Organizational Behavior
Site: | Saylor Academy |
Course: | BUS209: Organizational Behavior |
Book: | Organizational Behavior |
Printed by: | Guest user |
Date: | Saturday, September 7, 2024, 7:27 PM |
Description
Read this section for an overview of organizational behavior, defined as a systematic study of how individuals and groups act within the organizations where they work. As you read, think about how organizational behavior is related to organizational success. Also, look for the trends in organizational behavior (OB), since we will discuss these trends again in the course.
Learning Objectives
After reading this chapter, you should be able to understand and articulate answers to the following questions:
- What is organizational behavior (OB)?
- Why does organizational behavior matter?
- How can I maximize my learning in this course?
- What research methods are used to study organizational behavior?
- What challenges and opportunities exist for OB?
Source: Saylor Academy, https://saylordotorg.github.io/text_organizational-behavior-v1.1/s05-organizational-behavior.html This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License.
College Textbook Revolution: The Case of Unnamed Publisher
Figure 1.1
![](https://learn.saylor.org/pluginfile.php/3776688/mod_book/chapter/31558/1.1.jpg)
The
traditional textbook publishing model no longer serves the interests of
students, educators, and authors. Textbooks are too expensive for
students and too inflexible for instructors. And authors, the major,
initial source of value in the industry, are increasingly confused by
faster revision demands and their compensation for those revisions. Flat
World addresses all these industry pain points.
- Jeff Shelstad
In
2007, two textbook publishing industry veterans, Jeff Shelstad and Eric
Frank, started Unnamed Publisher, a privately held company, to be a new
and disruptive model for the college textbook market. Traditional
business textbook publishers carry a portfolio of 5 to 10 titles per
subject and charge premium prices for new textbooks, an average of
$1,000 in textbooks for a college student's first year, according to a
recent General Accounting Office (GAO) report. FWK's strategy aims to
turn the traditional model on its head by providing online textbook
access free to students (http://www.gone.2012books.lardbucket.org). FWK
earns revenues by selling students the digital textbooks in alternate
formats, print and audio initially, and also by selling highly efficient
and mobile study aids. Despite the fact that professors have rated the
academic quality of FWK textbooks as equal to or higher than that of
textbooks from traditional publishers, the cost to students is a
fraction of current market prices due to the efficiencies of the FWK
business model. Moreover, with FWK's platform, instructors who adopt FWK
books for their classes are able to pick and choose the material
provided to their students, even if it is from earlier versions of
textbooks that have since been revised.
Shelstad
and Frank previously served as the editorial director and the marketing
director, respectively, at Prentice Hall, a major U.S. publisher of
educational materials and a division of Pearson PLC. They resigned from
Prentice Hall in January 2007 with plans to start a higher education
publishing business together. During the first several months, they met
with many students, professors, authors, advisors, and potential angel
investors. The result was Unnamed Publisher. Shelstad became the CEO;
Frank was the chief marketing officer. They also added David Wiley as
the chief openness officer.
Asked
why he started FWK, Shelstad said, "I was convinced the college
textbook publishing industry model was broken". He added, "When more and
more students are running from your core product, you have a problem.
For example, many leading business school textbooks sell in the college
bookstore or on various Internet sites for $150 or more. Students by and
large don't see that value. So they search frantically for substitutes,
and the Internet has made the availability and pricing of substitutes
very obvious". In its first term (fall of 2009), FWK had 40,000 students
using its textbooks. This steadily continued to rise as faculty
discovered the low-priced alternative that combined quality and
affordability for their students. As of January 2013, FWK has published
more than 100 books, with faculty customers at more than 2000
institutions in 44 countries. As a result, more than 600,000 students
have benefited from affordable textbook choices that lower costs,
increase access, and personalize learning.
Media
attention regarding the fledgling FWK was generally very favorable.
Social media experts also gave the company accolades. For example, Chris
Anderson devoted a page to the FWK business model in his bestselling
book "Free: The Future of a Radical Price". Moreover, early user reviews
of the product were also very positive. For instance, an instructor who
adopted an early FWK text, Principles of Management, noted, "I highly
recommend this book as a primary textbook for…business majors. The
overall context is quite appropriate and the search capability within
the context is useful. I have been quite impressed [with] how they have
highlighted the key areas". At the same time, opportunities to improve
the Web interface still existed, with the same reviewer noting, "The
navigation could be a bit more user friendly, however". FWK uses user
input like this to better adjust the strategy and delivery of its model.
This type of feedback led the FWK design squad to improve its custom
Web interface, so that instructors can more easily change the book.
Further
changes occurred in late 2012, when the company announced it would no
longer offer free online access to its textbooks. Moving from "free to
fair" (the entry point for students is now $19.95) was a difficult but
necessary decision. On its website, the company explained:
"As
the transition to digital has changed student buying trends, the free
format has become a barrier to our long-term growth and ability to offer
a fair and affordable model that works for all our customers, from
individual students and instructors to our institutional partners".
In
December 2012, the company announced the appointment of Christopher
Etesse as CEO. Etesse is a former senior executive and Chief Technology
Officer with Blackboard Inc. Shelstad will remain with the company in a
strategic role as Founder.
