Daily Work Contexts and Resistance to Organisational Change: The Role of Leader-Member Exchange, Development Climate, and Change Process Characteristics,” Applied Psychology: An International Review 57, no. 2 (2008), pp. 313–334. 15. S. Oreg and N. Sverdlik, “Ambivalence toward Imposed Change: The Conflict between Dispositional Resistance to Change and the Orientation toward the Change Agent,” Journal of Applied Psychology 96, no. 2 (2011), pp. 337–349. 16. D. B. Fedor, S. Caldwell, and D. M. Herold, “The Effects of Organizational Changes on Employee Commitment: A Multilevel Investigation,” Personnel Psychology 59 (2006), pp. 1–29; and R. D. Foster, “Resistance, Justice, and Commitment to Change,” Human Resource Development Quarterly 21, no. 1 (2010), pp. 3–39. 17. S. Oreg, “Personality, Context, and Resistance to Organizational Change,” European Journal of Work and Organizational Psychology 15, no. 1 (2006), pp. 73–101. 18. S. M. Elias, “Employee Commitment in Times of Change: Assessing the Importance of Attitudes Toward Organizational Change,” Journal of Management 35, no. 1 (2009), pp. 37–55. 19. J. W. B. Lang and P. D. Bliese, “General Mental Ability and Two Types of Adaptation to Unforeseen Change: Applying Discontinuous Growth Models to the Task-Change Paradigm,” Journal of Applied Psychology 94, no. 2 (2009), pp. 411–428. 20. C. O. L. H. Porter, J. W. Webb, and C. I Gogus, “When Goal Orientations Collide: Effects of Learning and Performance Orientation on Team Adaptability in Response to Workload Imbalance,” Journal of Applied Psychology 95, no. 5 (2010), pp. 935–943. 21. See, for instance, A. Karaevli, “Performance Consequences for New CEO ‘Outsiderness’: Moderating Effects of Pre- and Post-Succession Contexts,” Strategic Management Journal 28, no. 7 (2007), pp. 681–706. 22. K. Lewin, Field Theory in Social Science (New York: Harper & Row, 1951). 23. P. G. Audia, E. A. Locke, and K. G. Smith, “The Paradox of Success: An Archival and a Laboratory Study of Strategic Persistence Following Radical Environmental Change,” Academy of Management Journal (October 2000), pp. 837–853; and P. G. Audia and S. Brion, “Reluctant to Change: Self- Enhancing Responses to Diverging Performance Measures,” Organizational Behavior and Human Decision Processes 102, no. 2 (2007), pp. 255–269. 24. J. B. Sorensen, “The Strength of Corporate Culture and the Reliability of Firm Performance,” Administrative Science Quarterly (March 2002), pp. 70–91. 25. J. Amis, T. Slack, and C. R. Hinings, “The Pace, Sequence, and Linearity of Radical Change,” Academy of Management Journal (February 2004), pp. 15–39; and E. Autio, H. J. Sapienza, and J. G. Almeida, “Effects of Age at Entry, Knowledge Intensity, and Imitability on International Growth,” Academy of Management Journal (October 2000), pp. 909–924. 26. J. P. Kotter, “Leading Changes: Why Transformation Efforts Fail,” Harvard Business Review (March–April 1995), pp. 59–67; and J. P. Kotter, Leading Change (Harvard Business School Press, 1996). 27. See, for example, C. Eden and C. Huxham, “Action Research for the Study of Organizations,” in S. R. Clegg, C. Hardy, and W. R. Nord (eds.), Handbook of Organization Studies (London: Sage, 1996); and L. S. Lüscher and M. W. Lewis, “Organizational Change and Managerial Sensemaking: Working Through Paradox,” Academy of Management Journal 51, no. 2 (2008), pp. 221–240. 28. For a sampling of various OD definitions, see H. K. Sinangil and F. Avallone, “Organizational Development and Change,” in N. Anderson, D. S. Ones, H. K. Sinangil, and C. Viswesvaran (eds.), Handbook of Industrial, Work and Organizational Psychology , vol. 2 (Thousand Oaks, CA: Sage, 2001), pp. 332–335; and R. J. Marshak and D. Grant, “Organizational Discourse and New Organization Development Practices,” British Journal of Management 19, no. 1 (2008), pp. S7–S19. 29. See, for instance, R. Lines, “Influence of Participation in Strategic Change: Resistance, Organizational Commitment and Change Goal Achievement,” Journal of Change Management (September 2004), pp. 193–215. 30. S. Highhouse, “A History of the T-Group and Its Early Application in Management Development,” Group Dynamics: Theory, Research, & Practice (December 2002), pp. 277–290. 31. J. E. Edwards and M. D. Thomas, “The Organizational Survey Process: General Steps and Practical Considerations,” in P. Rosenfeld, J. E. Edwards, and M. D. Thomas (eds.), Improving Organizational Surveys: New Directions, Methods, and Applications (Newbury Park, CA: Sage, 1993), pp. 3–28. 32. E. H. Schein, Process Consultation: Its Role in Organizational Development , 2nd ed. (Reading, MA: Addison-Wesley, 1988), p. 9. See also E. H. Schein, Process Consultation Revisited: Building Helpful Relationships (Reading, MA: Addison-Wesley, 1999). 33. Schein, Process Consultation. 34. W. W. G. Dyer, W. G. Dyer, and J. H. Dyer, Team Building: Proven Strategies for Improving Team Performance (Hoboken, NJ: Jossey-Bass, 2007). 35. U. Wagner, L. Tropp, G. Finchilescu, and C. Tredoux (Eds), Improving Intergroup Relations (New York: Wiley-Blackwell, 2008). 36. See, for example, R. Fry, F. Barrett, J. Seiling, and D. Whitney (eds.), A ppreciative Inquiry & Organizational Transformation: Reports from the Field (Westport, CT: Quorum, 2002); J. K. Barge and C. Oliver, “Working with Appreciation in Managerial Practice,” Academy of Management Review (January 2003), pp. 124–142; and D. van der Haar and D. M. Hosking, “Evaluating Appreciative Inquiry: A Relational Constructionist Perspective,” Human Relations (August 2004), pp. 1017–1036. Endnotes 613 37. G. Giglio, S. Michalcova, and C. Yates, “Instilling a Culture of Winning at American Express,” Organization Development Journal 25, no. 4 (2007), pp. P33–P37. 38. A. Harrington, “Who’s Afraid of a New Product?” Fortune (November 10, 2003), pp. 189–192; C. C. Manz, F. Shipper, and G. L. Stewart, “Everyone a Team Leader: Shared Influence at W. L. Gore and Associates,” Organizational Dynamics 38, no. 3 (2009), pp. 239–244. 39. See, for instance, R. M. Kanter, “When a Thousand Flowers Bloom: Structural, Collective and Social Conditions for Innovation in Organizations,” in B. M. Staw and L. L. Cummings (eds.), Research in Organizational Behavior, vol. 10 (Greenwich, CT: JAI Press, 1988), pp. 169–211. 40. F. Damanpour, “Organizational Innovation: A Meta-Analysis of Effects of Determinants and Moderators,” Academy of Management Journal (September 1991), p. 557. 41. Ibid., pp. 555–590; and G. Westerman, F. W. McFarlan, and M. Iansiti, “Organization Design and Effectiveness over the Innovation Life Cycle,” Organization Science 17, no. 2 (2006), pp. 230–238. 42. See P. R. Monge, M. D. Cozzens, and N. S. Contractor, “Communication and Motivational Predictors of the Dynamics of Organizational Innovation,” Organization Science (May 1992), pp. 250–274; P. Schepers and P. T. van den Berg, “Social factors of work-environment creativity,” Journal of Business and Psychology 21, no. 3 (2007), pp. 407–428. 43. D. L. Day, “Raising Radicals: Different Processes for Championing Innovative Corporate Ventures,” Organization Science (May 1994), pp. 148–172; and M. E. Mullins, S. W. J. Kozlowski, N. Schmitt, and A. W. Howell, “The Role of the Idea Champion in Innovation: The Case of the Internet in the Mid-1990s,” Computers in Human Behavior 24, no. 2 (2008), pp. 451–467. 44. Howell and Higgins, “Champions of Change.” J. M. Howell and C. A. Higgins “Champions of change: Identifying, un- derstanding, and supporting champions of technological in- novations.” Organizational Dynamics 19, (1990), pp. 40–55. 45. See S. Shane, S. Venkataraman, and I. MacMillan, “Cultural Differences in Innovation Championing Strategies,” Journal of Management 21, no. 5 (1995), pp. 931–952. 46. A. Taylor, “Chrysler’s Speed Merchant,” Fortune (September 6, 2010), pp. 77–82. 47. See, for example, T. B. Lawrence, M. K. Mauws, B. Dyck, and R. F. Kleysen, “The Politics of Organizational Learning: Integrating Power into the 4I Framework,” Academy of Management Review (January 2005), pp. 180–191. 48. D. H. Kim, “The Link Between Individual and Organizational Learning,” Sloan Management Review (Fall 1993), p. 37. 49. C. Argyris and D. A. Schon, Organizational Learning (Reading, MA: Addison-Wesley, 1978). 50. B. Dumaine, “Mr. Learning Organization,” Fortune (October 17, 1994), p. 148. 51. F. Kofman and P. M. Senge, “Communities of Commitment: The Heart of Learning Organizations,” Organizational Dynamics (Autumn 1993), pp. 5–23. 52. Dumaine, “Mr. Learning Organization,” p. 154. 53. See, for instance, S. Armour, “Rising Job Stress Could Affect Bottom Line,” USA Today (July 29, 2003), p. 1B; and J. Schramm, “Work/Life on Hold,” HRMagazine 53 (October 2008), p. 120. 54. Adapted from R. S. Schuler, “Definition and Con- ceptualization of Stress in Organizations,” Organizational Behavior and Human Performance (April 1980), p. 189. For an updated review of definitions, see C. L. Cooper, P. J. Dewe, and M. P. O’Driscoll, Organizational Stress: A Review and Critique of Theory, Research, and Applications (Thousand Oaks, CA: Sage, 2002). 55. See, for instance, M. A. Cavanaugh, W. R. Boswell, M. V. Roehling, and J. W. Boudreau, “An Empirical Examination of Self-Reported Work Stress Among U.S. Managers,” Journal of Applied Psychology (February 2000), pp. 65–74. 56. N. P. Podsakoff, J. A. LePine, and M. A. LePine, “Differential Challenge-Hindrance Stressor Relationships with Job Attitudes, Turnover Intentions, Turnover, and Withdrawal Behavior: A Meta-Analysis,” Journal of Applied Psychology 92, no. 2 (2007), pp. 438–454; and J. A. LePine, M. A. LePine, and C. L. Jackson, “Challenge and Hindrance Stress: Relationships with Exhaustion, Motivation to Learn, and Learning Performance,” Journal of Applied Psychology (October 2004), pp. 883–891. 57. L. W. Hunter and S. M. B. Thatcher, “Feeling the Heat: Effects of Stress, Commitment, and Job Experience on Job Performance,” Academy of Management Journal 50, no. 4 (2007), pp. 953–968. 58. J. C. Wallace, B. D. Edwards, T. Arnold, M. L. Frazier, and D. M. Finch, “Work Stressors, Role-Based Performance, and the Moderating Influence of Organizational Support,” Journal of Applied Psychology 94, no. 1 (2009), pp. 254–262. 59. N. W. Van Yperen and O. Janssen, “Fatigued and Dissatisfied or Fatigued but Satisfied? Goal Orientations and Responses to High Job Demands,” Academy of Management Journal (December 2002), pp. 1161–1171; and N. W. Van Yperen and M. Hagedoorn, “Do High Job Demands Increase Intrinsic Motivation or Fatigue or Both? The Role of Job Control and Job Social Support,” Academy of Management Journal (June 2003), pp. 339–348. 60. J. de Jonge and C. 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Austin, “When Does Quality of Relationships with Coworkers Predict Burnout over Time? The Moderating Role of Work Motivation” Journal of Organizational Behavior 31 (2010), pp. 1163–1180. 74. See, for example, C. M. Middeldorp, D. C. Cath, A. L. Beem, G. Willemsen, and D. I. Boomsma, “Life Events, Anxious Depression, and Personality: A Prospective and Genetic Study,” Psychological Medicine 38, no. 11 (2008), pp. 1557–1565; A. A. Uliaszek, R. E. Zinbarg, S. Mineka, M. G. Craske, J. M. Sutton, J. W. Griffith, R. Rose, A. Waters, and C. Hammen, “The Role of Neuroticism and Extraversion in the Stress-Anxiety and Stress-Depression Relationships,” Anxiety, Stress, and Coping 23, no. 4 (2010), pp. 363–381. 75. J. D. Kammeyer-Mueller, T. A. Judge, and B. A. Scott, “The Role of Core Self-Evaluations in the Coping Process,” Journal of Applied Psychology 94, no. 1 (2009), pp. 177–195. 76. R. J. Burke, A. M. Richardson, and M. Mortinussen, “Workaholism Among Norwegian Managers: Work and Well-Being Outcomes,” Journal of Organizational Change Management 7 (2004), pp. 459–470; and W. B. Schaufeli, T. W. Taris, and W. van Rhenen, “Workaholism, Burnout, and Work Engagement: Three of a Kind or Three Different Kinds of Employee Well-Being,” Applied Psychology: An International Review 57, no. 2 (2008), pp. 173–203. 77. J. Chen, C. Silverthorne, and J. Hung, “Organization Communication, Job Stress, Organizational Commitment, and Job Performance of Accounting Professionals in Taiwan and America,” Leadership & Organization Development Journal 27, no. 4 (2006), pp. 242–249; and C. Liu, P. E. Spector, and L. Shi, “Cross-National Job Stress: A Quantitative and Qualitative Study,” Journal of Organizational Behavior (February 2007), pp. 209–239. 78. P. E. Spector, T. D. Allen, S. A. Y. Poelmans, L. M. Lapierre, C. L. Cooper, M. O’Driscoll, et al., “Cross National Differences in Relationships of Work Demands, Job Satisfaction, and Turnover Intention with Work-Family Conflict,” Personnel Psychology 60, no. 4 (2007), pp. 805–835. 79. H. M. Addae and X. Wang, “Stress at Work: Linear and Curvilinear Effects of Psychological-, Job-, and Organization- Related Factors: An Exploratory Study of Trinidad and Tobago,” International Journal of Stress Management (November 2006), pp. 476–493. 80. J. Schaubroeck, J. R. Jones, and J. L. Xie, “Individual Differences in Utilizing Control to Cope with Job Demands: Effects on Susceptibility to Infectious Disease,” Journal of Applied Psychology (April 2001), pp. 265–278. 81. M. Kivimäki, J. Head, J. E. Ferrie, E. Brunner, M. G. Marmot, J. Vahtera, and M. J. Shipley, “Why Is Evidence on Job Strain and Coronary Heart Disease Mixed? An Illustration of Measurement Challenges in the Whitehall II Study,” Psychosomatic Medicine 68, no. 3 (2006), pp. 398–401. 82. M. Borritz, K. B. Christensen, U. Bültmann, R. Rugulies, T. Lund, I Andersen, E. Villadsen, F. Didreichsen, and T. S. Krisensen, “Impact on Burnout and Psychosocial Work Characteristics on Future Long-Term Sickness Absence, Prospective Results of the Danish PUMA Study Among Human Service Workers,” Journal of Occupational and Environmental Medicine 52, no. 10 (2010), pp. 964–970. 83. B. D. Steffy and J. W. Jones, “Workplace Stress and Indicators of Coronary-Disease Risk,” Academy of Management Journal 31, no. 3 (1988), pp. 686–698. 84. R. Illies, N. Dimotakis, and I. E. DePater, “Psychological and Physiological Reactions to High Workloads: Implications Endnotes 615 for Well-Being,” Personnel Psychology 63, no. 2 (2010), pp. 407–463. 85. D. Örtqvist and J. Wincent, “Prominent Consequences of Role Stress: A Meta-Analytic Review,” International Journal of Stress Management , 13, no. 4 (2006), pp. 399–422. 86. J. R. Hackman and G. R. Oldham, “Development of the Job Diagnostic Survey,” Journal of Applied Psychology (April 1975), pp. 159–170; J. J. Hakanen, A. B. Bakker, and M. Jokisaari, “A 35-Year Follow-Up Study on Burnout Among Finnish Employees,” Journal of Occupational Health Psychology 16, no. 3 (2011), pp. 345–360; Crawford, LePine, and Rich, “Linking Job Demands and Resources to Employee Engagement and Burnout; and G. A. Chung-Yan, “The Nonlinear Effects of Job Complexity and Autonomy on Job Satisfaction, Turnover, and Psychological Well-Being,” Journal of Occupational Health Psychology 15, no. 3 (2010), pp. 237–251. 87. L. L. Meier, N. K. Semmer, A. Elfering, and N. Jacobshagen, “The Double Meaning of Control: Three-Way Interactions Between Internal Resources, Job Control, and Stressors at Work,” Journal of Occupational Health Psychology 13, no. 3 (2008), pp. 244–258. 88. E. M. de Croon, J. K. Sluiter, R. W. B. Blonk, J. P. J. Broersen, and M. H. W. 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Goodman (ed.), Change in Organizations (San Francisco: Jossey-Bass, 1982), p. 1. www.time.com http://money.cnn.com/magazines/fortune Appendix Research in Organizational Behavior 616 A number of years ago, a friend of mine was excited because he had read about the findings from a research study that finally, once and for all, resolved the ques- tion of what it takes to make it to the top in a large cor- poration. I doubted there was any simple answer to this question but, not wanting to dampen his enthusiasm, I asked him to tell me of what he had read. The answer, according to my friend, was participation in college athlet- ics . To say I was skeptical of his claim is a gross under- statement, so I asked him to tell me more. The study encompassed 1,700 successful senior ex- ecutives at the 500 largest U.S. corporations. The re- searchers found that half of these executives had played varsity-level college sports. 1 My friend, who happens to be good with statistics, informed me that since fewer than 2 percent of all college students participate in in- tercollegiate athletics, the probability of this finding oc- curring by mere chance is less than 1 in 10 million! He concluded his analysis by telling me that, based on this research, I should encourage my management students to get into shape and to make one of the varsity teams. My friend was somewhat perturbed when I suggested that his conclusions were likely to be flawed. These ex- ecutives were all males who attended college in the 1940s and 1950s. Would his advice be meaningful to females in the twenty-first century? These executives also weren’t your typical college students. For the most part, they had attended elite private colleges such as Princeton and Amherst, where a large proportion of the student body participates in intercollegiate sports. And these “jocks” hadn’t necessarily played football or basketball; many had participated in golf, tennis, baseball, cross-country run- ning, crew, rugby, and similar minor sports. Moreover, maybe the researchers had confused the direction of causality. That is, maybe individuals with the motivation and ability to make it to the top of a large corporation are drawn to competitive activities like college athletics. My friend was guilty of misusing research data. Of course, he is not alone. We are all continually bom- barded with reports of experiments that link certain substances to cancer in mice and surveys that show changing attitudes toward sex among college students, for example. Many of these studies are carefully de- signed, with great caution taken to note the implica- tions and limitations of the findings. But some studies are poorly designed, making their conclusions at best suspect, and at worst meaningless. Rather than attempting to make you a researcher, the purpose of this appendix is to increase your awareness as a consumer of behavioral research. A knowledge of research methods will allow you to appreciate more fully the care in data collection that underlies the information and conclusions presented in this text. Moreover, an un- derstanding of research methods will make you a more skilled evaluator of the OB studies you will encounter in business and professional journals. So an appreciation of behavioral research is important because (1) it’s the foundation on which the theories in this text are built, and (2) it will benefit you in future years when you read reports of research and attempt to assess their value. Purposes of Research Research is concerned with the systematic gathering of information. Its purpose is to help us in our search for the truth. Although we will never find ultimate truth— in our case, that would be to know precisely how any person or group would behave in any organizational context—ongoing research adds to our body of OB knowledge by supporting some theories, contradicting others, and suggesting new theories to replace those that fail to gain support. Research Terminology Researchers have their own vocabulary for communi- cating among themselves and with outsiders. The fol- lowing briefly defines some of the more popular terms you’re likely to encounter in behavioral science studies. 2 For every complex problem, there is a solution that is simple, neat, and wrong. —H. L. Mencken A P P E N D I X Research in Organizational Behavior 617 Variable A variable is any general characteristic that can be mea- sured and that changes in amplitude, intensity, or both. Some examples of OB variables found in this textbook are job satisfaction, employee productivity, work stress, ability, personality, and group norms. Hypothesis A tentative explanation of the relationship between two or more variables is called a hypothesis . My friend’s state- ment that participation in college athletics leads to a top executive position in a large corporation is an example of a hypothesis. Until confirmed by empirical research, a hypothesis remains only a tentative explanation. Dependent Variable A dependent variable is a response that is affected by an in- dependent variable. In terms of the hypothesis, it is the variable that the researcher is interested in explaining. Referring back to our opening example, the dependent variable in my friend’s hypothesis was executive succession. In organizational behavior research, the most popular dependent variables are productivity, absenteeism, turn- over, job satisfaction, and organizational commitment. 3 Independent Variable An independent variable is the presumed cause of some change in the dependent variable. Participating in var- sity athletics was the independent variable in my friend’s hypothesis. Popular independent variables studied by OB researchers include intelligence, personality, job satisfaction, experience, motivation, reinforcement patterns, leadership style, reward allocations, selection methods, and organization design. You may have noticed we said that job satisfaction is frequently used by OB researchers as both a depen- dent and an independent variable. This is not an error. It merely reflects that the label given to a variable de- pends on its place in the hypothesis. In the statement “Increases in job satisfaction lead to reduced turnover,” job satisfaction is an independent variable. However, in the statement “Increases in money lead to higher job satisfaction,” job satisfaction becomes a dependent variable. Moderating Variable A moderating variable abates the effect of the indepen- dent variable on the dependent variable. It might also be thought of as the contingency variable: If X (inde- pendent variable), then Y (dependent variable) will oc- cur, but only under conditions Z (moderating variable). To translate this into a real-life example, we might say that if we increase the amount of direct supervision in the work area ( X ), then there will be a change in worker productivity ( Y ), but this effect will be moderated by the complexity of the tasks being performed ( Z ). Causality A hypothesis, by definition, implies a relationship. That is, it implies a presumed cause and effect. This direc- tion of cause and effect is called causality . Changes in the independent variable are assumed to cause changes in the dependent variable. However, in behavioral re- search, it’s possible to make an incorrect assumption of causality when relationships are found. For example, early behavioral scientists found a relationship between employee satisfaction and productivity. They concluded that a happy worker was a productive worker. Follow- up research has supported the relationship, but discon- firmed the direction of the arrow. The evidence more correctly suggests that high productivity leads to satis- faction rather than the other way around. Correlation Coefficient It’s one thing to know that there is a relationship be- tween two or more variables. It’s another to know the strength of that relationship. The term correlation coeffi- cient is used to indicate that strength, and is expressed as a number between –1.00 (a perfect negative relation- ship) and �1.00 (a perfect positive correlation). When two variables vary directly with one another, the correlation will be expressed as a positive number. When they vary inversely—that is, one increases as the other decreases—the correlation will be expressed as a negative number. If the two variables vary indepen- dently of each other, we say that the correlation be- tween them is zero. For example, a researcher might survey a group of employees to determine the satisfaction of each with his or her job. Then, using company absenteeism reports, the researcher could correlate the job satisfaction scores against individual attendance records to deter- mine whether employees who are more satisfied with their jobs have better attendance records than their counterparts who indicated lower job satisfaction. Let’s suppose the researcher found a correlation coefficient of �0.50 between satisfaction and attendance. Would that be a strong association? There is, unfortunately, no precise numerical cutoff separating strong and weak relationships. A standard statistical test would need to be applied to determine whether the relationship was a significant one. A final point needs to be made before we move on: A correlation coefficient measures only the strength of association between two variables. A high value does not imply causality. The length of women’s skirts and stock market prices, for instance, have long been noted to 618 A P P E N D I X Research in Organizational Behavior be highly correlated, but one should be careful not to infer that a causal relationship between the two exists. In this instance, the high correlation is more happen- stance than predictive. Theory The final term we introduce in this section is theory . The- ory describes a set of systematically interrelated concepts or hypotheses that purports to explain and predict phe- nomena. In OB, theories are also frequently referred to as models . We use the two terms interchangeably. There are no shortages of theories in OB. For in- stance, we have theories to describe what motivates people, the most effective leadership styles, the best way to resolve conflicts, and how people acquire power. In some cases, we have half a dozen or more separate theories that purport to explain and predict a given phenomenon. In such cases, is one right and the oth- ers wrong? No! They tend to reflect science at work— researchers testing previous theories, modifying them, and, when appropriate, proposing new models that may prove to have higher explanatory and predictive powers. Multiple theories attempting to explain com- mon phenomena merely attest that OB is an active dis- cipline, still growing and evolving. Evaluating Research As a potential consumer of behavioral research, you should follow the dictum of caveat emptor —let the buyer beware! In evaluating any research study, you need to ask three questions. 4 Is it valid? Is the study actually measuring what it claims to be measuring? A number of psychological tests have been discarded by employers in recent years because they have not been found to be valid measures of the applicants’ ability to do a given job successfully. But the validity issue is relevant to all research studies. So, if you find a study that links cohesive work teams with higher productivity, you want to know how each of these variables was measured and whether it is actually measuring what it is supposed to be measuring. Is it reliable? Reliability refers to consistency of mea- surement. If you were to have your height measured every day with a wooden yardstick, you’d get highly reliable re- sults. On the other hand, if you were measured each day by an elastic tape measure, there would probably be con- siderable disparity between your height measurements from one day to the next. Your height, of course, doesn’t change from day to day. The variability is due to the unre- liability of the measuring device. So if a company asked a group of its employees to complete a reliable job satisfac- tion questionnaire, and then repeat the questionnaire six months later, we’d expect the results to be very similar— provided nothing changed in the interim that might sig- nificantly affect employee satisfaction. Is it generalizable? Are the results of the research study generalizable to groups of individuals other than those who participated in the original study? Be aware, for example, of the limitations that might exist in research that uses college students as subjects. Are the findings in such studies generalizable to full-time employees in real jobs? Similarly, how generalizable to the overall work population are the results from a study that assesses job stress among 10 nuclear power plant engineers in the hamlet of Mahone Bay, Nova Scotia? Research Design Doing research is an exercise in trade-offs. Richness of information typically comes with reduced generaliz- ability. The more a researcher seeks to control for con- founding variables, the less realistic his or her results are likely to be. High precision, generalizability, and control almost always translate into higher costs. When researchers make choices about whom they’ll study, where their research will be done, the methods they’ll use to collect data, and so on, they must make some concessions. Good research designs are not perfect, but they do carefully reflect the questions being addressed. Keep these facts in mind as we review the strengths and weaknesses of five popular research designs: case stud- ies, field surveys, laboratory experiments, field experi- ments, and aggregate quantitative reviews. Case Study You pick up a copy of Soichiro Honda’s autobiography. In it he describes his impoverished childhood; his deci- sions to open a small garage, assemble motorcycles, and eventually build automobiles; and how this led to the creation of one of the largest and most successful cor- porations in the world. Or you’re in a business class and the instructor distributes a 50-page handout covering two companies: Wal-Mart and Kmart. The handout de- tails the two firms’ histories; describes their corporate strategies, management philosophies, and merchandis- ing plans; and includes copies of their recent balance sheets and income statements. The instructor asks the class members to read the handout, analyze the data, and determine why Wal-Mart has been so much more successful than Kmart in recent years. Soichiro Honda’s autobiography and the Wal-Mart and Kmart handouts are case studies. Drawn from real- life situations, case studies present an in-depth analysis of one setting. They are thorough descriptions, rich in details about an individual, a group, or an organization. The primary source of information in case studies is A P P E N D I X Research in Organizational Behavior 619 obtained through observation, occasionally backed up by interviews and a review of records and documents. Case studies have their drawbacks. They’re open to the perceptual bias and subjective interpretations of the observer. The reader of a case is captive to what the observer/case writer chooses to include and exclude. Cases also trade off generalizability for depth of infor- mation and richness of detail. Because it’s always dan- gerous to generalize from a sample of one, case studies make it difficult to prove or reject a hypothesis. On the other hand, you can’t ignore the in-depth analysis that cases often provide. They are an excellent device for initial exploratory research and for evaluating real-life problems in organizations. Field Survey A lengthy questionnaire was created to assess the use of ethics policies, formal ethics structures, formalized activ- ities such as ethics training, and executive involvement in ethics programs among billion-dollar corporations. The public affairs or corporate communications office of all Fortune 500 industrial firms and 500 service cor- porations were contacted to get the name and address of the “officer most responsible for dealing with ethics and conduct issues” in each firm. The questionnaire, with a cover letter explaining the nature of the study, was mailed to these 1,000 officers. Of the total, 254 re- turned a completed questionnaire, for a response rate just above 25 percent. The results of the survey found, among other things, that 77 percent had formal codes of ethics and 54 percent had a single officer specifically assigned to deal with ethics and conduct issues. 