Canadian Organizational Behaviour [10 ed.] 9781259271304, 1259271307

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CANADIAN ORGANIZATIONAL BEHAVIOUR

STEVEN L. McSHANE

CURTIN UNIVERSITY AND UNIVERSITY OF VICTORIA KEVIN TASA

YORK UNIVERSITY SANDRA L. STEEN

UNIVERSITY OF REGINA

Canadian Organizational Behaviour Tenth Edition Copyright © 2018,2015,2012,2009,2006, 2004,2001 , 1998, 1995, 1992 by McGraw-Hi ll Ryerson Limited. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, or stored in a data base or retrieval syste m, without the prior written permission of McGraw-H ill Ryerson Limited, or in the case o f photocopying or other reprographic copying, a licence from The Canadian Copyright Licensing Agency (Access Copyright). For an Access Copyright licence, vis it www.accesscopyright.ca or call toll free to 1-800-893-5777. Statistics Canada information is used w ith the permission of Statistics Canada. Users are forbidden to copy this material and/or redisseminate the data, in an original or modified form, for commercial purposes, without the expressed permission of Statistics Canada. Information on the availability of the wide range of data from Statistics Canada can be obtained from Statistics Canada's Regional Offices, its World W ide Web s ite at http://www.statcan.gc.ca, and its toll-free access number 1-800-263- 1136. The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by d1e authors or McGraw-Hill Ryerson, and McGraw-Hill Ryerson does not guarantee the accuracy of information presented at these s ites. ISBN- 13: 978- 1-25-927130-4 ISBN- 10: 1-25-927 130-7 12345678910 TC P 222120 19 18 Printed and bound in Canada. Care has been taken to trace ownership of copyright material contained in this text; however, the publisher will welcome any information that e nables it to rectify any reference or credit for s ubsequent editions. Portfolio Director: Nicole Meehan Portfolio Manager: Kim Brewster and Alwynn Pinard Senior Marketing Manager: Cathie Lefebvre Content Developer: Erin Catto and Brianna Mcilwain Photo/Permissions Research: Monika Schurmann Senior Portfolio Associate: Stephanie Giles Supervising Editor: Jeanette McCurdy Copy Editor: Sarah Fulton Production Coordinator: Sarah Strynatka Manufacturing Production Coordinator: Emily Hickey Cover Design: Michelle Losier Cover Image: Painting by Patrice Murciano Interior Design: Michelle Losier Page Layout: SPi Global

Dedicated with love and devotion to Donna, and to our wonderful daughters, Bryton and Madison- S.L.M. Dedicated to Ena and Vidya. Thanks-K. T. For Aaron, Matt, and Jess-S.L.S.

About the Authors STEVEN L. MCSHANE Steven L. McShane is adjunct professor at the Curtin Graduate School of Bu.~ine~s (Australia) and the Peter B. Gusta\'SOn School of Business, University of Victoria (Canada). He pt'eviously held the positions of profes.~r at Simon Fra~r University Business School in Canada and professO!' of management at the University of Western Au.stralia Business School. He currently teache~ in the !MBA pmgram at the Antai College of Economics and Management at Shanghai Jiao Tong University. Early in his career, Steve taught at Queen's University in Canada. Steve has received awards for his teaching quality and i1movation, and receives high ratings from students in Perth, Shanghai, Singapore, Manila, and other places where he ha.~ taught. He is also a popular visiting speaker, having gi\-en dozens of invited talks atld seminars in recent years to faculty and students in the United States, China, Canada, Malaysia, India, and other countries. S teve earned his PhD from Michigan State University, where he specialized in organizational behaviour and labour relations. He also holds a Master's of Industrial Re lations from the University of Toronto and an undergraduate degree from Queen's University in Canada. Steve is a past president of the Administrative Sciences Association of Canada and served as director of graduate programs in Simon Fraser University's business faculty. He has conducted executive programs with Nokia, TUV-SUD, Wesfarmers Group, Main Roads WA, McGraw-Hill, ALCOA World A lumina Austral ia, and many other organizations. Along with co-autho!'ing Canadian Organizarional Behaviour, Tenth Edition, Ste\-e is lead co-author of Organizational Behavior, Eighth Edition (2018) and M: Organizational Behavior, Third Edition (2016) in the United States, and Organisational Behaviour: Asia Pacific, Fifth Edition (2016) in that region. He is also co-author of editions or translations of his organizational behaviour book in C hina, India, Quebec, Taiwan, and Brazil. Steve ha~ published several dozen articles and conference papers on workplace values, training transfer, organizationalleam ing, exit-voice-loyalty, employee socialization, wrongful dismissal, media bias in business magazines, and other diverse topics. Steve e njoys spending his leisure time hiking, swimming, body board surfing, canoeing, ski ing, and travelling with his w ife and two daughters. KEVIN TASA Dr. Kevin Tasa is an associate professor o f organizational behaviour at the Schulich School of Business, York University. He is also the program director for the school's Master of Management Progran1. Prior to joining Schulich, he was an a.~soci ate professor, and director of the MBA progran1, at the DeGroote School o f Business, McMaster University. He is the recipient of the MBA Award for Teaching Excellence at both Schulich and McMa.~ter. He is also an editorial board member of the Journal of Organizarional Behavior and teaches courses in managerial negotiation and organizational behaviour at the masters and doctoral levels. With Roy Lewicki, Bruce Barry, and David Saunders, he co-authored Essentials of Negotiarion, one o f the most w idely used negotiation textbooks in Canadian bus iness schools. Kevin received his doctO!'ate in organizational behaviour from the Rotman School of Management at the University of Toronto. He also holds an MSc in health administration from the University of Toronto and a BComm from the University of Saskatchewan. His research ha.~ been published in top-tier journals such a.~ Academy of Managemenr Journal, Journal of Applied Psychology, Organiwrional Behavior and Human Decision Processes and Journal of Organiwtional Behavior. Currently, his research focuses on team dynamics, such as boundary spanning and decision making under stress, as well a~ the s ituational and psychological determin ant~ of unethical behaviour in negotiation. Finally, Kevin frequently teaches seminars on negotiation s kills and conflict management, serving a.~ a faculty member with institutions such a.~ the Physic ian Leadership Institute of the Canadian Medical Association, the Schulich Executive Education Centre, Linamar Corporation, the University of Alberta Executive Education, and the Hamilton Health Science Centre. SANDRA L. STEEN Sandra L. Steen teaches in the Paul J. Hill School of Business and the Kenneth Levene Graduate School of Business at the University of Regina. Sandra also leads executive education and professional development sessions with the Centre for Management Development, Faculty o f Business Administration. Sandra ha.~ an integrated education and background in both organizational behaviour and human resource management. She received her MBA from the University of Regina and has more than 25 years of leading, managing, teaching, and consulting across a wide range of organizations in the private, public, and not-for-profit sectors. Sandra teaches in the undergraduate, Executive MBA, Ma.~ter of Human Resource Management, Master of Administration in Leadership, and Levene MBA - International Business programs at the University of Regina. In addition to Canadian Organizational Behaviour, Tenth Edition, Sandra is lead co-author with professors Raymond Noe (Ohio State University), John R. Hollenbeck (Michigan State University), Barry Gerhart (University of Wisconsin-Madison), and Patrick Wright (Cornell University) of Human Resource Management, Fourth Canadian Edition (2016). Sandra is a Chartered Professional in Human Resources (CPHR) and a member of CPHR Sa.~katchewan . Sandra has recei\-ed recognition for her teaching accomplishment~. including " Inspiring Teacher Award-Business Administration." In her leisure time, Sandra enjoys time at the lake with her husband Aaron, and their children, Man and Jess. iv

Brief Contents PART ONE Chapter 1

Introduction Introduction to t he Field of O rganizational Behaviour

PART TWO

Individual Behaviour and Processes

Chapter 2

Individual Behaviour, Personality, and Values

Chapter 3

Perceiving Ourselves and Others in Organizations

Chapter 4

Workplace Emotions, Attitudes, and Stress

Chapter 5

Foundations of Employee Motivation

Chapter 6

Applied Performance Practices

PART THREE

Team Processes

Chapter 8

Team Dynamics

Chapter 9

Communicating in Organizations

Chapter 10

Power and Inf luence in the Workplace

Chapter 11

Conf lict and Negotiation in the Workplace

Chapter 12

Leadership in Organizational Settings

187

215 246

Designing Organizational Stru ctures

Chapter 14

O rganizational Culture

390

Chapter 15

O rganizational Change

419

Additional Cases

305

335

362

CA 1

Theory Building and Systematic Research Methods

A1

GL1

Endnotes Index

275

Organizational Processes

Chapter 13

Glossary

94

158

Decision Making and Creativity

Appendix

65

126

Chapter 7

PART FOUR

31

EN1

IN 1

v

Contents Preface xiii Acknowledgements xxv

( PART TWO ) Indiv idual Behaviour and Processes

~RT ON EVntroduction

CHAPTER 2 Individual Behaviour, Personality, and Values 31

CHAPTER 1

LEARNING OBJECTIVES

Introduction to the Field of Organizational Behaviour

MARS Model of Ind ividual Behaviour and Performance

LEARNING OBJECTIVES

Role Perceptions

2

Historical Foundations of Organizational Behaviour Why Study Organizational Behaviour? 4 Contemporary Developments Facing Organizations

4

6

Task Performance 37 Organizational Citizenship

The Systematic Research Anchor

The Multiple Levels of Analysis Anchor

14

Debating Point: Should Companies Use Personality Tests to Select Job Applicants? 46

14

Values in the Workplace

15

Organizational Learning Perspective

Types of Values

17

Values Congruence

21

Three Ethical Principles

22

25

Global Connections 2.3: Alcoa Executive Sets Ethical Standard in Russia 5 1 Supporting Ethical Behaviour Values Across Cultures

26 27

28

Class Exercise It All Makes Sense? Self-Assessment for Chapter 1

29

30

29

54

55

Uncertainty Avoidance

Web Exercise Diagnosing Organizational Stakeholders

vi

Power Distance

53

53

Individualism and Collectivism

Case Study The Fast-Fashion Success of Zara Case Study Ancel ltd.