Only
time will tell if the $30 million invested in FWK by 2012 will result
in the establishment of a new titan in textbook publishing or will be an
entrepreneurial miss.
Discussion Questions
- Which competitive advantages does Unnamed Publisher seem to possess?
- Which learning styles might be most effective for individuals in entrepreneurial firms? Explain your answer.
- How might the extensive textbook industry experience that the Unnamed Publisher founders possess help or hinder the company's ultimate success or failure?
- If you were one of the Unnamed Publisher founders, how would you prioritize how you spent your time in the first weeks on the job after getting the venture capital funding?
Understanding Organizational Behavior
Learning Objectives
- Learn about the layout of this book.
- Understand what organizational behavior is.
- Understand why organizational behavior matters.
- Learn about OB Toolboxes in this book.
About This Book
The people make the place.
- Benjamin Schneider, Fellow of the Academy of Management
This
book is all about people, especially people at work. As evidenced in
the opening case, we will share many examples of people making their
workplaces work. People can make work an exciting, fun, and productive
place to be, or they can make it a routine, boring, and ineffective
place where everyone dreads to go. Steve Jobs, cofounder, chairman, and
CEO of Apple Inc. attributes the innovations at Apple, which include the
iPod, MacBook, and iPhone, to people, noting, "Innovation has nothing
to do with how many R&D dollars you have.…It's not about money. It's
about the people you have, how you're led, and how much you get
it". This became a sore point with investors in early 2009 when Jobs took
a medical leave of absence. Many wonder if Apple will be as successful
without him at the helm, and Apple stock plunged upon worries about his
health.
Figure 1.2
![](https://learn.saylor.org/pluginfile.php/3776688/mod_book/chapter/31559/1.2.jpg)
Steve
Jobs is known for developing innovative products by hiring the right
people for the job and fostering a culture of hard work and creativity.
Mary
Kay Ash, founder of Mary Kay Inc., a billion-dollar cosmetics company,
makes a similar point, saying, "People are definitely a company's
greatest asset. It doesn't make any difference whether the product is
cars or cosmetics. A company is only as good as the people it
keeps".
Just
like people, organizations come in many shapes and sizes. We understand
that the career path you will take may include a variety of different
organizations. In addition, we know that each student reading this book
has a unique set of personal and work-related experiences, capabilities,
and career goals. On average, a person working in the United States
will change jobs 10 times in 20 years.U.S. Bureau of Labor Statistics.
(2005). In order
to succeed in this type of career situation, individuals need to be
armed with the tools necessary to be lifelong learners. So, this book
will not be about giving you all the answers to every situation you may
encounter when you start your first job or as you continue up the career
ladder. Instead, this book will give you the vocabulary, framework, and
critical thinking skills necessary for you to diagnose situations, ask
tough questions, evaluate the answers you receive, and act in an
effective and ethical manner regardless of situational characteristics.
Throughout
this book, when we refer to organizations, we will include examples
that may apply to diverse organizations such as publicly held,
for-profit organizations like Google and American Airlines, privately
owned businesses such as S. C. Johnson & Son Inc. (makers of Windex
glass cleaner) and Mars Inc. (makers of Snickers and M&Ms), and
not-for-profit organizations such as the Sierra Club or Mercy Corps, and
nongovernmental organizations (NGOs) such as Doctors Without Borders
and the International Red Cross. We will also refer to both small and
large corporations. You will see examples from Fortune 500 organizations
such as Intel Corporation or Home Depot Inc., as well as small start-up
organizations. Keep in mind that some of the small organizations of
today may become large organizations in the future. For example, in
1998, eBay Inc. had only 29 employees and $47.4 million in income, but
by 2008 they had grown to 11,000 employees and over $7 billion in
revenue. Regardless of the size or type of
organization you may work for, people are the common denominator of how
work is accomplished within organizations.
Together,
we will examine people at work both as individuals and within work
groups and how they impact and are impacted by the organizations where
they work. Before we can understand these three levels of organizational
behavior, we need to agree on a definition of organizational behavior.
What Is Organizational Behavior?
Organizational
behavior (OB) is defined as the systematic study and application of
knowledge about how individuals and groups act within the organizations
where they work. As you will see throughout this book, definitions are
important. They are important because they tell us what something is as
well as what it is not. For example, we will not be addressing childhood
development in this course - that concept is often covered in
psychology - but we might draw on research about twins raised apart to
understand whether job attitudes are affected by genetics.
OB
draws from other disciplines to create a unique field. As you read this
book, you will most likely recognize OB's roots in other disciplines.
For example, when we review topics such as personality and motivation,
we will again review studies from the field of psychology. The topic of
team processes relies heavily on the field of sociology. In the chapter
relating to decision making, you will come across the influence of
economics. When we study power and influence in organizations, we borrow
heavily from political sciences. Even medical science contributes to
the field of organizational behavior, particularly to the study of
stress and its effects on individuals.
Figure 1.3
![](https://learn.saylor.org/pluginfile.php/3776688/mod_book/chapter/31559/1.3.jpg)
OB spans topics related from the individual to the organization.