5 The preceding study illustrates a typical field survey. A sample of respondents (in this case, 1,000 corporate officers in the largest U.S. publicly held corporations) was selected to represent a larger group that was under examination (billion-dollar U.S. business firms). The respondents were then surveyed using a questionnaire or interviewed to collect data on particular characteris- tics (the content and structure of ethics programs and practices) of interest to the researchers. The standard- ization of response items allows for data to be easily quantified, analyzed, and summarized, and for the re- searchers to make inferences from the representative sample about the larger population. The field survey provides economies for doing re- search. It’s less costly to sample a population than to obtain data from every member of that population. (There are, for instance, more than 5,000 U.S. business firms with sales in excess of a billion dollars; and since some of these are privately held and don’t release fi- nancial data to the public, they are excluded from the Fortune list). Moreover, as the ethics study illustrates, field surveys provide an efficient way to find out how people feel about issues or how they say they behave. These data can then be easily quantified. But the field survey has a number of potential weaknesses. First, mailed questionnaires rarely obtain 100 percent returns. Low response rates call into ques- tion whether conclusions based on respondents’ an- swers are generalizable to nonrespondents. Second, the format is better at tapping respondents’ attitudes and perceptions than behaviors. Third, responses can suf- fer from social desirability; that is, people saying what they think the researcher wants to hear. Fourth, since field surveys are designed to focus on specific issues, they’re a relatively poor means of acquiring depth of information. Finally, the quality of the generalizations is largely a factor of the population chosen. Responses from executives at Fortune 500 firms, for instance, tell us nothing about small- or medium-sized firms or not-for- profit organizations. In summary, even a well-designed field survey trades off depth of information for breadth, generalizability, and economic efficiencies. Laboratory Experiment The following study is a classic example of the laboratory experiment. A researcher, Stanley Milgram, wondered how far individuals would go in following commands. If subjects were placed in the role of a teacher in a learn- ing experiment and told by an experimenter to admin- ister a shock to a learner each time that learner made a mistake, would the subjects follow the commands of the experimenter? Would their willingness to comply decrease as the intensity of the shock was increased? To test these hypotheses, Milgram hired a set of subjects. Each was led to believe that the experiment was to investigate the effect of punishment on memory. Their job was to act as teachers and administer pun- ishment whenever the learner made a mistake on the learning test. Punishment was administered by an electric shock. The subject sat in front of a shock generator with 30 levels of shock—beginning at zero and progressing in 15-volt increments to a high of 450 volts. The demar- cations of these positions ranged from “Slight Shock” at 15 volts to “Danger: Severe Shock” at 450  volts. To increase the realism of the experiment, the subjects re- ceived a sample shock of 45 volts and saw the learner—a pleasant, mild-mannered man about 50  years old— strapped into an “electric chair” in an adjacent room. Of course, the learner was an actor, and the electric shocks were phony, but the subjects didn’t know this. Taking his seat in front of the shock generator, the subject was directed to begin at the lowest shock level and to increase the shock intensity to the next level each time the learner made a mistake or failed to respond. 620 A P P E N D I X Research in Organizational Behavior When the test began, the shock intensity rose rap- idly because the learner made many errors. The sub- ject got verbal feedback from the learner: At 75 volts, the learner began to grunt and moan; at 150 volts, he demanded to be released from the experiment; at 180  volts, he cried out that he could no longer stand the pain; and at 300 volts, he insisted that he be let out, yelled about his heart condition, screamed, and then failed to respond to further questions. Most subjects protested and, fearful they might kill the learner if the increased shocks were to bring on a heart attack, insisted they could not go on with their job. Hesitations or protests by the subject were met by the experimenter’s statement, “You have no choice, you must go on! Your job is to punish the learner’s mis- takes.” Of course, the subjects did have a choice. All they had to do was stand up and walk out. The majority of the subjects dissented. But dissension isn’t synonymous with disobedience. Sixty-two percent of the subjects increased the shock level to the maximum of 450 volts. The average level of shock administered by the remaining 38 percent was nearly 370 volts. 6 In a laboratory experiment such as that conducted by Milgram, an artificial environment is created by the researcher. Then the researcher manipulates an inde- pendent variable under controlled conditions. Finally, since all other things are held equal, the researcher is able to conclude that any change in the dependent variable is due to the manipulation or change imposed on the independent variable. Note that, because of the controlled conditions, the researcher is able to imply causation between the independent and dependent variables. The laboratory experiment trades off realism and generalizability for precision and control. It provides a high degree of control over variables and precise mea- surement of those variables. But findings from labora- tory studies are often difficult to generalize to the real world of work. This is because the artificial laboratory rarely duplicates the intricacies and nuances of real or- ganizations. In addition, many laboratory experiments deal with phenomena that cannot be reproduced or ap- plied to real-life situations. Field Experiment The following is an example of a field experiment. The management of a large company is interested in de- termining the impact that a four-day workweek would have on employee absenteeism. To be more specific, management wants to know if employees working four 10-hour days have lower absence rates than similar em- ployees working the traditional five-day week of 8 hours each day. Because the company is large, it has a number of manufacturing plants that employ essentially similar workforces. Two of these are chosen for the experiment, both located in the greater Cleveland area. Obviously, it would not be appropriate to compare two similar-sized plants if one is in rural Mississippi and the other is in ur- ban Copenhagen because factors such as national cul- ture, transportation, and weather might be more likely to explain any differences found than changes in the number of days worked per week. In one plant, the experiment was put into place— workers began the four-day week. At the other plant, which became the control group, no changes were made in the employees’ five-day week. Absence data were gathered from the company’s records at both lo- cations for a period of 18 months. This extended time period lessened the possibility that any results would be distorted by the mere novelty of changes being imple- mented in the experimental plant. After 18 months, management found that absenteeism had dropped by 40 percent at the experimental plant, and by only 6 percent in the control plant. Because of the design of this study, management believed that the larger drop in absences at the experimental plant was due to the introduction of the compressed workweek. The field experiment is similar to the laboratory ex- periment, except it is conducted in a real organization. The natural setting is more realistic than the laboratory setting, and this enhances validity but hinders control. In addition, unless control groups are maintained, there can be a loss of control if extraneous forces intervene— for example, an employee strike, a major layoff, or a cor- porate restructuring. Maybe the greatest concern with field studies has to do with organizational selection bias. Not all organizations are going to allow outside research- ers to come in and study their employees and operations. This is especially true of organizations that have serious problems. Therefore, since most published studies in OB are done by outside researchers, the selection bias might work toward the publication of studies conducted almost exclusively at successful and well-managed organizations. Our general conclusion is that, of the four research designs we’ve discussed to this point, the field experi- ment typically provides the most valid and generaliz- able findings and, except for its high cost, trades off the least to get the most. 7 Aggregate Quantitative Reviews What’s the overall effect of organizational behavior modification (OB Mod) on task performance? There have been a number of field experiments that have sought to throw light on this question. Unfortunately, the wide range of effects from these various studies makes it hard to generalize. To try to reconcile these diverse findings, two re- searchers reviewed all the empirical studies they could A P P E N D I X Research in Organizational Behavior 621 find on the impact of OB Mod on task performance over a 20-year period. 8 After discarding reports that had inadequate information, had nonquantitative data, or didn’t meet all conditions associated with principles of behavioral modification, the researchers narrowed their set to 19 studies that included data on 2,818 individuals. Using an aggregating technique called meta-analysis, the researchers were able to synthesize the studies quanti- tatively and to conclude that the average person’s task performance will rise from the 50th percentile to the 67th percentile after an OB Mod intervention. The OB Mod–task performance review done by these researchers illustrates the use of meta-analysis, a quantitative form of literature review that enables re- searchers to look at validity findings from a comprehen- sive set of individual studies, and then apply a formula to them to determine if they consistently produced sim- ilar results. 9 If results prove to be consistent, it allows researchers to conclude more confidently that validity is generalizable. Meta-analysis is a means for overcom- ing the potentially imprecise interpretations of qualita- tive reviews and to synthesize variations in quantitative studies. In addition, the technique enables researchers to identify potential moderating variables between an independent and a dependent variable. In the past 25 years, there’s been a surge in the popu- larity of this research method. Why? It appears to offer a more objective means for doing traditional literature reviews. Although the use of meta-analysis requires re- searchers to make a number of judgment calls, which can introduce a considerable amount of subjectivity into the process, there is no arguing that meta-analysis reviews have now become widespread in the OB literature. Ethics in Research Researchers are not always tactful or candid with sub- jects when they do their studies. For instance, questions in field surveys may be perceived as embarrassing by re- spondents or as an invasion of privacy. Also, researchers in laboratory studies have been known to deceive par- ticipants about the true purpose of their experiment “because they felt deception was necessary to get honest responses.” 10 The “learning experiments” conducted by Stanley Milgram, which were conducted more than 30 years ago, have been widely criticized by psychologists on ethical grounds. He lied to subjects, telling them his study was investigating learning, when, in fact, he was concerned with obedience. The shock machine he used was a fake. Even the “learner” was an accomplice of Milgram’s who had been trained to act as if he were hurt and in pain. Yet ethical lapses continue. For instance, in 2001, a professor of organizational behavior at Columbia University sent out a common letter on university let- terhead to 240 New York City restaurants in which he detailed how he had eaten at this restaurant with his wife in celebration of their wedding anniversary, how he had gotten food poisoning, and that he had spent the night in his bathroom throwing up. 11 The letter closed with: “Although it is not my intention to file any reports with the Better Business Bureau or the Depart- ment of Health, I want you to understand what I went through in anticipation that you will respond accord- ingly. I await your response.” The fictitious letter was part of the professor’s study to determine how restau- rants responded to complaints. But it created culinary chaos among many of the restaurant owners, managers, and chefs as they reviewed menus and produce deliv- eries for possibly spoiled food, and questioned kitchen workers about possible lapses. A follow-up letter of apol- ogy from the university for “an egregious error in judg- ment by a junior faculty member” did little to offset the distress it created for those affected. Professional associations like the American Psycho- logical Association, the American Sociological Associa- tion, and the Academy of Management have published formal guidelines for the conduct of research. Yet the ethical debate continues. On one side are those who ar- gue that strict ethical controls can damage the scientific validity of an experiment and cripple future research. Deception, for example, is often necessary to avoid con- taminating results. Moreover, proponents of minimiz- ing ethical controls note that few subjects have been appreciably harmed by deceptive experiments. Even in Milgram’s highly manipulative experiment, only 1.3 percent of the subjects reported negative feelings about their experience. The other side of this debate focuses on the rights of participants. Those favoring strict ethical controls argue that no procedure should ever be emotionally or physically distressing to subjects, and that, as professionals, researchers are obliged to be completely honest with their subjects and to protect the subjects’ privacy at all costs. Summary The subject of organizational behavior is composed of a large number of theories that are research based. Research studies, when cumulatively integrated, become theories, and theories are proposed and fol- lowed by research studies designed to validate them. The concepts that make up OB, therefore, are only as valid as the research that supports them. The topics and issues in this book are for the most part research-derived. They represent the result of sys- tematic information gathering rather than merely hunch, intuition, or opinion. This doesn’t mean, of course, that 622 A P P E N D I X Research in Organizational Behavior we have all the answers to OB issues. Many require far more corroborating evidence. The generalizability of others is limited by the research methods used. But new information is being created and published at an acceler- ated rate. To keep up with the latest findings, we strongly encourage you to regularly review the latest research in organizational behavior. More academic work can be found in journals such as the Academy of Management Jour- nal, Academy of Management Review, Administrative Science Quarterly, Human Relations, Journal of Applied Psychology, Journal of Management, Journal of Organizational Behavior , and Leadership Quarterly . For more practical interpreta- tions of OB research findings, you may want to read the Academy of Management Executive, California Management Review, Harvard Business Review, Organizational Dynamics , and the Sloan Management Review . Endnotes 1. J. A. Byrne, “Executive Sweat,” Forbes , May 20, 1985, pp. 198–200. 2. See D. P. Schwab, Research Methods for Organizational Behav- ior (Mahwah, NJ: Lawrence Erlbaum Associates, 1999); and S. G. Rogelberg (ed.), Blackwell Handbook of Research Meth- ods in Industrial and Organizational Psychology (Malden, MA: Blackwell, 2002). 3. B. M. Staw and G. R. Oldham, “Reconsidering Our Depen- dent Variables: A Critique and Empirical Study,” Academy of Management Journal, December 1978, pp. 539–559; and B. M. Staw, “Organizational Behavior: A Review and Reformu- lation of the Field’s Outcome Variables,” in M. R. Rosenzweig and L. W. Porter (eds.), Annual Review of Psychology, vol. 35 (Palo Alto, CA: Annual Reviews, 1984), pp. 627–666. 4. R. S. Blackburn, “Experimental Design in Organizational Settings,” in J. W. Lorsch (ed.), Handbook of Organizational Behavior (Upper Saddle River, NJ: Prentice Hall, 1987), pp. 127–128; and F. L. Schmidt, C. Viswesvaran, D. S. Ones, “Reliability Is Not Validity and Validity Is Not Reliability,” Personnel Psychology, Winter 2000, pp. 901–912. 5. G. R. Weaver, L. K. Trevino, and P. L. Cochran, “Corporate Ethics Practices in the Mid-1990’s: An Empirical Study of the Fortune 1000,” Journal of Business Ethics, February 1999, pp. 283–294. 6. S. Milgram, Obedience to Authority (New York: Harper & Row, 1974). For a critique of this research, see T. Blass, “Under- standing Behavior in the Milgram Obedience Experiment: The Role of Personality, Situations, and Their Interac- tions,” Journal of Personality and Social Psychology, March 1991, pp. 398–413. 7. See, for example, W. N. Kaghan, A. L. Strauss, S. R. Barley, M. Y. Brannen, and R. J. Thomas, “The Practice and Uses of Field Research in the 21st Century Organization,” Journal of Management Inquiry, March 1999, pp. 67–81. 8. A. D. Stajkovic and F. Luthans, “A Meta-Analysis of the Effects of Organizational Behavior Modification on Task Performance, 1975–1995,” Academy of Management Journal, October 1997, pp. 1122–1149. 9. See, for example, K. Zakzanis, “The Reliability of Meta Ana- lytic Review,” Psychological Reports, August 1998, pp. 215–222; C. Ostroff and D. A. Harrison, “Meta-Analysis, Level of Anal- ysis, and Best Estimates of Population Correlations: Cautions for Interpreting Meta-Analytic Results in Organizational Be- havior,” Journal of Applied Psychology, April 1999, pp. 260–270; R. Rosenthal and M. R. DiMatteo, “Meta-Analysis: Recent De- velopments in Quantitative Methods for Literature Reviews,” in S. T. Fiske, D. L. Schacter, and C. Zahn-Wacher (eds.), An- nual Review of Psychology, vol. 52 (Palo Alto, CA: Annual Re- views, 2001), pp. 59–82; and F. L. Schmidt and J. E. Hunter, “Meta-Analysis,” in N. Anderson, D. S. Ones, H. K. Sinangil, and C. Viswesvaran (eds.), Handbook of Industrial, Work & Organizational Psychology, vol. 1 (Thousand Oaks, CA: Sage, 2001), pp. 51–70. 10. For more on ethical issues in research, see T. L. Beauchamp, R. R. Faden, R. J. Wallace, Jr., and L. Walters (eds.), Ethical Issues in Social Science Research (Baltimore, MD: Johns Hop- kins University Press, 1982); and J. G. Adair, “Ethics of Psy- chological Research: New Policies, Continuing Issues, New Concerns,” Canadian Psychology, February 2001, pp. 25–37. 11. J. Kifner, “Scholar Sets Off Gastronomic False Alarm,” New York Times, September 8, 2001, p. A1. Comprehensive Cases 623 1 Managing Motivation in a Difficult Economy Learning Goals In this case, you’ll have an opportunity to assess a motivational program designed to reenergize a trou- bled company’s workforce. Acting on behalf of the company’s executive board, you’ll evaluate the board’s current strategy based on survey data. You’ll also advise board members about improving the effectiveness of this program based on what you’ve learned about goal- setting and motivation in organizations. Major Topic Areas ● Changing nature of work ● Diversity and age ● Goal-setting ● Organizational downsizing ● Organizational justice The Scenario Morgan-Moe’s drug stores are in trouble. A major regional player in the retail industry, the company has hundreds of stores in the upper Midwest. Unfortunately, a sharp decline in the region’s manufacturing econ- omy has put management in a serious financial bind. Revenues have been consistently dwindling. Custom- ers spend less, and the stores have had to switch their focus to very low-margin commodities, such as milk and generic drugs, rather than the high-margin impulse- buy items that used to be the company’s bread and butter. The firm has had to close quite a few locations, reversing its expansion plans for the first time since it incorporated. Being that this is uncharted territory for the com- pany, Jim Claussen, vice president for human relations, had been struggling with how to address the issue with employees. As the company’s fortunes worsened, he could see that employees were becoming more and more disaffected. Their insecurity about their jobs was taking a toll on attitudes. The company’s downsizing was big news, and the employees didn’t like what they were hearing. Media reports of Morgan-Moe’s store closings have focused on the lack of advance notice or communica- tion from the company’s corporate offices, as well as the lack of severance payments for departing employees. In the absence of official information, rumors and gossip have spread like wildfire among remaining employees. A few angry blogs developed by laid-off employees, like IHateMorganMoe.blogspot.com , have made the morale and public relations picture even worse. Morgan-Moe is changing in other ways as well. The average age of its workforce is increasing rapidly. A cou- ple of factors have contributed to this shift. First, fewer qualified young people are around because many families have moved south to find jobs. Second, stores have been actively encouraged to hire older workers, such as retir- ees looking for some supplemental income. Managers are very receptive to these older workers because they are more mature, miss fewer days of work, and do not have child care responsibilities. They are also often more quali- fied than younger workers because they have more experi- ence, sometimes in the managerial or executive ranks. These older workers have been a great asset to the company in troubled times, but they are especially likely to leave if things get bad. If these older workers start to leave the company, taking their hard-earned experience with them, it seems likely that Morgan-Moe will sink deeper toward bankruptcy. The System Claussen wasn’t quite sure how to respond to employ- ees’ sense of hopelessness and fear until a friend gave him a book entitled Man’s Search for Meaning. The book was written by a psychologist named Victor Frankl, who survived the concentration camps at Auschwitz. Frankl found that those who had a clear sense of purpose, C A S E 624 C O M P R E H E N S I V E C A S E S Ostremski, another proponent of Program I, added, “It’s okay for the employees to feel a little uncertain—if they think we’re in the clear, they’ll slack off. If they think we’re in trouble, they’ll give up.” Cal Martins also questions the need to provide infor- mation to the whole team, but he chose Program II. “A person should know where he or she stands in the job, but they don’t have to know about everyone else. It cre- ates unnecessary tension.” This is somewhat similar to Cindy Ang’s reason for picking Program V. “When we have our brainstorming meetings, I learn what they [the employees] think is most pressing, not what some spreadsheet says. It gives me a better feel for what’s going on in my store. Num- bers count, of course, but they don’t tell you everything. I was also a little worried that employees would be upset if they saw that we aren’t performing well.” Results to Date Claussen is convinced the most elaborate procedure (Program IV) is the most effective, but not everyone in the executive committee is won over by his advocacy. Although they have supported the test implementa- tion of the system because it appears to have relatively low costs, others on the committee want to see results. CEO Jean Masterson has asked for a complete break- down of the performance of the various stores over the past 4 years. She’s especially interested in seeing how sales figures and turnover rates have been affected by the new program. The company has been collecting data in spread- sheets on sales and turnover rates, and it prepared the following report, which also estimates the dollar cost of staff time taken up in each method. These costs are based on the number of hours employees spend work- ing on the program multiplied by their wage rate. Esti- mates of turnover, profit, and staff time are collected per store. Profit and turnover data include means and standard deviations across locations; profit is net of the monthly time cost. Turnover information refers to the percentage of employees who either quit or are termi- nated in a month. To see if any patterns emerged in managers’ selec- tion of programs, the company calculated relationships between program selection and various attributes of the stores. Program I was selected most frequently by the oldest stores and those in the most economically dis- tressed areas. Programs II and III were selected most frequently by stores in urban areas and in areas where the workforce was younger on average. Programs IV and V were selected most frequently in stores in rural areas, and especially where the workforce is older on average. a reason to live, were more likely to persevere in the face of nearly unspeakable suffering. Something about this book, and its advocacy of finding meaning and direction as a way to triumph over adversity, really stuck with Claussen. He thought he might be able to apply its lessons to his workforce. He proposed the idea of a new direction for management to the company’s executive committee, and they reluctantly agreed to try his suggestions. Over the last 6 months, stores throughout the com- pany have used a performance management system that, as Claussen says, “gets people to buy into the idea of performing so that they can see some real results in their stores. It’s all about seeing that your work serves a broader purpose. I read about how some companies have been sharing store performance information with employees to get them to understand what their jobs really mean and participate in making changes, and I thought that was something we’d be able to do.” The HR team came up with five options for the management system. Corporate allowed individual managers to choose the option they thought would work best with their employees so that managers wouldn’t feel too much like a rapid change was being forced on them. Program I is opting out of the new idea, continuing to stay the course and providing em- ployees with little to no information or opportunities for participation. Program II tracks employee absence and sick leave and shares that information with indi- vidual employees, giving them feedback about things they can control. Management takes no further action. Program III tracks sales and inventory replacement rates across shifts. As in Program II, information is shared with employees, but without providing em- ployee feedback about absence and sick leave. Program IV, the most comprehensive, tracks the same informa- tion as Programs II and III. Managers communicate it in weekly brainstorming sessions, during which em- ployees try to determine what they can do better in the future and make suggestions for improving store per- formance. Program V keeps the idea of brainstorming but doesn’t provide employees with information about their behavior or company profits. Since implementing the system, Claussen has spo- ken with several managers about what motivated them to choose the program they did. Artie Washington, who chose Program IV, said, “I want to have my employ- ees’ input on how to keep the store running smoothly. Everybody worries about their job security in this econ- omy. Letting them know what’s going on and giving them ways to change things keeps them involved.” Betty Alvarez couldn’t disagree more. She selected Program I. “I would rather have my employees doing their jobs than going to meetings to talk about doing their jobs. That’s what management is for.” Michael CASE 1 Managing Motivation in a Difficult Economy 625 which continues the status quo) affect the infer- ences you can draw about program success? c. What are the advantages of randomly assign- ing different conditions to the stores instead of using this self-selection process? 5. How does the changing nature of the workforce and the economy, described in your textbook and in the case, affect your conclusions about how to manage retail employees? Does the participation of a more experienced workforce help or hurt these programs? Why might these programs work differ- ently in an economy that isn’t doing so poorly? 6. Claussen essentially designed the program on his own, with very little research into goal-setting and motivation. Based on your textbook, how well has he done? Which parts of the program appear to fit well with research evidence on goal-setting? What parts would you change to get more substantial improvements in employee motivation? 7. Describe the feelings employees might have when these systems are implemented that could help or hinder the program’s success. What advice would you give managers about how to implement the programs so they match the principles of organiza- tional justice described in your textbook? Your Assignment Your task is to prepare a report for the company’s exec- utive committee on the effectiveness of these programs. Make certain it is in the form of a professional busi- ness document. Your audience won’t necessarily know about the organizational principles you’re describing, so make sure you provide detailed explanations that someone in a real business can understand. When you write, make sure you touch on the follow- ing points: 1. Consider the five management systems as variables in an experiment. Identify the independent and dependent variables, and explain how they are related to one another. 2. Based on the discussion of independent and dependent variables in the textbook, is there any- thing else you’d like to measure as an outcome? 