50

50

Moral Intensity, Moral Sensitivity, and Situational Influences 5 1

Connecting the Dots: An Integrative Model of Organizational Behaviour 23 Chapter Summary

48

49

Ethica l Va lues and Behaviour

Global Connections 1.2: 2 1 Days of Y'ello Care

KeyTerms 26 Critical Thinking Questions

46

47

Values and Ind ividual Behaviour

High-Performance Work Practices (HPWP) Perspective 19

25

40

41

Jungian Personality Theory and the Myers-Briggs Type Indicator 43

Perspectives of Organizationa l Effectiveness

The Journey Beg ins

40

Personality Determ inants: Nature versus Nurture

13

Open Systems Perspective

38

Global Connections 2.2: The Doctor Is Ill .. . but Will See You Now 39

Five-Factor Model of Personality

14

The Contingency Anchor

38

Joining and Staying with the Organization Mainta ining Work Attendance 38

Personality in Organizations

12

Debating Point: Is There Enough Evidence to Support Evidence-Based Management? 1 3 The Multidisciplinary Anchor

38

Counterproductive Work Behaviours

8

Increasing Workforce Diversity 10 Global Connections 1.1: Leveraging the Diversity Dividend at Canaccord Genuity 10 Anchors of Organizational Behaviour Knowledge 12

Stakeholder Perspective

35

Situational Factors 35 Global Connections 2.1 : Iceland Foods Takes MARS to Success 36 Types of Individual Behaviour 36

7

Emerg ing Employment Relationsh ips

32

33

Employee Motivation Abi lity 34

Welcome to the Field of Organ izational Behaviour! The Field of Organizational Behaviour 2

Technological Change Globalization 8

31

55

Achievement-Nurturing Orientation

55

Global Connections 2.4: Cross-Cultural Hiccups at Beam Suntory 56

Contents

vii

Caveats about Cross-Cultural Knowledge Cultural Diversity within Canada Chapter Summary KeyTerms 59

Emotions, Attitudes, and Behaviour

56

57

96

How Emotions Influence Attitudes and Behaviour

58

Generating Positive Emotions at Work

Debating Point

Critical Th inki ng Questions 59 Case Study SNC-Lavalin Group Inc 60 Case Study Ethics Dilemma Vignettes 6 1 Class Exercise Personal Values Exercise Self-Assessments for Chapter 2

HaWig Fun at Work Really a Good Idea?

Cognitive Dissonance

63

Emotions and Personality

10 1

Managing Emotions at Work

101

Emotional Dissonance

Perceiving Ourselves and Others in Organizations 65

Emotionallntelllgence

103

103

Emotional Intelligence Outcomes and Development 104

65

Job Satisfaction Self-Concept: How We Perceive Ourselves 66 Self-Concept Complexity, Consistency, and Clarity

67

106

Job Satisfaction and Work Behaviour Job Satisfaction and Performance

107

108

Self-Enhancement 69 Self-Verification 70

Job Satisfaction and Customer Satisfaction

Self-Evaluation

Job Satisfaction and Business Ethics

71

The Social Self 72 Self-Concept and Organizational Behaviour

Organizational Commitment

Building Organizational Commitment General Adaptation Syndrome

76

Consequences of Distress

Improving Perceptions 83 Awareness of Perceptual Biases

113

Individual Differences in Stress

83

84

Managing Work-Related Stress Chapter Summary

Meaningfullnteraction 85 Global Mindset: Developing Perceptions across Borders

Key Terms 86

Developing a Global Mindset 87 Global Connections 3 .1: Developong a Global Mondset through Immersion 88 89

Critical Thinking Questions

112

114

Global Connections 4 .2: Chronic Work Overload in China 115

Debating Point Do We Need Diversity Training Programs? 83

Chapter Summary KeyTerms 90

111

112

Stressors: The Causes of Stress

82

Improving Self-Awareness

110

Work-Related Stress and Its Management

Attribution Theory 79 Self-Fulfilling Prophecy 80 Other Perceptual Effects

1OS

110

Consequences of Affective and Continuance Commitment 11 0

73

Perceiving the World around Us 73 Perceptual Organization and Interpretation 75 Specific Perceptual Processes and Problems 76 Stereotyping in Organizations

101

Global Connections 4 .1: Learning to Express Posotive Emotions at Aeroflot 102

CHAPTER 3

LEARNING OBJECTIVES

11 6

116

119

120

Critical Thinking Questions

120

Case Study Diana's Dosappointment: The Promotoon Stumbling Block 121 Case Study Rough Seas on the UNK650

122

Team Exercise Rankong Jobs on Theor EmotiOnal Labour Self-Assessments for Chapter 4

124

90

Case Study Hy Dairies ltd. 91 Web Exercise Diversity & Stereotyping on Display in Corporate Websites 9 2 Self-Assessments for Chapter 3 92

CHAPTER 5 Foundations of Employee Motivation LEARN ING OBJECTIVES

126

126

CHAPTER4

Employee Engagement

Workplace Emotions, Attitudes, and Stress

Global Connections 5.1: DHL Express Employees Get Engaged 128

LEARNING OBJECTIVES

94

Emotions in the Workplace Types of Emotions 96

95

100

100

Emotional Display Norms across Cu ltu res

63

98

99

94

127

Employee Drives and Needs

129

Individual Differences in Needs Needs and Drives Theories

130

130

124

viii

Contents

Maslow's Needs Hierarchy Theory Intrinsic and Extrinsic Motivation Learned Needs Theory Four-Drive Theory

130

Watch Out for Unintended Consequences

132

Job Design Practices

133

Job Design and Work Efficiency

134

Expectancy Theory of Motivation

Scientific Management

138

Job Design and Work Motivation

Organizational Behaviour Modification

140

Job Characteristics Model

Global Connections 5.2: Airbaltic Motivates Employee Involvement and Learning w ith Gamification 141 142

Goal Setting and Feedback

143

Organizational Justice

Job Design Practices That Motivate

144

146 146

Personal Goal Setting

177

148

178

179

Constructive Thought Patterns Designing Natural Rewards

Global Connections 5.3: Pay Fairness Troubles at Foxconn Chapter Summary

176

Self-Leadersh ip Practices

147

148

Procedural Justice

150

151

Self-Monitoring

1 52

179

180

180

Self-Reinforcement

180

Effectiveness of Self-Leadership

153 Critical Thinking Questions

Key Terms

180

Personal and Situational Predictors of Self-Leadership 153

Chapter Summary

Case Study Predicting Harry's Work Effort Case Study Barrie Super Subs

1 54

Key Terms

1 55

Class Exercise Needs Priority Exercise Self-Assessments for Chapter 5

174

174

Global Connections 6.4: Svenska Handelsbanken's Branch-Level Empowerment 177

Debating Point Does Equity Motivate More Than Equality? Equity Theory

172

Supporting Empowerment

Evaluating Goal Setting and Feedback

171

171

Social and Information Processing Job Characteristics Empowerment Practices

Characteristics of Effective Feedback Sources of Feedback

171

Problems w ith Job Specialization

Organizational Behaviour Modification and Social Cognitive Theory 139

Social Cognitive Theory

169

Global Connections 6.3: Job Specialization at the Arsenal of Ven ice 170

137

Expectancy Theory in Practice

168

169

156

1 57

181

181

182

Critical Thinking Questions

182

Case Study YakkaTech ltd.

183

Team Exercise Is Student Work Enriched? Self-Assessments for Chapter 6

184

186

CHAPTER 6 Applied Performance Pra ctices LEARNING OBJECTIVES

15 8

The Meaning of Money in the Workplace Financial Reward Practices

( PART TH REE) Team Processes

158

CHAPTER 7

159

Decision Making and Creativity

160

Membership- and Seniority-Based Rewards

160

LEARNING OBJECTIVES

Global Connections 6.1: Mega Reward for Tiens Group Employees 161 Job Status-Based Rewards

187

Rational Choice Paradigm of Decision Making Rational Choice Decision-Making Process

162

Competency-Based Rewards

187

Problems with the Rationa l Choice Parad igm

162

Performance-Based Rewards

163

Identifying Problems and Opportun ities

190

Improving Reward Effectiveness

166

Problems w ith Problem Identification

190

Link Rewards to Performance

166

Ensure that Rewards Are Relevant

190

Global Connections 7.1: A Famous Missed Opportunity Identifying Problems and Opportunities More Effectively

166

Searching for, Evaluating, and Choosing Alternatives

Debating Point Is It Time to Ditch the Performance Review? 166 Use Team Rewards for Interdependent Jobs Ensure that Rewards Are Va lued

188 189

Problems with Goals 167

167

Global Connections 6.2: When Rewards Go Wrong

192

Problems w ith Information Processing Problems w ith Maximization 168

Evaluating Opportunities

194

194

192

191 192 192

Contents

ix

195

The Role of Emotions and Intuition Emotions and Making Choices Intuition and Making Choices

Virtual Teams

Escalation of Commitment

238

Team Decision Making

199

199 200 20 1

Organizational Conditions Supporting Creativity Activities That Encourage Creativity

203

203

Debating Point: Should Organizations Practise Democracy? 205 Benefits of Employee Involvement

206

Global Connections 7.2: Brasilata, the Ideas Company

208

Contingencies of Employee Involvement

209

Chapter Summary

Key Terms 242 Critical Thinking Questions

207

Team Exercise Team Tower Power

244

Self-Assessments for Chapter 8

245

CHAPTER 9 Communicating in Organizations LEARNING OBJECTIVES

210

Critical Thinking Questions

211

Case Study Employee Involvement Cases Team Exercise Where in the World Are We?