Those
who study organizational behavior - which now includes you - are
interested in several outcomes such as work attitudes (e.g., job
satisfaction and organizational commitment) as well as job performance
(e.g., customer service and counterproductive work behaviors). A
distinction is made in OB regarding which level of the organization is
being studied at any given time. There are three key levels of analysis
in OB. They are examining the individual, the group, and the
organization. For example, if I want to understand my boss's
personality, I would be examining the individual level of analysis. If
we want to know about how my manager's personality affects my team, I am
examining things at the team level. But, if I want to understand how my
organization's culture affects my boss's behavior, I would be
interested in the organizational level of analysis.
Why Organizational Behavior Matters
OB
matters at three critical levels. It matters because it is all about
things you care about. OB can help you become a more engaged
organizational member. Getting along with others, getting a great job,
lowering your stress level, making more effective decisions, and working
effectively within a team…these are all great things, and OB addresses
them!
It
matters because employers care about OB. A recent survey by the
National Association of Colleges and Employers (NACE) asked employers
which skills are the most important for them when evaluating job
candidates, and OB topics topped the list.
The following were the top five personal qualities/skills:
- Communication skills (verbal and written)
- Honesty/integrity
- Interpersonal skills (relates well to others)
- Motivation/initiative
- Strong work ethic
These are all things we will cover in OB.
Finally,
it matters because organizations care about OB. The best companies in
the world understand that the people make the place. How do we know
this? Well, we know that organizations that value their employees are
more profitable than those that do not.Huselid, M. A. (1995). The impact
of human resource management practices on turnover, productivity, and
corporate financial performance. Research shows that successful organizations have a
number of things in common, such as providing employment security,
engaging in selective hiring, utilizing self-managed teams, being
decentralized, paying well, training employees, reducing status
differences, and sharing information. For example, every Whole Foods store
has an open compensation policy in which salaries (including bonuses)
are listed for all employees. There is also a salary cap that limits the
maximum cash compensation paid to anyone in the organization, such as a
CEO, in a given year to 19 times the companywide annual average salary
of all full-time employees. What this means is that if the average
employee makes $30,000 per year, the highest potential pay for their CEO
would be $570,000, which is a lot of money but pales in comparison to
salaries such as Steve Jobs of Apple at $14.6 million or the highest
paid CEO in 2007, Larry Ellison of Oracle, at $192.9
million. Research shows that organizations
that are considered healthier and more effective have strong OB
characteristics throughout them such as role clarity, information
sharing, and performance feedback. Unfortunately, research shows that
most organizations are unhealthy, with 50% of respondents saying that
their organizations do not engage in effective OB practices.
In
the rest of this chapter, we will build on how you can use this book by
adding tools to your OB Toolbox in each section of the book as well as
assessing your own learning style. In addition, it is important to
understand the research methods used to define OB, so we will also
review those. Finally, you will see what challenges and opportunities
businesses are facing and how OB can help overcome these challenges.
Adding to Your OB Toolbox
Your OB Toolbox
OB Toolboxes appear throughout this book. They indicate a tool that you can try out today to help you develop your OB skills.
Throughout
the book, you will see many OB Toolbox features. Our goal in writing
this book is to create something useful for you to use now and as you
progress through your career. Sometimes we will focus on tools you can
use today. Other times we will focus on things you may want to think
about that may help you later. As you progress, you may discover some OB
tools that are particularly relevant to you while others are not as
appropriate at the moment. That's great - keep those that have value to
you. You can always go back and pick up tools later on if they don't
seem applicable right now.
The
important thing to keep in mind is that the more tools and skills you
have, the higher the quality of your interactions with others will be
and the more valuable you will become to organizations that compete for
top talent. It is
not surprising that, on average, the greater the level of education you
have, the more money you will make. In 2006, those who had a college
degree made 62% more money than those who had a high school degree.U.S.
Bureau of Labor Statistics. Organizations value and pay for skills as
the next figure shows.
Figure 1.4
![](https://learn.saylor.org/pluginfile.php/3776688/mod_book/chapter/31559/1.4.jpg)
Education and training have financial payoffs as illustrated by these unemployment and earnings for workers 25 and older.
Tom
Peters is a management expert who talks about the concept of
individuals thinking of themselves as a brand to be managed. Further, he
recommends that individuals manage themselves like free agents. The following
OB Toolbox includes several ideas for being effective in keeping up
your skill set.
Your OB Toolbox: Skill Survival Kit
- Keep your skills fresh. Consider revolutionizing your portfolio of skills at least every 6 years.
- Master something. Competence in many skills is important, but excelling at something will set you apart.
- Embrace ambiguity. Many people fear the unknown. They like things to be predictable. Unfortunately, the only certainty in life is that things will change. Instead of running from this truth, embrace the situation as a great opportunity.
- Network. The term has been overused to the point of sounding like a cliché, but networking works. This doesn't mean that having 200 connections on MySpace, LinkedIn, or Facebook makes you more effective than someone who has 50, but it does mean that getting to know people is a good thing in ways you can't even imagine now.
-
Appreciate new technology. This doesn't mean you should get and use
every new gadget that comes out on the market, but it does mean you need
to keep up on what the new technologies are and how they may affect you
and the business you are in.
A key step in building your OB skills and filling your toolbox is to learn the language of OB. Once you understand a concept, you are better able to recognize it. Once you recognize these concepts in real-world events and understand that you have choices in how you will react, you can better manage yourself and others. An effective tool you can start today is journaling, which helps you chart your progress as you learn new skills. For more on this, see the OB Toolbox below.