3. Look over the data and decide which method of management appears most effective in generating revenues and reducing turnover, and why. Which methods appear least effective, and why? 4. Are there any concerns you have about these data? a. Does a comparison of the number of stores us- ing each method influence your conclusions at all? b. Does the fact that managers are selecting the specific program to use (including Program I, Program Methods Number of Stores Average Turnover Weekly Profi t per Month Monthly Staff Time Cost Program I Traditional management 83 Mean � 30% SD � 10% Mean � $5,700 SD � $3,000 None Program II Share absence and sick leave 27 Mean � 23% SD � 14% Mean � $7,000 SD � $5,800 $1,960 Program III Share sales and inventory 35 Mean � 37% SD � 20% Mean � $11,000 SD � $2,700 $2,440 Program IV Share information and brainstorm 67 Mean � 17% SD � 20% Mean � $13,000 SD � $3,400 $3,420 Program V Brainstorm without sharing information 87 Mean � 21% SD � 12% Mean � $14,000 SD � $2,400 $2,750 626 C O M P R E H E N S I V E C A S E S 2 Repairing Jobs That Fail to Satisfy C A S E Learning Goals Companies often divide up work as a way to improve efficiency, but specialization can lead to negative con- sequences. DrainFlow is a company that has effectively used specialization to reduce costs relative to its com- petitors’ costs for years, but rising customer complaints suggest the firm’s strong position may be slipping. After reading the case, you will suggest some ways it can cre- ate more interesting work for employees. You’ll also tackle the problem of finding people qualified and ready to perform the multiple responsibilities required in these jobs. Major Topic Areas ● Job design ● Job satisfaction ● Personality ● Emotional labor The Scenario DrainFlow is a large residential and commercial plumb- ing maintenance firm that operates around the United States. It has been a major player in residential plumb- ing for decades, and its familiar rhyming motto, “When Your Drain Won’t Go, Call DrainFlow,” has been plas- tered on billboards since the 1960s. Lee Reynaldo has been a regional manager at Drain- Flow for about 2 years. She used to work for a newer competing chain, Lightning Plumber, that has been drawing more and more customers from DrainFlow. Although her job at DrainFlow pays more, Lee isn’t happy with the way things are going. She’s noticed the work environment just isn’t as vital or energetic as the environment she saw at Lightning. Lee thinks the problem is that employees aren’t mo- tivated to provide the type of customer service Lightning Plumber employees offer. She recently sent surveys to customers to collect information about performance, and the data confirmed her fears. Although 60 per- cent of respondents said they were satisfied with their experience and would use DrainFlow again, 40 percent felt their experience was not good, and 30 percent said they would use a competitor the next time they had a plumbing problem. Lee is wondering whether DrainFlow’s job design might be contributing to its problems in retaining cus- tomers. DrainFlow has about 2,000 employees in four basic job categories: plumbers, plumber’s assistants, order processors, and billing representatives. This structure is designed to keep costs as low as possible. Plumbers make very high wages, whereas plumber’s assistants make about one-quarter of what a licensed plumber makes. Using plumber’s assistants is therefore a very cost-effective strategy that has enabled Drain- Flow to easily undercut the competition when it comes to price. Order processors make even less than assis- tants but about the same as billing processors. All work is very specialized, but employees are often depen- dent on another job category to perform at their most efficient level. Like most plumbing companies, DrainFlow gets business mostly from the Yellow Pages and the Inter- net. Customers either call in to describe a plumbing problem or submit an online request for plumbing services, receiving a return call with information within 24 hours. In either case, DrainFlow’s order processors listen to the customer’s description of the problem to determine whether a plumber or a plumber’s assistant should make the service call. The job is then assigned accordingly, and a service provider goes to the location. When the job has been completed, via cell phone a bill- ing representative relays the fee to the service rep, who presents a bill to the customer for payment. Billing rep- resentatives can take customers’ credit card payments by phone or e-mail an invoice for online payment. The Problem Although specialization does cut costs significantly, Lee is worried about customer dissatisfaction. According to her survey, about 25 percent of customer contacts ended in no service call because customers were con- fused by the diagnostic questions the order processors asked and because the order processors did not have sufficient knowledge or skill to explain the situation. That means fully one in four people who call DrainFlow to hire a plumber are worse than dissatisfied: they aren’t customers at all! The remaining 75 percent of calls that CASE 2 Repairing Jobs That Fail to Satisfy 627 form, so they think we can answer all their questions. Most of us don’t know any more about plumbing than the caller. If they don’t use the terms on the survey, we don’t understand what they’re talking about. A plumber would, but we’re not plumbers; we just take the calls.” Customer service issues also involve the billing rep- resentatives. They are the ones who have to keep con- tacting customers about payment. “It’s not my fault the wrong guy was sent,” says Elizabeth Monty. “If two guys went out, that’s two trips. If a plumber did the work, you pay plumber rates. Some of these customers don’t get that I didn’t take their first call, and so I get yelled at.” The billing representatives also complain that they see only the tail end of the process, so they don’t know what the original call entailed. The job is fairly imper- sonal, and much of the work is recording customer complaints. Remember—40 percent of customers aren’t satisfied, and it’s the billing representatives who take the brunt of their negative reactions on the phone. As you can probably tell, all employees have to engage in emotional labor, as described in your textbook, and many lack the skills or personality traits to complete the customer interaction component of their jobs. They aren’t trained to provide customer service, and they see their work mostly in technical, or mechanical, terms. Quite a few are actually anxious about speaking directly with customers. The office staff (order processors and billing representatives) realize customer service is part of their job, but they also find dealing with negative feedback from customers and co-workers taxing. A couple of years ago a management consulting company was hired to survey DrainFlow worker atti- tudes. The results showed they were less satisfied than workers in other comparable jobs. The following table provides a breakdown of respondent satisfaction levels across a number of categories: did end in a customer service encounter resulted in other problems. The most frequent complaints Lee found in the customer surveys were about response time and cost, especially when the wrong person was sent to a job. A plumber’s assistant cannot complete a more technically complicated job. The appointment has to be resched- uled, and the customer’s time and the staff’s time have been wasted. The resulting delay often caused custom- ers in these situations to decline further contact with DrainFlow—many of them decided to go with Light- ning Plumber. “When I arrive at a job I can’t take care of,” says plumber’s assistant Jim Larson, “the customer gets ticked off. They thought they were getting a licensed plumber, since they were calling for a plumber. Telling them they have to have someone else come out doesn’t go over well.” On the other hand, when a plumber responds to a job easily handled by a plumber’s assistant, the cus- tomer is still charged at the plumber’s higher pay rate. Licensed plumber Luis Berger also does not like being in the position of giving customers bad news. “If I get called out to do something like snake a drain, the cus- tomer isn’t expecting a hefty bill. I’m caught between a rock and a hard place—I don’t set the rates or make the appointments, but I’m the one who gets it from the customer.” Plumbers also resent being sent to do such simple work. Susie McCarty is one of DrainFlow’s order proces- sors. She’s frustrated too when the wrong person is sent to a job but feels she and the other order processors are doing the best they can. “We have a survey we’re sup- posed to follow with the calls to find out what the prob- lem is and who needs to take the job,” she explains. “The customers don’t know that we have a standard   DrainFlow Plumbers DrainFlow Plumber Assistants DrainFlow Offi ce Workers Average Plumber Average Offi ce Workers I am satisfi ed with the work I am asked to do. 3.7 2.5 2.5 4.3 3.5 I am satisfi ed with my working conditions. 3.8 2.4 3.7 4.1 4.2 I am satisfi ed with my interactions with co-workers. 3.5 3.2 2.7 3.8 3.9 I am satisfi ed with my interactions with my supervisor. 2.5 2.3 2.2 3.5 3.4 628 C O M P R E H E N S I V E C A S E S Your Assignment Your task is to prepare a report for Lee on the poten- tial effectiveness of her cash reward and structured- interview programs. Make certain it is in the form of a professional business document that you’d actually give to an experienced manager at this level of a fairly large corporation. Lee is very smart when it comes to managing finances and running a plumbing business, but she won’t necessarily know about the organizational behavior principles you’re describing. Because any new proposals must be passed through top management, you should also address their concerns about cost con- tainment. You’ll need to make a strong evidence-based financial case that changing the management style will benefit the company. When you write, make sure you touch on the follow- ing points: 1. Although it’s clear employees are not especially sat- isfied with their work, do you think this is a reason for concern? Does research suggest satisfied work- ers are actually better at their jobs? Are any other be- havioral outcomes associated with job satisfaction? 2. Using job characteristics theory, explain why the present system of job design may be contributing to employee dissatisfaction. Describe some ways you could help employees feel more satisfied with their work by redesigning their jobs. 3. Lee has a somewhat vague idea about how to imple- ment the cash rewards system. Describe some of the specific ways you would make the reward system work better, based on the case. 4. Explain the advantages and disadvantages of using financial incentives in a program of this nature. What, if any, potential problems might arise if peo- ple are given money for achieving customer satis- faction goals? What other types of incentives might be considered? 5. Create a specific plan to assess whether the reward system is working. What are the dependent vari- ables that should change if the system works? How will you go about measuring success? 6. What types of hiring recommendations would you make to find people better suited for these jobs? Which Big Five personality traits would be useful for the customer service responsibilities and emo- tional labor? The information about average plumbers and aver- age office workers is taken from the management con- sulting company’s records of other companies. They aren’t exactly surprising, given some of the complaints DrainFlow employees have made. Top management is worried about these results, but they haven’t been able to formulate a solution. The traditional DrainFlow cul- ture has been focused on cost containment, and the “soft stuff” like employee satisfaction hasn’t been a major issue. The Proposed Solution The company is in trouble, and as revenues shrink and the cost savings that were supposed to be achieved by dividing up work fail to materialize, a change seems to be in order. Lee is proposing using cash rewards to improve per- formance among employees. She thinks if employees were paid based on work outcomes, they’d work harder to satisfy customers. Because it’s not easy to measure how satisfied people are with the initial call-in, Lee would like to give the order processors a small reward for every 20 calls successfully completed. For the hands- on work, she’d like to have each billing representative collect information about customer satisfaction for each completed call. If no complaints are made and the job is handled promptly, a moderate cash reward would be given to the plumber or plumber’s assistant. If the customer indicates real satisfaction with the service, a larger cash reward would be provided. Lee also wants to find people who are a better fit with the company’s new goals. Current hiring procedure relies on unstructured interviews with each location’s general manager, and little consistency is found in the way these managers choose employees. Most lack train- ing in customer service and organizational behavior. Lee thinks it would be better if hiring methods were standard- ized across all branches in her region to help managers identify recruits who can actually succeed in the job. CASE 3 Building a Coalition 629 3 Building a Coalition C A S E Learning Goals Many of the most important organizational behavior challenges require coordinating plans and goals among groups. This case describes a multiorganizational effort, but the same principles of accommodation and com- promise also apply when trying to work with multiple divisions within a single organization. You’ll create a blueprint for managing a complex development team’s progress, steering team members away from negative conflicts and toward productive discussion. You’ll also be asked to help create a new message for executives so they can lead effectively. Major Topic Areas ● Group dynamics ● Maximizing team performance ● Organizational culture ● Integrative bargaining The Scenario The Woodson Foundation, a large nonprofit social ser- vice agency, is teaming up with the public school sys- tem in Washington, D.C., to improve student outcomes. There’s ample room for improvement. The schools have problems with truancy, low student performance, and crime. New staff quickly burn out as their initial enthusiasm for helping students is blunted by the harsh realities they encounter in the classroom. Turnover among new teachers is very high, and many of the best and brightest are the most likely to leave for schools that aren’t as troubled. The plan is to create an experimental after-school program that will combine the Woodson Foundation’s skill in raising private money and coordinating com- munity leaders with the educational expertise of school staff. Ideally, the system will be financially self- sufficient, which is important because less money is available for schools than in the past. After several months of nego- tiation, the leaders of the Woodson Foundation and the school system have agreed that the best course is to develop a new agency that will draw on resources from both organizations. The Woodson foundation will pro- vide logistical support and program development and measurement staff; the school system will provide class- rooms and teaching staff. The first stage in bringing this new plan to fruition is the formation of an executive development team. This team will span multiple functional areas and establish the operating plan for improving school performance. Its cross-organizational nature means representatives from both the Woodson Foundation and the school district must participate. The National Coalition for Parental Involvement in Education (NCPIE) is also going to be a major partner in the program, acting as a representative for parents on behalf of the PTA. Conflict and Agreement in the Development Team While it would be perfect if all the groups could work together easily to improve student outcomes, there is little doubt some substantive conflicts will arise. Each group has its own interests, and in some cases these are directly opposed to one another. School district representatives want to ensure the new jobs will be unionized and will operate in a way consis- tent with current school board policies. They are very concerned that if Woodson assumes too dominant a role, the school board won’t be able to control the operations of the new system. The complexity of the school system has led to the development of a highly complex bureau- cratic structure over time, and administrators want to make sure their policies and procedures will still hold for teachers in these programs even outside the regular school day. They also worry that jobs going into the new system will take funding from other school district jobs. Woodson, founded by entrepreneur Theodore Woodson around 1910, still bears the hallmarks of its founder’s way of doing business. Woodson emphasized efficiency and experimentation in everything he did. Many of the foundation’s charities have won awards for minimizing costs while still providing excellent ser- vices. Their focus on using hard data to measure perfor- mance for all their initiatives is not consistent with the school district culture. Finally, the NCPIE is driven by a mission to in- crease parental control. The organization believes that when communities are able to drive their own educa- tional methods, students and parents are better able to achieve success together. The organization is strongly 630 C O M P R E H E N S I V E C A S E S they know what’s best. The parents, at least, have more of a stake in this.” “The most important thing is the kids,” says second-year teacher Ari Kaufman. He is well liked by his students but doesn’t get along well with other faculty members. He’s seen as a “squeaky wheel.” “The schools need change so badly. And how did they get this way? From too little outside involvement.” Community organizer Mason Dupree doesn’t like the level of bureaucracy either. He worries that the school’s answer to its problems is to throw more money at them. “I know these kids. I grew up in these neighbor- hoods. My parents knew every single teacher I had. The schools wanted our involvement then. Now all they want is our money. And I wouldn’t mind giving it to them if I thought it would be used responsibly, not spent on raises for people who haven’t shown they can get the job done.” Meredith Watson, with the Woodson Foundation, agrees the schools have become less focused on the families. A former teacher, she left the field of educa- tion after being in the classroom for 6 years. “There is so much waste in the system,” she complains. “Jobs are unnecessarily duplicated, change processes are need- lessly convoluted. Unless you’re an insider already, you can’t get anything done. These parents want to be involved. They know their kids best.” Unlike her NCPIE colleagues, Candace Sharpe thinks the schools are doing the best they can. She is a county social worker, relatively new to the D.C. area. “Parents say they want to be involved but then don’t fol- low through. We need to step it up, we need to lead the way. Lasting change doesn’t come from the outside, it comes from the home.” Victor Martinez has been at the Woodson Founda- tion for 10 years, starting as an intern straight out of col- lege. “It’s sometimes hard to see a situation when you’re in the thick of it,” he explains. “Nobody likes to be told they’re doing something wrong, but sometimes it has to be said. We all know there are flaws in the system. We can’t keep the status quo. It just isn’t cutting it.” Strategies for the Program Team Once the basic membership and principles for the de- velopment team have been established, the program team would also like to develop a handbook for those who will be running the new program. Ideally, this set of principles can help train new leaders to create an inspi- rational message that will facilitate success. The actual content of the program and the nature of the message will be hammered out by the development team, but it is still possible to generate some overriding principles for the program team in advance of these decisions. committed to celebrating diversity along racial, gender, ethnic, and disability status categories. Its members are most interested in the process by which changes are made, ensuring everyone has the ability to weigh in. Some demographic diversity issues complicate the team’s situation. Most of the students served by the Washington, D.C., school district are African Ameri- can, along with large populations of Caucasians and Hispanics. The NCPIE makeup generally matches the demographic diversity of the areas served by the public schools. The Woodson foundation, based in northern Virginia, is predominantly staffed by Caucasian profes- sionals. There is some concern with the idea that a new group that does not understand the demographic con- cerns of the community will be so involved in a major change in educational administration. The leadership of the new program will have to be able to present an effective message for generating enthusiasm for the program across diverse stakeholder groups. Although the groups differ in important ways, it’s also worth considering what they have in common. All are interested in meeting the needs of students. All would like to increase student learning. The school system does benefit from anything that increases student test scores. And the Woodson Foundation and NCPIE are united in their desire to see more parents engaged in the system. Candidates for the Development Team The development team will consist of three individuals— HR representatives from the Woodson Foundation, the schools, and the NCPIE—who have prepared the fol- lowing list of potential candidates for consideration. Victoria Adams is the superintendent of schools for Washington, D.C. She spearheaded the initial commu- nication with the Woodson Foundation and has been building support among teachers and principals. She thinks the schools and the foundation need to have larger roles than the parents and communities. “Of course we want their involvement and support, but as the professionals, we should have more say when it comes to making decisions and implementing pro- grams. We don’t want to shut anyone out, but we have to be realistic about what the parents can do.” Duane Hardy has been a principal in the Washing- ton area for more than 15 years. He also thinks the schools should have the most power. “We’re the ones who work with these kids every day. I’ve watched class sizes get bigger, and scores and graduation rates go down. Yes, we need to fix this, but these outside groups can’t understand the limitations we’re dealing with. We have the community, the politicians, the taxpayers— everyone watching what we’re doing, everyone thinking CASE 4 Boundar yless Organizations 631 the research on groups and teams in the textbook to defend your choices. 3. Using principles from the chapters on groups and teams, describe how you will advise the team to manage conflict effectively. 4. Describe how integrative negotiation strategies might achieve joint goals for the development team. The following points should help you form a mes- sage for the program team: 1. Leaders of the new combined organization should have a good idea of the culture of the school dis- trict, the NCPIE, and the Woodson Foundation be- cause they will need to manage relationships with all three groups on an ongoing basis. How would you describe the culture of these various stake- holder organizations? Use concepts from the chap- ter on organizational culture to describe how they differ and how they are similar. 2. Consider how leaders of the new program can gen- erate a transformational message and encourage employee and parent trust. Using material from the chapter on leadership, describe how you would ad- vise leaders to accomplish these ends. 3. Given the potential for demographic fault lines in negotiating these changes, what would you advise as a strategy for managing diversity issues for pro- gram leaders? Your Assignment The Woodson Foundation, the NCPIE, and the schools have asked you to provide some information about how to form teams effectively. They would like your response to explain what should be done at each step of the way, from the selection of appropriate team members to set- ting group priorities and goals, setting deadlines, and describing effective methods for resolving conflicts that arise. After this, they’d like you to prepare a brief set of principles for leaders of the newly established program. That means you will have two audiences: the develop- ment team, which will receive one report on how it can effectively design the program, and the program team, which will receive one report on how it can effectively lead the new program. The following points should help you form a com- prehensive message for the development team: 1. The development team will be more effective if members have some idea about how groups and teams typically operate. Review the dominant per- spectives on team formation and performance from the chapters in the book for the committee so it can know what to expect. 2. Given the profiles of candidates for the develop- ment team, provide suggestions for who would likely be a good group member and who might be less effective in this situation. Be sure you are using 4 Boundaryless Organizations C A S E Learning Goals The multinational organization is an increasingly com- mon and important part of the economy. This case takes you into the world of a cutting-edge music soft- ware business seeking success across three very differ- ent national and organizational cultures. Its managers need to make important decisions about how to struc- ture work processes so employees can be satisfied and productive doing very different tasks. Major Topic Areas ● Organizational structure and boundaryless organizations ● Organizational culture ● Human resources ● Organizational socialization The Scenario Newskool Grooves is a transnational company develop- ing music software. The software is used to compose music, play recordings in clubs, and produce albums. Founder and CEO Gerd Finger is, understandably, the company’s biggest fan. “I started this company from nothing, from just me, my ideas, and my computer. I love music—love playing music, love writing programs for making music, love listening to music—and the money is nice, too.” Gerd says he never wanted to work 632 C O M P R E H E N S I V E C A S E S that incorporate its computer technology. Making this massive market change might be challenging for some companies, but for an organization that reinvents itself every 2 or 3 years like Newskool does, the bigger fight is a constant war against stagnation and rigidity. The organization has a very decentralized culture. With only 115 employees, the original management philosophy of allowing all employees to participate in decision making and innovation is still the lifeblood of the company’s culture. One developer notes, “At Newskool, they want you to be part of the process. If you are a person who wants to do what you’re told at work, you’re in trouble. Most times, they can’t tell you what they want you to do next—they don’t even know what comes next! That’s why they hire employees who are creative, people who can try to make the next thing happen. It’s challenging, but a lot of us think it’s very much an exciting environment.” The Boundaryless Environment Because so much of the work can be performed on computers, Gerd decided early to allow employees to work outside the office. The senior management in Ber- lin and Los Angeles are both quite happy with this ar- rangement. Because some marketing work does require face-to-face contact, the Los Angeles office has weekly in-person meetings. Employees who like Newskool are happiest when they can work through the night and sleep most of the day, firing up their computers to get work done at the drop of a hat. Project discussions often happen via social networking on the company’s intranet. The Kiev offices have been less eager to work with the boundaryless model. Managers say their computer programmers find working with so little structure rather uncomfortable. They are more used to the idea of a strong leadership structure and well-defined work processes. “When I started,” says one manager, “Gerd said get- ting in touch with him would be no problem, getting in touch with L.A. would be no problem. We’re small, we’re family, he said. Well, it is a problem. When I call L.A., they say to wait until their meeting day. I can’t al- ways wait until they decide to get together. I call Gerd— he says, ‘Figure it out.’ Then when I do, he says it isn’t right and we have to start again. If he just told me in the first place, we would have done it.” Some recent events have also shaken up the com- pany’s usual way of doing business. Developers in the corporate offices had a major communications break- down about their hardware DJ controller, which re- quired many hours of discussion to resolve. It seems for someone else, to give away his ideas and let someone else profit from them. He wanted to keep control over them, and their image. “Newskool Grooves is always ahead of the pack. In this business, if you can’t keep up, you’re out. And we are the company everyone else must keep up with. Everyone knows when they get something from us, they’re getting only the best and the newest.” The company headquarters are in Berlin, the nerve center for the organization, where new products are de- veloped and the organizational strategy is established. Newskool outsources a great deal of its coding work to programmers in Kiev, Ukraine. Its marketing efforts are increasingly based in its Los Angeles offices. This division of labor is at least partially based on technical expertise and cost issues. The German team excels at design and production tasks. Because most of News- kool’s customers are English speakers, the Los Angeles office has been the best group to write ads and market products. The Kiev offices are filled with outstanding programmers who don’t require the very high rates of compensation you’d find in German or U.S. offices. The combination of high-tech software, rapid reorgani- zation, and outsourcing makes Newskool the very defi- nition of a boundaryless organization. Gerd also makes the final decision on hiring every employee for the company and places a heavy empha- sis on independent work styles. “Why would I want to put my company in the hands of people I can’t count on?” he asks with a laugh. “They have to believe in what we’re doing here, really understand our direction and be able to go with it. I’m not the babysitter, I’m not the school master handing out homework. School time is over. This is the real world.” The Work Culture Employees want to work at this company because it’s cutting edge. Newskool’s software is used by a number of dance musicians and DJs, who have been the firm’s core market, seeing it as a relatively expensive but very high-quality and innovative brand. Whenever the rest of the market for music software goes in one direction, it seems like Newskool heads in a completely different direction in an effort to keep itself separate from the pack. This strategy has tended to pay off. While com- petitors develop similar products and therefore need to continually lower their prices to compete with one another, Newskool has kept revenues high by creating completely new types of products that don’t face this type of price competition. Unfortunately, computer piracy has eroded News- kool’s ability to make money with just software-based music tools, and it has had to move into the production of hardware, such as drum machines and amplifiers challenges of so many workers heading in so many dif- ferent directions. You will need to prepare a report for the company’s executive committee. Your report should read like a proposal to a corporate executive who has a great deal of knowledge about the technical aspects of his company but might not have much knowledge of organizational behavior. When you write, make sure you touch on the follow- ing points: 1. Identify some of the problems likely to occur in a boundaryless organization like Newskool Grooves. What are the advantages of boundaryless organizations? 