213

248

249

A Model of Commun ication

250 251

Internet-Based Commun ication

Team Dynamics

Workplace Commun ication through Socia l Media 254

215

LEARNING OBJECTIVES

215

Teams and Informal Groups

2 16

Social Acceptance Media Richness

218

2 19 A Model ofTeam Effectiveness 220 The Challenges of Teams

Organizational and Team Environment Team Design Elements

22 1

Task Characteristics

22 1

257

Communication Barriers (Noise)

260

260

Information Overload

220

261

Cross-Cultural and Gender Commun ication

223

Gender Differences in Communication

Improving Interpersonal Communication

226 227

Getting Your Message Across

Team Cohesion

Active Listening

229

262

263 264

264

264

Improving Communication throughout the Hierarchy

230 Team Processes 23 1 Team Trust

Workspace Design

231

External Team Processes

232

232

265

266

Internet-Based Organizational Communication

Internal Team Processes Team Development

259

Communication Channels and Persuasion

Global Connections 9.1: Politely Waiting for Some Silence 262

226

Team Efficacy

257

257

Nonverbal Differences across Cultures

223

Team Composition

255

Nonverbal Communication

Choosing the Best Communication Channel

218

Informal Groups

Advantages and Disadvantages of Teams

Team Norms

25 1

Problems with Email

CHAPTER 8

249

Influences on Effective Encoding and Decod ing Communication Channels

214

246

246

The Importance of Communication

210

Self-Assessments for Chapter 7

242

243

Case Study ArbreCorp Ltee

205

Employee Involvement in Decision Making

Team States

239

241

Chapter Summary

Characteristics of Creative People

Team Size

238

Constraints on Team Decision Making

Improving Creative Decision Making in Teams

The Creative Process

KeyTerms

237

Success Factors for Virtua l Teams

198 198

Evaluating Decision Outcomes More Effectively Creativity

235

Debating Point Are Virtual Teams More Trouble Than They're Worth7 236

197

Evaluating Decision Outcomes

235

Success Factors for Self-Directed Teams

197

Making Choices More Effectively Implementing Decisions

235

Self-Directed Teams

195 196

Direct Communication with Top Management Communicating through the Grapevine Grapevine Characteristics

269

269

266 268

Contents

X

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sy>tems. customer bi lling. etc.). These centre> typically have more than two do1.cn employee> in

Additional Cases Case 1

A MlR KISS?

Case 2

ARCTIC MINING CONSULTANTS

Case 3

BRIDGING THE TWO WORLDS: THE ORGANIZATIONAL DILEMMA

Case 4

GOING TO THE X·STREAM

Case 5

KEEPING SUZANNE CHALMERS

Case 6

NORTHWEST CANADIAN FOREST PRODUCTS LIMITED (REVISED)

Case 7

THE REGENCY GRAND HOTEL

Case 8

SIMMONS LABORATORIES

Case 9

TAMARACK INDUSTRIES

Case 10 THE OUTSTANDING FACULTY AWARD Case 11 VETEMENTS LTEE

xxi

Preface

EXPERIENTIAL EXERCISES AND SELF-ASSESSMENTS Experiential exercises and self-assessments represent an important part of active learning. Canadian Organizational Behaviow; Tenth Ed ition, fac ilitates th is important learning process by offering a team, web, or class exercise in every chapter. Self-assessments personalize the meaning of several organizational behaviour concepts, and this edition features four dozen of them in Connect, with automated scoring and detai led feedback. Small call-out icons in every chapter help students locate text content most relevant to each of these excellent resources. In addition, the last page of each chapter has a convenient table that briefly describes the self-assessments in Connect associated with that chapter.

Team Exercise: TEAM TOWER POWER Purpose This exercise is designed to help you understand team roles, team development, and other issues in the development and maintenance of effective teams. Materials The instructor will provide enough LEGO® pieces or similar materials for each team to complete the assigned task. Al l teams should have identical (or very similar) amounts and types of pieces. The instructor wiU need a measuring tape and stopwatch. Students may use writi ng materials duri ng the design stage (see

Self-Assessments for Chapter 2

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Or\t of lbt l'lkia v; ldtl~' $1Udlltd tll'ld •e Lahour' Outc ry," Daily Mail (London. UK), 2013. 25; S.R. Levine. "How Zara Took Customer Focus to New Heights." Credi t Union Times (20 13): 10: C. Nogueir. "How lnditex Rules the Weaves. and Plans to Carry on Doing So." El Pais (Madrid. Spain), 24 April 2013. 4; G. Ruddick. "Spain's Leader in Fast Fashion Has Much to Teach British Store Rivals," Daily Telegraph (London). 15 March 20 13,2: "The Cult ofZara." Sunday Independent (Dublin, Ireland) . 10 February 2013. 24.

Case Study: ANCOL LTD. by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada) Paul Simard wa~ delighted when Ancol Ltd. offered him the job of manager at its Jonquiere, Quebec plant. Simard was happy enough managing a s mall metal stamping plant with another company, but the headhunter's invitation to apply for the plant manager job at one of Canada's leading metal fabrication companies was irresistible. Although the Jonquiere plant was the s mallest of Ancol's 15 operations across Canada, the plant manager position was a valuable first step in a promising career. One of Simard's first observations at Ancol's Jonquiere plant was that relations between employees and management were strained. Taking a page from a recent executive seminar he had attended on bu ilding trust in the workplace, Simard ordered the removal of all time clocks from the plant. Instead, the plant would a~sume that employees had put in their full shift. This symbolic gesture, he believed, would establish a new level of credibility and strengthen relations between management and employees at the site. Initially, the 250 production employees at the Jonquiere plant appreciated their new freedom. They felt respected and saw this gesture as a sign of positive change from the new plant manager. 1\vo months later, however, problems started to appear. A few people began showing up late, leaving early, or taking extended lunch breaks. A lthough this represented only about 5 percent of the employees, others found the s ituation unfair. Moreover, the increa~ed absenteeism levels were beginning to have a noticeable effect on plant productivity. The problem had to be managed. Simard asked supervisors to observe and record when the employees came or went and to discuss attendance problems with those abusing their privileges. But the supervisors had no previous experience with keeping attendance and many Jacked the necessary interpersonal skills to discuss the matter with s ubordinates. Employees resented the reprimands, so relations with supervisors deteriorated. The additional responsibi lity of keeping track of attendance also made it difficult for supervisors to complete their other responsibi lities. After just a few months, Ancol found it necessary to add another supervisor position and reduce the number of e mployees assigned to each supervisor. But the problems did not end there. Without time clocks, the payroll department could not deduct pay for the amount of time that e mployees were late. Instead, a Jetter of reprimand was placed in the e mployee's personnel file. However, this required yet more time and additional skills from the s upervisors. Employees did not want these letters to become a permanent record, so they filed grievances with their labour union. The number of grievances doubled over six months, which required even more time for both union officials and s upervisors to handle these disputes. Nine months after removing the time clocks, Paul Simard met w ith union officials, who agreed that it would be better to put the time clocks back in. Employee-management relations had deteriorated below the level when Simard had started. Supervisors were burnt out from overwork. Productivity had dropped due to poorer attendance records and increased administrative workloads. A couple of months after the time clocks were put back in place, Simard attended an operations meeting at Ancol's headquarters in Toronto. During lunch, Simard described the time clock incident to Liam Jackson,

Chapter One

Introduction to the Field of Organizational Behaviour

29

Ancol's plant manager in Northern British Columbia. Jackson looked surprised, then chuckled. Jackson explained that the previous B.C. plant manager had done something like that with s imilar consequences six or seven years earlier. The previous manager had left some time ago, but Jackson heard about the B.C. time clock from a supervisor during the manager's retirement party two months ago. "I guess it's not quite like lightning striking the same place twice," said Simard to Jackson. "But it s ure feels like it."

Discussion Questions I. Discuss the consequences of the time clock re moval on Ancol's effectiveness as an organization using any two of the perspectives of organ izational effectiveness. 2. What changes should occur to minimize the likelihood of these problems in the future? © 2000 Steven L. McShane

Web Exercise: DIAGNOS ING ORGANIZATIONAL STAKEHOLDERS Purpose This exercise is designed to help you understand how stakeholders influence organizations as part of the open systems anchor.

Materials Students need to select a company and, prior to class, retrieve and analyze publicly avai lable information over the past year or two about that company. This may include annual reports, which are usually found on the websites o f publicly traded companies. Where possible, student~ should also scan full-text newspaper and magazine databases for articles published over the previous year about the company.

Instructions The instructor may have students work alone or in groups for this activity. Students w ill select a company and investigate the relevance and influence of various stakeholder groups on the organization. Stakeholders can be identified from annual reports, newspaper articles, website s tatements, and other available sources. Stakeholders should be rank-ordered in terms of their perceived importance to the organization. Students should be prepared to present or discuss their rank-ordering of the organ ization's stakeholders, including evidence for this ordering.

Discussion Questions I. What are the main reasons why certain stakeholders are more important than others for this organization? 2. On the basis of your knowledge of the organ ization's environmental situation, is this rank order of stakeholders in the organization's best interest, or s hould speci fic other stakeholders be given higher priority? 3. What societal groups, if any, are not mentioned as stakeholders by the organization? Does this lack of reference to these unmentioned groups make sense?

Class Exercise: IT ALL MAKES SENSE? Purpose This exercise is designed to help you understand how organizational behaviour theories can help you refine and improve your personal theories about what goes on in organizations.

Instructions Read each of the statement~ below and determine whether each statement is true or false, in your opinion. The class will consider the answers to each question and discuss the implications for studying organ izational behaviour.

Part O ne

30

Intro d uctio n

This exercise may also be conducted as a team activity, whereby students answer these questions in teams rather than alone.

~

~

rl:4. 5.

False

TTrue

False

A decision maker•s effectiveness increases w ith the number of choices or alternatives available to he r/him.

_!.rue

False

O rganization.'i are more effective when they minimize conflict am ong employees.

True

False

Employees have more power with many close friend'i than with many acquaintances.

True

False

Companies are more s uccessful whe n they have s trong corporate cultures.

False

Employees perform better without stress. T he best way to c hange people and organizations is by pinpointing the source of their current problems.

~ - True 7.

True

False

8.

True

False

Female leaders involve employees in decisions to a greater degree than do male leaders.

9.

True

False

T he best decisions are made without emotion.

10.

True

False

If employees fee l they are paid unfai rly, nothing other than changing their pay w ill reduce their fee lings of injustice.

....__

-

A happy worker is a productive worker.