OB Toolbox: Journaling as a Developmental Tool
- What exactly is journaling? Journaling refers to the process of writing out thoughts and emotions on a regular basis.
- Why is journaling a good idea? Journaling is an effective way to record how you are feeling from day to day. It can be a more objective way to view trends in your thoughts and emotions so you are not simply relying on your memory of past events, which can be inaccurate. Simply getting your thoughts and ideas down has been shown to have health benefits as well such as lowering the writer's blood pressure, heart rate, and decreasing stress levels.
- How do I get started? The first step is to get a journal or create a computer file where you can add new entries on a regular basis. Set a goal for how many minutes per day you want to write and stick to it. Experts say at least 10 minutes a day is needed to see benefits, with 20 minutes being ideal. The quality of what you write is also important. Write your thoughts down clearly and specifically while also conveying your emotions in your writing. After you have been writing for at least a week, go back and examine what you have written. Do you see patterns in your interactions with others? Do you see things you like and things you'd like to change about yourself? If so, great! These are the things you can work on and reflect on. Over time, you will also be able to track changes in yourself, which can be motivating as well.
Isn't OB Just Common Sense?
As teachers we have heard this question many times. The answer, as you might have guessed, is no - OB is not just common sense. As we noted earlier, OB is the systematic study and application of knowledge about how individuals and groups act within the organizations where they work. Systematic is an important word in this definition. It is easy to think we understand something if it makes sense, but research on decision making shows that this can easily lead to faulty conclusions because our memories fail us. We tend to notice certain things and ignore others, and the specific manner in which information is framed can affect the choices we make. Therefore, it is important to rule out alternative explanations one by one rather than to assume we know about human behavior just because we are humans! Go ahead and take the following quiz and see how many of the 10 questions you get right. If you miss a few, you will see that OB isn't just common sense. If you get them all right, you are way ahead of the game!
Putting Common Sense to the Test
Please answer the following 10 questions by noting whether you believe the sentence is true or false.
- Brainstorming in a group is more effective than brainstorming alone.
- The first 5 minutes of a negotiation are just a warm-up to the actual negotiation and don't matter much.
- The best way to help someone reach their goals is to tell them to do their best.
- If you pay someone to do a task they routinely enjoy, they'll do it even more often in the future.
- Pay is a major determinant of how hard someone will work.
- If a person fails the first time, they try harder the next time.
- People perform better if goals are easier.
- Most people within organizations make effective decisions.
- Positive people are more likely to withdraw from their jobs when they are dissatisfied.
- Teams with one smart person outperform teams in which everyone is average in intelligence.
You may check your answers with your instructor.
Key Takeaway
This book is about people at work. Organizations come in many shapes and sizes. Organizational behavior is the systematic study and application of knowledge about how individuals and groups act within the organizations where they work. OB matters for your career, and successful companies tend to employ effective OB practices. The OB Toolboxes throughout this book are useful in increasing your OB skills now and in the future.
Exercises
-
Which type of organizations did you have the most experience with?
How did that affect your understanding of the issues in this chapter?
- Which skills do you think are the most important ones for being an effective employee?
- What are the three key levels of analysis for OB?
- Have you ever used journaling before? If so, were your experiences
positive? Do you think you will use journaling as a tool in the future?
- How do you plan on using the OB Toolboxes in this book? Creating a
plan now can help to make you more effective throughout the term.
Understanding Your Learning Style
Learning Objectives
- Understand different dimensions of learning styles.
- Diagnose your own learning style.
- Explore strategies for working with your preferred learning style.
Learning Styles
In order to maximize your learning in this course and in any learning situation, it's important to understand what type of learner you are. Some people learn better by seeing information. For example, if you notice that you retain more information by reading and seeing diagrams and flow charts, you may be a visual learner. If you primarily learn by listening to others such as in lectures, conversations, and videos, you may be an auditory learner. Finally, if you have a preference for actually doing things and learning from trial and error, you may be a kinesthetic learner. If you are unaware of what your primary learning style is, take a moment to diagnose it at the Web site listed below.
What Is Your Learning Style?
Take the following online learning style quiz to find out what type of learner you are:
http://www.vark-learn.com/english/page.asp?p=questionnaire
Now
that you have established which type of learner you are, let's go
through some recommendations for your style. Here are some learning
recommendations.Adapted from recommendations by Jennifer Yeh at San
Francisco State University.
- If you are a visual learner,
- draw pictures and diagrams to help you understand;
- take careful notes during class so you can refer back to them later on;
- summarize the main points of what you learn using charts.
- If you are an auditory learner,
- join study groups so you can discuss your questions and ideas and hear responses;
- write down any oral instructions you hear in class right away;
- consider taping lectures if your professor says it is OK and view online lectures on topics you are interested in.
- If you are a kinesthetic learner,
- schedule your homework and study sessions so you can take breaks and move around between reading your notes or chapters;
- take good notes during class - this will force you to pay attention and process information even when you feel like you are "getting it";
- don't sign up for long once-a-week classes - they normally require too much sitting and listening time.