2. Consider some of the cultural issues that will affect a company operating in such different parts of the world and whose employees may not be representa- tive of the national cultures of each country. Are the conflicts you observe a function of the different types of work people have to perform? 3. Based on what you know about motivation and per- sonality, what types of people are likely to be sat- isfied in each area of the company? Use concepts from job characteristics theory and the emerging social relationships perspective on work to describe what might need to change to increase employee satisfaction in all areas. 4. What types of human resources practices need to be implemented in this sort of organization? What principles of selection and hiring are likely to be effective? Which Big Five traits and abilities might Newskool supervisors want to use for selection? 5. What kind of performance measures might you want to see for each office? 6. How can the company establish a socialization pro- gram that will maximize employee creativity and independence? Do employees in all its locations need equal levels of creativity? that people who seldom met face to face had all made progress—but had moved in opposite directions! To test and design the company’s hardware products, em- ployees apparently need to do more than send each other code; sometimes they need to collaborate face to face. Some spirited disagreements have been voiced within the organization about how to move forward in this new environment. The offices are experiencing additional difficul- ties. Since the shift to newer products, Sandra Pelham in the Los Angeles office has been more critical of the company. “With the software, we were more limited in the kinds of advertising media we could access. So now, with the hardware—real instruments—we finally thought, ‘All right, this is something we can work with!’ We had a whole slate of musicians and DJs and produc- ers to contact for endorsements, but Gerd said, ‘No way.’ He didn’t want customers who only cared that a celebrity liked us. He scrapped the whole campaign. He says we’re all about creativity and doing our own thing—until we don’t want to do things his way.” Although the organization is not without problems, there is little question Newskool has been a standout success in the computer music software industry. While many are shuttering their operations, Newskool is using its market power to push forward the next generation of electronic music-making tools. As Gerd Finger puts it, “Once the rest of the industry has gotten together and figured out how they’re all going to cope with change, they’ll look around and see that we’re already three miles ahead of them down the road to the future.” Your Assignment Gerd has asked for your advice on how to keep his organization successful. He wants to have some sort of benchmark for how other boundaryless organiza- tions in the tech sector stay competitive despite the CASE 4 Boundar yless Organizations 633 634 C O M P R E H E N S I V E C A S E S Learning Goals One of the most consistent changes in the structure of work over the past few decades has been a shift from a manufacturing economy to a service economy. More workers are now engaged in jobs that include providing care and assistance, especially in education and medicine. This work is satisfying for some people, but it can also be highly stressful. In the following sce- nario, consider how a company in the nursing care industry is responding to the challenges of the new environment. Major Topic Areas ● Stress ● Organizational change ● Emotions ● Leadership The Scenario Parkway Nursing Care is an organization facing a mas- sive change. The company was founded in 1972 with just two nursing homes in Phoenix, Arizona. The com- pany was very successful, and throughout the 1980s it continued to turn a consistent profit while slowly ac- quiring or building 30 more units. This low-profile ap- proach changed forever in 1993 when venture capitalist Robert Quine decided to make a major investment in expanding Parkway in return for a portion of its profits over the coming years. The number of nursing homes exploded, and Parkway was operating 180 homes by the year 2000. The company now has 220 facilities in the south- western United States, with an average of 115 beds per facility and a total of nearly 30,000 employees. In ad- dition to health care facilities, it also provides skilled in-home nursing care. Parkway is seen as one of the best care facilities in the region, and it has won numerous awards for its achievements in the field. As members of the Baby Boom generation become senior citizens, the need for skilled care will only in- crease. Parkway wants to make sure it is in a good position to meet this growing need. This means the company must continue expanding rapidly. The pressure for growth is one significant challenge, but it’s not the only one. The nursing home industry has come under increasing government scrutiny following investigations that turned up widespread patient abuse and billing fraud. Parkway has always had outstanding patient care, and no substantiated claim of abuse or ne- glect in any of its homes has ever been made, but the need for increased documentation will still affect the company. As the federal government tries to trim Medi- care expenses, Parkway may face a reduction in funding. The Problem As growth has continued, Parkway has remained com- mitted to providing dignity and health to all residents in its facilities. The board of directors wants to see re- newed commitment to the firm’s mission and core values, not a diffusion of its culture. Its members are worried there might be problems to address. Interviews with employees suggest there’s plenty to worry about. Shift leader Maxine Vernon has been with Parkway for 15 years. “Now that the government keeps a closer eye on our staffing levels, I’ve seen management do what it can to keep positions filled, and I don’t always agree with who is hired. Some of the basic job skills can be taught, sure, but how to care for our patients—a lot of these new kids just don’t pick up on that.” “The problem isn’t with staff—it’s with Parkway’s fo- cus on filling the beds,” says nurse’s aide Bobby Reed. “When I started here, Parkway’s reputation was still about the service. Now it’s about numbers. No one is in- tentionally negligent—there just are too many patients to see.” A recent college graduate with a B.A. in psychol- ogy, Dalton Manetti is more stressed than he expected he would be. “These aren’t the sweet grannies you see in the movies. Our patients are demanding. They complain about everything, even about being called patients, probably because most of them think they shouldn’t be here in the first place. A lot of times, their gripes amount to nothing, but we have to log them in anyway.” Carmen Frank has been with Parkway almost a year and is already considering finding a new job. “I knew there were going to be physical parts to this job, and I thought I’d be able to handle that. It’s not like I was looking for a desk job, you know? I go home after every C A S E 5 The Stress of Caring CASE 5 The Stress of Caring 635 chapter on organizational change explains, AI proce- dures systematically collect employee input and then use this information to create a change message every- one can support. The human resources department conducted focus groups, asking employees to describe some of their concerns and suggestions for the future. The focus groups highlighted a number of suggestions, although they don’t all suggest movement in the same direction. Many suggestions concerned schedule flexibility. One representative comment was this: “Most of the stress on this job comes because we can’t take time off when we need it. The LPNs [licensed practical nurses, who do much of the care] and orderlies can’t take time off when they need to, but a lot of them are single parents or primary caregivers for their own children. When they have to leave for child care responsibilities, the work suffers and there’s no contingency plan to help smooth things over. Then everyone who is left has to work extra hard. The person who takes time off feels guilty, and there can be fights over taking time off. If we had some way of covering these emergency absences, we’d all be a lot happier, and I think the care would be a lot better.” Other suggestions proposed a better method for communicating information across shifts. Most of the documentation for shift work is done in large spiral notebooks. When a new shift begins, staff members say they don’t have much time to check on what happened in the previous shift. Some younger caregivers would like to have a method that lets them document patient outcomes electronically because they type faster than they can write. The older caregivers are more commit- ted to the paper-based process, in part because they think switching systems would require a lot of work. (Government regulations on health care reporting re- quire that any documentation be made in a form that cannot be altered after the fact, to prevent covering up shift with aches all over—my back, my arms, my legs. I’ve never had to take so much time off from a job be- cause I hurt. And then when I come back, I feel like the rest of the staff thinks I’m weak.” “I started working here right out of high school be- cause it was the best-paid of the jobs I could get,” says Niecey Wilson. “I had no idea what I was getting myself into. Now I really like my job. Next year I’m going to start taking some night classes so I can move into an- other position. But some of the staff just think of this as any other job. They don’t see the patients as people, more like inventory. If they want to work with inven- tory, they should get a job in retail.” Last month, the company’s human resources de- partment pulled the following information from its records at the request of the board of directors. The numbers provide some quantitative support for the concerns voiced by staff. Injuries to staff occur mostly because of back strain from lifting patients. Patient incidents reflect injuries due to slips, falls, medication errors, or other accidents. Certified absences are days off from work due to medi- cally verified illnesses or injuries. Other absences are days missed that are not due to injuries or illnesses; these are excused absences (unexcused absences are grounds for immediate firing). Using Organizational Development to Combat Stress and Improve Performance The company wants to use such organizational devel- opment methods as appreciative inquiry (AI) to cre- ate change and reenergize its sense of mission. As the Year Patients Injuries per Staff Member Incidents per Patient Certifi ed Absences per Staff Other Absence per Staff Turnover Rate 2000 21,200 3.32 4.98 4.55 3.14 0.31 2001 22,300 3.97 5.37 5.09 3.31 0.29 2002 22,600 4.87 5.92 4.71 3.47 0.28 2003 23,100 4.10 6.36 5.11 3.61 0.35 2004 23,300 4.21 6.87 5.66 4.03 0.31 2005 23,450 5.03 7.36 5.33 3.45 0.28 2006 23,600 5.84 7.88 5.28 4.24 0.36 2007 24,500 5.62 8.35 5.86 4.06 0.33 2008 24,100 7.12 8.84 5.63 3.89 0.35 2009 25,300 6.95 9.34 6.11 4.28 0.35 636 C O M P R E H E N S I V E C A S E S abuse, so specialized software systems must be used for electronic documentation.) Finally, the nursing care staff believes its perspec- tives on patient care are seldom given an appropriate hearing. “We’re the ones who are with the patients most of the time, but when it comes to doing this the right way, our point of view gets lost. We really could save a lot of money by eliminating some of these un- necessary routines and programs, but it’s something management always just says it will consider.” Staff members seem to want some way to provide sugges- tions for improvement, but it isn’t clear what method they would prefer. Your Assignment Parkway has taken some initial steps toward a new direc- tion, but clearly it has a lot of work left to do. You’ve been brought in as a change management consultant to help the company change its culture and respond to the stress that employees experience. Remember to create your report as if for the leadership of a major corporation. When you write your recommendations, make sure you touch on the following points: 1. What do the data on employee injuries, incidents, absences, and turnover suggest to you? Is there rea- son for concern about the company’s direction? 2. The company is going to be making some signifi- cant changes based on the AI process, and most change efforts are associated with resistance. What are the most common forms of resistance, and which would you expect to see at Parkway? 3. Given the board of directors’ desire to reenergize the workforce, what advice would you provide for creating a leadership strategy? What leader behav- iors should nursing home directors and nurse su- pervisors demonstrate? 4. What are the major sources of job stress at Parkway? What does the research on employee stress suggest you should do to help minimize the experience of psychological strain for employees? Create a plan for how to reduce stress among employees. 5. Based on the information collected in the focus groups, design a survey to hand out to employees. What sort of data should the survey gather? What types of data analysis methods would you like to em- ploy for these data? 637 Indexes Name Index References followed by b indicate boxes; e, exhibits; f, figure; n, notes A A. T. Kearney, 519 Abelson, M., 336n Abosch, K. S., 268n Abrams, D., 302n Abramson, L. Y., 195n, 198n Ackerman, P. L., 234n Ackman, William, 448 f Acton, Lord, 436 b Adair, W. L., 365n, 477n Adam, H., 467n Adams, G. A., 572n Adams, G. L., 441n, 443n Adams, J. S., 235n Adams, J. Stacy, 220 Addae, H. M., 614n Addison, J. T., 268n Adegbesan, J. A., 508n Aditya, R. N., 402n, 403n, 404n Adkins, B., 163n Adler, N., 365n Adler, N. J., 199n Agle, B. R., 408n Agnvall, E., 364n Aguinis, H., 329n, 573n Aguirre, F., 35n Ahearne, M., 304n, 402n Ahlburg, D., 93n Ahlfinger, N. Richardson, 305n Ahmad, A. S., 66n Aiken, M., 509n Ailon, G., 162n Aime, F., 330n AirAsia, 347 f, 532 Ajzen, I., 92n Akerlof, G. A., 198n Akst, D., 402n Albarracín, D., 92n, 197n Aleandri, Emelise, 232 Alge, B. J., 364n Algesheimer, R. L., 291n Allen, D., 330n Allen, D. G., 615n Allen, N. J., 129n, 331n Allen, P., 538n Allen, T. D., 266n, 407n, 408n, 614n Allen, W. R., 573n Alliger, G. M., 402n, 408n, 573n Allison, M., 363n Allouf, M., 442n Alloy, L. B., 128n Allport, G. W., 159n Allport, Gordon, 133 Arnold, T. J., 509n Arnst, C., 191n Arrington, K., 267n Arthur, M. B., 404n Arthur, W., 539n Arthur, W., Jr., 162n, 332n Arum, R., 230n Arvey, R. D., 159n, 508n Aryee, S., 267n, 407n, 442n Asch, S. E., 196n, 303n Asch, Solomon, 282 , 293 Ash, Mary Kay, 379 Ashford, J., 36n Ashford, S. J., 365n, 611n Ashforth, B. E., 125n, 126n, 129n, 302n, 365n, 442n Ashkanasy, N. M., 111e, 125n, 127n, 162n, 401n Ashkenas, R., 508n Ashmos, D. P., 267n, 541n Aspinwall, L. G., 126n Aspinwall, Lisa, 534 b Atkinson, J. W., 233n Atwater, L., 234n, 402n Atwater, L. E., 196n, 235n, 408n, 574n Au, W., 515n Audia, P. G., 611n, 612n Augier, M., 197n Austin, N., 35n Austin, S., 614n Autio, E., 612n Avallone, F., 612n Avery, D. R., 65n, 66n, 67n, 302n Avolio, B. J., 92n, 233n, 404n, 405n, 406n, 408n, 409n Awamleh, R., 403n Awong, T., 210n Axelrod, J., 262n Axtell, R. E., 365n Aycan, Z., 93n, 236n, 267n Ayman, R., 402n Azar, B., 534n B Baas, M., 128n, 199n Babcock, L., 476n, 477n Babkoff, H., 126n Bacdayan, P., 573n Bacharach, S. B., 441n Bachiochi, P. D., 93n Bachrach, D. G., 94n, 406n, 442n Backstrom, I., 35n Badal, J., 440n Bader, P., 408n Baer, M., 160n Bagsby, P. G., 128n Bailey, D. E., 330n, 476n Almeida, J. G., 612n Almond, S., 66n Almor, T., 509n Alsop, R., 36n Alutto, J. A., 613n Amabile, T. M., 199n Amanatullah, E. T., 477n Amankwah-Amoah, J., 328n Amarel, D., 614n Ambady, N., 65n, 125n, 127n, 128n Ambrose, M. L., 235n, 509n, 541n Amburgey, T. L., 509n Ames, D. R., 161n, 401n, 476n Amis, J., 612n Amstad, F. T., 303n Anand, G., 573n Anand, N., 508n Anand, R., 67n Anand, V., 365n Andersen, I., 614n Andersen, J. A., 197n Anderson, C., 441n, 475n, 477n, 509n Anderson, N., 65n, 66n, 129n, 163n, 266n, 363n, 403n, 571n, 572n, 612n, 613n Andersson, L. M., 303n Ando, J., 160n Andrews, J. P., 403n Andrews, M., 615n Andrews, M. C., 441n, 442n Andrews, S., 412n Ang, S., 378n, 401n, 574n Angell, L. C., 331n Ansberry, C., 266n Anstey, K. J., 65n Anthony, S. D., 507n Anthony, W. P., 442n Antonakis, J., 401n Applebaum, E., 267n Applebaum, S. H., 283 e Aquino, K., 423n Aranya, N., 509n Arbaugh, J. B., 573n Ardena, R., 181n Ardichvili, A., 37n, 541n Argyris, C., 613n Ariely, D., 36n Arita, E., 268n Arkani, S., 87n Armeli, S., 93n Armenakis, A. A., 305n, 330n Armour, S., 37n, 574n, 611n, 613n Arnau, R. C., 159n Arnold, D., 541n Arnold, J., 475n Arnold, J. A., 129n Arnold, T., 613n, 615n 638 I N D E X E S Bailey, J., 94n, 197n Bailey, W., 37n Bailyn, L., 574n Baker, Avery, 90 Baker, P., 308n Baker, R., 610n Baker, W. F., 157, 158n Bakker, A. B., 233n, 572n, 615n Bakker, P., 572n Baldwin, T. T., 65n, 365n Balkundi, P., 330n Ball, Arie, 567 b Ballinger, G. A., 364n Balloun, J. L., 37n Ball-Rokeach, S. J., 161n Baltes, B. B., 266n, 305n Balthazard, P., 160n, 404n Balzer, W. K., 93n Bamberger, P., 303n Bamberger, P. A., 330n Banaji, M., 126n Banaji, M. R., 128n Bandelli, A. C., 160n Bandura, A., 235n Bandura, Albert, 216 – 217 Banks, W. C., 303n Bannister, B. D., 402n Barbarian, J., 573n Barber, L. K., 128n Barber, N., 66n Barbuto, J. E., Jr., 609n Barclays, 38 Barden, J., 365n Bardes, M., 37n, 406n, 541n Bardi, A., 161n Barge, J. K., 612n Barker, B., 37n Barker, P. B., 129n Barlcay, L. J., 236n Barling, J., 37n, 93n, 304n, 405n, 406n, 409n Barnes-Farrell, J. L., 267n Baron, H., 572n Bar-On, R., 127n Baron, R. A., 197n, 441n, 475n Baron, R. S., 305n Barr, Anthony J., 68 Barrett, F., 612n Barrett, L. F., 127n Barrick, M. R., 66n, 92n, 159n, 330n, 331n, 405n, 571n, 572n Barringer, M. W., 269n Barron, F. X., 199n Barry, B., 476n, 477n Barsade, S. G., 125n, 128n Barsness, Z. I., 267n, 443n Bartol, K. M., 269n, 330n, 405n Bartram, D., 36n Bartz, Carol, 375 f Basch, J., 127n Bashshur, M. R., 539n Bass, B. M., 404n, 408n, 409n, 440n Basuil, D., 496n Bateman, T. S., 161n Bates, J., 508n Batey, M., 160n Battistelle, R. A. G., 54 b Bauer, C. C., 305n Bauer, T. N., 403n, 540n Baughman, K., 509n Baughn, C., 185n Baum, J. R., 405n Baumann, M. R., 305n Baumeister, R. F., 392n Baxter, Steve, 530 f Baynton, D., 573n Bayo-Moriones, A., 269n, 420n Bazerman, M., 234n Bazerman, M. H., 193n, 194n, 197n, 258n, 476n, 477n Bazerman, Max, 258 b Beal, D. J., 127n, 304n Beard, D. W., 509n Beccalli, N., 405n Bechara, A., 127n, 129n Becherer, R. C., 161n Bechger, T. M., 196n Bechky, B. A., 365n Becht, B., 489n Becker, A., 573n Becker, B., 571n Becker, D. V., 127n Becker, T. E., 233n, 403n Becker, W. S., 237n Beckham, David, 323 Beckhard, R., 540n Beckman, C., 125n Bedeian, A. G., 129n, 236n, 305n Beehr, T. A., 162n, 540n Beem, A. L., 614n Beersma, B., 320n, 477n Begley, S., 63n, 194n Behfar, K. J., 332n, 475n, 476n Behson, S. J., 266n Beimel, S., 403n, 404n Belau, L., 331n Belfield, C. R., 268n Belkin, L. Y., 365n Bell, Alexander Graham, 189 Bell, B. S., 66n, 573n Bell, J., 198n Bell, S. T., 67n, 162n, 302n, 314n, 331n, 332n Belohlav, J. A., 66n, 302n, 314n Benbow, C. P., 199n Benedict, C., 232n Bennett, N., 304n Bennett, R. J., 129n, 303n Bennett, W., 573n, 574n Bennis, W., 403n Benoit, A., 471n Bentein, K., 93n, 94n, 540n Benz, M., 81e, 93n Ben-Ze’ev, A., 126n Berdahl, J. L., 423n Berg, J. M., 92n Berger, J., 303n Bergman, M. E., 441n, 539n Bergmann, T. J., 475n, 508n Berkowitz, L., 195n, 235n Berlo, D. K., 363n Bernard, D. S., 269n Bernerth, J. B., 332n Bernstein, E., 362n Berry, C. M., 159n, 303n, 572n Berson, Y., 404n, 405n Bertua, C., 66n, 571n Bess, L., 159n Beus, J. M., 539n Beyer, D., 473n Beyer, J. M., 196n Bezos, Jeff, 580 f Bezuijen, X. M., 197n Bhalla, A., 489n Bhappu, A. D., 476n Bhatia, P., 92n, 405n Bhawe, N. M., 196n Bhidé, A., 194n Bhidé, Amar, 194 Bianco, Janet, 421 Bieser, M., 305n Bigley, G., 235n, 236n Bilotta, J. G., 302n bin Laden, Osama, 306 Bing, M. N., 541n Binnewies, C., 601n, 615n Binney, E., 364n Binns, A., 439n Birdi, K., 571n Birger, J., 400 Birkeland, S. A., 159n Birkinshaw, J., 611n Biron, M., 303n Birtch, T., 236n Birtch, T. A., 196n, 558n, 574n Bischoff, S. J., 196n Bishop, V., 264n Bixby, M. B., 185n Bizer, G. Y., 365n Bizjak, J., 231 Black, M. M., 65n Blackmon, K., 365n Blackwell, K. C., 127n Blader, S. L., 94n Blair, C. A., 92n, 94n Blair, E. S., 234n Blank, H., 408n Blankenship, K. L., 364n Blasi, J., 269n Blass, F. R., 440n I N D E X E S 639 Brown, D., 269n, 615n Brown, D. J., 92n, 161n Brown, E. R., 61n Brown, J. D., 196n Brown, K. G., 36n, 235n, 473n, 475n, 573n Brown, M., 406n Brown, M. E., 406n, 541n Brown, P., 480n Brown, P. D., 197n Brown, T. J., 539n Brown-Radford, J. A., 405n Bruch, H., 65n, 303n Brunner, E., 614n Bruursema, K., 95n Bryant, A., 362n, 366n, 503n, 512n Bryant, F. B., 198n Bryant, P., 198n Brymer, R. A., 128n Brynaert, Didier, 528 – 529 Bryon, K., 363n Buchanan, D. A., 441n Buchanan, M. A., 185n Buchanan, N. T., 614n Buchko, A. A., 269n Buckley, M. R., 67n, 405n Budhwar, P. S., 442n Buffardi, L. C., 37n Buffett, Warren, 436 b, 503 b Bühner, M., 572n Bulger, C. A., 575n Bulkeley, W. M., 508n Bültmann, U., 614n Bunce, D., 93n, 266n Bunch, R., 329n Burack, E. H., 541n Burgess, M., 233n Burke, C., 204n Burke, C. S., 332n Burke, D., 158n, 400, 611n Burke, L. A., 197n, 573n Burke, M., 572n Burke, M. J., 304n Burke, R. J., 574n, 614n Burnett, D. D., 163n Burnham, D. H., 233n Burns, G. N., 268n Burns, J. M., 406n Burns, L. R., 508n Burns, M., 230n Burns, T., 508n Burns, Ursula M., 510 , 511 f Burris, E. R., 407n Bursik, K., 441n Burson, K. A., 197n Burt, R. S., 406n Burton, C. M., 197n Bushman, B. J., 198n Buss, A. H., 159n Butalid, L., 126n Bowen, F., 365n Bowler, W. M., 442n Bowles, H. R., 476n, 477n Bowman, K., 93n Boyar, S. L., 162n, 575n Boyatzis, R. E., 233n Boyd, C., 423n Bozeman, B., 408n Bozeman, D. P., 441n, 442n Bozionelos, N., 408n Bracken, D., 70n Bracker, J. S., 233n Bradley, B. H., 405n, 473n, 475n Bradley, J. C., 129n, 571n Bradlow, E. T., 407n Brady, D., 36n, 157, 158n, 364n, 409n Brady, M. P., 305n Brafman, O., 272n Brafman, R., 272n Brandt, R. L., 366n Brannick, M. T., 159n Branson, Holly, 134 f Branson, Richard, 134 f, 369 , 382 , 398 , 519 Branzei, O., 440n Brass, D. J., 161n, 302n Bratko, D., 128n Bratton, V. K., 442n Brauer, M., 305n Bravo, J., 407n Brazil, D. M., 403n Brechan, I., 197n Breckler, S. J., 92n Brett, J., 475n, 477n Brett, J. F., 574n Brett, J. M., 36n, 365n, 477n Breugelmans, S. M., 126n Bridoux, F., 267n Bridwell, L. G., 232n Brief, A. P., 539n Briggs, A. L., 331n Briggs, T. E., 266n Brin, Sergey, 503 b Briñol, P., 364n, 365n, 440n Brion, S., 611n, 612n Broadwater, Gene, 212 Brockner, J., 267n Brockway, J. H., 198n Brodbeck, F. C., 305n Broersen, J. P. J., 615n Brookbank, Renee, 337 f Brooks, A. W., 477n Brooks, S. M., 36n Broschak, J. P., 94n Brotheridge, C. M., 127n Brotherton, P., 267n Brouer, R. L., 440n Broughton, P. D., 238n Brown, B., 507n Brown, C. E., 509n Blau, G. J., 92n Blau, K., 398n Blau, P. M., 509n Blickle, G., 440n Bliese, P. D., 571n, 612n Bligh, M. C., 408n Bliss-Moreau, E., 127n Blonk, R. W. B., 615n Blue, L., 615n Bluedorn, A. C., 509n Blum, T. C., 199n Blume, B. D., 365n Boal, K. R., 92n Boatwright, K. J., 402n Bobko, P., 65n, 572n Bock, Laszio, 366 Bock, W., 540n Bode, N., 441n Bodensteiner, W. D., 509n Bodie, N. L., 185n Bodinson, G., 329n Bodner, T., 540n, 574n Boehm, S. 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R., 65n Flynn, James, 63 Foerster, J., 198n Foldes, H. J., 129n Folger, R., 236n Fong, E., 284e, 303n Fong, S. C. L., 269n Fontaine, J., 210n Foo, M., 36n, 129n Foote, N., 304n Ford, Henry, 480 – 481 , 523 Ford, J. D., 611n Ford, J. K., 539n Ford, Kelly, 49 f Ford, L. W., 611n Erez, A., 128n, 160n, 284e, 303n, 330n, 404n Erez, M., 93n, 234n, 236n Erezand, A., 160n Ergeneli, A., 92n Erickson, J. J., 604n Erickson, R. J., 127n Erickson, T., 333n Ertürk, A., 420n Erwin, P. J., 129n Esser, J. K., 305n Esterl, M., 507n Estes, B., 573n Ettling, J. T., 403n Euwema, M. C., 476n Evans, D. P., 574n Evans, J. M., 476n Evans, M. G., 402n Evans, R., 405n Ewing, J., 363n, 507n F Fabrigar, L. R., 92n, 365n Facchin, S., 441n Facteau, J. D., 574n Fadiman, J., 203n Fai, K., 198n Fairhurst, G. T., 508n Fairley, J., 122n, 569n Falbe, C. M., 440n Falk, C. F., 196n Falk, D. W., 232n Fandt, P. M., 442n, 443n Fanelli, A., 404n Farber, Henry, 156 Farh, C. I. 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S., 235n, 236n, 268n, 303n, 615n Goodstein, J., 541n Goodwin, V. L., 234n Gopalan, R., 243n Gordon, A. H., 126n Gordon, G. G., 538n Gordon, M., 412n Gordon, W. J. J., 199n Gordono, F. S., 54 b Gore, J. S., 260n Górska-Kolodziejczyk, El´zbieta, 528 f Gosling, S. D., 159n Gottesman, I. I., 159n Gottfredson, G. D., 162n Gottfredson, L. S., 66n Goudreau, J., 564n Gough, O., 87n Gouvier, W. D., 66n Govan, C. L., 477n Goyette, K. A., 64n Graeff, C. L., 402n Graen, G. B., 403n Gramzow, R. H., 195n Grandey, A., 108b, 127n, 129n Grandey, A. A., 127n, 129n, 614n Granhag, P. A., 356n, 365n Grant, A., 94n, 534n, 575n Grant, A. M., 158n, 160n, 161n, 266n Grant, Adam, 534 b Grant, D., 612n Grantham, Bronwyn, 329 Grant-Vallone, E., 573n Gratton, L., 333n Gratton, Linda, 87 Gratz, K. L., 126n Grawitch, M. J., 128n Gray, B., 365n, 476n Gray, H. M., 128n Grayson, C., 198n George, E., 64n, 94n, 196n, 302n George, J. M., 94n, 128n, 129n, 199n, 234n, 401n Gergen, K., 236n Gerhardt, M. W., 401n Gerhart, B., 30n, 36n, 95n, 268n, 571n Gerloff, E. A., 509n Gersick, C. J. G., 302n Gerstner, C. R., 403n Gettman, H., 477n Geyelin, M., 476n Ghiselli, E. E., 571n Giacalone, R. A., 432n, 442n, 541n Giacobbe-Miller, J. K., 236n Giacobbi, P. R., 126n Giacomantonio, M., 477n Giancola, F., 268n Giangreco, A., 612n Giannakakis, A. E., 292n Gibbs, J. L., 508n Gibson, C. B., 302n, 332n, 378n, 508n Gibson, D. E., 125n Gibson, G. B., 326n Gibson, J. L., 304n Gibson, S. K., 408n Giebels, E., 365n Giessner, S. R., 440n Gigerenzer, G., 197n Giglio, G., 613n Gigone, D., 305n Gilboa, S., 615n Giles, W. F., 330n Gilkey, R., 127n Gillispie, Billy, 396 Gilman, M., 268n Gilmore, D. C., 443n Gilovich, T., 197n Gilson, K. K., 330n Gilson, L., 329n Gilson, L. L., 199n, 330n Gilstap, J. B., 432n, 442n Giluk, T. I., 36n Gimein, M., 540n Gino, F., 158n, 574n Gioia, D. A., 302n Gittell, J. H., 507n Gladwell, M., 198n Gladwell, Malcolm, 182 Glasman, L. R., 92n Glast, F., 454n Glater, J. D., 571n Gleason, M. E., 204n Gleaves, D. H., 159n Gleibs, I. H., 539n Glibkowski, B. C., 407n Glick, W. H., 196n, 304n, 509n Glomb, T. M., 93n, 303n, 475n, 614n Goates, N., 475n, 477n Goerke, M., 195n Gogus, C. I., 612n Fulmer, I. S., 36n, 94n, 160n Fulmer, R. M., 406n Furnham, A., 160n G Gaertner, S., 66n, 94n, 236n Gage, Phineas, 102 Gagné, M., 233n, 614n Gailliot, M. T., 198n Gaines, J., 538n Galagan, P., 573n Galang, M. C., 442n Galarcep, I., 332n Galbraith, J. R., 508n Galbreath, J., 63n Gale, S. F., 539n Galinsky, A. D., 199n, 234n, 476n, 477n Gallagher, P., 159n Gallo, D. D., 402n Galunic, D. C., 509n Galvin, B. M., 160n, 404n Gamero, N., 475n Gamm, L. D., 235n Gan Kleef, G. A., 477n Gangestad, S. W., 161n Gans, Keri, 564 Ganster, D. C., 613n Ganzach, Y., 67n Garcia, S., 539n García-Morales, V. J., 404n Garcia-Zamor, J.