True

-

-

Self-Assessment for Chapter 1 SELF-ASSESSMENT NAME

DESCRIPTION

Are you a good te lecommuter?

Telecommuting is an increasingly popular Vlorkplace activity. and it pote ntially offers benefit'i for both companies and telecommute rs. However. some people are better s uited than others to telecomm uting and other fo rms of remote work. This self-assessment estimates personal characteristics that relate to e mployee success at telecommuting. thereby providing a rough indication of how well you might adj ust to telecommuting.

( PART TWO J Individual Behaviour and Processes CHAPTER 2

Individual Behaviour, Personality, and Values LEARNING OBJECTIVES After reading this chapter, you should be able to: LO 1 Describe the four factors that directly influence individual behaviour and performance.

L02 Summarize the five types of individual behaviour in organizations. L03 Describe personality and discuss how the "Big Five" p ersona lity dimensions and four MBTI types relate to individual behaviour in organizations. L04 Summarize Schwartz's model of individual va lues and discuss the conditions where values influence b ehaviour. LOS Describe three ethical principles and discuss three factors t hat influence ethical behaviour.

L06 Describe five va lues common ly studied across cultures, and discuss the diverse cultures within Canada.

31

32

Part Two

Individual Behaviour and Processes

Most companies strive for a safe work environment, but few are as dedicated as Mississauga-based Mother Parkers Tea & Coffee Inc. As one of North America's largest private label coffee producers, Mother Parkers instills safety-oriented behaviour through employee motivation, ability, role clarity, and situational support. "Safety is the core of everything we do here," says Chris Meffen, production manager of Mother Parkers' award-winning ReaiCup operations. To motivate safe work behaviour, Mother Parkers employees in Mississauga and Ajax, Ontario, and Fort Worth, Texas, are actively involved in testing and selecting new safety-oriented equipment. A special cross-functional committee of employees also conducts "ergo-blitzes" with production staff to uncover ergonomic risks and recommend solutions. "We wanted to empower the operators to recogn ize hazards in their work area, voice those concerns, and to be a part of the solutions; says Adrian Khan, Mother Parkers' environmental health and safety manager. "When it comes down to it, they are the experts running the machines who know exactly what the hazards are in the workplace; adds Khan, who was recently named Canada's Safety Leader of the Year by Canadian Occupational Safety magazine. Ability is the second driver of safe work behaviour. Mother Parkers employees are trained on safety procedures before they first enter the production floor. They also learn current developments from community experts at special health and safety day events. Mother Parkers also actively manages a third driver of safe work behaviour: the physical work environment. For example, the company's award-winning state-of-the-art automated production systems include built-in accident prevention features; highly visible floor markers cue employees to stop and look both ways before crossing forklift travel areas; and communication boards display the latest safety improvement statistics as well as key safety information. Mother Parkers' fourth ingredient for safe work behaviour is clarifying role expectations. Specifically, employees are continuously reminded that safety is paramount. These role perceptions are reiterated through ongoing safety training, employee involvement in ergonomic risk prevention, and the presence of numerous workplace safety cues. In fact, rem inding everyone about safety is a daily event. "We begin our production meetings and shift handovers by talking about safety," says production manager Chris Meffen. Safety-focused role expectations also extend to contractors, all of whom complete a safety training program before their projects begin. "We set expectations and standards with contractors before they come on site on what it means to be on site at Mother Parkers from a health and safety perspective; says Mike Bate, vice-president of human resources. 1

otivating staff to be safety conscious, providing ongoing safety training, establishing clear safety-focused role expectations, and creating a safety-first work environment have contributed to Mother Parkers' ascension as a workplace health and safety role model in Canada. This chapter begins by introducing the four direct drivers of individual behaviour and performance that Mother Parkers applies to ensure that employees consistently engage in safe work behaviours. Next, we rev iew the five types of individual behaviour that represent the individual-level dependent variables found in most organ izational behav iour research. The latter half of this chapter focuses on the two most stable characteristics within individuals, namely their personality and values. We introduce the two models of personality, discuss how personal values influence behaviour, explain the main factors to consider in ethical behaviour, describe the main types of cross-cultural values, and examine similarities and d ifferences in personal values across Canada and with people in the United States.

M

MARS Model of Individual Behaviour and Performance For most of the past century, experts have investigated the direct predictors of individual behaviour and performance. 2 One of the earliest formulas was performance = person x situation, where person includes individual characteristics and situation represents external influences on the indiv idual's behaviour. Another frequently mentioned

Chapter Two

Individual Behaviour, Personality, and Values

33

formula is performance = ability x motivation. 3 Sometimes known as the "skill-and-w ill" model, th is formula elaborates two specific characteristics within the person that influence indiv idual performance. Some organizational studies use the ability-motivation-opportunity (AMO) model, which refers to the three variables but with a limited interpretation of the situation. Along with ability, motivation, and situation, researchers have more recently identified a fourth key direct pred ictor of ind ividual behav iour and performance: role perceptions (the indiv idual's expected role obl igations).4 Exhibit 2 . 1 illustrates these four variables-motivation, abi lity, role perceptions, and situational factors-which are represented by the acronym MARS. 5 All four factors are critical influences on an individual's voluntary behaviour and performance; if any one of them is low in a given situation, the employee will perform the task poorly. For example, motivated salespeople with clear role perceptions and suffic ient resources (situational factors) will not perform their jobs a~ well if they lack sales skills and related knowledge (ability). Motivation, ability, and role perceptions are clustered together in the model because they are located within the person. Situational factors are external to the individual but still affect his or her behaviour and performance.6 The four MARS variables are the direct predictors of employee performance, customer service, co-worker collegiality, ethical behaviour, and all other forms of voluntary behaviour in the workplace. Let's look in more detail at each of the four factors in the MARS model.

EMPLOYEE MOTIVATION Motivation represents the forces within a person that affect his or her direction, intensity, and persistence of voluntary behaviour.7 Direction refers to the path along which people steer their effort. In other words, motivation is goal-directed, not random. People have choices about what they are trying to achieve and at what level of qual ity, quantity, and so forth. They are motivated to arrive at work on time, finish a project a few hours early, or aim for many other targets. The second element of motivation, cal led intensity, is the amount of effort al located to the goal. Intensity is al l about how much people push themselves to complete a task. Two employees might be motivated to finish their project a few hours early (direction), but only one of them puts forth enough effort (intensity) to achieve this goal. The third element of motivation is persistence, which refers to the length of time that the individual continues to exert effort toward an objective. Employees sustain their effort until they reach their goal or give up beforehand. To help remember these three elements of motivation, consider the metaphor of driving a car in which the thrust of the engine is your effort. Direction refers to where you steer the car, intensity is how

EXHIBIT 2.1

MARS Model of Indiv id ual Behaviour and Results

Indiv idual characteristics

MARS M odel Behaviour and results

...............

• 'll*llllfl-

· Oiz , ,....

ct

• C I QCixl&

• JIIJIIJIIu. . .. SC I Zt ·?I IIII s

c

1 Cl

34

Part Two

Individual Behaviour and Processes

much you put your foot down on the gas pedal, and persistence is for how long you drive toward your destination. Remember that motivation is a force that exists within individuals; it is not their actual behaviour. Thus, direction, intensity, and persistence are cognitive (thoughts) and emotional conditions that directly cause us to move.

ABILITY Employee abilities also make a d ifference in behaviour and task performance. Ability includes both the natural aptitudes and the learned capabilities required to successfully complete a task. Aptitudes are the natural talents that help employees learn spec ific tasks more quickly and perform them better. For example, finger dexterity is an aptitude by which individuals learn more quickly and potentially achieve higher performance at picking up and handli ng small objects with their fingers. Employees with high finger dexterity are not necessarily better than others at first; rather, they usually learn the skill faster and eventually reach a higher level of performance. Learned capabilities are the physical and mental skills and knowledge you have acquired. They tend to wane over time when not in use. Aptitudes and learned capabil ities (ski lls and knowledge) are the main e lements of a broader concept called competencies, which are characteristics of a person that result in superior performance. 8 The challenge is to match a person's abil ities with the job's requirements because a good match tends to increase employee performance and well-being. One matching strategy is to select applicants who already demonstrate the required competencies. For example, companies ask applicants to perform work samples, provide references for checking their past performance, and complete various selection tests. A second strategy is to train employees who lack specific knowledge or skills needed for the job.9

•

by t he NUMBERS

Mind the MARS Gap on Ability, Role Perceptions, and Situational Factors 10

of 500 Canadian senior executives say that finding skilled workers is somewhat or very difficult

of more than 13,000 employees surveyed across 34 countries say the skills gap is a real problem for their employer.

of 2.2 million employees surveyed worldwide strongly agree that they know what is expected of them at work.

25",.{,

of 2,061 U.K. adults surveyed say they receive insufficient training and development in their existing role.

24~ of more than 400,000

l

employees surveyed across 500 organizations worldwide say that lack of tools is their top source of decreased productivity (second highest to unproductive co-workers).

Chapter Tw o

Individual Behaviour, Personality, and Values

35

The third person-job matching strategy is to redesign the job so that employees are given tasks only within their current abilities. For example, a complex task might be simplified-some aspects of the work are transferred to others-so a new employee performs only tasks that he or she is currently able to perform. As the employee becomes more competent at these tasks, other tasks are added back into the job.