For
various reasons, using flash cards seems to help with all three
learning styles. For example, for an auditory learner, saying the
answers aloud when using flash cards helps to solidify concepts. For a
visual learner, seeing the answers written down on the flash card can be
helpful. And for the kinesthetic learner, the act of creating and
organizing flash cards helps the concepts stick.
Key Takeaway
People tend to have a preferred learning style. Visual learners see things to learn them. Auditory learners hear things to learn them. Kinesthetic learners do things to learn them.
Exercises
- Were you surprised by your primary learning style? Why or why not?
- How does your learning style affect the kinds of classes you take?
- Try out a few of the suggestions for your learning style over the next week and see how they work.
- Now that you've learned more about your own learning style, are
there some things you might consider doing to expand on your other
styles? If so, what steps might you take to do this?
Understanding How OB Research Is Done
Learning Objectives
- Learn the terminology of research.
- Understand the different types of OB research methods used.
OB Research Methods
OB researchers have many tools they use to discover how individuals, groups, and organizations behave. Researchers have working hypotheses based on their own observations, readings on the subject, and information from individuals within organizations. Based on these ideas, they set out to understand the relationships among different variables. There are a number of different research methods that researchers use, and we will discuss a few of these below. Imagine that your manager has asked you to find out if setting goals will help to make the employees at your company more productive. We will cover the different ways you could use research methods to answer this question, impress your boss, and hopefully get a promotion.
Surveys
Surveys are one of the primary methods management researchers use to learn about OB. A basic survey involves asking individuals to respond to a number of questions. The questions can be open-ended or close-ended. An example of an open-ended question that could be used to address your manager's question would be to ask employees how they feel about goal setting in relation to productivity, then summarize your findings. This might work if you have a small organization, but open-ended surveys can be time consuming to summarize and hard to interpret at a glance. You could get more specific by asking employees a series of close-ended questions in which you supply the response key, such as a rating of 1 to 5. Today it is easy to create online surveys that quickly compile the results automatically. There are even several free survey tools available online such as http://freeonlinesurveys.com/ and http://www.surveygizmo.com/, or you can use paper-and-pencil surveys.
Sample Survey About the Effectiveness of Goal Setting
Instructions:
We would like to gather your opinions about different aspects of work.
Please answer the following three questions using the scale below:
Response Scale:
1=Strongly disagree
2=Disagree
3=Neither agree nor disagree
4=Agree
5=Strongly agree
Setting goals at work helps me to focus | 1 | 2 | 3 | 4 | 5 |
Goal setting is effective in improving performance | 1 | 2 | 3 | 4 | 5 |
I get more done when I use goal setting | 1 | 2 | 3 | 4 | 5 |
Field Studies
Laboratory Studies
Case Studies
Meta-Analysis
Measurement Issues in OB
Another important thing to understand is the difference between reliability and validity. Imagine you own a trucking company. A major component in trucking is managing the weight of different cargo. If you had a scale that gave you the same weight three times, we would say that was a very reliable scale. But, if it turns out the weights given are in kilograms instead of pounds, it would not be a valid measure if you charge for delivery by the pound.Key Takeaway
Exercises
- Create a hypothesis about people at work. Now that you have one in mind, which method do you think would be most effective in helping you test your hypothesis?
- Have you used any of the OB research methods before? If not, what can you do to become more familiar with them?
- Give an example of a reliable measure.
- Give an example of a valid measure.
- How can you know if a relationship is causal or correlational?
Trends and Changes
Learning Objectives
- Understand current challenges for OB.
- Understand current opportunities for OB.
Challenges and Opportunities
There are many trends within the workplace and around the globe that have and will continue to affect the workplace and your career. We are sure you have noticed many of these trends simply by reading newspaper headlines. We will highlight some of these trends along with the challenges and opportunities they present for students of organizational behavior.
Ethical Challenges
Business ethics refers to applying ethical principles to situations that arise at work. It feels like it's been one ethical scandal after the other. Enron Corp., AIG, Tyco International, WorldCom, and Halliburton Energy Services have all been examples of what can be described in terms ranging from poor judgment to outright illegal behavior. The immediate response by government has been the Sarbanes-Oxley Act, which went into effect in 2002. This act consists of 11 different requirements aimed at greater accountability, which companies must comply with in terms of financial reporting. And while there may be some benefit to businesses from complying with these rules, few see this as the long-term solution to dealing with unethical behavior. The challenge is to continue to think about business ethics on a day-to-day basis and institute cultures that support ethical decision making. The opportunity for organizations to be on the forefront of ethical thinking and actions is wide open. OB research finds that the most important determinant of whether a company acts ethically is not necessarily related to the policies and rules regarding ethical conduct but instead whether it has a culture of consistently ethical behavior and if leaders are committed to this ethical behavior.
OB Toolbox: Take an Ethics-at-Work Audit
- Do you integrate ethics into your day-to-day decisions at work? It's easy to think about ethics as something big that you either have or don't have, but the reality is that ethical decisions are made or not made each and every day.
- Do you take the "front page" test when making important decisions at work? Thinking about how you would feel if the decisions you are making at work showed up on the front page of your local newspaper can help you avoid engaging in questionable behavior.
- Do you role model ethics at work? Seeing others engage in unethical behavior is the start of a slippery slope when it comes to ethics. Consider the decisions you are making and how they are consistent or inconsistent with how you would like to be seen by others.