-C., 541n Gard, M. G., 126n Gardner, A., 564n Gardner, W. L., 403n, 405n, 442n Gardner, W. T., 126n Gärling, T., 198n Garrett, R. P., 269n Garrosa, E., 614n Garst, H., 613n Garvey, C., 235n Garza, A. S., 233n, 234n Gasparino, C., 40n Gates, B., 364n Gates, Bill, 103 , 398 , 436 b, 519 Gates, Robert, 306 Gaugler, B. B., 572n Gavin, J. H., 64n, 332n Gavin, M. B., 407n, 441n Gawande, Atul, 191 b Gebert, D., 67n, 332n Geddes, D., 122n, 127n, 129n Gefter, J., 441n Gehmawat, P., 489n Geier, J. G., 401n Geis, F. L., 160n Geletkanycz, M. A., 540n Gelfand, M., 477n Gelfand, M. J., 93n, 162n, 236n, 476n Gellatly, I. R., 66n Geller, E. S., 234n I N D E X E S 645 Harris, T. B., 572n Harrison, D. A., 64n, 67n, 92n, 93n, 94n, 95n, 143b, 233n, 330n, 332n, 475n, 541n Harrison, J. R., 540n Hart, P. M., 613n Hart, W., 197n Hartel, C. E. J., 125n, 127n Harter, J. K., 83b, 93n, 94n, 233n, 541n Hartke, D. D., 402n Hartman, L. P., 406n Hartnell, C. A., 388n, 406n, 538n Harvey, J., 234n Harvey, M. G., 405n Harvey, P., 129n, 195n Harvey, R. J., 159n Harvey, S., 404n Haselhuhn, M. P., 477n Haslam, S. A., 303n Hastie, R., 305n Hastings, R. R., 66n, 298n Hatfield, J. D., 236n Hauenstein, M. A., 160n Hausenblas, H. A., 126n Hauser, M., 404n Hauserman, N., 441n Hausknecht, J. P., 93n, 94n, 571n Haviland, J. M., 125n Haviland-Jones, J. M., 128n Hawver, T. H., 401n Hayes, L. J., 269n Hayes, T. L., 93n, 94n, 233n Haynes, D., 129n He, D., 540n He, X., 198n Head, J., 614n Healey, A., 66n Healy, J., 196n Heaphy, E., 37n Heaphy, E. D., 37n Heath, C., 36n Hebl, M. R., 65n, 67n Hedberg, B., 508n Hedge, J. W., 574n Hedlund, J., 331n Heidemeier, H., 574n Heilman, M. E., 65n, 196n Heim, K., 436n Heimpel, S. A., 128n Heine, S. J., 196n, 440n Helfat, C. E., 507n Heller, D., 266n Heller, F., 267n Hellweg, S. A., 365n Hemmasi, M., 143 b Heneman, H. G., III, 196n, 237n Henley, N. M., 363n Henneman, T., 364n Hensel, R., 574n Hepper, E. G., 195n H Hackel, S., 471n Hackett, R. D., 93n Hackman, J. R., 244e, 263n, 266n, 303n, 330n, 540n, 615n Hackman, Richard, 240 – 241 , 328 Hage, J., 509n Hagedoorn, M., 613n Hahn, U., 198n Hahn, V. C., 601n, 615n Haidt, J., 126n Hakanen, J. J., 615n Halbesleben, B., 234n Halbesleben, J. B., 614n Halbesleben, J. R. B., 442n Hale, J. L., 305n Hall, A. T., 441n Hall, D. T., 232n, 407n Hall, E. T., 365n Hall, J. E., 364n Hall, R. J., 442n Halrynjo, S., 65n Halverson, K. C., 404n Ham, J., 442n Hambley, L. A., 408n Hambrick, D. C., 540n Hamdani, M. R., 473n, 475n Hamel, G., 611n Hamilton, A. L., 302n Hamilton, D. L., 196n Hamilton, K., 332n Hamm, S., 235n Hammen, C., 614n Hammer, L. B., 574n Hammond, Larry, 527 Hampson, S. E., 159n, 162n Han, J., 574n Han, T., 268n Haney, C., 303n Hanges, P., 405n Hanges, P. J., 67n, 163n, 196n Hanke, K., 210n Hankin, B. L., 195n Hannah, S. T., 541n Hannan, M. T., 611n Hansen, M. T., 301n Hansson, J., 508n Harding, D. J., 305n Hardman, D., 197n Hardy, C., 612n Hargis, M. B., 575n Harkins, S. G., 234n, 304n Harold, C. M., 236n Harrell, M. M., 266n Harries, C., 197n Harrington, A., 613n Harrington, B., 575n Harris, K. J., 406n, 441n, 442n, 443n Harris, P. R., 304n, 509n Harris, S. G., 615n Grazioplene, R., 181n Green, B. A., 159n Green, S. G., 127n, 304n, 403n Greenbaum, R., 37n, 541n Greenberg, Hank, 381 Greenberg, J., 235n, 236n, 404n Greenberg, M., 236n Greenberg, Spencer, 164 , 165 f Greenglass, E. R., 615n Greenhouse, S., 37n, 569n, 607n Greenstein, F. I., 127n Greenwald, J., 364n Greer, L., 475n, 476n Gregersen, H., 143 b Gregory, G., 328n Greguras, G. J., 92n, 127n, 233n Grensing-Pophal, L., 539n Grewel, D., 127n Griffeth, R. W., 66n, 94n, 236n Griffin, M. A., 613n Griffin, R. W., 199n, 266n, 283e, 303n Griffith, J. M., 235n Griffith, J. W., 614n Griffith, T. L., 359n Grijalva, E., 155n Griskevicius, V., 232n, 365n Grizzle, J. W., 539n Gröpel, P., 615n Gross, J. J., 107b, 126n, 128n Grosser, T. J., 364n Grossman, M., 126n Grossman, R., 235n Grossman, R. J., 64n Grover, M. B., 65n Gruenfeld, D. H., 476n Gruys, M. L., 508n, 541n Grynbaum, M. M., 196n, 264n Grzywacz, J. G., 266n Guerrero, S., 302n Guilbault, R. L., 198n Guillaume, C., 65n Gullo, K., 90n Gumbel, P., 539n Gunia, B. C., 477n Gunnthorsdottir, A., 304n Gunz, S., 258n Gupta, N., 268n, 509n Gupta, Rajat, 410 , 411 f Gupta, S., 329n Gupta, V. K., 196n Gurau, C., 291n Gurchiek, K., 364n, 572n Gurtner, A., 332n Gustafson, D. H., 305n Guthrie, J. P., 268n, 496n, 508n Guttman, H. M., 333n Guzman, M. J., 266n Guzzo, R. A., 305n Gwin, Donna, 474 646 I N D E X E S Hudy, M. J., 93n Huff, C., 364n Huff, J. W., 266n Huffcutt, A. I., 572n Hughes, S., 314n Hui, C., 302n Huismans, S. E., 476n Hulin, C., 441n Hulin, C. L., 234n Hülscheger, U. R., 66n Humberd, B., 575n Humke, A., 441n Humphrey, R. H., 125n, 401n Humphrey, S. E., 36n, 67n, 93n, 126n, 129n, 198n, 266n, 267n, 330n, 331n, 333n Hung, J., 614n Huning, T. M., 615n Hunsinger, D., 200n Hunsinger, M., 196n Hunt, J. G., 404n Hunter, E. M., 601n Hunter, J., 571n Hunter, J. E., 67n, 232n, 235n, 571n Hunter, L. W., 613n Huo, Y. J., 236n Huonker, J. W., 267n Hurst, C., 94n, 158n, 160n Hurtz, G. M., 159n Huselid, M. A., 571n Huseman, R. C., 236n Hutcherson, C. A., 126n Hutchins, H. S., 573n Huxham, C., 612n Huy, Q. N., 612n Hyatt, D. E., 330n, 332n Hyde, J. S., 195n, 198n Hymowitz, C., 329n, 507n I Iaconi, G. D., 283 e Iansiti, M., 613n Ibar, Y., 197n Ibish, H., 43 e Ignatius, A., 610n Iida, M., 204n Ilgen, D. R., 67n, 302n, 331n, 332n, 333n, 509n Ilies, R., 94n, 128n, 129n, 159n, 160n, 266n, 314n, 401n, 402n, 403n, 406n, 441n Illies, R., 614n Immelt, J., 22 Immelt, Jeff, 428 b Inglehart, R. F., 162n Irani, Ray, 243 b Irwin, J. L., 93n Isaacowitz, D. M., 128n Isen, A. M., 126n, 128n, 129n, 475n Isenberg, D. J., 305n Hofstede, G., 162n, 163n, 232n, 304n Hofstede, Geert, 150 Hogan, J., 159n Hogan, R., 160n Hogan, R. T., 159n Hoge, W., 37n Hogg, M., 302n Hogg, M. A., 302n, 303n Holden, E. W., 65n Holladay, C. L., 67n, 235n Holland, B., 159n Holland, E., 159n Holland, J. L., 162n Holland, John, 148 Holland, K., 95n Hollander, E. P., 406n Hollenbeck, J. R., 67n, 198n, 234n, 305n, 331n, 333n, 509n Hollingshead, A. B., 305n Holman, D., 126n Holmes, E. K., 604n Holtz, B. C., 236n Hom, P. W., 65n, 66n, 94n Hom, W., 94n Homan, A. C., 67n, 320n, 476n Hong, Y., 108b, 406n, 518n Hong, Y. Y., 196n Hopkins, Jim, 363 Horner, M. T., 574n Horwitz, I. B., 67n, 331n Horwitz, S. K., 67n, 331n Hosking, D. M., 612n Hoskins, Diane, 113 f Hosmer, L. T., 406n Hough, L. M., 303n, 453n, 474n Hourigan, S., 364n House, R. J., 163n, 232n, 237n, 401n, 402n, 403n, 404n, 405n House, Robert, 376 , 379 Houston, J. M., 402n Houston-Philpot, K., 407n Howard, A., 126n, 508n, 574n Howard, J. L., 442n Howell, A. W., 613n Howell, J. M., 403n, 404n, 405n, 406n, 409n, 613n Howell, J. P., 402n, 408n Ho-Ying, J., 406n Hsee, C. K., 197n Hsiao, Y. P., 196n Hsieh, T., 538n Hsieh, Tony, 229 b, 520 f Hu, J., 388n, 406n Hu, L., 305n Hu, Q., 614n Huang, J., 405n Huang, Y., 304n Huang, Y.-M., 129n Huber, G., 196n Huber, G. P., 304n, 509n Herbst, M., 36n Hernández, E. G., 12n Hernández, M., 67n, 539n Herold, D. M., 612n Herper, M., 142 b Herrbach, O., 302n Hershey, J. C., 407n Hertel, G., 332n Herzberg, F., 232n Herzberg, Frederick, 205 – 206 Heskett, J., 74 b Hess, A. M., 508n Hess, J. A., 127n Hesselbein, F., 540n Hetland, H., 405n Hewlett, S. A., 611n Hewlin, P. F., 304n, 365n Hezlett, S. A., 407n, 408n Hicks, J. A., 197n Higgins, C. A., 159n, 440n, 443n, 613n Higgins, E. T., 407n, 440n Higgins, L. H., 196n Higgins, M., 476n Higgins, M. J., 508n Higgs, C. A., 330n Highhouse, S., 612n Hill, Dan, 124 Hill, E. J., 267n, 604n Hill, G. W., 305n Hill, T. E., 365n Hiller, N. J., 93n, 94n, 161n Hilton, J. L., 196n Hinds, P. J., 476n Hinings, C. R., 612n Hinkin, T. R., 404n, 440n Hirschfeld, R. R., 330n, 332n Hirschhorn, L., 344 e Hirschman, C., 363n Hirst, G., 199n Hite, B., 162n Hmieleski, K. M., 197n Ho, S. S., 236n Hobson, W., 301n Hochschild, A. R., 127n Hochtief, 354 f Hochwarter, W., 539n Hochwarter, W. A., 65n, 440n, 441n, 442n, 615n Hodgetts, R. M., 9n, 36n Hodson, R., 93n Hoegl, M., 199n Hoel, H., 264n Hoffman, B. J., 92n, 94n, 162n Hoffman, D. A., 538n Hoffman, L. R., 477n Hoffman, M. E., 575n Hoffman, R. L., 476n Hofman, D. A., 158n Hofmann-Towfigh, N., 161n Hofmeister, A., 468n I N D E X E S 647 Kammeyer-Mueller, J. D., 93n, 161n, 196n, 408n, 508n, 540n, 614n Kamprad, Ingvar, 519 Kanagawa, C., 260n Kanar, A. M., 573n Kandola, Binna, 87 Kane, K., 161n Kanfer, R., 234n, 330n Kanso, R., 181n Kanter, R. M., 440n, 613n Kanungo, R. N., 380e, 403n, 409n Kapko, M., 474n Kaplan, S., 129n Kaplan, S. N., 158n Kappes, H. B., 204n Kaps, S. C., 475n Kaptein, M., 526n Karaevli, A., 612n Karagonlar, G., 403n Karalakulasingam, C. J., 269n Karau, S. J., 304n Kashlak, R., 36n Kashy, D. A., 365n Kass, N., 405n Katerberg, R., 302n Katigbak, M. S., 160n Kato, T., 266n Katz, R. L., 36n Katzenbach, J. R., 329n Kauhanen, A., 267n Kaymaz, K., 266n Kearney, E., 67n, 332n Keating, J. E., 195n Keegan, A. E., 404n Keeping, L. M., 574n Kelleher, Herb, 381 , 519 Keller, B., 268n Keller, M. C., 126n Keller, R. T., 405n Kelley, H. H., 195n Kelloway, E. K., 93n, 405n, 409n Kelly, E., 67n Kelly, S., 561n Kelner, S., 128n Kemmler, G., 65n Kendall, D., 332n Kennedy, D. A., 159n Kennedy, J. C., 440n, 574n Kennedy, J. K., 402n Kennedy, John F., 379 , 386 Kennedy, R. B., 159n Kenny, D. A., 401n Kenrick, D. T., 127n, 232n Keoun, B., 506n Kern, W., 400n Kerr, N. L., 305n Kerr, S., 395e, 508n Kerschreiter, R., 305n Kersting, M., 66n Kessels, J., 574n Johnson, D. E., 404n Johnson, E. C., 571n Johnson, K., 126n Johnson, M., 364n Johnson, M. D., 94n, 160n, 266n, 302n, 305n, 333n Johnson, P. D., 539n Johnson, R., 94n Johnson, S. L., 196n Johnson, W., 159n Johnston, A. M., 61n Joiner, T. E., 161n Jokisaari, M., 615n Jonas, E., 197n Jonas, K., 442n Jondle, D., 37n, 541n Jones, C. J., 160n Jones, D., 125n, 401n, 407n Jones, D. A., 236n Jones, D. C., 267n Jones, E., 195n Jones, J. R., 614n Jones, J. W., 614n Jones, K., 400n Jones, L. M., 538n Joni, S. A., 473n Jordan, A. H., 107 b Jordan, M. H., 330n Jorm, A. F., 65n Joseph, D. L., 127n, 128n Joshi, A., 67n, 291n, 331n Joss, Robert, 505 Joyce, W. F., 509n Judd, C. M., 305n Judge, T. A., 36n, 82e, 94n, 126n, 128n, 129n, 158n, 159n, 160n, 161n, 162n, 196n, 197n, 233n, 235n, 266n, 272n, 383e, 401n, 402n, 404n, 405n, 408n, 440n, 443n, 540n, 571n, 614n Jundt, D., 333n Jung, Andrea, 382 Jung, D. I., 332n, 404n, 406n Jung, R. E., 181n Jurkiewicz, C. L., 541n Justin, J. E., 408n K Kabanoff, B., 402n Kacmar, C. J., 305n, 441n Kacmar, K. M., 65n, 406n, 432n, 441n, 442n, 443n Kahai, S. S., 408n Kahn, W. A., 233n Kahneman, D., 197n, 198n, 301n Kalbfleisch, P. J., 363n Kalev, A., 67n Kalmi, P., 267n Kamdar, D., 477n Kamin, A. M., 92n Islam, G., 540n Ivancevich, J. M., 234n, 304n, 615n Iverson, R. D., 93n, 129n, 406n, 508n Iwata, Satoru, 139 f Iyengar, S. S., 197n Izard, C. E., 125n J Jabbour, C. J. C., 54 b Jackson, C. L., 235n, 331n, 332n, 613n Jackson, M. R., 67n Jackson, S. E., 571n Jackson, T., 199n Jacobshagen, N., 615n Jaffe, D., 303n Jago, A. G., 402n, 403n Jakupcak, M., 126n James, A., 198n James, L. R., 159n, 408n, 539n Janis, I. L., 161n, 305n Janiszewski, C., 197n Jansen, K. J., 540n Janssen, O., 613n Janssens, M., 302n Jaramillo, J. F., 541n Jarrett, C., 107 b Jauhar, S., 191n Jauhar, Sandeep, 191 b Javers, E., 438n Javidan, M., 163n, 401n, 402n, 404n, 405n Jawahar, I. M., 574n Jaworski, R. A., 304n, 331n Jay, C., 475n Jayson, S., 65n, 194n Jefferson, Thomas, 386 Jehn, K. A., 474n, 475n, 476n, 538n Jenkins, G. D., Jr., 268n Jensen, J. M., 302n Jensen, M. C., 302n Jenson, A. R., 66n Jeong, S. S., 161n, 474n Jepperson, R. L., 539n Jermier, J. M., 395e, 538n Ji, L., 171n Jianzhou, Wang, 393 f Jick, T., 508n Jimenez-Rodriguez, M., 330n Jobs, Steve, 24 b, 243 b, 369 , 379 , 380 , 381 , 396 , 398 , 436 b, 506 Johannesen-Schmidt, M. C., 383 e Johll, N. L., 305n John, O. P., 107b, 128n, 159n Johns, G., 30n Johns, T., 507n Johnsen, T. B., 405n Johnson, A. B., 364n Johnson, B. T., 364n Johnson, C. E., 209n 648 I N D E X E S Krieger, L. S., 573n Kring, A. M., 126n Krings, F., 441n Krischer, M. M., 601n Krisensen, T. S., 614n Kriska, S. D., 443n Kristof, A. L., 443n Kristof-Brown, A. E., 405n, 571n Krizan, Z., 305n Kroeck, K. G., 405n Krueger, J. I., 292n Kruger, J., 197n Kruglanski, A., 308n Kruglanski, A. W., 197n, 407n, 440n Kruml, S. M., 129n Kruse, D., 267n, 269n Kuchinsky, David, 474 Kuenzi, M., 37n, 541n Kuhn, K. M., 268n Kulik, C. T., 235n Kullman, Ellen, 580 Kumar, K., 331n Kumar, N., 236n Kunstman, J. W., 441n Kunze, F., 65n Kurke, L. B., 615n Kurland, N. B., 363n Kurman, J., 234n Kurtzberg, T. R., 365n Kurz, Tony, 90 Kwon, S., 477n Kwong, J. Y. Y., 197n, 198n, 574n L Labedo, O. J., 442n Labianca, G., 364n Labianca, J., 345n Labianca, Joe, 345 b Labich, K., 65n Labroo, A. A., 129n, 475n LaChapelle, M., 571n Lachnit, C., 571n Ladika, S., 359n Lafley, A. G., 24 b, 214 , 401 LaFrance, M., 126n LaGanke, J., 305n Lam, S. S. K., 67n, 92n, 330n, 405n, 406n Lam, W., 403n Lambert, L., 541n Lambert, L. S., 162n, 171n Lamborghini, Ferruccio, 417 Lampel, J., 489n Lämsä, A., 573n Lance, C. E., 162n Landers, R. N., 571n Landy, F. J., 128n, 237n Lane, S. P., 204n Lang, J., 66n Klotz, A. C., 473n, 475n Knafo, A., 162n Kniffin, K. M., 345n Knight, A. P., 304n, 331n Knight, Bobby, 103 Knopoff, K., 125n Ko, C. E., 539n Kobata, M. T., 364n Kocieniewski, D., 428n Kock, N., 364n Koenig, A. M., 408n Koestner, R., 233n Kofman, F., 613n Koh, C., 574n Koh, W., 92n, 405n Kohles, J. C., 408n Kolb, D. A., 233n Kolodinksy, R. W., 440n, 441n, 541n Komaki, J. L., 235n Konrad, A. 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S., 124n LeRouge, C., 500n, 508n Lescornez, Philippe, 528 – 529 Leslie, L. M., 65n, 67n Lester, S. W., 161n Leung, A. K., 199n Leung, K., 236n Lev-Arey, D., 65n, 67n Leventhal, G. S., 236n Levering, R., 540n Levi, R., 330n Levin, B., 2n, 406n Levin, R., 269n Levine, D., 90n Levine, J. M., 304n Levine, S., 475n, 476n Levine, T. R., 365n Levitz, J., 43 e Levy, P. E., 160n, 161n, 442n, 574n Lewicki, R., 476n Lewicki, R. J., 477n Lewin, K., 612n Lewin, Kurt, 584 Lewis, A., 198n Lewis, K., 403n Lewis, K. M., 128n Lewis, M., 125n, 128n Lewis, M. W., 612n Li, C., 196n Li, N., 161n Li, W., 540n Li, Y., 476n Liang, J., 93n, 161n Liao, H., 36n, 291n, 303n, 475n, 508n, 518n Liao, Y., 515n Lichtenstein, S., 197n Liden, R. C., 304n, 331n, 388n, 403n, 406n Liden, Wayne, 403n Lang, J. W. B., 66n, 612n Lang, Z., 301n Langan-Fox, J., 305n, 363n Langfred, C. W., 330n Langhout, R. D., 441n Lanzara, G. F., 539n Lapedis, D., 266n Lapierre, L. 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H., 95n LeHew, C. W., 268n Lehman Brothers, 38 , 182 f, 579 Lehrer, J., 398n, 436n Lei, L., 476n, 477n Leiponen, A., 507n 650 I N D E X E S Maslow, A., 232n Maslow, A. H., 203n Maslow, Abraham, 203 – 204 Mason, P. A., 540n Masterson, S. S., 403n Masuda, A. D., 266n Mathe, K., 539n Mathieu, J., 291n, 329n Mathieu, J. E., 302n, 330n, 332n Matousek, A., 283 e Matson, E., 304n Matsumoto, D., 108 b Matsushita, 417 Matteson, M. T., 615n Matthews, R. A., 575n Matthews, V., 540n Mattioli, D., 47f, 512n Maue, B., 198n Maurer, J. G., 161n Maurer, S. D., 572n Maurer, T. J., 64n Mausner, B., 232n Mauws, M. K., 539n, 613n Maxfield, M., 404n May, D. R., 405n Mayer, D. M., 37n, 65n, 67n, 160n, 304n, 406n, 407n, 440n, 541n Mayer, J. D., 127n, 128n Mayer, R. C., 406n, 407n Maynard, M. T., 329n, 330n Mayo, E., 303n Mayo, M., 404n Mayville, S., 66n Mazerolle, M. D., 159n Mazzetti, M., 308n McCann, D., 331n McCarthy, D., 269n, 401n McCarthy, D. J., 541n McCarthy, J., 534n McCarthy, J. 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F., 304n, 305n, 476n I N D E X E S 651 Moore, S. E., 365n Moran, R. T., 304n, 509n Moregeson, F. P., 572n Moreland, R. L., 304n Moreno-Jiménez, B., 12n, 614n Morgan, H. J., 125n Morgan, P. M., 476n Morgan Stanley, 52 Morgenson, G., 198n Morgeson, F. P., 36n, 93n, 266n, 267n, 302n, 314n, 331n, 403n, 406n, 509n, 571n Mori, Ikuo, 466 f Morris, C. G., 199n Morris, M. A., 66n, 67n Morris, M. W., 196n, 477n Morrison, D., 93n Morrison, E. W., 302n, 365n, 540n Morrison, S., 503n Morrison, T. G., 442n Mortinussen, M., 614n Mosakowski, E., 331n Moscoso, S., 66n, 571n Moser, K., 574n Moskowitz, M., 540n Mossholder, K. W., 260n, 475n Motowidlo, S. J., 614n Mount, M. K., 36n, 92n, 159n, 331n, 571n, 572n, 574n Mowday, R. T., 236n, 539n Mowen, J. C., 539n Moyer, L., 537n Moynihan, D. P., 92n Mroczek, D., 147 b Muccino, A., 540n Muir, N. K., 475n, 509n Mulcahy, Anne, 510 Mulki, J. P., 541n Mullen, B., 304n, 305n Mulligan, C. B., 200n Mullin, B. A., 302n Mullins, M. E., 613n Mumby, D. 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K., 539n Minton-Eversole, T., 572n Mintzberg, H., 6, 7n, 36n, 440n, 441n, 508n Miquelon, P., 615n Mirabile, M., 544n Misangyi, V., 404n Misangyi, V. F., 404n Mitchell, A., 37n Mitchell, A. A., 408n Mitchell, Dawn, 567 b Mitchell, J. A., 541n Mitchell, M. S., 232n Mitchell, T. R., 234n, 237n, 363n, 402n Mitra, A., 268n Mitroff, I. A., 541n Mitsuhashi, H., 509n Mittal, V., 198n Miyamoto, Y., 443n Moberg, D. J., 199n Moede, W., 304n Moeller, N. L., 266n Mohammed, S., 331n, 332n Mojza, E. J., 601n, 615n Mojzisch, A., 305n Mol, M. J., 611n Molenaar, P. C. M., 613n Moller, J., 195n Mondore, S., 539n Money, W. H., 402n Monge, P. R., 267n, 613n Monin, B., 107 b Moon, H., 198n, 331n, 440n, 477n, 509n Moore, D. A., 197n, 258n, 476n Moore, H., 575n Moore, L. F., 538n McGonigal, K. M., 128n McGrath, J. E., 305n, 364n McGrath, R. G., 24n, 507n McGregor, D., 232n McGregor, Douglas, 205 McGrew, J. F., 302n McGurk, D., 305n McIlroy, A., 181n McIntrye, J. M., 233n McKay, P. 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H., 195n, 198n Michaels, Randy, 536 Michaelsen, L. K., 331n Michalcova, S., 613n Michel, J. S., 575n 652 I N D E X E S Ong, M., 234n Ono, Y., 160n Oore, D. G., 573n Opland, R. A., 302n Oppenheimer, D. M., 197n Opt, S. K., 365n Ordóñez, L. D., 234n Oreg, S., 612n O’Reilly, C. A., 67n, 163n, 539n O’Reilly, C. A., III, 331n, 538n Ormiston, M. E., 440n Ornstein, S., 236n Ortega, J., 266n Örtqvist, D., 615n Orvis, K. A., 573n Oryol, V. E., 160n Osborn, A. F., 305n Ostroff, C., 94n, 196n, 235n, 539n, 540n, 571n O’Sullivan, M., 127n Oticon A/S, 493 Ott, E., 126n Ou, A. Y., 30n, 93n, 538n Oumlil, A. B., 37n Ouwerkerk, J. W., 120 b Overbeck, J. R., 477n Ozer, M., 403n P Packard, J. S., 614n Paddock, E. L., 236n Padgett, M. Y., 65n Paese, P. W., 305n Paetzold, R. L., 66n Page, Larry, 158 , 503 b Page, R., 572n Paine, J. B., 94n Palestrant, Daniel, 525 f Palmer, D. K., 572n Palmer, K., 266n Palmieri, P. A., 441n Pan, P. P., 268n Panaccio, A., 540n Pandey, A., 496n Pandey, S. K., 92n Papper, E. 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M., 37n Spychalski, A. C., 572n Srinivasan, D., 408n Srivastava, S., 128n, 159n, 330n Shteigman, A., 302n Shuffler, M., 330n Shulkin, D. J., 269n Shulkin, S., 266n Sibony, O., 301n Sillito, S. D., 305n Silver, S. D., 304n Silver, S. R., 92n, 267n Silver, T., 266n Silver, W. S., 234n Silverstein, S., 441n Silverthorne, C., 614n Sim, J., 406n Simmonds, D., 378n Simmons, J. P., 197n Simon, B., 538n Simon, H. A., 170, 196n, 197n Simons, T., 236n Simpson, J. A., 406n, 407n Simpson, R. L., 363n Simsek, Z., 404n, 405n, 539n Sin, H., 127n Sinangil, H. K., 65n, 129n, 363n, 612n, 613n Sinar, E. F., 93n Sinclair, R. C., 365n Sine, W. D., 509n Sippola, A., 67n Sitkin, S. B., 36n, 406n Sitzman, T., 573n Sitzmann, T., 573n Siu, O., 76b, 405n Sivaprasad, L., 269n Sivasubramaniam, N., 405n Skarlicki, D. P., 236n Skilling, Jeff, 386 Skinner, B. F., 235n Slack, T., 612n Slaughter, J. E., 233n, 234n Slocum, J. W., 541n Slocum, J. W., Jr., 538n Slovic, P., 197n, 198n Sluiter, J. K., 615n Smale, A., 67n Small, D. A., 477n Smith, A. D., 476n Smith, A. K., 197n Smith, D. B., 162n, 540n, 572n Smith, D. K., 329n Smith, D. M., 127n Smith, Fred, 519 Smith, J., 123n Smith, J. A., 402n Smith, Jim, 123 Smith, K. G., 269n, 612n Smith, M. A., 159n Smith, Morgan, 371 f Smith, N. R., 233n Smith, P. B., 236n, 303n, 358n Smith, P. C., 93n, 126n Shaffer, J. A., 571n Shaffer, M. A., 143b, 269n Shafir, E., 197n Shah, A., 330n Shah, A. K., 197n Shalhoop, J., 161n Shallenbarger, S., 96n Shalley, C. E., 199n Shamir, B., 404n, 405n Shane, S., 613n Shani, A. B., 196n Shanock, L. R., 236n Shapiro, D. A., 475n Shapiro, D. L., 332n, 407n Shapiro, H. J., 237n Sharma, E. K., 573n Sharma, R. T., 96n Sharma, S., 123n Shaver, P. R., 125n Shavitt, S., 440n Shaw, J. C., 82e, 235n, 236n Shaw, J. D., 268n, 304n, 332n, 441n, 443n, 475n, 509n Shaw, M. E., 304n Sheehan, M. K., 574n Sheikh, S., 198n Sheldon, K. M., 210n, 233n, 573n Shell, A., 166n Shellenbarger, S., 37n, 123n, 267n Shenkar, O., 509n Shepherd, L., 269n Sheppard, L., 509n Shepperd, J. A., 304n Sherman, M. P., 305n Shevell, Nancy, 264 Shi, K., 76b, 405n, 540n Shi, L., 614n Shields, J. L., 269n Shiflett, S., 402n Shih, H., 475n Shiller, R. J., 198n, 301n Shiller, Robert, 301 Shin, S. J., 331n, 404n Shin, Y., 508n Shiota, M. N., 365n Shipley, M. J., 614n Shipp, A. J., 162n, 171n, 540n Shipper, F., 36n, 613n Shirako, A., 467n Shirom, A., 615n Shishkin, P., 43 e Shiv, B., 129n Shleicher, D. J., 161n Shmulyian, S., 94n, 539n Shockley, K. M., 266n Shonk, J. H., 329n Shonk, K., 124n Shore, L. M., 403n Shotland, A., 573n Shrout, P. E., 204n I N D E X E S 657 Tanlu, L., 258n Tannenbaum, S. I., 573n Tapon, F., 269n Taras, V., 162n Taris, T. W., 614n Tasa, K., 332n Taskin, L., 267n Tatcher, J. B., 441n Tate, G., 160n Tausky, C., 93n Taylor, A., 480n, 538n, 613n Taylor, G. S., 94n Taylor, H., 573n Taylor, P., 540n Taylor, P. J., 365n, 573n Taylor, R. N., 161n Taylor, S., 162n, 572n Teel, K. S., 574n Tekleab, A. G., 476n Tellegen, A., 126n Ten Velden, F. S., 477n Tenant, Kate Riley, 439 Tenbrunsel, A. E., 194n, 258n Tenne-Gazit, O., 405n Tepper, B. J., 209n, 402n Tepper, Bennett, 232 Terry, D. J., 302n, 303n Tesluk, P. E., 330n, 476n Tetrault, L. A., 402n Tetrick, L. E., 403n Tett, R. P., 163n Thain, John, 182 Thakor, A. V., 243n, 538n Thatcher, J. B., 443n Thatcher, S. M. B., 613n Thau, S., 232n Thayer, S. K., 404n Thelen, N., 197n Thierry, H., 197n, 237n, 404n Thomas, J. B., 302n Thomas, K., 326n, 453n Thomas, K. W., 474n, 476n, 477n Thomas, M. D., 612n Thomas, S. C., 571n Thompson, E., 544n Thompson, J. R., 268n Thompson, K. R., 539n Thompson, L., 330n, 477n Thompson, L. J., 185n Thoresen, C. J., 94n, 159n, 571n Thoresen, J. D., 571n Thorman, Rebecca, 156 Thornton, M., 200n Thurm, S., 243n Thurow Kröning, B., 198n Tierney, B. W., 508n Tierney, J., 61n Tierney, P., 235n Tillquist, K., 157, 158n Tilstone, P., 315n Strack, F., 198n Straus, S. G., 364n Straus, S. S., 330n Strauss, G., 267n Strauss, J. P., 92n, 159n Streib, G., 235n Stride, C. B., 571n Stroh, L. K., 36n Stross, R., 364n Stuhlmacher, A. F., 477n Sturges, Jonathan, 164 , 165 f Sturman, M. C., 37n Su, Z., 420n Subirats, M., 538n Subramanian, N., 198n Subramony, M., 266n Subway, 55 Sue-Chan, C., 234n Suh, E. M., 160n Sullenberger, Sully, 398 Sullivan, K., 204n Sulsky, L. M., 574n Summers, Larry, 61 Sundstrom, E., 333n Surface, E. A., 235n, 268n Surowiecki, J., 36n Susanto, E., 475n Suttle, J. L., 232n, 244e, 266n, 540n Sutton, C., 614n Sutton, C. D., 162n Sutton, J. M., 614n Sutton, R. I., 12n, 388n Suzuki, A., 160n Sverdlik, N., 612n Swann, W. B., Jr., 364n Swartz, J., 359n Sweeney, B., 541n Swider, B. W., 572n Sy, T., 129n, 508n Symons, C., 305n Sytsma-Jordan, S., 66n Szalavitz, M., 107 b Szulanski, G., 475n, 476n Szymanski, K., 304n T Taber, T. D., 403n Taggar, S., 332n Taggart, J., 269n Tait, M., 65n Takemura, K., 196n Takeuchi, K., 267n Takeuchi, R., 267n Tamir, M., 128n Tamkins, M. M., 196n Tan, C., 406n Tan, C. S. F., 407n Tan, H. H., 210n, 407n Tangirala, S., 364n, 365n, 407n Tanikawa, M., 235n St. Clair, L., 36n Stack, J., 269n Stagl, K. C., 332n Stahl, G. K., 462n Stahl, M. J., 233n Stajkovic, A. D., 234n, 235n, 269n Stalker, G. M., 508n Stankov, L., 127n, 128n Stanovich, K. E., 198n Stanton, J. M., 126n, 267n Staples, D. S., 304n Stark, E. M., 304n, 332n Staudinger, U., 126n Staw, B. M., 93n, 125n, 198n, 199n, 237n, 267n, 303n, 331n, 333n, 364n, 509n, 539n, 613n Stecklow, S., 441n Steel, P., 162n, 441n, 614n, 615n Steel, R., 94n Steel, R. P., 266n Steenkamp, J.-B. E. M., 236n Steensma, H., 66n Steers, R., 236n Steers, R. M., 196n, 235n, 539n Steffy, B. D., 614n Steiden, B., 308n Steiger-Mueller, M., 403n Stein, E. W., 364n Stein, J. H., 236n Steindl, J. R., 65n Steiner, D. D., 108 b Steiner, I. D., 332n Steinl, W., 129n Stephens, P., 269n Stern, I., 443n Stevens, C. K., 67n, 443n Stewart, D., 573n Stewart, G. L., 67n, 330n, 331n, 571n, 572n, 613n Stewart, S. M., 508n, 541n Stewart, T. A., 330n Stewart, W. H., Jr., 161n Stewart. A., 43 e Stibal, J., 441n Stickney, L. T., 122n Stilwell, D., 403n Stine-Cheyne, K. J., 574n Stinglhamber, F., 93n, 403n Stipp, D., 64n Stogdill, R. M., 402n Stone, Biz, 592 f Stone, D. L., 539n Stone, E. F., 266n Stoner, J., 539n Stone-Romero, E. F., 539n Story, L., 336n Stout, D., 404n Stoute, Steve, 416 Stovall, J. F., 408n Stoverink, A. C., 572n 658 I N D E X E S van Dijk, E., 129n van Dijk, W., 120 b van Dijke, M., 406n, 440n Van Dyne, L., 378n Van Eerde, W., 237n, 615n Van Engen, M. L., 383 e van Ginkel, W. P., 332n Van Hoye, G., 364n Van Iddekinge, C. H., 65n, 162n van Iterson, A., 345n, 363n van Ittersum, K., 400 Van Kleef, G. A., 67n, 129n, 320n, 477n van Knippenberg, B., 320n, 406n Van Knippenberg, D., 67n, 199n, 320n, 332n, 404n, 406n, 476n van Koningsbruggen, G. M., 120 b Van Maanen, J., 540n van Olffen, W., 92n van Raaij, F., 198n van Rhenen, W., 233n, 614n van Vianen, A., 163n Van Vianen, A. E. M., 127n, 541n Van Vugt, M., 408n van Woerkorn, M., 143 b Van Yperen, N. W., 613n Vance, R. J., 93n, 94n Vandenberg, R., 93n Vandenberg, R. J., 267n, 268n, 615n Vandenberghe, C., 93n, 94n, 233n, 539n, 540n VandenHeuvel, A., 65n Vanderheiden, P. A., 508n Varella, P., 404n Varma, A., 66n Varner, I. I., 143 b Vauclair, C., 210n Vecchio, R. P., 236n, 402n, 403n Vehkaperä, M., 573n Veiga, J. F., 404n, 405n, 539n Venkataraman, S., 613n Venkataramani, V., 304n, 475n Verdú-Jover, A. J., 404n Verepej, M. A., 329n Veres, J. G., 67n Vergel, A., 12n Verghese, A., 294n Verhezen, P., 526n Verney, T. P., 305n Vernon, L. L., 365n Vernon, P. A., 128n Verquer, M. L., 162n, 540n Vest, M. J., 162n Vickers, M. H., 124n Victor, B., 541n Victorov, V. I., 236n Viechtbauer, W., 159n Vigoda, E., 442n, 443n Villa, J. R., 402n, 408n Villado, A. J., 162n, 331n Villadsen, E., 614n Turley, James, 607 b Turner, M., 607n Turner, M. E., 305n Turner, R. N., 67n Turner, T., 269n Turnley, W. H., 236n, 432n, 442n Tushman, M. L., 439n Tuzinski, K. A., 571n Tversky, A., 198n Twenge, J. M., 162n, 304n Tyler, K., 474n Tyler, T. R., 94n, 236n Tynan, R. O., 196n, 333n Tzeng, J. M., 64n U Uchitelle, L., 2n Uggerslev, K. L., 574n Uhl-Bien, M., 403n Uliaszek, A. A., 614n Ullman, Mike, 386 Ullrich, J., 292n Ulrich, D., 87, 508n Ulrich, M., 126n Unckless, A. L., 161n Underhill, C. M., 407n United Auto Workers, 461 f United Nations, 421 Urwin, P., 162n Useem, J., 408n Uy, D., 197n Uy, M. A., 129n V Väänänen, A., 303n Vahtera, J., 303n, 614n Vail, Diana, 89 Valasquez, M., 199n Valentine, S., 573n Valle, M., 442n Vallerand, R. J., 615n Valley, K. L., 476n van Aken, M. A. G., 126n van Beest, I., 129n van Breukelen, W., 66n van Dam, K., 197n, 612n Van de Ven, A. H., 509n Van de Vliet, E., 305n, 474n, 476n van den Berg, P. T., 197n, 404n, 613n Van den Brande, I., 302n van der Haar, D., 612n van der Heijden, B. I. J. M., 574n van der Laan, S., 258n van der Leeden, R., 574n van der Vlist, R., 66n van der Weide, J. G., 404n van der Zee, K. I., 159n, 572n Van Deusen, F., 575n Van deVen, A. H., 305n van Dierendonck, D., 406n Tims, M., 233n Tindale, R. S., 305n, 476n Tinsley, C. H., 24n Tischler, L., 91n Tjosvold, D., 474n Tluchowska, M., 64n Todorov, A., 196n Toh, S. M., 302n, 509n Tomljenovic, B., 442n Tong, K., 236n Tonidandel, S., 67n Tordera, N., 303n Torelli, C. J., 440n Toren, N., 36n Tosi, H. L., 235n, 404n Tóthmérész, B., 301n Totterdell, P., 129n Towler, A. J., 403n, 409n Toya, K., 518n Toyama, M., 476n Tozzi, J., 267n Tracey, J. B., 440n Tracey, T. J., 162n Tracy, B., 615n Tracy, J. L., 125n Tran, V. N., 508n Tranel, D., 127n Trap, P., 580n Travaglione, A., 508n Traver, H., 573n Treadway, D. C., 440n, 441n, 443n Tredoux, C., 612n Tremblay, M., 93n, 94n Trent, J., 197n Trevino, L. K., 37n, 364n, 541n, 573n Treviño, L. K., 406n Trevor, C. O., 37n, 95n, 508n Triandis, H. C., 160n Triemer, A., 129n Trochim, W. M. K., 332n, 476n Tropp, L., 612n Trougakos, J. P., 127n Trump, Donald, 141 Truxillo, D., 540n Truxillo, D. M., 540n Trzesniewski, K. H., 155n Tsai, W.-C., 127n, 129n, 443n Tschan, F., 332n Tse, Irene, 90 Tsui, A. S., 540n Tsui, B., 439n Tsui, O., 378n Tubbs, M. E., 234n, 305n Tucker, J. S., 540n Tuckman, B. W., 302n Tugend, A., 265n Tully, S., 36n Tuna, C., 36n Turban, D. B., 36n, 196n, 407n, 572n Turkheimer, E., 159n I N D E X E S 659 Welch, W. M., 200n Weldon, E., 332n Welker, R. B., 236n Weller, A., 126n Weller, I., 95n Wells, A., 198n Wells, G. L., 198n Welsh, E. T., 407n Wenger, E., 304n Werdigier, J., 63n Werth, L., 198n Wessel, H., 571n Wesseling, Y. M., 120 b Wesson, M. J., 236n West, B. J., 443n, 509n West, M. A., 475n West, R. F., 198n Westcott, S., 266n Westerman, G., 613n Westphal, J. D., 443n Westrick, P., 159n Westwood, R., 538n Wetzel, Jim, 540n Whetzel, D. L., 572n Whitaker, B. G., 160n White, B., 508n White, D. W., 328n White, E., 95n, 268n, 439n White, F. A., 364n White, M., 35n Whiting, S. W., 573n Whitman, D. S., 161n Whitmore, B., 400 Whitney, D., 612n Whittaker, J., 233n Whittington, E. J., 128n Wholey, D. R., 508n Whoriskey, P., 536n Wicker, A. W., 92n Wicks, A. C., 541n Wiechmann, D., 332n Wiemann, S., 572n Wiener, L., 268n Wiener, Y., 538n Wiess, E. M., 65n Wigdor, L. A., 232n Wiggins, J. A., 304n Wiklund, H., 35n Wild, E., 236n Wildavsky, A., 199n Wilderom, C. M., 162n Wilding, M., 232n Wildman, J., 330n Wiley, J. W., 36n, 500n, 508n, 539n Wilk, S. L., 572n Wilken, B., 443n Willaby, H. W., 477n Willemsen, G., 614n Williams, A., 364n Williams, C. C., 507n Wang, H., 233n, 267n, 540n Wang, J., 573n Wang, L., 196n Wang, M., 540n Wang, P., 233n Wang, X., 405n, 614n Wang, X. M., 574n Wang, Y., 509n, 540n Wanous, J., 93n Wanous, J. P., 540n Wansink, B., 400 Ward, E. A., 440n Warr, P., 93n Warren, P. A., 198n Warrior, Padmasree, 362 Wartzman, R., 157n Waryszak, R., 36n Washington, George, 436 b Wasserman, M. E., 573n Wasserman, S., 508n Wassmer, U., 508n Wasti, S. A., 441n Waters, A., 614n Watson, C., 477n Watson, D., 104e, 105e, 126n Watson, S. B., 596n Watson, W. E., 331n Watt, J. D., 92n Wayne, S. J., 304n, 331n, 403n, 407n Weaver, G. R., 37n, 573n Webb, J. W., 612n Weber, D., 268n Weber, J., 145e, 162n, 409n Weber, M., 183n, 403n Weber, Max, 379 Weber, R. A., 539n Weber, T., 405n Webster, E. C., 196n Webster, J., 364n Wee, Susie, 326 Weekley, J. A., 509n Wefald, A. J., 233n Wegener, D. T., 364n Weightman, Mike, 316 f Weiner, R. L., 441n Weingarden, S. M., 161n Weingart, L., 477n Weingart, L. R., 332n, 363n, 475n, 476n, 477n Weinstein, B., 496n Weinstein, Elaine, 256 Weiss, B., 160n Weiss, H. M., 93n, 125n, 126n, 127n Weiss, L., 304n Weiss, T., 611n Welbourne, T. M., 268n, 269n Welch, F., 64n Welch, J., 267n, 611n Welch, Jack, 381 , 492 Welch, S., 267n, 611n Vinson, G., 129n Virick, M., 267n Viswesvaran, C., 65n, 129n, 363n, 572n, 612n, 613n Vlasic, B., 480n Voelpel, S. C., 332n Vogel, M., 572n Vohs, K. D., 392n Volkema, R., 468n Volkema, R. J., 475n von Aarburg, M., 572n Von Glinow, M. A., 407n von Hippel, W., 196n Vonk, R., 442n Vora, D., 303n Voss, K., 332n Vredenburgh, D. J., 305n Vrij, A., 356n, 365n Vroman, K., 302n Vroom, V. H., 236n, 237n, 402n W Waddington, K., 345n, 364n Wadlinger, H. A., 128n Wagner, D. T., 314n Wagner, J. A., 331n Wagner, J. A., III, 267n, 268n, 509n Wagner, R., 541n Wagner, S. E., 162n Wagner, S. H., 540n Wagner, T., 126n Wagner, U., 612n Wagoner, Richard, 396 f Wahba, M. A., 232n, 237n Waldman, D. A., 160n, 404n Waldrock, David, 324 Walker, A. G., 363n Walker, D., 43 e Walker, L. J., 398n Wall, J, A., Jr., 304n, 476n Wall, T. D., 126n, 571n Wallace, J. C., 539n, 613n, 615n Wallen, A. S., 196n Waller, M. J., 196n, 302n Walsh, Bill, 326 Walsh, J., 196n Walsh, J. P., 365n Walster, E., 235n Walster, G. W., 235n Walter, F., 303n, 401n Walters, A. E., 477n Walton, K. E., 159n Walton, Sam, 398 , 524 Walumbwa, F. O., 233n, 388n, 405n, 406n, 541n Wanberg, C. R., 93n, 161n, 407n, 408n, 540n Wang, D., 420n Wang, E., 476n Wang, G., 159n, 405n, 572n 660 I N D E X E S Zacharatos, A., 406n Zahn-Waxler, C., 92n Zajac, E. J., 611n Zaleskiewicz, T., 198n Zand, D. E., 406n Zappe, J., 569n Zardkoohi, A., 198n Zatzick, C. D., 508n Zedeck, S., 441n Zeelenberg, M., 126n Zeidner, R., 364n Zelditch, M., 303n Zell, Sam, 536 Zellars, K. L., 305n, 615n Zellmer-Bruhn, M. E., 476n Zerbe, W. J., 125n, 127n Zhan, Y., 540n Zhang, A., 196n Zhang, J., 197n Zhang, X., 269n, 405n Zhang, Z., 171n Zhao, H., 142b, 407n Zhao, L., 304n Zhong, J. A., 403n Zhou, J., 94n, 128n, 199n, 331n, 404n, 442n Zhou, X., 403n Zhu, J., 475n Zhu, W., 92n, 405n Ziegert, J. C., 67n, 196n, 304n, 331n Ziegler, M., 572n Zimbardo, P. G., 303n, 398n Zimbardo, Phil, 398 Zimbardo, Philip, 279 Zimmerman, R. D., 66n, 571n, 572n, 573n Zinbarg, R. E., 614n Zingheim, P. K., 268n Zivnuska, S., 406n, 441n, 442n, 443n, 615n Zohar, D., 405n Zyphur, M. J., 540n Organization Index References followed by b indicate boxes; e, exhibits; f, figure; n, notes A Aaron’s Rents, 421 f ABB, 488 Abbott, 565 e Accenture, 565 e, 567 b ADM, 52 Admiral, 529 Adobe Systems, 396 , 605 Alliance of Motion Picture and Television Producers (AMPTP), 474 Allianz AG, 428 f Allstate, 565 e Woodward, D., 265n Woodworth, R. D., 126n Workman, M., 36n Woychowski, Terry J., 478 Wrenn, K. A., 64n Wright, J., 93n, 422n Wright, J. A., 266n Wright, M. A., 539n Wright, P., 33n Wright, P. M., 268n Wright, T. A., 92n Wrzesniewski, A., 92n, 160n, 161n Wu, G., 477n Wu, H., 64n Wu, P., 36n Wu, S. J., 125n Wu, S. Y., 305n Wyer, M. M., 365n Wyer, R. S., 108 b Wysocki, B., Jr., 268n X Xanthopoulou, D., 233n Xia, F., 196n Xiao, Z., 197n Xie, J. L., 614n Xin, K. R., 36n, 540n Xu, H., 476n Y Yahoo!, 499 Yakushko, O., 302n Yamagata, S., 160n Yamaguchi, S., 476n Yammarino, F. J., 403n, 404n, 408n Yan, A., 508n Yan, X. H., 476n Yanadori, Y., 266n Yanashita, Koichi, 254 Yang, D., 420n Yang, H.