ROLE PERCEPTIONS Along with motivation and abi lity, employees require accurate role perceptions to perform their jobs well. Role perceptions refer to how clearly people understand the job duties (roles) assigned to or expected of them. These perceptions range from role clarity to role ambiguity. When 7,000 employees in a global survey were asked what would most improve their performance, "greater clarity about what the organization needs from me" was identified as the most important factor. 11 Role clarity ex ists in three forms. First, employees have clear role perceptions when they understand the specific duties or consequences for which they are accountable. This may seem obvious, but employees are occasionally evaluated on job duties they were never told wa~ within their zone of responsibility. This Jack of role clarity may be an increasing concern as organizations move away from prec isely defined job descriptions to broader work responsibilities. Second, role clarity exists when employees understand the priority of their various tasks and performance expectations. This is illustrated in the cla~sic dilemma of prioritizing quantity versus quality, such as how many customers to serve in an hour (quantity) versus how well the employee should serve each customer (quality). Role clarity in the form of task priorities also exists in the dilemma of al locating personal time and resources, such as how much time managers should devote to coaching employees versus meeting with clients. The third form of role perceptions involves understanding the preferred behaviours or procedures for accomplishing tasks. Role ambiguity exists when an employee knows two or three ways to perform a task, but misunderstands which of these the company prefers. Role perceptions are important because they represent how well employees know where to direct their effort. 12 Employees with role clarity perform work more accurately and efficiently whereas those with role ambiguity waste considerable time and energy by performing the wrong tasks or the right ta~ks in the wrong way. Furthermore, role clarity is essential for coordination with co-workers and other stakeholders. For instance, performers at Canada's Cirque du Solei] depend on each other to perform precise behaviours at exact times, such as catching each other in midair. Role clarity ensures that these expectations are met and the performances are executed safely. Finally, role clarity motivates employees because they have a higher bel ief that their effort will produce the expected outcomes. In other words, people are more confident exerting the required effort when they know what is expected of them.

SITUATIONAL FACTORS Individual behaviour and performance also depend on the situation, which is any context beyond the employee's immediate control. 13 The situation has two main influences on individual behaviour and performance. 14 One influence is that the work context constrains or facilitates behaviour and performance. Employees who are motivated, ski lled, and know their role obligations will nevertheless perform poorly if they Jack time, budget, physical work facilities, and other resources. The other influence is that the work environment provides cues to guide and motivate people. Mother Parkers Tea & Coffee uses many cues throughout the production floor to warn employees of safety risks and guide their behaviour to minimize those risks. For example, forklift routes are clearly marked, and painted footprints on both sides show employees where to stop before proceeding to cross. Barriers and warni ng signs are sin1ational factors that cue employees about moving forkl ifts and other hazards.

36

Part Tw o

Individual Behaviour and Processes

Global Connections 2.1: ICELAND FOODS TAKES MARS TO SUCCESS In the U.K.'s highly competitive retail foods market, Iceland Foods Group Ltd. continues to perform well, was recently named the nation's best online supermarket, and is consistently rated as one of the top dozen places to work in the U.K. The key drivers of Iceland Foods' success are the four variables depicted in the MARS model. Employees are motivated by a living wage (higher than most supermarkets), an inspiring CEO, and individual and store-level incentives. "A well-motivated staff is priceless," says Iceland's founder and CEO Malcolm Walker. "That is our secret weapon." Iceland Foods also boasts some of the highest employee scores on ability (most staff members say they receive all the training they need to do their job well), role clarity (most say they are clear about what is expected of them in their jobs). and situational support (most say managers ensure they have the resources needed to do the job). 15

Iceland Foods Group has become one of the most successful food retailers in the United Kingdom through the four variables in the MARS model. Courtesy of Iceland Foods.

Types of Individual Behaviour The four elements of the MARS model-moti vation, abil ity, role percepti ons, and si tuational factors-affect all voluntary workpl ace behaviours and performance. There are many varieties of indi vidual behaviour, but most can be organized i nto the five categories described over the next few pages: task perfor mance, organizational citizenship behaviours, counterproducti ve work behaviours, j oini ng and staying with the organization, and maintai ning work attendance (Exhibit 2.2).

Chapter Two

EXHIBIT 2.2

Individual Behaviour, Personality, and Values

37

Five Types of Individual Behaviour in the Workplace

TASK PERFORMANCE Task performance refers to the individual's voluntary goal-directed behav iours that contribute to organizational objectives. 16 Most jobs require incumbents to complete several tasks. For example, foreign exchange traders at RBC Capital Markets in Toronto and elsewhere must be able to identify and execute profitable trades, work cooperatively with clients and co-workers, assist in training new staff, and work on special telecommunications equipment without error. All tasks involve various degrees of working with people, data, th ings, and ideas. 17 Foreign exchange traders, for instance, mainly work with data (e.g., perform ing techn ical analysis of trends}, people (e.g., sharing information with co-workers and clients), and ideas (interpreting charts and econom ic reports). There are three types of task performance: proficient, adaptive, and proactive. 18 Proficient task performance refers to performing the work efficiently and accurately. It involves accomplishing the a~signed work at or above the expected standards of qual ity, quantity, and other indicators of effectiveness. Adaptive task performance refers to how well employees modify their thoughts and behaviour to align with and support a new or changing environment. Essentially, adaptive task performance is about how well employees respond to change in the workplace and in their job duties. Proactive task performance refers to how well employees take the initiative to anticipate and introduce new work patterns that benefit the organization. Proactive behaviours bring about change in oneself, co-workers, and the workplace to achieve what is perceived to be a better future for the organization.

Employees in almost every job are expected to perform their work proficiently. However, adaptive and proactive task performance are also important when the work is ambiguous. This ambiguity exists in many situations, such as when the cl ient's expectations are unclear, resources to perform the work have uncertain availability, and the methods used to perform the work are rapidly evolving due to emerging technology.

38

Part Two

Individual Behaviour and Processes

ORGANIZATIONAL CITIZENSHIP Employee behaviour extends beyond performing specific tasks. It also includes various forms of cooperation and helpfulness to others that support the organization's social and psychological context. 19 These activities are called organizational citizenshi p beh aviours (OCBs). Some OCBs are directed toward individuals, such as assisting co-workers with their work problems, adjusting a~signed work schedules to accommodate co-workers, showing genuine courtesy toward co-workers, and sharing work resources (supplies, technology, staff) with co-workers. Other OCBs represent cooperation and helpfulness toward the organization, such as supporting the company's publ ic image, offering ideas beyond those required for one's own job, attending voluntary functions that support the organization, and keeping up with new developments in the organization. Early literantre defined OCBs a~ discretionary behaviours (employees don't have to perform them), whereas more recent studies indicate that some OCBs are a job requirement even if they aren't explicitly stated. In fact, OCBs may be as important a~ ta~k performance when managers evaluate employee performance.20 OCBs can have a significant effect on individual, team, and organizational effectiveness. 21 Employees who help others have higher task performance because they also receive more support from coworkers. OCBs also increase team performance where members depend on each other. However, engaging in OCBs can have negative consequences. 22 OCBs take time and energy away from performing tasks, so employees who give more attention to OCBs r isk lower career success in companies that reward task performance. Also, employees who frequently perform OCBs tend to have higher workfamily confl ict because of the amount of time required for these activities.

COUNTERPRODUCTIVE WORK BEHAVIOURS Organizational behaviour is interested in all workplace behaviours, including dysfunctional activities collectively known as counterprod uctive work behaviours (CWBs). CWBs are voluntary behaviours that have the potential to directly or indirectly harm the organization or its stakeholders 23 This concept includes a wide array of intentional and unintentional behaviours, such as harassing co-workers, creating unnecessary confl ict, deviating from preferred work methods (e.g., shortcuts that undermine work qual ity), being untruthful, steal ing, sabotaging work, and wa~ting resources. CWBs are not minor concerns; research suggests that they can substantially undermine the organization's effectiveness.

JOIN ING AND STAYING WITH THE ORGANIZATION Organizations consist of people working together toward common goals, so another critical set of 24 behaviours is joining and staying with the company. In spite of the slow economic recovery and high unemployment in several parts of Canada, many companies struggle to find suitable applicants for some types of jobs. A recent large-scale survey reported that 77 percent of Canadian employers have moderate to extreme difficulty recruiting talent and 42 percent of business leaders say the skills shortage has resulted in productivity problems in their organization. For instance, B.C. Children's Hospital wa~ recently forced to close two of its eight operating rooms due to a shortage of trained pediatric nurses. 25 Even when companies are able to hire qualified staff in the face of shortages, they need to ensure that these employees stay with the company26 Employee turnover removes valuable knowledge, skills, and relationships with co-workers and external stakeholders, all of which take time for new staff to acquire. In later chapters, we identify other problems with employee turnover, such a~ its adverse effect on customer service, team development, and corporate culture strength. Employee turnover does offer some benefits, such a~ removing people with counterproductive work behaviours and opening up positions to new employees with fresh ideas. But overall, turnover tends to have a negative effect on organizational effectiveness.

MAINTAINING WORK ATTENDANCE Along with attracting and retaining employees, organizations need everyone to show up for work at scheduled times. Statistics Canada reports that Canadian employees miss an average of 8.3 days of scheduled work each year, compared to approximately 6.5 days and 4.5 days per year in the United Kingdom and United States, respectivelyY

Chapter Two

Individual Behaviour, Personality, and Values

39

What are the main causes of absenteeism and lateness?28 Employees often point to situational factors, such a~ bad weather, transit strike, personal illness, and family demands (e.g., sick children). These are usually valid explanations, but some people still show up for work because of their strong motivation to attend, whereas others take sick leave at the slightest sign of bad weather or illness. Some absenteeism occurs because employees need to get away from workplace bullying, difficult customers, boring work, and other stressful conditions. Absenteeism is also higher in organizations with generous sick leave because this benefit minimizes the financial loss of taking time away from work. Another factor in absenteeism is the person's values and personality. Final ly, sntdies report that absenteeism is higher in teams with strong absence norms, meaning that team members tolerate and even expect co-workers to take time off. Presenteeism Although most companies focus on problems with absenteeism, presenteeism may be more serious in some situations 29 Presenteeism occurs when people attend work even though their capacity to work is significantly diminished by illness, fatigue, personal problems, or other factors. These employees tend to be less productive and may reduce the productivity of co-workers. In addition, they may worsen their own health and increase health and safety risks for co-workers. Presenteeism is more common among employees with low job security (such as new and temporary staff), employees who lack sick leave pay or similar financial buffers, and those whose absence would immediately affect many people. Personality also plays a role; some people possess traits that motivate them to show up for work when others would gladly recover at home.30 Personality is a widely cited predictor of most forms of individual behaviour. It is also the most stable personal characteristic, so we introduce this topic next.