- Do you consider if rewards are distributed ethically at work? Situations in which there are "haves" and "have nots" are breeding grounds of unethical behavior. Maintaining pay equity can help keep everyone more honest.
- Have
you held a "risk brainstorm" at work? If you ask those around you if
they see any situations that are challenging ethical behavior, you can
uncover some seriously risky situations and avoid them.
Lack of Employee Engagement
Studies
suggest that fostering engagement, a concept related to passion, in
employees has a significant impact on the corporate bottom line. Gallup,
for instance, has been on the forefront of measuring the impact of what
is called employee engagement. Employee engagement is a concept that is
generally viewed as managing discretionary effort, that is, when
employees have choices, they will act in a way that furthers their
organization's interests. An engaged employee is a person who is fully
involved in and enthusiastic about their work. The
consulting firm BlessingWhite offers this description of engagement and
its value: "Engaged employees are not just committed. They are not just
passionate or proud. They have a line-of-sight on their own future and
on the organization's mission and goals. They are 'enthused' and 'in
gear' using their talents and discretionary effort to make a difference
in their employer's quest for sustainable business
success".
Engaged
employees are those who are performing at the top of their abilities
and happy about it. According to statistics that Gallup has drawn from
300,000 companies in its database, 75%–80% of employees are either
"disengaged" or "actively disengaged".
That's
an enormous waste of potential. Consider Gallup's estimation of the
impact if 100% of an organization's employees were fully engaged:
- Customers would be 70% more loyal.
- Turnover would drop by 70%.
- Profits would jump by 40%.
Job
satisfaction studies in the United States routinely show job
satisfaction ratings of 50%–60%. But one recent study by Harris
Interactive of nearly 8,000 American workers went a step
further. What did the researchers
find?
- Only 20% feel very passionate about their jobs.
- Less than 15% agree that they feel strongly energized by their work.
- Only 31% (strongly or moderately) believe that their employer inspires the best in them.
It is clear that engagement is both a challenge and an opportunity for OB.
Technology
Technology has transformed the way work gets done and has created many great opportunities. The nexus of increasing personal computing power, the Internet, as well as nanotechnology are allowing things to be created that weren't even imaginable 50 years ago. And the rate of technological change is not expected to slow down anytime soon. Gordon Moore, a cofounder of Intel Corp., shocked the world in 1975 with what is now termed Moore's Law, which states that computing power doubles every 2 years. This explains why a 4-year-old computer can barely keep up with the latest video game you have purchased. As computers get faster, new software is written to capitalize on the increased computing power. We are also more connected by technology than ever before. It is now possible to send and receive e-mails or text messages with your coworkers and customers regardless of where in the world you are. Over 100 million adults in the United States use e-mail regularly (at least once a day and Internet users around the world send an estimated 60 billion e-mails every day, making e-mail the second most popular medium of communication worldwide, second only to voice. Technology has also brought a great deal of challenges to individuals and organizations alike. To combat the overuse of e-mail, companies such as Intel have instituted "no e-mail Fridays," in which all communication is done via other communication channels. The technology trend contains challenges for organizational behavior.
Flattening World
Thomas
Friedman's book The World Is Flat: A Brief History of the Twenty-First
Century makes the point that the Internet has "flattened" the world and
created an environment in which there is a more level playing field in
terms of access to information. This access to information has led to an
increase in innovation, as knowledge can be shared instantly across
time zones and cultures. It has also created intense competition, as the
speed of business is growing faster and faster all the time. In his
book Wikinomics, Don Tapscott notes that mass collaboration has changed
the way work gets done, how products are created, and the ability of
people to work together without ever meeting.
There
are few barriers to information today, which has created huge
opportunities around the globe. Marc Andreessen, cofounder of Netscape
Communications Corporation, notes, "Today, the most profound thing to me
is the fact that a 14-year-old in Romania or Bangalore or the Soviet
Union or Vietnam has all the information, all the tools, all the
software easily available to apply knowledge however they
want". Of course,
information by itself is not as important as having the right
information at the right time. A major challenge for individuals in the
flattened world is learning how to evaluate the quality of the
information they find. For tips on how to evaluate the quality of
information, see the OB Toolbox below.
OB Toolbox: Tips for Evaluating the Quality of Information
Here are a few Internet resources to refer to when evaluating information you find on the Web:
- http://www.library.jhu.edu/researchhelp/general/evaluating/
- http://www.uwec.edu/Library/tutorial/mod5/
- http://www.librarysmart.com/working/LSPublic/01_evaluate.asp
Sustainability and Green Business Practices
Figure 1.8
![](https://learn.saylor.org/pluginfile.php/3776688/mod_book/chapter/31562/1.8.jpg)
Social
responsibility is not just something organizations do at the price of
profits. It can also lead to superior results. Environmentally Neutral
Design (END) has designed a shoe that reduces the amount of material
needed so it costs less to produce and is the lightest performance shoe
on the market.
The
primary role of for-profit companies is to generate shareholder wealth.