-C., 305n Yang, J., 475n, 549n, 580n Yaniv, I., 197n Yao, X., 233n Yates, C., 613n Ybarra, O., 126n Yetton, P. W., 402n Yik, M., 198n Yockey, M. D., 268n Yoshioka, I., 36n Youssef, C. M., 37n, 541n Yu, G., 196n Yuki, M., 196n Yukl, G., 440n Yutaka, K., 160n Z Zaal, J. N., 159n Zablah, A. R., 539n Zaccaro, S. J., 266n, 401n, 404n, 408n Williams, C. R., 234n Williams, E. N., 302n Williams, Evan, 592 f Williams, J. R., 574n Williams, K. D., 304n Williams, K. Y., 331n Williams, L. A., 196n Williams, M., 330n Williams, M. J., 196n Williams, M. L., 235n Williams, S., 162n Williams, Sunita, 348 f Williams, W., 61n Williamson, B., 267n Williamson, I. O., 162n Willis, J., 196n Willis, R., 236n Willness, C. R., 441n, 614n Wilpert, B., 267n Wilson, D. C., 65n, 66n Wilson, D. S., 345n Wilson, E., 476n Wilson, J. A., 407n Wilson, J. W., 330n Wilson, M. G., 267n, 615n Wilson, T. L., 235n Wimpfheimer, O., 21 f Wincent, J., 615n Winter, C., 336n Winter, D. G., 233n Winter, R. J., 441n Winters, M., 67n Wipro, 551 Wirtz, J., 108 b Wiseman, R. M., 268n Wisher, R., 573n Withers, L. A., 365n Withey, M. J., 94n Witt, L. A., 65n, 163n, 234n, 402n, 442n, 518n, 539n Witvliet, C., 572n Woehr, D. J., 92n, 94n, 428n, 572n, 574n Woertz, Patricia, 207 f Wofford, J. C., 234n, 402n Wojnaroski, P., 234n Wolchover, N., 155n Wong, C., 127n Wong, C.-S., 401n Wong, E., 198n Wong, K. F. E., 197n, 198n, 574n Wood, J., 229n Wood, J. V., 128n Wood, M. B., 573n Wood, R. E., 234n Wood, S. J., 571n Wood, W., 126n Wooden, M., 65n Woodman, R. W., 199n Woodruff, S., 302n Woods, S. A., 162n I N D E X E S 661 I IBM, 52 , 249 , 254 , 311 , 329 , 359 , 439 , 456 f, 488 , 524 , 565 e IDS Financial Services, 256 ImageNet Company, 550 f Intel, 52 , 605 International Atomic Energy Commission, 316 f Intuit, 298 J Jake, 460 Johnson & Johnson, 298 , 565 e K Kaiser Permanente, 346 KeySpan Corp., 256 KFC, 86 Koei, 532 Kraft, 576 L Lindblad Expeditions, 157 LinkedIn, 567 b, 581 b Liz Claiborne, 579 L’Oreal, 116 , 188 , 324 Los Angeles Dodgers, 118 f Los Angeles Galaxy, 323 LoveMachine, 491 Lowe’s, 400 , 532 M Macy’s, 298 , 515 Manpower Business Solutions, 351 Marks & Spencer, 497 Marriott International, 72 f Mars, 438 Mary Kay Cosmetics, 226 f Masterfoods, 528 MBNA, 536 – 537 McDonald’s, 16 , 187 f, 482 , 493 McKinsey & Company, 400 , 410 The Men’s Wearhouse, 529 Mercedes-Benz, 16 Merck, 400 Merrill Lynch, 310 , 350 , 394 , 579 MGM, 491 Microsoft, 49 f, 362 , 483 , 483 f, 499 , 532 , 549 , 605 Miller Brewing, 551 Mitsubishi, 421 Molson Coors, 77 Monster.com, 567 b Morningstar, 605 Motorola, 52 , 492 MTS Systems, 122 MTV, 90 N NASCAR, 59 f, 321 f National Football League (NFL), 471 DreamWorks Animation, 605 DuPont, 565 e, 580 E eBay, 147 f Eli Lilly, 243 Encore Capital Group, 598 f Enron, 382 Enterprise Rent-A-Car, 16 Equal Employment Opportunity Commission (EEOC), 51 , 561 b Ericsson, 524 Ernst & Young, 248 f, 607 Everett Clinic, 259 ExxonMobil, 16 , 52 , 532 F Facebook, 359 , 503 , 516 f, 567 b, 581 b Factory Card & Party Outlet, 55 Federal Express (Fedex), 250 f, 446 Ford Motor Company, 16 , 298 , 311 , 461 f, 498 , 523 , 529 Foursquare, 494 f Fuji Heavy Industries, 466 f G Galleon Group, 410 Gannett, 363 Genentech, 77 f, 605 General Electric (GE), 21 , 214 , 400 , 428 , 492 , 529 General Foods, 308 General Mills, 565 e, 605 General Motors (GM), 26 f, 186 , 311 , 478 , 479 f, 480 , 494 , 579 Genetech, 565 e Gensler, 113 f Gentex Corp., 16 Ghana Airways, 328 Globoforce, 569 Goldman Sachs, 90 , 334 , 396 Google, 366 , 499 , 503 , 570 GreenForest, 329 Groupon, 503 GTE, 591 H H. J. Heinz, 52 Hallmark Cards Inc., 324 , 565 e Harrah’s Entertainment, 549 Harvard Business Review , 24, 206n Hawthorne Works, 281 HealthSouth, 382 Hewitt Associates, 254 Hewlett-Packard (HP), 90 , 492 , 498 , 529 Hollywood Video, 181 Home Depot, 340 f, 372 , 400 Honda, 16 , 311 Hyundai, 213 f, 519 Alltel, 52 Alters, Boldt, Brown, Rash, and Culmo, 606 f Amazon.com, 20 , 580 f American Airlines, 221 f, 532 American Council on Education, 81 American Express, 18 , 52 , 249 , 565 e, 591 , 605 Ameriquest, 579 AOL (America Online), 519 Apex Precision Technologies, 244 Apple, 24 , 109 f, 381 , 494 , 497 , 503 , 506 , 569 , 578 AT&T, 249 , 492 , 494 Auglaize Provico, 527 B Bal Seal Engineering, 274 f Bank of America (BOA), 400 , 536 – 537 , 549 , 565 e Basex, 349 Bear Stearns, 579 Berkshire Hathaway, 503 Best Buy, 298 , 396 BHP Billiton, 396 Blizzard Entertainment, 106 f Blockbuster, 181 Blue CrossBlue Shield of North Carolina, 565 e BMW Group, 16 , 311 , 488 , 493 f Boeing, 20 , 386 , 488 , 491 f, 494 , 503 , 529 Bristol-Myers Squibb, 565 e Burger King, 16 C Cabela’s, 547 f Cadbury, 576 , 577 f Capital Alliance Partners, 90 Carlson, 565 e Caterpillar, 77 , 498 Chrysler, 311 , 372 , 494 , 579 , 593 Cigna, 324 f Cisco, 298 , 311 , 494 , 565 e Citi, 565 e Citibank, 505 Coca-Cola, 493 Cold Stone Creamery, 554 f Colgate-Palmolive, 565 e Conference Board, 74 Countrywide Financial, 579 Crouse Hospital, 488 f CSN Stores, 84 f D Deloitte, 87 , 565 e Delta Airlines, 174 f Deutsche Bank, 524 , 565 e, 607 Discovery Communications, 565 e Disney, 516 Domino’s, 20 662 I N D E X E S U.S. Bureau of the Census, 48 U.S. Department of the Census, 249 U.S. Equal Employment Opportunity Commission, 49 U.S. Naval Academy, 552 f U.S. Navy, 591 U.S. Supreme Court, 550 U.S. Winter Olympics Team, 326 UCLA, 81 United Auto Workers, 461 f University of Chicago, 188 University of Kentucky, 396 University of Michigan, 371 UPS (United Parcel Service), 359 , 421 , 446 US Airways, 85 , 532 U.S. Equal Employment Opportunity Commission, 49 U.S. News and World Report , 169 U.S. Postal Service (USPS), 444 , 446 V VeriSign, 494 Veterinary Cancer Group, 75 f Virgin Group, 134 f Volkswagen, 16 Volvo, 308 W W. L. Gore & Associates, 257 , 308 , 520 , 591 – 592 Walmart, 52 , 86 f, 252 , 255 f, 400 , 421 , 524 Warner Brothers, 491 Washington Mutual, 579 Wegmans Food Markets, 251 f, 520 Wells Fargo, 298 , 319 f Western Electric, 280 Wetherill Associates, 529 Whole Foods, 324 Workforce Employment Solutions, 55 Workplace Bullying Institute (WBI), 12 World Bank, 421 WorldCom, 382 X Xerox, 510 , 529 Z Zappos, 10 f, 85 , 229 , 520 f, 569 Scania, 273 f Science Applications International Corporate (SAIC), 567 Screen Actors Guild (SAG), 474 Securities and Exchange Commission (SEC), 505 Security Alarm, 55 Sermo, 525 f ServiceMaster, 590 f Sharper Image, 579 Shea & Gould, 457 Shui On Group, 298 Siemens, 506 – 507 Singapore Airlines, 243 Smith & Wesson, 551 Society for Human Resource Management (SHRM), 41 Sodexo, 567 Southwest Airlines, 499 , 529 , 549 Sprig Toys, Inc., 311 f Starbucks, 116 f, 285 f, 311 , 362 , 610 State Farm Insurance, 400 Subaru, 466 f Sun Microsystems, 249 SunGard, 503 Symantec Corporation, 259 T Target, 448 f, 530 f Tata, 551 Tesla Motors, 363 3M, 492 , 497 , 529 Time Warner, 519 Tommy Hilfiger, 90 Tom’s of Maine, 529 Towers Watson, 74 Toyota Motor Corporation, 217 f, 311 , 537 – 538 TRANSCO, 59 Translation, 416 Transportation Security Administration (TSA), 85 Tribune Company, 536 Turner Broadcasting, 565 e 20th Century Fox, 491 Twitter, 503 , 567 b, 581 b, 592 f Tyco, 382 Tyson Foods, 529 U U.S. Air Force, 116 U.S. Bureau of Labor Statistics, 122 National Hockey League (NHL), 471 National Public Radio (NPR), 40 NEC Corporation, 494 Nestlé, 52 , 438 NestléPurina, 564 New York Stock Exchange (NYSE), 505 The New Yorker , 12 Newman’s Own, 491 Nike, Inc., 176 f, 415 f, 520 , 524 Nintendo, 139 f Nissan Motor Company, 52 , 57 f, 311 Nokia, 16 , 17 f, 396 Nordstrom’s, 514 – 515 Northern Grumman, 298 Novell, 524 , 532 Nucor, 255 O Oracle Corporation, 90 , 259 f P Park Nicollet Health Services, 494 Patagonia, 19 Pearson, 565 e Peoples Flowers, 55 Pepsi, 499 Phoenix Inn, 259 PNC, 567 PricewaterhouseCoopers, 524 , 528 f Procter & Gamble, 417 , 482 , 485 , 488 , 549 Progress Energy, 41 Prudential, 298 , 565 e Publix Supermarkets, 44 f, 257 R Radio Shack, 345 – 346 Raybestos Products, 89 Raytheon, 52 Rebellion Research Technologies, 164 Reckitt Benckiser, 489 REI, 565 e Renault, 87 Research in Motion, 494 Richmond Group, 361 Ritz Carlton Hotel Company, 19 f Roadway Express, 591 Rubbermaid, 52 S Safeway, 59 , 474 SAS Institute, 68 , 70 , 564 , 565 e, 569 Index A Combined Glossary/Subject Index 663 References followed by b indicate boxes; e, exhibits; f, figure; n, notes A Ability, An individual’s capacity to perform the various tasks in a job, 52 , 53 individuals with disability and, 48 – 49 intellectual, 52 – 55 , 61 b, 185 physical, 55 – 56 of team members, 315 – 316 trust and, 389 Absenteeism age and, 45 gender and, 46 job satisfaction and, 85 organizational commitment and, 75 Accommodating, The willingness of one party in a conflict to place the opponent’s interests above his or her own, 453 Acquisitions, 518 – 519 Action research, A change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicate, 587 Adjourning stage, The final stage in group development for temporary groups, characterized by concern with wrapping up activities rather than task performance, 275 Administrators, 5 Affect, A broad range of feelings that people experience, 98 – 99 , 100 – 101 Affect intensity, Individual differences in the strength with which individuals experience their emotions, 103 Affective component, The emotional or feeling segment of an attitude, 70 – 71 Affective events theory (AET), A model that suggests that workplace events cause emotional reactions on the part of employees, which then influence workplace attitudes and behaviors, 110 – 112 African American workers, 18 Age, 44 – 46 , 107 Aggressiveness, in organizational culture, 513 Agreeableness, A personality dimension that describes someone who is good natured, cooperative, and trusting, 136 , 137 , 138 – 139 Ambiguous responsibility, 291 , 451 Americans with Disabilities Act (ADA), 48 – 49 , 550 Anchoring bias, A tendency to fixate on initial information, from which one and to expect the orders to be obeyed, 484 , 485 Automatic processing, A relatively superficial consideration of evidence and information making use of heuristics, 351 Autonomy, The degree to which a job provides substantial freedom and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out, 210 b, 240 – 241 Availability bias, The tendency for people to base their judgments on information that is readily available to them, 179 Avoiding, The desire to withdraw from or suppress a conflict, 453 B Baby boomers, 18 , 146 Background checks, 546 Balance, 55 e Bargaining. See Negotiation BATNA, The best alternative to a negotiated agreement, 464 , 465 Behavior attitudes and, 71 – 73 in conflict process, 454 ethical, 22 – 23 in performance evaluation, 556 Behavioral component, An intention to behave in a certain way toward someone or something, 70 – 71 Behaviorally anchored rating scales (BARS), Scales that combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates the employees based on items along a continuum, but the points are examples of actual behavior on the given job rather than general descriptions or traits , 559 Behavioral theories of leadership, Theories proposing that specific behaviors differentiate leaders from nonleaders, 370 – 372 Behaviorism, A theory that argues that behavior follows stimuli in a relatively unthinking manner, 218 , 219 Benefits and downsizing, 495 Benevolence, 389 Biases, in decision-making, 177 – 182 , 292 b Big Five Model, A personality assessment model that taps five basic dimensions, 136 – 139 , 142 b, 369 – 370 then fails to adequately adjust for subsequent information , 178 – 179 Anger cross-cultural perception of in, 467 b in negotiation, 118 teams and, 320 b at work, 119 Anthropology, The study of societies to learn about human beings and their activities, 13 e, 14 Antisocial behavior, 283 Apologies, 432 e Application forms, 545 – 546 Appreciative inquiry (AI), An approach that seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance , 591 Arbitrator, A third party to a negotiation who has the authority to dictate an agreement, 468 , 469 Arousal, 217 Asia, cross-cultural perception in, 467 b Assertiveness, in handling conflict, 453 Assessment centers, A set of performance- simulation tests designed to evaluate a candidate’s managerial potential, 548 Attentional processes, 219 Attitudes, Evaluative statements or judgments concerning objects, people, or events, 70 – 78 behavior and, 71 – 73 components of, 70 – 71 distinctness of, 78 global implications of, 88 job, 73 – 78 , 119 job satisfaction and, 73 in OB model, 26 profitability and, 83 b variables affecting, 73 Attribution theory, An attempt to determine whether an individual’s behavior is internally or externally caused, 168 – 170 Attribution theory of leadership, A leadership theory that says that leadership is merely an attribution that people make about other individuals, 393 – 394 Authentic leaders, Leaders who know who they are, know what they believe in and value, and act on those values and beliefs openly and candidly. Their followers would consider them to be ethical people, 386 – 387 Authority, The rights inherent in a managerial position to give orders 664 G L I N D E X Biographical characteristics, Personal characteristics—such as age, gender, race, and length of tenure—that are objective and easily obtained from personnel records. These characteristics are representative of surface-level diversity, 44 , 45 age, 44 – 46 disability, 48 – 49 gender, 46 – 47 gender identity, 51 – 52 race, ethnicity, 48 religion, 50 – 51 sexual orientation, 51 – 52 tenure, 50 Blog (Web log), A Web site where entries are written, and generally displayed in reverse chronological order, about news, events, and personal diary entries, 348 , 349 Board representatives, 251 Body art, 51 Body coordination, 55 e Bonus, A pay plan that rewards employees for recent performance rather than historical performance, 255 – 256 Boomers, 18 , 146 Boundaryless organization, An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams, 492 – 494 Bounded rationality, A process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity, 176 – 177 Brainstorming, An idea-generation process that specifically encourages any and all alternatives while withholding any criticism of those alternatives, 295 – 296 Bullying, 12 Bureaucracy, An organization structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command, 487 – 488 C Capacity, in organizational structure, 499 Centralization, The degree to which decision making is concentrated at a single point in an organization, 485 , 501 Chain of command, The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom, 483 – 484 Challenge stressors, Stressors associated with workload, pressure to complete tasks , and time urgency , 596 , 597 Change, Making things different, 580 , 581 forces for, 578 – 579 as organizational challenge, 20 organizational culture and, 518 resistance to, 580 – 584 tactics for overcoming resistance to, 582 – 584 See also Organizational change Change agents, Persons who act as catalysts and assume the responsibility for managing change activities, 580 , 581 Channel richness, The amount of information that can be transmitted during a communication episode, 350 , 352 Charismatic leadership theory, A leadership theory that states that followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviors, 379 – 382 Checklists, 191 b China cross-cultural perception of in, 467 b cultural perception of time in, 171 b long-term orientation in, 153 f organizational structure in, 499 f performance evaluation in, 558 b Citizenship, Actions that contribute to the psychological environment of the organization, such as helping others when not required , 555 Citizenship behavior, Discretionary behavior that contributes to the psychological and social environment of the workplace, 27 , 84 – 85 Civility training, 552 – 553 Coalitions, 418 Coercion, 584 Coercive power, A power base that is dependent on fear of the negative results from failing to comply, 414 , 415 Cognition, in conflict process, 451 – 452 Cognitive component, The opinion or belief segment of an attitude, 70 – 71 Cognitive dissonance, Any incompatibility between two or more attitudes or between behavior and attitudes, 72 , 73 Cognitive evaluation theory, A version of self-determination theory which holds that allocating extrinsic rewards for behavior that had been previously intrinsically rewarding tends to decrease the overall level of motivation if the rewards are seen as controlling, 208 , 209 Cohesiveness, The degree to which group members are attracted to each other and are motivated to stay in the group, 288 , 289 Collaborating, A situation in which the parties to a conflict each desire to satisfy fully the concerns of all parties, 453 Collectivism, A national culture attribute that describes a tight social framework in which people expect others in groups of which they are a part to look after them and protect them, 150 , 151 Communication, The transfer and understanding of meaning, 8 , 9 , 336 barriers to effective, 353 – 355 choice of channels for, 350 – 351 cross-cultural differences in, 356 – 359 , 462 b downsizing and, 495 downward, 339 , 340 f electronic, 345 – 349 functions of, 336 – 337 global implications of, 360 lateral, 339 – 340 nonverbal, 341 – 342 oral, 340 – 341 processing of, 351 – 352 as source of conflict, 450 trust and, 390 upward, 339 written, 341 Communication apprehension, Undue tension and anxiety about oral communication, written communication, or both, 355 Communication process, The steps between a source and a receiver that result in the transfer and understanding of meaning, 338 , 339 Compensation establishing structure for, 252 – 253 job satisfaction and, 79 , 81 , 82 e measuring CEO, 243 b as motivation, 262 b variable programs for, 252 – 257 Competency-based pay, 256 Competing, A desire to satisfy one’s interests, regardless of the impact on the other party to the conflict , 453 , 579 Complexity, in organizational structure, 499 Compromising, A situation in which each party to a conflict is willing to give up something, 454 , 455 , 462 Conceptual skills, 8 G L I N D E X 665 as organizational challenge, 17 organizational culture and, 532 – 533 in organizational politics, 434 in organizational structure, 502 in perception, 169 in performance evaluation, 558 b, 563 of personality factors, 139 in power tactics, 419 – 420 in selection process, 550 in self-determination and autonomy, 210 b in stress, 600 in stress management, 604 b Customer satisfaction, 18 – 19 , 19 f, 84 f displayed emotions and, 108 emotions and moods in, 118 – 119 Customer service. See Customer satisfaction D Day of week, as emotion, mood source, 104 Deadlines, 186 , 460 Decisional roles, 7 – 8 Decision-making during 2008 financial crisis, 182 – 183 biases in, 177 – 182 checklists in, 191 b communication as facilitator in of, 337 emotions, moods and, 116 global implications of, 192 group, 290 – 296 individual differences and, 184 – 186 organizational constraints on, 186 – 187 in organizations, 175 – 177 perception and, 174 – 175 rational, 175 – 177 Decisions, Choices made from among two or more alternatives, 174 , 175 Deductive reasoning, 53 e Deep acting, Trying to modify one’s true inner feelings based on display rules, 110 , 111 Deep-level diversity, Differences in values, personality , and work preferences that become progressively more important for determining similarity as people get to know one another better , 42 Defensive behaviors, Reactive and protective behaviors to avoid action, blame, or change, 430 , 431 Demands, Responsibilities, pressures , obligations , and even uncertainties that individuals face in the workplace , 596 , 597 Departmentalization, The basis by which jobs in an organization are grouped together, 482 – 483 Dependence, B’s relationship to A when A possesses something that B requires, 412 – 413 , 416 – 418 Controlled processing, A detailed consideration of evidence and information relying on facts, figures, and logic, 351 Controlling, Monitoring activities to ensure they are being accomplished as planned and correcting any significant deviations, 6 Cooperativeness, in handling conflict, 452 – 453 Core plus pan, for benefits, 258 – 259 Core self-evaluations, Bottom-line conclusions individuals have about their capabilities, competence, and worth as a person, 82 , 139 – 140 Core values, The primary or dominant values that are accepted throughout the organization, 514 , 515 Corruption and power, 436 Cost-minimization strategy, A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses , and price cutting , 497 Counterproductivity, Actions that actively damage the organization, including stealing , behaving aggressively toward co-workers , or being late or absent , 85 , 555 Creative-thinking skills, 189 Creativity, The ability to produce novel and useful ideas, 116 – 117 , 181 b, 188 – 189 Critical incidents, A way of evaluating the behaviors that are key in making the difference between executing a job effectively and executing it ineffectively, 558 Cross-functional teams, Employees from about the same hierarchical level, but from different work areas, who come together to accomplish a task, 311 – 312 Cultural differences in communication, 356 – 359 in conflict resolution, 457 – 458 in decision-making, 185 – 186 displayed emotions and, 108 b in emotions and moods, 102 in ethical choices and decision- making, 190 in goal-setting, 213 – 214 in group cohesiveness, 314 b in hierarchy of needs, 204 Hofstede’s framework for, 150 – 153 in job satisfaction, 79 – 80 in leadership, 372 , 378 b, 385 in motivation, 260 b in negotiation, 462 b, 465 – 466 in organizational behavior, 30 Conceptual skills, The mental ability to analyze and diagnose complex situations, 8 Conciliator, A trusted third party who provides an informal communication link between the negotiator and the opponent, 468 , 469 Confirmation bias, The tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgments, 179 Conflict, A process that begins when one party perceives that another party has negatively affected, or is about to negatively affect , something that the first party cares about , 446 – 447 cross-cultural perception of, 467 b sources of, 450 in teams, 322 unit performance and, 470 e views of, 447 – 449 Conflict management, The use of resolution and stimulation techniques to achieve the desired level of conflict, 454 , 455 e Conflict process, A process that has five stages: potential opposition or incompatibility, cognition and personalization , intentions , behavior , and outcomes , 449 – 458 Conformity, The adjustment of one’s behavior to align with the norms of the group, 282 – 283 , 290 , 432 e Conscientiousness, A personality dimension that describes someone who is responsible, dependable, persistent, and organized, 136 , 137 , 370 Consensus, in attribution theory, 168 Consideration, The extent to which a leader is likely to have job relationships characterized by mutual trust, respect for subordinates’ ideas, and regard for their feelings, 371 Consistency in attitude and behavior, 72 – 73 in attribution theory, 168 Consultation, as power tactic, 418 Context and perception, 167 Contingency variables, Situational factors: variables that moderate the relationship between two or more variables, 15 Contingent selection, 549 – 550 Contrast effect, Evaluation of a person’s characteristics that is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics, 171 – 172 Control, communication as form of, 336 – 337 666 G L I N D E X in e-mail, 346 functions of, 102 – 103 global implications of, 121 judging, 107 in negotiation, 465 , 468 b OB applications of, 115 – 121 sources of, 103 – 108 See also Moods Empathy, in negotiation, 468 b Employee engagement, An individual’s involvement with, satisfaction with, and enthusiasm for the work he or she does, 77 – 78 Employee involvement, A participative process that uses the input of employees and is intended to increase employee commitment to an organization’s success, 250 – 251 Employee-oriented leader, A leader who emphasizes interpersonal relations, takes a personal interest in the needs of employees, and accepts individual differences among members, 371 – 372 Employee(s) benefits for, 257 – 259 , 495 ethnic diversity of, 18 involvement programs for, 250 – 252 loyalty, 87 b organizational culture and, 523 – 525 , 527 – 529 outsourcing and, 500 b participation and downsizing, 495 recognition programs for, 259 – 261 recruitment of diverse, 56 – 57 response to organizational politics, 429 – 430 satisfaction, dissatisfaction of, 205 – 207 , 250 satisfaction and communication, 360 selection of, 116 , 520 selection process for, 544 – 551 socialization of, 520 – 523 stress and, 607 b training and development programs for, 551 – 554 withdrawal behavior of, 26 f, 75 , 85 See also Attitudes; Human resource management; Motivation; Work- life balance Employee stock ownership plan (ESOP), A company-established benefits plan in which employees acquire stock, often at below-market prices , as part of their benefits , 257 Enactive mastery, 216 Encounter stage, The stage in the socialization process in which a new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge, 521 Double-loop learning, A process of correcting errors by modifying the organization’s objectives, policies , and standard routines , 594 , 595 Downsizing, 494 – 496 Driving forces, Forces that direct behavior away from the status quo, 585 Drug testing, 549 – 550 Dual career couples, 47 b Due process, in performance evaluation, 562 Dynamic flexibility, 55 e Dynamic strength, 55 e Dysfunctional conflict, Conflict that hinders group performance, 448 , 449 , 456 – 457 E Economy, 15 – 16 Effectiveness, The degree to which an organization meets the needs of its clientele or customers, 28 downsizing and, 495 in group decision-making, 291 of managers, 9 team, 312 – 322 trust and, 390 Efficiency, The degree to which an organization can achieve its ends at a low cost, 28 , 291 Effort-performance relationship, 223 Electronic meeting, A meeting in which members interact on computers, allowing for anonymity of comments and aggregation of votes , 295 – 296 E-mail, 345 – 347 Emotional contagion, The process by which peoples’ emotions are caused by the emotions of others, 118 – 119 Emotional dissonance, Inconsistencies between the emotions people feel and the emotions they project, 109 Emotional intelligence (EI), The ability to detect and to manage emotional cues and information, 112 – 115 , 116 , 370 Emotional labor, A situation in which an employee expresses organizationally desired emotions during interpersonal transactions at work, 108 – 109 Emotional stability, A personality dimension that characterizes someone as calm, self-confident, secure (positive) versus nervous, depressed, and insecure (negative), 136 , 137 Emotion regulation, 111 Emotions, Intense feelings that are directed at someone or something, 98 – 100 as barrier to communication, 353 – 354 in conflict process, 452 cultural differences in, 102 Deviant workplace behavior, Voluntary behavior that violates significant organizational norms and, in so doing, threatens the well-being of the organization or its members. Also called antisocial behavior or workplace incivility, 32 , 85 – 86 , 119 , 283 – 284 Dignity culture, 515 b Direction, in motivation, 202 Disability, individuals with, 48 – 49 , 56 Discrimination, Noting of a difference between things; often we refer to unfair discrimination which means making judgments about individuals based on stereotypes regarding their demographic group, 42 – 43 age, 46 forms of, 43 e racial, ethnic, 48 religious, 51 – 52 sex, 46 – 47 Discriminatory policies, 43 e Displayed emotions, Emotions that are organizationally required and considered appropriate in a given job, 108 b, 109 – 110 Disseminator roles, 7 , 7 e Distinctiveness in attribution theory, 168 in social identity theory, 274 Distributive bargaining, Negotiation that seeks to divide up a fixed amount of resources, 458 – 460 Distributive justice, Perceived fairness of the amount and allocation of rewards among individuals, 222 , 223 Disturbance handlers, 7 Diversity, The extent to which members of a group are similar to, or different from, one another, 56 – 57 , 288 – 290 cultural differences in, 54 b global implications of, 60 group performance and, 58 levels of, 42 organizational culture and, 518 programs, 58 – 59 of team members, 317 – 318 in U.S. workforce, 40 – 42 See also Workplace diversity Diversity management, The process and programs by which managers make everyone more aware of and sensitive to the needs and differences of others, 56 – 57 Divestiture socialization, 522 e Dominant culture, A culture that expresses the core values that are shared by a majority of the organization’s members, 514 , 515 G L I N D E X 667 Flexible benefits, A benefits plan that allows each employee to put together a benefits package individually tailored to his or her own needs and situation, 257 – 258 Flexible spending plans, for benefits, 259 Flextime, Flexible work hours, 245 – 247 , 248 f Forced comparison, Method of performance evaluation where an employee’s performance is made in explicit comparison to others (e.g., an employee may rank third out of 10 employees in her work unit) , 559 Formal channels, Communication channels established by an organization to transmit messages related to the professional activities of members, 338 , 339 Formal group, A designated work group defined by an organization’s structure, 272 , 273 Formalization, The degree to which jobs within an organization are standardized, 486 , 487 , 515 – 516 Formal regulations, 186 Formal small-group networks, 343 Forming stage, The first stage in group development, characterized by much uncertainty, 275 Functional conflict, Conflict that supports the goals of the group and improves its performance, 447 – 448 , 455 – 456 Functions, of managers, 6 Fundamental attribution error, The tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgments about the behavior of others, 169 G Gainsharing, A formula-based group incentive plan, 256 , 257 Galatea effect, 217 Gender bullying differences by, 12 as emotion, mood source, 107 – 108 influence on decision-making, 184 in negotiation, 466 stress and, 596 b in the workforce, 46 – 47 Gender identity, 51 – 52 General mental ability (GMA), An overall factor of intelligence, as suggested by the positive correlations among specific intellectual ability dimensions , 53 Generation Nexters, 146 , 155 Expert power, Influence based on special skills or knowledge, 415 Explanations, 222 Explosive strength, 55 e Extent flexibility, 55 e Extraversion, A personality dimension describing someone who is sociable, gregarious, and assertive, 136 , 137 – 138 , 370 Extrinsic rewards and motivation, 208 – 211 F Face culture, 515 b Facial expressions, 100 Failure, 24 b