Global Connections 2.2: THE DOCTOR IS ILL ... BUT WILL SEE YOU NOW Most physicians urge sick patients to stay home, yet few take their own advice. Three-quarters of New Zealand doctors working in hospitals say they went to work while unwell over the previous year. Approximately the same percentage of Swedish doctors recently surveyed admitted that over the previous year they had gone to work one or more times with an illness for which they would have advised patients to stay at home. "Presenteeism is the elephant in the room that nobody wants to talk or do anything about," suggests Michael Edmond, an executive and physician at the University of Iowa Hospitals & Clinics. It is difficult for medical centres to find a replacement on short notice and many doctors feel guilty letting down their co-workers and patients. "There is an unspoken understanding that you probably shou ld be on your deathbed if you are calling in sick," says an attending physician at a Philadelphia hospital where 83 percent of doctors admitted working while sick within the past year. "It inconveniences my colleagues, is complicated to pay back shifts, and makes me look bad to do so." 31

Presenteeism is a serious problem among physicians, even though they urge their unwell patients to stay away from work until recovered. ©Shutterstock/pathdoc

40

Part Tw o

Individual Behaviour and Processes

Personality in Organizations Getting hired at Bridgewater Associates-the world's largest hedge fund-is not a cakewalk. The process begins with applicants watching onl ine videos depicting the culture and daily office life at the Westport, Connecticut, investment firm. Next, they spend two or three more hours completing four online assessments, including a popular measure of personal ity traits (MBTI). Applicants who pass the online selection process engage in a structured interview over the phone with consultants, who further assess the individual's character. Even after accepting Bridgewater's job offer, new recruits take a final two-hour personality test developed by the company. Bridgewater then uses the application data to produce the new hire's "baseball card"-a compact profile of his or her personality, abilities, culture fit, and performance. Bridgewater employees can view any coworker's profile on their phone or tablet using the firm's highly secure ba~eball card app.32 The hiring process at Bridgewater Associates is unusual. But one practice the hedge fund ha~ in common with many organizations is it~ attempt to measure each job applicant's personality- the relatively enduring pattern of thoughts, emotions, and behaviours that characterize a person, along with the psychological processes behind those characteristics.33 In essence, personality is the bundle of characteristics that make us similar to or different from other people. We estimate an individual's personality by what he or she says or does, and we infer the person's internal states-including thoughts and emotions-from these observable behaviours. People engage in a wide range of behaviours in their daily lives, yet close inspection of those actions reveals discernible patterns called personality traits. 34 Traits are broad concepts that al low us to label and understand individual differences. For example, you probably have some friends who are more talkative than others. Some people like to take risks whereas others are risk-averse. Each trait impl ies that there is something within the person, rather than environmental influences alone, that predicts this behavioural tendency. In fact, studies report that an individual's personality traits mea~ured in childhood predict various behaviours and outcomes in adulthood, including educational attainment, employment success, marital relationships, illegal activities, and health-risk behaviours. 35 Although people have behavioural tendencies, they do not act the same way in all situations. Such consistency would be considered abnormal because it indicates a person's insensitivity to social norms, reward systems, and other external conditions? 6 People vary their behaviour to suit the situation, even if the behaviour is at odds with their personal ity. For example, talkative people remain relatively quiet in a library where "no talking" rules are explicit and strictly enforced. Even there, however, personal ity differences are apparent because talkative people tend to do more chatting in libraries relative to other people in that setting.

PERSONALITY DETERMINANTS: NATURE VERSUS NURTURE Personality is shaped by both nature and nurture, although the relative importance of each continues to be debated and studied.37 Nature refers to our genetic or hereditary origins-the genes that we inherit from our parents. Studies of identical twins reveal that heredity has a very large effect on personality; up to SO percent of variation in behaviour and 30 percent of temperament preferences can be attributed to a person's genetic characteristics. In other words, genetic code not only determines our eye colour, skin tone, and physical shape; it also significantly affects our attitudes, decisions, and behaviour. Personality is also shaped by nurture--our social ization, life experiences, and other forms of interaction with the environment. Personality develops and changes mainly from childhood to young adulthood, typical ly stabilizing by around age 30. However, some personality changes continue to occur later in life. For instance, a few traits (openness to experience, social vitality) increase through to young adulthood, then decline in later years, whereas other traits (agreeableness, conscientiousness) tend to increase through to late life. Our personal ity can also change somewhat as a result of our job characteristics over a long time period. 38 The main explanation for why personality becomes more stable by adulthood is that we form a clearer and more rigid self-concept. This increasing clarity of "who we are" anchors our behaviour with the help

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41

of the executivefimction. This is the part of the brain that monitors and regulates goal-directed behaviour to keep it consistent with our self-concept. Our understanding of who we are becomes clearer and more stable with age, which increases the stability and consistency of our personal ity and behaviour.39 We discuss self-concept in more detail in Chapter 3. The main point here is that personality is not completely determined by heredity; it is also shaped by life experiences, particularly early in a person's life.

Can you identify personality traits from blogging words? You can discover how well you interpret someone's personality in blogs and other writing by completing th is self-assessment in Connect.

FIVE-FACTOR MODEL OF PERSONALITY Hundreds of personality traits (e.g., sociable, anxious, curious, dependable, suspicious, talkative, adventurous) have been described over the years, so experts have tried to organize them into smaller clusters. The most researched and respected clustering of personality traits is the five-fa ctor (Big Five) mod el (FFM).40 Several decades ago, personality experts identified more than 17,000 words that describe an individual's personal ity. These words were distilled down to five broad personality dimensions, each with a cluster of specific traits. Similar results were found in studies of different languages, suggesting that the five-factor model is fairly robust across cultures. These " Big Five" dimensions, represented by the handy acronym CANOE, are outlined in Exhibit 2.3 and described below. Conscientiousness. Characterizes people who are organized, dependable, goal-focused, thorough, disciplined, methodical, and industrious. People with low conscientiousness tend to be careless, disorganized, and Jess thorough. Agreeableness. Describes people who are trusting, helpful, good-natured, considerate, tolerant, selfless, generous, and flexible. People with low agreeableness tend to be uncooperative and intolerant of others' needs as well as more suspicious and self-focused.

EXHIBIT 2.3

Personality dimension

Five-Factor Model Personality Dimensions

People with higher scores on this dimension tend to be more: Organized, dependable, goal-focused, thorough, disciplined, method ical, industrious Trusting, helpful, good-natured, considerate, tole rant, selfless, generous, flexible Anxious, insecure, se lf-conscious, depresse d, temperame ntal Imaginative, cre ative, unconventional, curious, nonconforming, autonomous, perceptive

Outgoing, ta lkative , energetic, sociable, assertive

42

Part Two Individual Behaviour and Processes Neuroticism. Refers to people who tend to be anxious, insecure, self-conscious, depressed, and temperamental. In contrast, people with low neuroticism (high emotional stability) are poised, secure, and calm. Openn ess to experience. This dimension is the most complex and has the lea~t agreement among scholars. It generally refers to the extent to which people are imaginative, creative, unconventional, curious, nonconforming, autonomous, and aesthetically perceptive. Those who score low on this dimension tend to be more resistant to change, less open to new ideas, and more conventional and fixed in their ways. Extr aversion. Describes people who are outgoing, talkative, energetic, soc iable, and assertive. The opposite is imroversion, which characterizes those who are quiet, cautious, and less interactive with others. Extraverts get their energy from the outer world (people and things around them), whereas introverts get their energy from the internal world, such as personal reflection on concepts and ideas. Introverts do not necessarily lack social skills. Rather, they are more inclined to direct their interests to idea~ than to social events. Introverts feel quite comfortable being alone, whereas extraverts are less comfortable without social interaction.

What is your Big Fi ve personality? You can discover your Big Five personality by completing this self-assessment in Connect.

Are you introverted or extraverted? You can discover your level of introversion or extraversion by completing this self-assessment in Connect.

Five-Factor Model and Work Performance Personal ity mainly affects behaviour and performance through motivation, specifically by influencing the individual's choice of goals (direction) as well as intensity and persistence of effort toward those goals. Consequently, all of the five-factor model dimensions predict one or more types of employee behaviour and performance to some extent. However, the Big Five dimensions cluster several specific traits, each of which can predict employee performance somewhat differently from others in the cluster. In fact, some experts suggest that performance is better predicted by the specific traits than by the broad Big Five dimensions. Another observation is that the relationship between a personal ity dimension or trait and performance may be nonl inear. People with moderate extraversion perform better in sales jobs than those with high or low extraversion, for example.4 1 Exhibit 2.4 identifies the Big Five personality dimensions that best predict five types of work behaviour and performance. 42 Conscientiousness stands out a~ the best overall personality predictor of proficient ta~k performance for most jobs. More precisely, proficient ta~k performance has the strongest association with the specific conscientiousness traits of industriousness (achievement, self-discipline, purposefulness) and dutifulness. Consc ientious employees set higher personal goals for themselves and are more persistent. They also engage in more organizational citizenship and in less counterproductive work behaviour. Conscientiousness is a weak predictor of adaptive performance (responding to change) and proactive performance (taking initiative toward new work patterns). In fact, two specific conscientiousness traits-orderliness and dependabil ity-tend to suppress adaptivity. Extraversion is the second best overall personality predictor of proficient task performance, but it is much weaker than conscientiousness. The specific extraversion dimension traits of assertiveness and positive emotionality are the strongest predictors within this dimension. Assertive employees with positive emotionality frame situations as challenges rather than threats, so they have a stronger "can-do" belief. Extraversion also predicts both adaptive and proactive performance, possibly because extraverts are comfortable engaging with their environment. Extraversion is associated with influencing others and being comfortable in social settings, which explains why effective leaders and salespeople tend to be somewhat more extraverted than the general population.

Chapter Two

Ind ivid ual Behaviour, Pe rsonality, and Values

EXHIBIT 2.4

Type of Performance

Relevant Personality Dimensions Type of Performance

Relevant Personality Dimensions

43

Big Five Personality and Work Performance

Adaptive task performance

Proficient task performance

• Conscientiousness • Extraversion

Proactive task performance

• Emotional stability • Extraversion (assertiveness) • Openness to experience

Organizational citizenship

• Conscientiousness • Agreeableness

• Extraversion (assertiveness) • Openness to experience

Counterproductive work behaviours

• Conscientiousness' • Agreeableness· "Negative relationship.