More recently, the concept of the triple bottom line has been gaining
popularity. Those subscribing to the triple bottom line believe that
beyond economic viability, businesses need to perform well socially and
environmentally. While some organizations have embraced the concepts
underlying the triple bottom line, businesses are also undergoing a
great deal of "greenwashing," which refers to the marketing of products
or processes as green to gain customers without truly engaging in
sustainable business practices. Sustainable business practices are those
that meet the present needs without compromising the needs of future
generations. The challenge is to reconcile the accountability that
publicly owned firms have in generating wealth for their shareholders
while attending to the triple bottom line. On the other hand,
organizations also have an opportunity to leverage a proactive stance
toward innovative processes that can result in even greater profits for
their products. For example, sales of the Toyota Prius, which combines
combustion engine efficiency with hybrid electric technology, have been
dramatic and have helped propel Toyota to record market share and
profits. An unlikely leader in the sustainability movement is Wal-Mart.
Wal-Mart hired Adam Werbach, the former president of the Sierra Club, to
help train 1.3 million North American Wal-Mart employees about
sustainability. Wal-Mart has also been pressuring suppliers to produce
compact fluorescent lightbulbs with less mercury and has slashed the
resources needed in packaging by requiring all suppliers to make
packages smaller. In
the future, increasing interdependence between businesses, governmental
agencies, and NGOs is bound to effect change throughout the
economy.
Aging Workforce and the Millennial Generation
You
have probably heard that the American workforce is aging. Over the next
30 years, 76 million baby boomers will retire, but there will only be
46 million new workers from Generations X and Y entering the labor
force. This demographic trend creates both challenges and opportunities
for organizations.
The
aging trend has been predicted for decades. "The number of U.S. workers
over the age of 40 has increased significantly over the past 30 years.
By 2010, more than 51% of the workforce will be 40 or older, up almost
20% over 30 years. At the same time, the portion of the workforce aged
25 to 39 will decline by nearly 3%. The number of workers aged 55 and
older will grow from 13% of the labor force in 2000 to 20% in
2020". There will be
record numbers of retirements. Aging workforces can create great
opportunities for industries such as health care, but it can also mean
great challenges lie ahead as entire industries related to basic
infrastructure face massive retirement projections. For example,
everything from air traffic controllers to truck drivers are predicted
to be in huge demand as thousands of retiring workers leave these
industries at roughly the same time.
Figure 1.9 Percentage of Labor Force by Age Group for 2004 and Projections for 2014
![](https://learn.saylor.org/pluginfile.php/3776688/mod_book/chapter/31562/1.9.jpg)
The
Millennial Generation (which includes those born between 1980 and 2000)
differs from previous generations in terms of technology and
multitasking as a way of life. Having never known anything different,
this population has technology embedded in their lives. In addition,
they value teamwork, feedback, and challenging work that allows them to
develop new skills. If you are in this generation or know those who are,
you know there is an expectation of immediate interaction. The challenge for
organizational behavior is to keep individuals from different
generations communicating effectively and managing people across
generational lines despite different values placed on teamwork,
organizational rewards, work–life balance, and desired levels of
instruction.
The Global Marketplace for Staffing: Outsourcing
Figure 1.10
![](https://learn.saylor.org/pluginfile.php/3776688/mod_book/chapter/31562/1.10.jpg)
A shamrock organization includes an equal number of regular employees, temporary employees, and consultants and contractors.
Outsourcing
has become a way of life for many organizations - especially those
based in the United States that are outsourcing to other countries where
labor is relatively inexpensive. Outsourcing refers to having someone
outside the formal ongoing organization doing work previously handled
in-house. This practice can involve temporary employees, consultants, or
even offshoring workers. Offshoring means sending jobs previously done
in one country to another country. Nowhere is there more outsourcing and
offshoring than in the software technology industry. A survey of
software developers revealed that 94% outsource project work, and when
they offshore, the work most frequently goes to India, Singapore,
Russia, and China. Microsoft has been expanding their use of employees in Canada for a
variety of reasons such as closer proximity to Microsoft's headquarters
in Seattle, Washington, as well as similarity of language and time
zones. Across industries, more than 80% of boards of directors in the
United States have considered offshore outsourcing. Charles Handy, author of The Age of Paradox, coined the term shamrock
organization, which is an organization comprising one-third regular
employees, one-third temporary employees, and one-third consultants and
contractors. He predicts that this is where organizations are headed in
the future. The darker side of the changing trend in organization
composition revolves around potential unemployment issues as companies
move toward a shamrock layout. Fortunately, this shift also presents an
opportunity for organizations to staff more flexibly and for employees
to consider the tradeoffs between consistent, full-time work within a
single organization versus the changing nature of work as a temporary
employee, contract worker, or consultant - especially while developing a
career in a new industry, in which increased exposure to various
organizations can help an individual get up to speed in a short amount
of time. The challenge for organizational behavior is managing teams
consisting of different nationalities separated not only by culture and
language but also in time and space.
Key Takeaway
Trends include ethical challenges, rapid technological change, a flattening world, sustainable business practices, demographic trends, and the global marketplace. A number of trends will influence the way work gets done today and in the future. Understanding organizational behavior will help you anticipate and adapt to these changes as a lifelong learner.
Exercises
-
Share an ethical dilemma you have observed at work or school to
someone in your class. What do you think should have been done
differently and why?
- How has technology and the flattening world affected you in the last 10 years? Please share examples of this.