Fairness, perception of, 58 , 84 , 222 , 416 , 434 Favors, 432 e Fear, as motivator, 228 b Feedback, The degree to which carrying out the work activities required by a job results in the individual obtaining direct and clear information about the effectiveness of his or her performance, 213 , 241 , 340 – 341 , 562 – 563 Felt conflict, Emotional involvement in a conflict that creates anxiety, tenseness, frustration, or hostility, 452 , 453 Felt emotions, An individual’s actual emotions, 109 , 110 Femininity, A national culture attribute that indicates little differentiation between male and female roles; a high rating indicates that women are treated as the equals of men in all aspects of the society, 151 Fiedler contingency model, The theory that effective groups depend on a proper match between a leader’s style of interacting with subordinates and the degree to which the situation gives control and influence to the leader, 372 – 375 Figurehead roles, 6 , 7 e Filtering, A sender’s manipulation of information so that it will be seen more favorably by the receiver, 353 Five-stage group-development model, The five distinct stages groups go through: forming, storming, norming, performing, and adjourning, 275 – 276 Fixed pie, The belief that there is only a set amount of goods or services to be divvied up between the parties, 459 Fixed vs. variable socialization, 522 e Flattery, 432 e Flexibility, physical, 55 e Enhancement, 432 e Entrepreneur roles, 7 , 142 b Environment, Institutions or forces outside an organization that potentially affect the organization’s performance, 499 – 500 Equity theory, A theory that says that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any inequities, 219 – 222 Escalation of commitment, An increased commitment to a previous decision in spite of negative information, 180 , 181 Essays, written, 558 Esteem, need for, 203 Ethical dilemmas and ethical choices, Situations in which individuals are required to define right and wrong conduct, 22 – 23 in decision-making, 187 – 188 decision-making and, 185 f of downsizing, 496 gossip as an, 345 b leadership and, 386 – 387 motivation and, 209 b rewards as, 258 b workplace romances as, 423 b Ethics emotions and, 103 failure and, 24 b global virtual teams and, 315 b during negotiation, 468 b in organizational culture, 525 – 527 in political behavior, 434 – 435 training in, 553 Ethnicity, 48 E-training, 553 , 554 f Evidence-based management (EBM), The basing of managerial decisions on the best available scientific evidence, 11 Exchange, as power tactic, 418 Exclusion, 43 e Excuses, 432 e Exemplification, 432 e Exercise, as emotion, mood source, 107 Exit, Dissatisfaction expressed through behavior directed toward leaving the organization, 82 – 84 Expectancy theory, A theory that says that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual, 224 – 226 Expectations, 173 Expertise, creativity and, 189 668 G L I N D E X and ensure that the idea is implemented, 593 Identification-based trust, Trust based on a mutual understanding of each other’s intentions and appreciation of each other’s wants and desires, 395 – 396 Illusory correlation, The tendency of people to associate two events when in reality there is no connection, 104 , 105 Imitation strategy, A strategy that seeks to move into new products or new markets only after their viability has already been proven, 497 – 498 Impression management (IM), The process by which individuals attempt to control the impression others form of them, 430 – 434 Incivility, 43 e Individualism, A national culture attribute that describes the degree to which people prefer to act as individuals rather than as members of groups, 150 , 151 Individual ranking, An evaluation method that rank-orders employees from best to worst, 559 Inductive reasoning, 53 e Influence and power tactics, 419 Informal channels, Communication channels that are created spontaneously and that emerge as responses to individual choices, 338 , 339 Informal group, A group that is neither formally structured nor organizationally determined, 272 , 273 Informational roles, 7 Information overload, A condition in which information inflow exceeds an individual’s processing capacity, 349 – 350 , 353 Ingratiation, 418 , 433 Ingroup bias, 292 b Ingroup favoritism, Perspective in which we see members of our ingroup as better than other people, and people not in our group as all the same , 273 Initiating structure, The extent to which a leader is likely to define and structure his or her role and those of subordinates in the search for goal attainment, 371 Injuries, safety at work, 119 – 120 Innovation, A new idea applied to initiating or improving a product, process , or service , 20 , 420 b, 512 , 591 – 593 Innovation strategy, A strategy that emphasizes the introduction of major new products and services, 497 Input, Variables that lead to processes, 24 – 25 H Halo effect, The tendency to draw a general impression about an individual on the basis of a single characteristic, 171 Hawthorne studies, 280 – 281 Health issues, 564 b Heredity, Factors determined at conception one’s biological, physiological, and inherent psychological makeup, 134 Hierarchy of needs, Abraham Maslow’s hierarchy of five needs—physiological, safety, social, esteem, and self- actualization—in which, as each need is substantially satisfied, the next need becomes dominant, 203 – 204 High-context cultures, Cultures that rely heavily on nonverbal and subtle situational cues in communication, 357 Higher-order needs, Needs that are satisfied internally, such as social, esteem, and self-actualization needs, 203 , 204 Hindrance stressors, Stressors that keep you from reaching your goals (for example, red tape , office politics , confusion over job responsibilities) , 596 , 597 Hindsight bias, The tendency to believe falsely, after an outcome of an event is actually known , that one would have accurately predicted that outcome , 181 – 182 Hispanic workers, 18 Historical precedents and decision- making, 186 – 187 Hofstede’s framework, for assessing culture, 150 – 153 Humane orientation, 154 Human resource management, 8 selection process, 544 – 551 social media and, 567 b training and development programs, 551 – 554 Human skills, The ability to work with, understand, and motivate other people, both individually and in groups, 8 Hygiene factors, Factors—such as company policy and administration, supervision, and salary—that, when adequate in a job, placate workers. When these factors are adequate, people will not be dissatisfied, 205 – 206 I Idea champions, Individuals who take an innovation and actively and enthusiastically promote the idea, build support, overcome resistance, Generation Xers, 146 Generation Yers, 146 , 155 Globalization, 16 – 17 Global Leadership and Organizational Behavior Effectiveness (GLOBE), 153 – 154 , 372 , 385 Goals achievement of, 204 b commitment to, 213 subconscious, 214 Goal-setting, implementation of, 214 – 219 Goal-setting theory, A theory that says that specific and difficult goals, with feedback, lead to higher performance, 212 – 214 Gossip, 344 , 345 b Grapevine, An organization’s informal communication network, 343 – 344 Graphic rating scales, An evaluation method in which the evaluator rates performance factors on an incremental scale, 559 Group cohesion, The extent to which members of a group support and validate one another while at work, 28 Group development, stages of, 274 – 276 Group functioning, The quantity and quality of a work group’s output, 28 Group order ranking, An evaluation method that places employees into a particular classification, such as quartiles , 559 Group performance, 58 Group polarization, 294 – 295 Group(s), Two or more individuals, interacting and interdependent , who have come together to achieve particular objectives , 272 , 273 , 343 cohesiveness of, 314 b decision-making in, 290 – 296 diversity in, 58 , 290 global implications of, 296 – 297 properties of, 278 – 290 size, 286 – 287 stages of development of, 275 – 276 temporary, 276 See also Teams Groupshift, A change between a group’s decision and an individual decision that a member within the group would make; the shift can be toward either conservatism or greater risk but it generally is toward a more extreme version of the group’s original position, 292 , 294 – 295 Groupthink, A phenomenon in which the norm for consensus overrides the realistic appraisal of alternative courses of action, 292 – 294 G L I N D E X 669 in-groups and out-groups; subordinates with in-group status will have higher performance ratings, less turnover, and greater job satisfaction, 377 – 379 Leader–member relations, The degree of confidence, trust, and respect subordinates have in their leader, 373 – 374 Leader-participation model, A leadership theory that provides a set of rules to determine the form and amount of participative decision making in different situations, 376 – 377 Leadership, The ability to influence a group toward the achievement of a vision or set of goals, 368 as an attribution, 393 authentic, 386 – 387 charismatic, 377 – 382 contingency theories of, 372 – 379 creating effective, 396 – 397 , 398 b emotions, moods and, 117 ethics and, 386 – 387 global implications of, 397 leader-member exchange (LMX) theory of, 377 – 379 vs. management, 368 mentoring and, 391 – 392 neutralizers of, 394 – 395 online, 395 path-goal theory of, 376 power and, 413 – 414 situational leadership theory of, 376 style, 372 – 374 substitutes for, 394 – 395 in teams, 313 – 314 trait theories of, 369 – 370 transformational, 382 – 385 Leadership roles, 6 , 7 e Leading, A function that includes motivating employees, directing others, selecting the most effective communication channels, and resolving conflicts, 6 Learning organization, An organization that has developed the continuous capacity to adapt and change, 593 – 595 Least preferred co-worker (LPC) questionnaire, An instrument that purports to measure whether a person is task or relationship oriented, 373 Legitimacy, as power tactic, 418 Legitimate power, The power a person receives as a result of his or her position in the formal hierarchy of an organization, 414 , 415 task significance, autonomy, and feedback, 240 – 242 Job design, The way the elements in a job are organized, 240 Job engagement, The investment of an employee’s physical, cognitive , and emotional energies into job performance , 211 – 212 Job enrichment, The vertical expansion of jobs, which increases the degree to which the worker controls the planning, execution, and evaluation of the work, 244 – 245 Job involvement, The degree to which a person identifies with a job, actively participates in it , and considers performance important to self-worth , 74 , 78 Job performance conscientiousness and, 136 – 137 core self-evaluation and, 139 – 140 defined, 555 individuals with disability and, 49 – 50 job satisfaction and, 84 organizational structure and, 501 – 502 Job rotation, The periodic shifting of an employee from one task to another, 243 – 244 Jobs movement of, 17 redesigning, 242 – 249 service, 18 Job satisfaction, A positive feeling about one’s job resulting from an evaluation of its characteristics, 74 , 78 – 87 age and, 45 attitudes and, 73 causes of, 81 – 82 cultural differences in, 79 – 80 global implications of, 88 impact on workplace, 82 – 86 intelligence and, 55 job performance and, 84 levels, 79 – 81 measuring, 79 profitability and, 86 promotion and, 79 Job sharing, An arrangement that allows two or more individuals to split a traditional 40-hour-a-week job, 247 – 248 Justice. See Fairness, perception of K Knowledge-based pay, 256 L Labor, low-cost, 17 Language, 354 , 356 – 357 , 524 – 525 Leader–member exchange (LMX) theory, A theory that supports leaders’ creation of Inspirational appeals, 418 Instant messaging (IM), 347 Institutionalization, A condition that occurs when an organization takes on a life of its own, apart from any of its members , and acquires immortality , 517 – 518 Instrumental values, Preferable modes of behavior or means of achieving one’s terminal values, 145 Insults, 43 e Integrative bargaining, Negotiation that seeks one or more settlements that can create a win-win solution, 459 e, 460 – 462 Integrity, 389 , 547 – 548 Intellectual abilities, The capacity to do mental activities—thinking, reasoning , and problem solving , 52 – 55 , 61 , 185 Intelligence and self-efficacy, 217 – 218 Intelligence quotient (IQ) tests, 53 Intensity, in motivation, 202 Intentions, Decisions to act in a given way, 452 – 454 Interacting groups, Typical groups in which members interact with each other face to face, 295 – 296 Interactional justice, The perceived degree to which an individual is treated with dignity, concern, and respect, 223 Interactionist view of conflict, The belief that conflict is not only a positive force in a group but also an absolute necessity for a group to perform effectively, 447 Interest levels, 352 Intergroup development, OD efforts to change the attitudes, stereotypes , and perceptions that groups have of each other , 590 – 591 Interpersonal roles, 6 , 7 e Interpersonal skills, 4 – 5 , 552 Interpretation and context, 167 Interviews, 173 , 433 , 548 – 549 Intimidation, 43 e Intrinsic task motivation, 190 , 208 – 209 Intuition, A gut feeling not necessarily supported by research, 11 – 12 , 177 Intuitive decision making, An unconscious process created out of distilled experience, 177 Investiture socialization, 522 e J Japan, 130 – 132 , 217 f Job characteristics model (JCM), A model that proposes that any job can be described in terms of five core job dimensions: skill variety, task identity, 670 G L I N D E X equity theory/organizational justice and, 219 – 222 fear as, 228 b global implications of, 228 goal-setting theory and, 212 – 214 hierarchy of needs theory and, 203 – 204 integrating contemporary theories of, 226 – 228 job characteristics model and, 240 – 242 McClelland’s theory of needs and, 207 – 208 rewards and, 252 – 261 self-determination theory and, 208 – 209 and social, physical context of work, 249 – 250 Theories X, Y and, 205 two-factor theory of, 204 – 208 Motivation-hygiene theory, 204 – 205 Motor reproduction processes, 219 Movement, A change process that transforms the organization from the status quo to a desired end state, 584 , 585 Multiteam systems, Systems in which different teams need to coordinate their efforts to produce a desired outcome, 314 , 315 Myers-Briggs Type Indicator (MBTI), A personality test that taps four characteristics and classifies people into 1 of 16 personality types, 135 – 136 N Narcissism, The tendency to be arrogant, have a grandiose sense of self- importance , require excessive admiration , and have a sense of entitlement , 140 , 155 Need for achievement (nAch), The drive to excel, to achieve in relationship to a set of standards , and to strive to succeed , 207 Need for affiliation (nAff), The desire for friendly and close interpersonal relationships, 207 Need for power (nPow), The need to make others behave in a way in which they would not have behaved otherwise, 207 Needs theory, hierarchy of, 202 – 203 Negative affect, A mood dimension that consists of emotions such as nervousness, stress, and anxiety at the high end and relaxation, tranquility, and poise at the low end, 100 – 101 Neglect, Dissatisfaction expressed through allowing conditions to worsen, 82 – 84 Negotiation, A process in which two or more parties exchange goods or services and McClelland’s theory of needs, A theory that states achievement, power, and affiliation are three important needs that help explain motivation, 207 – 208 Mechanistic model, A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization, 496 – 498 Mediator, A neutral third party who facilitates a negotiated solution by using reasoning, persuasion , and suggestions for alternatives , 467 – 468 Memory, 53 e Mental ability. See Intellectual abilities Mental models, Team members’ knowledge and beliefs about how the work gets done by the team, 321 – 322 Mentor, A senior employee who sponsors and supports a less-experienced employee, called a protégé , 391 – 392 Mergers, 518 – 519 Merit-based pay plan, A pay plan based on performance appraisal ratings, 254 – 255 Metamorphosis stage, The stage in the socialization process in which a new employee changes and adjusts to the job, work group , and organization , 522 , 523 Millennials, 146 – 148 , 155 Mockery, 43 e Model, An abstraction of reality. A simplified representation of some real-world phenomenon, 23 – 25 Modular plan, for benefits, 258 Monitor roles, 7 Moods, Feelings that tend to be less intense than emotions and that lack a contextual stimulus, 98 – 99 , 100 – 102 employment and, 106 f global implications of, 121 OB applications of, 115 – 121 sources of, 103 – 108 See also Emotions Motivating potential score (MPS), A predictive index that suggests the motivating potential in a job, 242 , 243 Motivation, The processes that account for an individual’s intensity, direction , and persistence of effort toward attaining a goal , 202 , 203 alternative work arrangements, 245 – 249 communication as form of, 337 creativity and task, 190 emotions, moods and, 117 employee involvement and, 252 employee recognition as, 261 Liaison roles, 6 , 7 e Life balance. See Work-life balance Literacy skills, 551 Long-term orientation, A national culture attribute that emphasizes the future, thrift , and persistence , 151 Low-context cultures, Cultures that rely heavily on words to convey meaning in communication, 357 Lower-order needs, Needs that are satisfied externally, such as physiological and safety needs, 203 – 204 Loyalty, Dissatisfaction expressed by passively waiting for conditions to improve, 82 – 84 Lying, 355 , 356 b M Machiavellianism, The degree to which an individual is pragmatic, maintains emotional distance, and believes that ends can justify means, 140 Managed conflict, 447 , 449 Management changing structure of, 503 vs. leadership, 368 organizational culture and, 520 organizational politics and, 425 e Management by objectives (MBO), A program that encompasses specific goals, participatively set, for an explicit time period, with feedback on goal progress, 214 – 215 Managers, An individual w ho achieves goals through other people , 5 activities of, 8 – 9 effective vs successful, 9 functional conflict and, 457 – 458 functions of, 6 influence on moods, emotions, 120 interpersonal skills of, 4 – 5 learning organizations and, 593 – 595 organizational behavior and, 30 , 32 organizational culture and, 525 sexual harassment and, 423 – 424 Masculinity, A national culture attribute that describes the extent to which the culture favors traditional masculine work roles of achievement, power , and control. Societal values are characterized by assertiveness and materialism , 150 – 151 Material symbols, What conveys to employees who is important, the degree of egalitarianism top management desires, and the kinds of behavior that are appropriate, 524 , 525 Matrix structure, An organization structure that creates dual lines of authority and combines functional and product departmentalization, 488 – 490 G L I N D E X 671 workplace, composed of distributive, procedural, and interactional justice, 222 , 223 Organizational politics, 424 – 426 , 429 Organizational structure, The way in which job tasks are formally divided, grouped , and coordinated , 480 designs of, 486 – 496 differences in, 496 – 501 global, 489 b global implications of, 502 as source of conflict, 450 – 451 Organizational survival, The degree to which an organization is able to exist and grow over the long term, 29 Organizing, Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made, 6 , 9 Other-inside/outside referent, 220 – 221 Other-orientation, 142 – 143 Outcomes, Key factors that are affected by some other variables in conflict process, 455 – 458 in OB model, 25 in organizational culture, 513 in performance evaluation, 555 – 556 Outsourcing, 500 b Overconfidence bias, 177 – 178 , 182 – 183 P Participative management, A process in which subordinates share a significant degree of decision-making power with their immediate superiors, 251 Path–goal theory, A theory that states that it is the leader’s job to assist followers in attaining their goals and to provide the necessary direction and/or support to ensure that leader–member exchange (LMX) theory A theory that supports leaders’ creation of in-groups and out- groups, 376 , 377 Pay. See Compensation Peer pressure, 294 b People skills, improving, 19 – 20 Perceived conflict, Awareness by one or more parties of the existence of conditions that create opportunities for conflict to arise, 451 – 452 Perceived organizational support (POS), The degree to which employees believe an organization values their contribution and cares about their well-being, 76 – 77 , 78 Perceivers, 167 Perception, A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment, 166 – 173 , 190 , 192 organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness, 10 applications for emotions and moods, 115 – 120 Big Five Model and, 138 e challenges, opportunities for, 15 – 23 developing model of, 22 – 30 disciplines of, 13 – 14 global implications of, 30 , 32 literature about, 31 model, 25 e variables in, 14 – 15 Organizational change, 584 – 586 action research process for, 587 creating a culture for, 591 – 595 global implications of, 606 Kotter’s eight-step plan for, 586 – 587 Lewin’s three-step model for, 584 – 586 See also Change Organizational citizenship behavior (OCB). See Citizenship behavior Organizational climate, The shared perceptions organizational members have about their organization and work environment, 516 – 518 Organizational commitment, The degree to which an employee identifies with a particular organization and its goals and wishes to maintain membership in the organization, 74 – 75 , 78 Organizational culture, A system of shared meaning held by members that distinguishes the organization from other organizations, 420 , 427 creating and sustaining, 519 – 523 defining, 512 – 514 ethical considerations for, 525 – 527 face and dignity cultures in, 515 b functions of, 516 – 519 global implications of, 533 as a liability, 517 – 518 positive environment for, 527 workplace spirituality and, 529 – 532 Organizational demography, The degree to which members of a work unit share a common demographic attribute, such as age, sex, race, educational level, or length of service in an organization, and the impact of this attribute on turnover, 318 , 320 Organizational development (OD), A collection of planned change interventions, built on humanistic– democratic values, that seeks to improve organizational effectiveness and employee well-being, 587 – 591 Organizational justice, An overall perception of what is fair in the attempt to agree on the exchange rate for them, 117 – 118 , 458 , 459 anger in, 118 cross-cultural differences in, 462 b global implications of, 469 – 470 process of, 463 – 467 in sports, 471 third-party, 467 – 468 See also Conflict Negotiator role, 7 e, 8 Netters, 146 , 155 Networking as a managerial activity, 8 as organizational challenge, 20 – 21 social, 347 – 348 , 359 Networks, formal communication, 343 Neutralizers, Attributes that make it impossible for leader behavior to make any difference to follower outcomes, 394 – 395 Nexters, 146 , 155 Nominal group technique, A group decision-making method in which individual members meet face to face to pool their judgments in a systematic but independent fashion, 295 – 296 Nonsanctioned leadership, 368 Norming stage, The third stage in group development, characterized by close relationships and cohesiveness, 275 Norms, Acceptable standards of behavior within a group that are shared by the group’s members, 280 , 281 , 285 – 286 Number aptitude, 53 e O Offers, in distributive bargaining, 460 Offshoring, 500 b Off-the-job training, 553 On-the-job training, 553 Openness to experience, A personality dimension that characterizes someone in terms of imagination, sensitivity, and curiosity, 136 , 137 , 138 , 370 Operant conditioning theory, 218 Organic model, A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making, 496 – 498 Organization, A consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals, 5 Organizational behavior (OB), A field of study that investigates the impact that individuals, groups, and structure have on behavior within 672 G L I N D E X leadership and, 413 – 414 personal, 415 sexual harassment as, 420 – 424 See also Political behavior Power distance, A national culture attribute that describes the extent to which a society accepts that power in institutions and organizations is distributed unequally, 150 , 151 , 420 b Power tactics, Ways in which individuals translate power bases into specific actions, 418 – 420 Prearrival stage, The period of learning in the socialization process that occurs before a new employee joins the organization, 521 Pressure, as power tactic, 418 Privacy, in e-mail, 346 – 347 Proactive personality, People who identify opportunities, show initiative , take action , and persevere until meaningful change occurs , 142 , 143 Problem, A discrepancy between the current state of affairs and some desired state, 174 , 175 Problem-solving skills, 552 Problem-solving teams, Groups of 5 to 12 employees from the same department who meet for a few hours each week to discuss ways of improving quality, efficiency , and the work environment , 310 , 311 Procedural justice, The perceived fairness of the process used to determine the distribution of rewards, 222 , 223 Process conflict, Conflict over how work gets done, 448 , 449 Process consultation (PC), A meeting in which a consultant assists a client in understanding process events with which he or she must deal and identifying processes that need improvement, 589 Process control, 222 Processes, Actions that individuals, groups, and organizations engage in as a result of inputs and that lead to certain outcomes, 25 Production-oriented leader, A leader who emphasizes technical or task aspects of the job, 372 , 373 Productivity, The combination of the effectiveness and efficiency of an organization, 28 – 29 age and, 45 organizational commitment and, 73 trust and, 390 Profit-sharing plan, An organizationwide program that distributes compensation Person-organization fit, 516 Persuasion, 351 – 352 Physical abilities, The capacity to do tasks that demand stamina, dexterity , strength , and similar characteristics , 55 – 56 Physiological needs, 203 Piece-rate pay plan, A pay plan in which workers are paid a fixed sum for each unit of production completed, 254 Planned change, Change activities that are intentional and goal oriented, 580 , 581 Planning, A process that includes defining goals, establishing strategy, and developing plans to coordinate activities, 6 Political behavior, Activities that are not required as part of a person’s formal role in the organization but that influence, or attempt to influence, the distribution of advantages and disadvantages within the organization, 424 – 430 in individuals, 426 – 427 in organizations, 424 – 425 , 427 , 428 b Political skill, The ability to influence others in such a way as to enhance one’s objectives, 420 , 421 Position power, Influence derived from one’s formal structural position in the organization; includes power to hire, fire, discipline, promote, and give salary increases, 374 , 375 Positive affect, A mood dimension that consists of specific positive emotions, 100 – 101 Positive organizational culture, A culture that emphasizes building on employee strengths, rewards more than punishes , and emphasizes individual vitality and growth , 527 – 529 , 534 b Positive organizational scholarship, An area of OB research that concerns how organizations develop human strength, foster vitality and resilience , and unlock potential , 22 Positivity offset, The tendency of most individuals to experience a mildly positive mood at zero input (when nothing in particular is going on), 101 Power, A capacity that A has to influence the behavior of B so that B acts in accordance with A’s wishes bases of, 414 – 416 corruption and, 436 defined, 412 – 413 fairness and, 416 formal, 414 global implications of, 435 Perceptual speed, 53 e Performance evaluation decision-making and, 186 execution of, 556 – 558 impression management and, 433 managerial considerations for, 560 – 563 methods of, 558 – 560 perception in, 173 political behavior in, 427 purposes of, 554 – 558 in teams, 314 – 315 Performance expectations, 173 Performance orientation, 154 Performance-reward relationship, 223 Performance-simulation tests, 548 Performing stage, The fourth stage in group development, during which the group is fully functional, 275 Persistence, in motivation, 202 Personal appeals, 418 Personal evaluation, global implications of, 566 Personality, Enduring characteristics that describe an individual’s behavior, 133 Big Five Model of, 136 – 139 determinants of, 134 – 135 as emotion, mood source, 103 – 104 global implications of, 154 in a global workplace, 143 b Holland’s typology of, 148 – 149 influence on decision-making, 184 Machiavellianism and, 140 measuring, 133 narcissism and, 140 in negotiation, 464 – 465 other-orientation, 142 – 143 persuasion and, 352 proactive, 142 risk taking, 141 – 142 self-efficacy and, 217 – 218 shaping, in the workplace, 147 b of team members, 316 – 317 tests, 547 Personality–job fit theory, A theory that identifies six personality types and proposes that the fit between personality type and occupational environment determines satisfaction and turnover, 148 – 150 Personality-organization fit theory, 150 Personality traits, 134 f, 135 Personalization, in conflict process, 451 – 452 Personal power, Influence derived from an individual’s characteristics, 415 Personal traits, in performance evaluation, 556 Personal variables, as source of conflict, 451 G L I N D E X 673 Rumination, 184 Rumors, 344 S Safety, at work, 119 – 120 , 203 Scarcity and dependence, 417 – 418 Schadenfreude , 120 b Security, of information, 350 Selective perception, The tendency to selectively interpret what one sees on the basis of one’s interests, background , experience , and attitudes , 170 , 171 , 353 Self-actualization, The drive to become what a person is capable of becoming, 203 , 204 , 205 Self-concordance, The degree to which peoples’ reasons for pursuing goals are consistent with their interests and core values, 210 Self-determination theory, A theory of motivation that is concerned with the beneficial effects of intrinsic motivation and the harmful effects of extrinsic motivation, 208 – 211 Self-efficacy, An individual’s belief that he or she is capable of performing a task, 215 – 218 , 370 Self-fulfilling prophecy, A situation in which a person inaccurately perceives a second person, and the resulting expectations cause the second person to behave in ways consistent with the original perception , 173 Self-inside/outside referents, 220 – 221 Self-managed work teams, Groups of 10 to 15 people who take on responsibilities of their former supervisors, 310 , 311 Self-monitoring, A personality trait that measures an individual’s ability to adjust his or her behavior to external, situational factors , 