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Agreeableness is positively associated with organizational citizenship and negatively associated with counterproductive work behaviours. 43 The reason is that employees with high agreeableness are motivated to be cooperative, sensitive, flexible, and supportive. Agreeableness does not predict proficient or proactive task performance very well, mainly because it is associated with lower motivation to set goals and achieve results. However, agreeableness does predict one's performance as a team member as well as in customer service jobs. Openness to experience is a weak predictor of proficient task performance, but it is one of the best personality predictors of adaptive and proactive performance. The mai n reason is that employees with higher openness scores have more curiosity, imagination, and tolerance of change.44 These traits also explain why openness to experience is associated with successful performance in creative work. Emotional stability (low neuroticism) is one of the best personality predictors of adaptive performance.45 Employees with higher emotional stability cope better with the ambiguity and uncertainty of change. In contrast, those with higher neuroticism view change as a threat, so they tend to avoid change and experience more stress when faced with workplace adjustments. These characteristics would suggest that emotional stability also predicts proactive perfor mance, but the limited research has reported mixed results. Emotional stability is associated with proficient task perfor mance, organizational citizenship, and counterproductive work behaviours, but its influence is neither strong nor consistent enough to be listed in Exhibit 2.4.

JUNGIAN PERSONALITY THEORY AND THE MYERS-BRIGGS TYPE INDICATOR The five-factor model of personality has the most research support, but it is not the most popular personality test in organizations. That distinction goes to Jungian personality theory, which is measured through the Myers-Briggs Typ e Indicator (MBTI) (see Exhibit 2 .5). Nearly a century ago, Swiss

44

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EXHIBIT 2.5

Jungian and Myers-Briggs Personality Types

Bllst-d 1m data from CPP. Inc.. Mmmlllin View. CA 994043 from lntmduction

1eeember 2016).

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suggest. One problem is that surveys often ask a single direct question, such as: "How satisfied are you with your job?" Many dissatisfied employees are reluctant to reveal their feelings to such a direct question because this is tantamount to admitting that they made a poor job choice and are not enjoying a large part of their life. The inflated results are evident in the fact that employees tend to report less satisfaction when asked about specific aspects of their work. For instance, 79 percent of Canadian federal government employees like their job overal l, yet only 64 percent are satisfied with how interpersonal issues are resolved in their work unit, and only 63 percent would recommend their department or agency as a great place to work. 58 Furthermore, several sntdies report that many employees plan to look for work within the next year or would leave their current employer if the r ight opportunity came along.59 A second problem is that culntral values make it difficult to compare job satisfaction across countries. People in China and Japan, for example, tend to subdue their emotions in public, and there is evidence that they also avoid extreme survey ratings such as "very satisfied." A third problem with job satisfaction ratings is that job satisfaction changes with economic conditions. Employees with the highest job satisfaction in current surveys tend to be in countries where the economies are chugging along quite well. 60

JOB SATISFACTION AND WORK BEHAVIOUR Does job satisfaction influence workplace behaviour? In general, yes! Job satisfaction affects many of the individual behaviours introduced in Chapter 2 (task performance, organizational citizenship, quitting, absenteeism, etc.).61 However, a more precise answer is that the effect of job satisfaction and dissatisfaction on individual behaviour depends on the person and the situation. A useful template for organizing and understanding the consequences of job dissatisfaction is the exit-voice-loyalty-neglect (E VLN) mod el. As the name suggests, the EVLN model identifies four ways that employees respond to dissatisfaction: 62 Exit. Exit includes leaving the organization, transferring to another work unit, or at least trying to get away from the dissatisfying situation. The traditional theory is that job dissatisfaction builds over time and eventually becomes strong enough to motivate employees to search for

better work opportunities elsewhere. This is likely true to some extent, but more recent thinking holds that specific "shock events" quickly energize employees to think about and engage in exit behaviour. For example, the emotional reaction you experience to an unfair management decision or a conflict episode with a co-worker motivates you to look at job ads and speak to friends about job opportunities where they work. This begins the process of re-al igning your self-concept away from your current employer and toward another company.63 Voice. Voice is any attempt to change, rather than escape from, the dissatisfying situation. Voice can be a constructive response, such as recommending ways for management to improve the situation, or it can be more confrontational, such as filing formal grievances or forming a coalition to oppose a decision. 64 In the extreme, some employees might engage in counterproductive behaviours to get attention and force changes in the organization.

Loyalty. In the original version of this model, loyalty was not an outcome of dissatisfaction. Rather, it determined whether people chose exit or voice (i.e., high loyalty resulted in voice; low loyalty produced exit) 65 More recent writers describe loyalty as an outcome, but in various and somewhat unclear ways. Generally, they suggest that "loyalists" are employees who respond to dissatisfaction by patiently waiting-some say they "suffer in silence"-for the problem to work itself out or be resolved by others. 66 Neglect. Neglect includes reducing work effort, paying less attention to quality, and increasing

absenteeism and lateness. It is generally considered a passive activity that has negative consequences for the organization. Which of the four EVLN alternatives do employees use? It depends on the person and situation. 67 The individual's personality, values, and self-concept are important factors. For example, people with a high-conscientiousness personal ity are less likely to engage in neglect and more likely to engage in

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voice. Pa~t experience also influences which EVLN action is applied. Employees who were unsuccessful with voice in the past are more likely to engage in exit or neglect when experiencing job dissatisfaction in the future. Another factor is loyalty, as it was originally intended in the EVLN model. Specifical ly, employees are more likely to quit when they have low loyalty to the company, and they are more likely to engage in voice when they have high loyalty. Finally, the response to dissatisfaction depends on the situation. Employees are less likely to use the exit option when there are few alternative job prospects, for example. Dissatisfied employees are more likely to use voice than the other options when they are aware that other employees are dependent on them 68

JOB SATISFACTION AND PERFORMANCE Is a happy worker a more productive worker? Clive Schlee thinks so. The CEO of the British deli chain Pret A Manger believes that happy employees result in happier customers and higher sales. "The first thing I look at is whether staff are touching each other-are they smiling, reacting to each other, happy, engaged? I can almost predict sales on body language alone," he says. Secret shoppers scout Pret A Manger outlets each week. If the secret shopper is served by a positive and happy employee behind the counter, all staff members at that location receive a bonus.69 The "happy worker" hypothesis is generally true, according to major reviews of the research on this subject. In other words, there is a moderately positive relationship between job satisfaction and performance. Workers tend to be more productive ro some extent when they have more positive attitudes toward their job and workplace.70 Why does job satisfaction affect employee performance only to some extent? One reason is that general attitudes (such as job satisfaction) don't predict specific behaviours very well. As the EVLN model explains, reduced performance (a form of neglect) is only one of four possible responses to dissatisfaction. A second reason is that some employees have little control over their performance because their work effort is paced by work technology or interdependence with co-workers in the production process. An assembly-l ine worker, for instance, installs a fixed number of windshields each hour with about the same quality of installation whether he or she has high or low job satisfaction. A third consideration is that job performance might cause job satisfaction, rather than vice versa?' Higher performers tend to have higher satisfaction because they receive more rewards and recognition than do low-performing employees. This connection between job satisfaction and performance isn't stronger, however, because many organizations do not reward good performance very well.

JOB SATISFACTION AND CUSTOMER SATISFACTION Earls Restaurants Ltd. has surv ived and thrived forover30 years in a highly competitive business. As the opening casestudytothischapterreported, a key ingredient in the Vancouver-basedcompany 'ssuccess is stated in its motto: "Great guest experiences begin with great partner experiences." Throughout the years, Earls' founders and leaders have embraced the idea that customers are more satisfied wi th their d ining experience when the cooks, servers, and other staff (all of whom are called partners at Earls) have pos itive emotions and attitudes regarding the ir jobs and employer. This view is echoed by The Container Store chai rman and CEO Kip Tindell. "We really believe that if you put the employees first, they really and truly will take better care of the customer than anybody else," says Tindell. 72 Earls Restaurants and The Container Store maintain strong customer service by applying the service profit chain model. This model, which is diagrammed in Exhibit 4 .5, proposes that job satisfaction has a positive effect on customer service, which flows on to shareholder financial returns. The process begins with workplace practices that increase or decrease job satisfaction. Job satisfaction then influences whether employees stay (employee retention) as well as their motivation and behaviour on the job. Retention, motivation, and behaviour affect service quality, which influences the customer's satisfaction, perceived value of the service, and tendency to recommend the service to others (referrals). These customer activities influence the company's profitability and growth. The service profit chain

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109

Wegmans is America's favourite supermarket. In fact, each year it receives several thousand requests from people in almost every state to build more stores. Wegmans clearly values its customers, but it does so by caring j ust as much for its employees. "What's most important to us is that our employees feel that Wegmans is a great place to work," explains CEO Danny Wegman. "When our people feel cared about and respected, they turn arou nd and make our customers feel that way too." Wegmans invests heavily in train ing each employee, usually promotes from w ithin, and offers scholarships to employees. Through careful selection and leadership, the company also nurtu res a fa mily-like culture. "I have never loved a job more than I do Wegmans,'' enthuses a pha rmacy tech nician nea r Syracuse, New York. "My co-workers are like a second family." 73 ©Wegmans Food Markets, Inc.