- Do you think the sustainability movement in business is a trend that's here to stay or a business fad? Why or why not?
- Do you see the aging (and retiring) workforce as an opportunity or a
threat for businesses? How do you think this will affect your career?
Maintaining Core Values: The Case of Nau
Figure 1.11
![](https://learn.saylor.org/pluginfile.php/3776688/mod_book/chapter/31563/1.11.jpg)
While
it might be easy to see the negative effects on the environment from
car emissions or the waste we produce, fewer people think about the
effects of discarded clothes on the environment. Many donate out-of-date
garments to a thrift store for resale, but few think about what happens
to those things that can't be resold or the articles that are beyond
use. However, the apparel industry uses more water than any industry
after agriculture. At least 8,000 chemicals are used to turn raw
materials into textiles, and 25% of the world's pesticides are used to
grow nonorganic cotton. To run a successful business, profits and
revenue are a necessary part of the equation, but in addition to fiscal
responsibility, what degree of social and environmental responsibility
are companies accountable for? These are questions that a small outdoor
and urban clothing company in Portland, Oregon, contemplates every day.
This company has committed itself to doing good through its business
practices.
A
relatively young company, Nau (pronounced "now") was founded on the
idea of using business as a vehicle for change, but its path has not
been easy. Nau was established in 2005 by a group of like-minded
individuals from Pacific Northwest clothing companies such as Patagonia,
Nike, and Marmot. Their goal was to create outdoor urban apparel
constructed from sustainable materials and processes, with the entire
life cycle of the product in mind. This includes taking into account the
cultivation of textiles all the way through to end-of-life disposal.
After 3 years of aggressive growth and expansion, Nau declared
bankruptcy in the spring of 2008 when they could not secure further
funding. But only a few short months later, Nau reopened as a subsidiary
of outdoor clothing company Horny Toad Inc., headquartered in Santa
Barbara, California. Although Nau is part of a larger company, it has
been able to create a balance between the ideals of a small,
independent, entrepreneurial business while being a successful part of a
larger company.
The
power structure that Nau shares with Horny Toad is decentralized;
logistically, the companies share a human resources department, IT,
warehousing space, and finances, but Nau maintains its product
independence and business strategy. From the time of its inception, Nau
created a network of close relationships with its overseas
manufacturers, which allowed the company the power and ability to
closely control its production process. During the transition, Nau
desired to maintain these relationships and so had to explain the
arduous process of bankruptcy to its overseas vendors and attempt to
explain transferring debt and liabilities from one company to another
company. Although the people and faces were the same, they were no
longer connected with that debt. Nau's small size enables it to
effectively control its supply chain and to determine everything from
which farm its raw materials come from to how and where textiles are
produced. For Nau, responsibility does not end with the consumer's
purchase. Other changes include the number of employees at Nau, which
prior to the bankruptcy was 65. In 2010, this number is down to 15
employees. While several of the individuals who took part in the
founding of the company are still there, change was not embraced by
others who felt that becoming part of a larger company would make it
difficult to maintain the original core values and beliefs.
So
far, these changes have been good for the company and good for
business. Nau was acquired at the beginning of an economic downturn, and
for a company that is dependent on consumer discretionary spending,
this might have been a recipe for failure. But business is picking up
for Nau, and it has been able to continue its Partners for Change
program, in which Nau donates 2% of each sale to one of its partner
organizations, such as Mercy Corps, Kiva, or Ecotrust, together working
to create positive economic and social change.
Discussion Questions
- What benefits might result from becoming a part of a larger organization?
- What are the benefits of maintaining the autonomy of a small company?
- How does globalization affect Nau's business strategy?
- What ethical dilemmas might employees at Nau and Horny Toad face during their day-to-day experience?
Conclusion
This
chapter is designed to familiarize you with the concept of
organizational behavior. We have covered methods organizations might use
to address issues related to the way people behave at work. In
addition, you should now be familiar with the large number of factors,
both within an individual and within the environment, that may influence
a person's behaviors and attitudes. In the coming years, society is
likely to see a major shift in the way organizations function, resulting
from rapid technological advances, social awareness, and cultural
blending. OB studies hope to enhance an organization's ability to cope
with these issues and create an environment that is mutually beneficial
to the company as well as its employees.
Exercises
Individual Exercise
Create an Action Plan for Developing Your OB Skills- Hopefully you have already completed reading this chapter. If not, wait until you've done so to complete this individual exercise.
- If you have not done so already, please take the learning styles survey at http://www.vark-learn.com/english/page.asp?p=questionnaire.
- In addition, please be sure you have reviewed the table of contents for this organizational behavior textbook.
- What themes do you see? How do you think these topics affect your interactions with others? How might your learning style affect how you'll approach this course? Have you ever considered journaling as a technique for self-improvement and reflection?
- Now, write down five action steps that you plan to take as you work through this book. Refer to these steps throughout the term and modify them as needed.
Group Exercise
Best Job–Worst Job- Please think about the best and worst jobs you have ever had. If you have never had a job, think of a school project instead. What made the job or project great or horrible?
- Now get into a small group of students and share your experience with them. Listen to what others are saying and see if you see any themes emerge. For example, what are the most common features of the best jobs? What are the most common features of the worst jobs?