141 Self-promotion, 432 e, 433 Self-serving bias, The tendency for individuals to attribute their own successes to internal factors and put the blame for failures on external factors, 169 Sensitivity training, Training groups that seek to change behavior through unstructured group interaction, 588 – 589 Serial socialization, 522 e Servant leadership, A leadership style marked by going beyond the leader’s own self-interest and instead focusing on opportunities to help followers grow and develop, 387 , 388 b Relationship conflict, Conflict based on interpersonal relationships, 448 , 449 Religion, in the workplace, 50 – 51 Representative participation, A system in which workers participate in organizational decision making through a small group of representative employees, 251 – 252 Resistance point, in negotiation, 459 – 460 Resource allocators, 7 – 8 Resources, for teams, 313 Resources, Things within an individual’s control that can be used to resolve demands, 596 , 597 Resources and dependence, 417 Restraining forces, Forces that hinder movement from the existing equilibrium, 585 Retail Leadership Development (RLD) Program, 59 – 60 Retention processes, 219 Reward power, Compliance achieved based on the ability to distribute rewards that others view as valuable, 414 , 415 Rewards-personal goals relationship, 224 Reward systems, 186 motivation and, 208 – 211 , 252 – 253 organizational culture and, 527 – 528 political behavior and, 427 – 429 in teams, 314 – 315 , 324 Risk aversion, The tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff , 180 – 181 Risk taking, 141 – 142 in organizational culture, 512 trust and, 390 Rituals, Repetitive sequences of activities that express and reinforce the key values of the organization, which goals are most important, which people are important, and which are expendable, 524 , 525 Rokeach Value Survey (RVS), 145 Role, A set of expected behavior patterns attributed to someone occupying a given position in a social unit, 277 allocation of, in teams, 317 ambiguity and political behavior, 427 of managers, 6 – 7 , 7 e Role conflict, A situation in which an individual is confronted by divergent role expectations, 278 – 279 Role expectations, How others believe a person should act in a given situation, 278 Role perception, An individual’s view of how he or she is supposed to act in a given situation, 277 based on some established formula designed around a company’s profitability, 256 , 257 Promotion, 79 See also Self-promotion Psychological contract, An unwritten agreement that sets out what management expects from an employee and vice versa, 278 Psychological empowerment, Employees’ belief in the degree to which they affect their work environment, their competence, the meaningfulness of their job, and their perceived autonomy in their work, 74 Psychology, The science that seeks to measure, explain, and sometimes change the behavior of humans and other animals, 13 e, 14 Punctuated-equilibrium model, A set of phases that temporary groups go through that involves transitions between inertia and activity, 276 Pygmalion effect, 217 R Race, 48 Randomness error, The tendency of individuals to believe that they can predict the outcome of random events, 180 , 181 Rational, Characterized by making consistent, value-maximizing choices within specified constraints , 175 Rational decision-making model, A decision-making model that describes how individuals should behave in order to maximize some outcome, 175 Rational persuasion, 418 Recognition programs, 259 – 260 Recruitment, 56 – 57 , 561 b Red Coats (Delta), 174 f Reference groups, Important groups to which individuals belong or hope to belong and with whose norms individuals are likely to conform, 283 Referent power, Influence based on identification with a person who has desirable resources or personal traits, 415 Reflected best-self, 22 Reflexivity, A team characteristic of reflecting on and adjusting the master plan when necessary, 321 Refreezing, Stabilizing a change intervention by balancing driving and restraining forces, 584 , 585 Reinforcement processes, 219 Reinforcement theory, A theory that says that behavior is a function of its consequences, 218 – 219 674 G L I N D E X Substitutes, Attributes, such as experience and training, that can replace the need for a leader’s support or ability to create structure, 394 – 395 Substitution and dependence, 418 Surface acting, Hiding one’s inner feelings and forgoing emotional expressions in response to display rules, 110 , 111 Surface-level discrimination, 44 – 52 , 290 Surface-level diversity, Differences in easily perceived characteristics, such as gender, race, ethnicity, age, or disability, that do not necessarily reflect the ways people think or feel but that may activate certain stereotypes, 42 Survey feedback, The use of questionnaires to identify discrepancies among member perceptions, 589 Systematic study, Looking at relationships, attempting to attribute causes and effects, and drawing conclusions based on scientific evidence, 11 – 12 T Target point, in negotiation, 459 Targets, in perception, 167 Task conflict, Conflict over content and goals of the work, 448 , 449 Task identity, The degree to which a job requires completion of a whole and identifiable piece of work, 240 , 241 Task performance, The combination of effectiveness and efficiency at doing your core job tasks, performing the duties and responsibilities that contribute to the production of a good or service or to administrative tasks , 26 , 555 Task significance, The degree to which a job has a substantial impact on the lives or work of other people, 240 , 241 Task structure, The degree to which job assignments are procedurized, 374 , 375 Tattoos, 51 Team building, High interaction among team members to increase trust and openness, 589 – 590 Team efficacy, 321 Teams anger and, 320 b composition, 315 – 319 context influences on, 313 – 315 global, 291 , 315 b global implications of, 325 member preferences in, 318 – 319 modeling on sports teams, 326 in organizational culture, 513 collectively than when working individually, 287 , 288 f, 322 Social media, 566 Social needs, 203 Social networking, 347 – 348 , 359 , 581 Social psychology, An area of psychology that blends concepts from psychology and sociology and that focuses on the influence of people on one another, 13 e, 14 Social trends and change, 579 Sociology, The study of people in relation to their social environment or culture, 13 e, 14 Span of control, The number of subordinates a manager can efficiently and effectively direct, 484 – 485 , 501 Spatial visualization, 53 e Specialization, as source of conflict, 451 Speed, of communication, 340 – 341 Spokesperson roles, 7 Stability, in organizational culture, 513 Stamina, 55 e Static strength, 55 e Status, A socially defined position or rank given to groups or group members by others, 274 , 285 – 286 Status characteristics theory, A theory that states that differences in status characteristics create status hierarchies within groups, 285 Stereotyping, Judging someone on the basis of one’s perception of the group to which that person belongs, 42 – 43 , 172 – 173 Stories, 523 – 524 Storming stage, The second stage in group development, characterized by intragroup conflict, 275 Strength, physical, 55 e Stress, A dynamic condition in which an individual is confronted with an opportunity, a demand, or a resource related to what the individual desires and for which the outcome is perceived to be both uncertain and important, 26 , 595 – 600 consequences of, 601 – 602 as emotion, mood source, 105 individual differences in, 599 – 600 in OB model, 26 sources of, 597 – 599 Stress management, 602 – 606 , 607 b Strong culture, A culture in which the core values are intensely held and widely shared, 514 – 515 Subcultures, Minicultures within an organization, typically defined by department designations and geographical separation , 514 , 515 Substantive selection, 546 – 547 Sexual harassment, Any unwanted activity of a sexual nature that affects an individual’s employment and creates a hostile work environment, 43 e, 46 – 47 , 107 , 421 – 424 Sexual orientation, 51 – 52 Short-term orientation, A national culture attribute that emphasizes the past and present, respect for tradition , and fulfillment of social obligations , 151 Silence, 354 – 355 , 526 b, 581 Similarity, in social identity theory, 273 – 274 Simple structure, An organization structure characterized by a low degree of departmentalization, wide spans of control , authority centralized in a single person , and little formalization , 486 – 487 Single-loop learning, A process of correcting errors using past routines and present policies, 594 , 595 Situational leadership theory (SLT), A contingency theory that focuses on followers’ readiness, 376 , 377 Size group, 451 of organizations, 498 of teams, 318 Skill-based pay, A pay plan that sets pay levels on the basis of how many skills employees have or how many jobs they can do, 256 , 257 Skills training, 551 Skill variety, The degree to which a job requires a variety of different activities, 240 , 241 Sleep, as emotion, mood source, 106 Social activities communication in, 337 as emotion, mood source, 105 Social anxiety, 355 Social cognitive theory, 214 Social identity theory, Perspective that considers when and why individuals consider themselves members of groups, 272 , 273 Socialization, A process that adapts employees to the organization’s culture, 520 – 523 Socialized charismatic leadership, A leadership concept that states that leaders convey values that are other centered versus self centered and who role-model ethical conduct, 387 Social-learning theory, The view that we can learn through both observation and direct experience, 214 , 219 Social loafing, The tendency for individuals to expend less effort when working G L I N D E X 675 opposite or converse mode of conduct or end-state of existence, 144 – 145 , 153 f generational, 145 – 148 global implications of, 154 , 156 importance of, 144 international, 150 – 153 table of, 152 e terminal vs. instrumental, 144 – 145 Value system, A hierarchy based on a ranking of an individual’s values in terms of their intensity, 144 Variable-pay program, A pay plan that bases a portion of an employee’s pay on some individual and/ or organizational measure of performance, 253 – 254 Verbal comprehension, 53 e Verbal persuasion, 217 Vicarious modeling, 217 Video conferencing, 348 – 349 Virtual offices, 248 Virtual organization, A small, core organization that outsources major business functions , 490 – 492 Virtual teams, Teams that use computer technology to tie together physically dispersed members in order to achieve a common goal, 312 , 313 Vision, A long-term strategy for attaining a goal or goals, 380 , 381 Vision statement, A formal articulation of an organization’s vision or mission, 381 Vocational Preference Inventory, 148 Voice, Dissatisfaction expressed through active and constructive attempts to improve conditions, 82 – 84 Volatility, in organizational structure, 499 W Weather, as emotion, mood source, 104 Wellness programs, Organizationally supported programs that focus on the employee’s total physical and mental condition, 605 Whistle-blowers, Individuals who report unethical practices by their employer to outsiders, 188 Withdrawal behavior, The set of actions employee take to separate themselves from the organization, 27 Women, 46 increase of, in U.S. labor force, 18 negotiation and, 467 Wonderlic Cognitive Ability Test, 54 – 55 Work, context of, 249 – 250 the direction of established goals by clarifying role and task requirements, 382 , 383 Transformational leaders, Leaders who inspire followers to transcend their own self-interests and who are capable of having a profound and extraordinary effect on followers, 382 Transgender employees, 52 Trunk strength, 55 e Trust, A positive expectation that another will not act opportunistically, 387 – 390 political behavior and, 427 in teams, 314 Trust propensity, 390 Turnover, 27 – 28 age and, 45 gender and, 46 job satisfaction and, 85 organizational commitment and, 75 race, ethnicity and, 48 strong organizational structure and, 515 Twitter, A free blogging and networking service where users send and read messages known as tweets, many of which concern OB issues, 348 , 349 Two-factor theory, A theory that relates intrinsic factors to job satisfaction and associates extrinsic factors with dissatisfaction. Also called motivation-hygiene theory, 205 – 207 , 252 U Uncertainty avoidance, A national culture attribute that describes the extent to which a society feels threatened by uncertain and ambiguous situations and tries to avoid them, 151 Uncertainty reduction, in social identity theory, 274 Unemployed, long-term, 561 b Unfreezing, Changing to overcome the pressures of both individual resistance and group conformity, 584 United States, value characteristics in, 153 f Unity of command, The idea that a subordinate should have only one superior to whom he or she is directly responsible, 484 , 485 Utilitarianism, A system in which decisions are made to provide the greatest good for the greatest number, 187 V Values, Basic convictions that a specific mode of conduct or end-state of existence is personally or socially preferable to an processes, 319 – 322 size of, 318 turning individuals into, 322 – 324 when to use, 324 – 325 See also Group(s) Technical skills, The ability to apply specialized knowledge or expertise, 8 , 551 – 552 Technology, The way in which an organization transfers its inputs into outputs, 498 Telecommuting, Working from home at least two days a week on a computer that is linked to the employer’s office, 248 – 249 Temporariness, as organizational challenge, 20 Tenure, 50 Terminal values, Desirable end-states of existence; the goals a person would like to achieve during his or her lifetime, 145 Test performance, 48 Text messaging (TM), 347 Theory X, The assumption that employees dislike work, are lazy, dislike responsibility, and must be coerced to perform, 204 , 205 , 252 Theory Y, The assumption that employees like work, are creative, seek responsibility, and can exercise self-direction, 204 , 205 , 252 Three-component model of creativity, The proposition that individual creativity requires expertise, creative thinking skills , and intrinsic task motivation , 189 – 190 360-degree evaluations, 557 Time, allocation of managers,’ 9 e Time of day, as emotion, mood source, 104 , 105 e Traditional management, 8 Traditional view of conflict, The belief that all conflict is harmful and must be avoided, 447 Training for leaders, 396 methods for, 553 – 554 for teams, 324 Training, programs, 551 – 554 Training programs effectiveness of, 554 for evaluators, 562 formal vs. informal, 553 Trait theories of leadership, Theories that consider personal qualities and characteristics that differentiate leaders from nonleaders, 369 – 370 Transactional leaders, Leaders who guide or motivate their followers in 676 G L I N D E X Work team, A group whose individual efforts result in performance that is greater than the sum of the individual inputs, 309 World politics and change, 579 , 584 Written tests, 547 X Xers (Generation Xers), 146 Z Zimbardo’s prison experiment, 279 – 280 Workplace environment, 22 Workplace incivility, 43 e, 283 Workplace spirituality, The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community, 529 – 532 Work sample tests, Hands-on simulations of part or all of the work that applicants for routine jobs must perform, 548 Work schedules, 46 Works councils, 251 Work specialization, The degree to which tasks in an organization are subdivided into separate jobs, 480 – 482 , 501 Workforce diversity, The concept that organizations are becoming more heterogeneous in terms of gender, age, race, ethnicity, sexual orientation, and inclusion of other diverse groups, 17 , 18 , 40 – 42 Work group, A group that interacts primarily to share information and to make decisions to help each group member perform within his or her area of responsibility, 309 Work-life balance, 21 – 22 conflicts in, 563 – 566 cultural differences in, 76 b stress and, 604 Workplace deviance, 85 – 86 , 119 Cover Title Page Copyright Page About the Authors Contents Preface Acknowledgments 1 Introduction 1 What Is Organizational Behavior? The Importance of Interpersonal Skills What Managers Do Enter Organizational Behavior Complementing Intuition with Systematic Study Disciplines That Contribute to the OB Field There Are Few Absolutes in OB Challenges and Opportunities for OB Coming Attractions: Developing an OB Model Summary and Implications for Managers SAL: Self-Assessment Library: How Much Do I Know About Organizational Behavior? Myth or Science?: “Most Acts of Workplace Bullying Are Men Attacking Women” An Ethical Choice: Can You Learn from Failure? glOBalization!: Does National Culture Affect Organizational Practices? Point/Counterpoint: Lost in Translation? Questions for Review Experiential Exercise Workforce Diversity Ethical Dilemma Jekyll and Hyde Case Incident 1 “Lessons for ‘Undercover’ Bosses” Case Incident 2 Era of the Disposable Worker? 2 The Individual 2 Diversity in Organizations Diversity Biographical Characteristics Ability Implementing Diversity Management Strategies Summary and Implications for Managers SAL: Self-Assessment Library: What’s My Attitude Toward Older People? Myth or Science?: “Dual-Career Couples Divorce Less” An Ethical Choice: Religious Tattoos glOBalization!: Images of Diversity from Around the Globe Point/Counterpoint: Men Have More Mathematical Ability Than Women Questions for Review Experiential Exercise Feeling Excluded Ethical Dilemma Board Quotas Case Incident 1 The Flynn Effect Case Incident 2 Increasing Age Diversity in the Workplace 3 Attitudes and Job Satisfaction Attitudes Job Satisfaction Summary and Implications for Managers SAL: Self-Assessment Library: How Satisfied Am I with My Job? An Ethical Choice: Do Employers Owe Workers More Satisfying Jobs? glOBalization!: Culture and Work–Life Balance SAL: Self-Assessment Library: Am I Engaged? Myth or Science?: “Favorable Job Attitudes Make Organizations More Profitable” Point/Counterpoint: Employer–Employee Loyalty Is an Outdated Concept Questions for Review Experiential Exercise What Factors Are Most Important to Your Job Satisfaction? Ethical Dilemma Bounty Hunters Case Incident 1 Long Hours, Hundreds of E-Mails, and No Sleep: Does This Sound Like a Satisfying Job? Case Incident 2 Crafting a Better Job 4 Emotions and Moods What Are Emotions and Moods? Emotional Labor Affective Events Theory Emotional Intelligence OB Applications of Emotions and Moods Summary and Implications for Managers SAL: Self-Assessment Library: How Are You Feeling Right Now? SAL: Self-Assessment Library: What’s My Affect Intensity? Myth or Science?: We Are Better Judges of When Others Are Happy Than When They Are Sad glOBalization!: Should You Expect “Service with a Smile” All Around the World? SAL: Self-Assessment Library: What’s My Emotional Intelligence Score? An Ethical Choice: Schadenfreude Point/Counterpoint: Sometimes Blowing Your Top Is a Good Thing Questions for Review Experiential Exercise Who Can Catch a Liar? Ethical Dilemma Happiness Coaches for Employees Case Incident 1 Is It Okay to Cry at Work? Case Incident 2 Can You Read Emotions from Faces? 5 Personality and Values Personality Values Linking an Individual’s Personality and Values to the Workplace International Values Summary and Implications for Managers SAL: Self-Assessment Library: Am I a Narcissist? Myth or Science?: Personality Predicts the Performance of Entrepreneurs glOBalization!: The Right Personality for a Global Workplace An Ethical Choice: Should You Try to Change Someone’s Personality? Point/Counterpoint: Millennials Are More Narcissistic Questions for Review Experiential Exercise What Organizational Culture Do You Prefer? Ethical Dilemma Freedom or Lack of Commitment? Case Incident 1 Is There a Price for Being Too Nice? Case Incident 2 Leadership from an Introvert’s Perspective 6 Perception and Individual Decision Making What Is Perception? Person Perception: Making Judgments About Others The Link Between Perception and Individual Decision Making Decision Making in Organizations Influences on Decision Making: Individual Differences and Organizational Constraints What About Ethics in Decision Making? Summary and Implications for Managers SAL: Self-Assessment Library: What Are My Gender Role Perceptions? glOBalization!: Chinese Time, North American Time Myth or Science?: Creative Decision Making Is a Right-Brain Activity SAL: Self-Assessment Library: Am I A Deliberate Decision Maker? An Ethical Choice: Whose Ethical Standards to Follow? SAL: Self-Assessment Library: How Creative Am I? Point/Counterpoint: Checklists Lead to Better Decisions Questions for Review Experiential Exercise Biases in Decision Making Ethical Dilemma Do Unethical Decisions Come from Bad Character? Case Incident 1 Computerized Decision Making Case Incident 2 Predictions That Didn’t Quite Pan Out 7 Motivation Concepts Defining Motivation Early Theories of Motivation Contemporary Theories of Motivation Integrating Contemporary Theories of Motivation Summary and Implications for Managers SAL: Self-Assessment Library: How Confident Am I in My Abilities to Succeed? Myth or Science?: “The Support of Others Improves Our Chances of Accomplishing Our Goals” An Ethical Choice: Motivated to Behave Unethically glOBalization!: Autonomy Needs Around the Globe SAL: Self-Assessment Library: What Are My Course Performance Goals? Point/Counterpoint: Fear Is a Powerful Motivator Questions for Review Experiential Exercise Goal-Setting Task Ethical Dilemma The Big Easy? Case Incident 1 It’s Not Fair! Case Incident 2 Bullying Bosses 8 Motivation: From Concepts to Applications Motivating by Job Design: The Job Characteristics Model Employee Involvement Using Rewards to Motivate Employees Summary and Implications for Managers SAL: Self-Assessment Library: What’s My Job’s Motivating Potential? Myth or Science?: “CEO Pay Can’t Be Measured” An Ethical Choice: Identifying Conflicts of Interest glOBalization!: Motivated by Individual Goals or Relational Goals? Point/Counterpoint: “If Money Doesn’t Make You Happy, You Aren’t Spending It Right” Questions for Review Experiential Exercise Assessing Employee Motivation and Satisfaction Using the Job Characteristics Model Ethical Dilemma Spitting Mad Case Incident 1 Multitasking: A Good Use of Your Time? Case Incident 2 Bonuses Can Backfire 3 The Group 9 Foundations of Group Behavior Defining and Classifying Groups Stages of Group Development Group Properties: Roles, Norms, Status, Size, Cohesiveness, and Diversity Group Decision Making Summary and Implications for Managers SAL: Self-Assessment Library: Do I Have a Negative Attitude Toward Working in Groups? SAL: Self-Assessment Library: Do I Trust Others? glOBalization!: Forming International Teams in a Virtual World Myth or Science?: “Asians Have Less Ingroup Bias Than Americans” An Ethical Choice: Should You Use Group Peer Pressure? Point/Counterpoint: Affinity Groups Fuel Business Success Questions for Review Experiential Exercise Wilderness Survival Ethical Dilemma Is Social Loafing Shirking? Case Incident 1 Negative Aspects of Collaboration? Case Incident 2 Herd Behavior and the Housing Bubble (and Collapse) 10 Understanding Work Teams Why Have Teams Become So Popular? Differences Between Groups and Teams Types of Teams Creating Effective Teams Turning Individuals into Team Players Beware! Teams Aren’t Always the Answer Summary and Implications for Managers SAL: Self-Assessment Library: How Good Am I at Building and Leading a Team? glOBalization!: Group Cohesiveness across Cultures An Ethical Choice: Using Global Virtual Teams as an Environmental Choice Myth or Science?: “Teams Work Best Under Angry Leaders” SAL: Self-Assessment Library: What Is My Team Efficacy? Point/Counterpoint: We Can Learn Much About Work Teams from Studying Sports Teams Questions for Review Experiential Exercise Fixed versus Variable Flight Crews Ethical Dilemma Unethical Teams Case Incident 1 Why Don’t Teams Work Like They’re Supposed to? Case Incident 2 Multicultural Multinational Teams at IBM 11 Communication Functions of Communication The Communication Process Direction of Communication Interpersonal Communication Organizational Communication Choice of Communication Channel Persuasive Communications Barriers to Effective Communication Global Implications Summary and Implications for Managers SAL: Self-Assessment Library: Am I a Gossip? An Ethical Choice: The Ethics of Gossip at Work Myth or Science?: “We Know What Makes Good Liars Good” glOBalization!: How Direct Should You Be? Point/Counterpoint: Social Networking Is Good Business SAL: Self-Assessment Library: How Good Are My Listening Skills? Questions for Review Experiential Exercise An Absence of Nonverbal Communication Ethical Dilemma Pitfalls of E-Mail Case Incident 1 Using Social Media to Your Advantage Case Incident 2 Should Companies That Fire Shoot First? 12 Leadership What Is Leadership? Trait Theories Behavioral Theories Contingency Theories Leader–Member Exchange (LMX) Theory Charismatic Leadership and Transformational Leadership Authentic Leadership: Ethics and Trust Leading for the Future: Mentoring Challenges to the Leadership Construct Finding and Creating Effective Leaders Summary and Implications for Managers SAL: Self-Assessment Library: What’s My Leadership Style? SAL: Self-Assessment Library: What’s My LPC Score? glOBalization!: Cross-Cultural Leadership Styles SAL: Self-Assessment Library: How Charismatic Am I? SAL: Self-Assessment Library: Am I an Ethical Leader? An Ethical Choice: Do Leaders Have a Responsibility to Protect Followers? Myth or Science?: “Power Helps Leaders Perform Better” Point/Counterpoint: Heroes Are Made, Not Born Questions for Review Experiential Exercise What Is a Leader? Ethical Dilemma Undercover Leaders Case Incident 1 Leadership Mettle Forged in Battle Case Incident 2 Leadership Factories 13 Power and Politics A Definition of Power Contrasting Leadership and Power Bases of Power Dependence: The Key to Power Power Tactics Sexual Harassment: Unequal Power in the Workplace Politics: Power in Action Causes and Consequences of Political Behavior The Ethics of Behaving Politically Summary and Implications for Managers SAL: Self-Assessment Library: Is My Workplace Political? glOBalization!: Power Distance and Innovation An Ethical Choice: Should All Sexual Behavior Be Prohibited at Work? Myth or Science?: “Corporate Political Activity Pays” SAL: Self-Assessment Library: How Good Am I at Playing Politics? Point/Counterpoint: Power Corrupts People Questions for Review Experiential Exercise Understanding Power Dynamics Ethical Dilemma Corporate Spying Case Incident 1 Delegate Power, or Keep It Close? Case Incident 2 The Persuasion Imperative 14 Conflict and Negotiation A Definition of Conflict Transitions in Conflict Thought The Conflict Process Negotiation Summary and Implications for Managers SAL: Self-Assessment Library: What’s My Preferred Conflict-Handling Style? Myth or Science?: “Communicating Well Is More Important in Cross-Cultural Negotiations” glOBalization!: Anger and Conflict Across Cultures SAL: Self-Assessment Library: What’s My Negotiating Style? An Ethical Choice: Using Empathy to Negotiate More Ethically Point/Counterpoint: Player–Owner Disputes Are Unnecessary Questions for Review Experiential Exercise A Negotiation Role-Play Ethical Dilemma The Lowball Applicant Case Incident 1 Choosing Your Battles Case Incident 2 Mediation: Master Solution to Employment Disputes? 15 Foundations of Organization Structure What Is Organizational Structure? Common Organizational Designs New Design Options Why Do Structures Differ? Organizational Designs and Employee Behavior Summary and Implications for Managers SAL: Self-Assessment Library: Do I Like Bureaucracy? SAL: Self-Assessment Library: How Willing Am I to Delegate? glOBalization!: The Global Organization An Ethical Choice: Downsizing with a Conscience Myth or Science?: “Employees Resent Outsourcing” Point/Counterpoint: The End of Management Questions for Review Experiential Exercise Dismantling a Bureaucracy Ethical Dilemma Directing the Directors Case Incident 1 Creative Deviance: Bucking the Hierarchy? Case Incident 2 Siemens’ Simple Structure—Not 4 The Organization System 16 Organizational Culture What Is Organizational Culture? What Do Cultures Do? Creating and Sustaining Culture How Employees Learn Culture Creating an Ethical Organizational Culture Creating a Positive Organizational Culture Spirituality and Organizational Culture Global Implications Summary and Implications for Managers SAL: Self-Assessment Library: What’s the Right Organizational Culture for Me? glOBalization!: Face Culture, Dignity Culture, and Organizational Culture Myth or Science?: “Employees Treat Customers the Same Way the Organization Treats Them” An Ethical Choice: Designing a Culture of Ethical Voice SAL: Self-Assessment Library: How Spiritual Am I? Point/Counterpoint: Organizations Should Strive to Create a Positive Organizational Culture Questions for Review Experiential Exercise Rate Your Classroom Culture Ethical Dilemma A Bankrupt Culture Case Incident 1 Mergers Don’t Always Lead to Culture Clashes Case Incident 2 Did Toyota’s Culture Cause Its Problems? 17 Human Resource Policies and Practices Selection Practices Training and Development Programs Performance Evaluation Managing Work–Life Conflicts in Organizations Summary and Implications for Managers SAL: Self-Assessment Library: How Much Do I Know About Human Resource Management (HRM)? glOBalization!: Performance Appraisal Around the World An Ethical Choice: Recruiting the Unemployed SAL: Self-Assessment Library: How Good Am I at Giving Performance Feedback? Myth or Science?: “Work Is Making Us Fat” Point/Counterpoint: Social Media Is a Great Source of New Hires Questions for Review Experiential Exercise Evaluating Performance and Providing Feedback Ethical Dilemma Credit Checking Case Incident 1 The End of the Performance Appraisal? Case Incident 2 Job Candidates Without Strong SAT Scores Need Not Apply 18 Organizational Change and Stress Management Forces for Change Planned Change Resistance to Change Approaches to Managing Organizational Change Creating a Culture for Change Work Stress and Its Management Summary and Implications for Managers SAL: Self-Assessment Library: How Well Do I Respond to Turbulent Change? Myth or Science?: “Men Experience More Job Stress Than Women” SAL: Self-Assessment Library: How Stressful Is My Life? An Ethical Choice: Responsibly Managing Your Own Stress glOBalization!: Work–Family Stress in Different Cultures Point/Counterpoint: Responsible Managers Relieve Stress on Their Employees Questions for Review Experiential Exercise Power and the Changing Environment Ethical Dilemma Changes at WPAC Case Incident 1 Starbucks Returns to Its Roots Case Incident 2 The Rise of Extreme Jobs Appendix A: Research in Organizational Behavior Comprehensive Cases Indexes A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Glindex A B C D E F G H I J K L M N O P R S T U V W X Z