EXHIBIT 4.5

Service Profit Chain Model

Sources: ll. Heskett. W. E. Sasser. and L A. Schlesinger. The Sen•lce Pmfit Chajn (New York: Free Press) 1997: A. l Rucci S. P. Kirn. and R. T. Qujnn. "The Employee-Customer-Profit Chain At SearS." Harvard Business Review 76 ( I998): 83 -97~ S. P. Brown aod S. K. Lam. '"'A Meta-Analysis of Relatjonships Linkjng Employee Sati..::faction to Cu..:;tomer Responses." Journal of ReLailing 84. oo. 3 (2008): 243- 255.

model has considerable research support. However, the benefits of job satisfaction do take considerable time to flow through to the organization's bottom Jine.74 Behind the service profit chain model are two key explanations for why satisfied employees tend to produce happier and more Joyal customers?5 One explanation is that job satisfaction tends to put employees

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in a more positive mood, and people in a good mood more naturally and frequently display friendliness and positive emotions. When employees have good feelings, their display of positive emotions "rubs off' on most (but not all) customers, so customers feel happier and consequently form a positive evaluation of the service experience (i.e., higher service quality). The effect is also mutual; happy customers make employees happier, which can lead to a cycle of positive emotions in the service experience. The second explanation is that satisfied employees are less likely to quit their jobs, so they have more work experience (i.e., better knowledge and skills) to serve clients. Lower turnover also enables customers to have the same employees serve them on different occasions, providing more consistent service. Some evidence indicates that customers build their loyalty to specific employees, not to the organization, so keeping employee turnover low tends to build customer loyalty.

JOB SATISFACTION AND BUSINESS ETH ICS Before leaving the topic of job satisfaction, we should mention that job satisfaction is also an ethical issue that influences the organization's reputation in the community. People spend a large portion of their time working in organizations, and many societies now expect companies to provide work environments that are safe and enjoyable. Indeed, employees in several countries closely monitor ratings of the best companies to work for, an indication that employee satisfaction is a virtue worth considerable goodwill to employers. The importance of this is apparent when an organization ha~ low job satisfaction. The company typically tries to hide this fact, and when morale problems become public, corporate leaders are usually quick to take steps to improve the situation.

O rganizational Commitment Organizational commitment represents the other half (with job satisfaction) of what some experts cal l "overall job attitude." Affective organization al commitm ent is the employee's emotional attachment to, involvement in, and identification with an organization. Affective commitment is a psychological bond whereby one chooses to be dedicated to and responsible for the organization.76 The "strong sense of family" and support for personal growth are two reasons why many employees at Earls Restaurants have strong affective commitment toward the company. Affective commitment is often distinguished from continu an ce commitmen t, which is a calculative attachment to the organization. This calculation takes two forms.77 One form occurs where an employee has no alternative employment opportunities (e.g., " I dislike working here but there are no other jobs available.") This condition exists where unemployment is high, employees lack the skills sought by other employers, or the employee's ski lls are so specialized that there is limited demand for them nearby. The other form of continuance commitment occurs when leaving the company would be a significant financial sacrifice (e.g., "I hate this place but I can't afford to quit!"). This perceived sacrifice condition occurs when the company offers high pay, benefits, and other forms of economic exchange in the employment relationship, or where quitting forfeits a large deferred financial bonus. ~

How committed are you to your school? You can discover your affective commitment as a student at your school by completing this self-assessment in Connect.

CONSEQUENCES OF AFFECTIVE AND CONTINUANCE COMMITMENT Affective commitment can be a significant competitive advantage. 78 Employees with a strong psychological bond to the organization are less likely to quit their jobs and be absent from work. They also have higher work motivation and organizational citizenship, as well a~ somewhat higher job performance. Affective commitment also improves customer satisfaction because long-tenure employees have better knowledge of work practices and because clients like to do business with the same employees. One concern is that employees with very high loyalty tend to have high conformity, which results in lower creativity. Another problem is

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Workplace Emotions, Attitudes, and Stress

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that very high commitment has sometimes been used to excuse or motivate illegal activity in defence of the organization. However, most companies suffer from too little rather than too much employee loyalty. In contrast to the benefits of affective commitment, employees with high levels of continuance commitment tend to have lower performance and are less likely to engage in organizational c itizenship behaviours. Furthermore, unionized employees with high continuance commitment are more likely to use formal grievances, whereas employees with high affective commitment engage in more cooperative problem solving when employee-employer relations sour. 79 Although some level of financial connection may be necessary, employers should not rely on continuance commitment to retain staff. Employers should focus on winning employees' hearts (affective commitment) rather than tying them financially to the organization (continuance commitment).

BUILDING ORGANIZATIONAL COMMITMENT There are almost a~ many ways to build affective commitment as there are topics in this textbook, but here are the most frequently mentioned strategies in the literature:

Justice and Support Affective commitment is higher in organizations that fulfil their obligations to employees and abide by humanitarian values, such as fairness, courtesy, forgiveness, and moral integrity. These values relate to the concept of organizational justice, which we discuss in the next chapter. Similarly, organizations that support employee well-being tend to cultivate higher levels of loyalty in return. 80 Shared Values The definition of affective commitment refers to a person's identification with the organization, and that identification is highest when employees believe their values are congruent with the organization's dominant values. Employees also experience more positive emotions when they agree with the values underlying corporate decisions, which increases their motivation to stay with the organization.81 Trust Trust refers to positive expectations one person has toward another person or group in situations involving risk. 82 Trust means putting faith in others. It is also a reciprocal activity: To receive trust, you must demonstrate trust. Employees identify with and feel obliged to work for an organization only when they trust its leaders. This explains why layoffs are one of the greatest blows to affective commitment. By reducing job security, companies reduce the trust employees have in their employer and the employment relationship. 83 Organizational Comprehension Organizational comprehension refers to how well employees understand the organization, including its strategic direction, social dynamics, and physical layout. 84 This awareness is a necessary prerequisite to affective commitment because it is difficult to identify with or feel loyal to something that you don't know very well. Furthermore, lack of information produces uncertainty, and the resulting stress can distance employees from that source of uncertainty (i.e., the organization). The practical implication here is to ensure that employees develop a reasonably clear and complete mental model of the organization. This occurs by giving staff information and opportunities to keep up-to-date about organizational events, interact with co-workers, discover what goes on in different parts of the organization, and learn about the organization's history and future plans. 85 Employee Involvement Employee involvement increases affective commitment by strengthening the employee's psychological ownership and social identity with the organization. 86 Employees feel that they are part of the organization when they participate in decisions that guide the organization' s future (see Chapter 7). Employee involvement also builds loyalty because giving this power is a demonstration of the company's trust in its employees. Organizational commitment and job satisfaction represent two of the most often studied and discussed attitudes in the workplace. Each is linked to emotional episodes and cognitive judgments about the workplace and one's relationship with the company. Emotions also play an important role in another concept that is on everyone's mind these days: stress. The final section of this chapter provides an overview of work-related stress and how it can be managed.

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Work-Related Stress and Its Management When asked if they often feel stressed by their work, most employees these days will answer an emphatic Yes! Not only do most people understand the concept; they feel they have plenty of personal experience with it. Stress is most often described as an adaptive response to a situation that is perceived as chal lenging or threatening to a person's well-being. 87 It is a physiological and psychological condition that prepares us to adapt to hostile or noxious environmental conditions. Our heart rate increases, muscles tighten, breathing speeds up, and perspiration increases. Our body also moves more blood to the brain, releases adrenaline and other hormones, fue ls the system by releasi ng more glucose and fatty acids, activates processes that sharpen our senses, and conserves resources by shutti ng down our immune response. One school of thought suggests that stress is a negative evaluation of the external environment. However, critics of this cognitive appraisal perspective point out that stress is more accurately described as an emotional experience, which may occur before or after a conscious evaluation of the situation.88 Whether stress is a complex emotion or a cognitive evaluation of the environment, it has become a perva~ive experience in the dai ly Jives of most people. Stress is typically described as a negative experience. This is known as distress-the degree of physiological, psychological, and behavioural deviation from healthy functioning. However, some level of stress-called eustress-is a necessary part of life because it activates and motivates people to achieve goals, change their environments, and succeed in life's chal lenges. 89 Our focus is on the causes and management of distress, because it has become a chronic problem in many societies.

GENERAL ADAPTATION SYNDROME The word stress wa~ first used more than 500 years ago to describe the human response to harsh environmental conditions. However, it wasn't until the 1930s that Canadian researcher Hans Selye (often described a~ the father of stress research) first documented the stress experience, called general a dapta tion syndrome.

•

by t he NUMBERS

Stressed Out, Burnt-Out!9 0

of 6,700 Americans surveyed say they have pu rposely changed j obs due to a stressful work environment.

of 400 Canadian w orkers surveyed say they are stressed at work on a day-to-day basis.

of more than 1,000 American workers surveyed say they are stressed at work on a day-to-day basis.

of all working days lost due to ill health in the U.K. are due to stress.

31",.6

of 1,000 German workers surveyed report that they felt stressed at work the previous day.

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Selye detennined (initially by sntdying rats) that people have a fairly consistent and automatic physiological response to stressful sintations, which helps them to cope with environmental demand~.9 1 The general adaptation syndrome consists of the three stages shown in Exhibit 4.6. The a/ann reaction stage occurs when a threat or chal lenge activates the physiological stress responses that were noted above. The individual's energy level and coping effectiveness decrease in response to the initial shock. The second stage, resistance, activates various biochemical, psychological, and behavioural mechanisms that give the individual more energy and engage coping mechanisms to overcome or remove the source of stress. To focus energy on the source of the stress, the body reduces resources to the immune system during this stage. This explains why people are more likely to catch a cold or some other illness when they experience prolonged stress. People have a limited resistance capacity, and if the source of stress persists, the individual will eventually move into the third stage, exhaustion. Most of us are able to remove the source of stress or remove ourselves from that source before becoming too exhausted. However, people who frequently reach exhaustion have increased risk of long-term physiological and psychological damage.92

How stressed are you? You ca n discover your perceived general level of stress over

th e past month by comple ting this self-assessment in Connect.

CONSEQUENCES OF DISTRESS Stress takes its toll on the human body.93 Many people experience tension headaches, muscle pain, and related problems mainly due to muscle contractions from the stress response. High stress levels also contribute to cardiovascular disease, including heart attacks and strokes, and may be associated with some forms of cancer. One major review estimated that more than I 00,000 deaths annually and as much as eight percent of health care costs in the United States are due to the consequences of work-related stress. Stress also produces various psychological consequences, such as job dissatisfaction, moodiness, depression, and lower organizational commitment. Furthermore, various behavioural outcomes have been linked to high or persistent stress, including lower job performance, poor decision making, and increased workplace accidents and aggressive behaviour. Most people react to stress through "fight or flight," so, as a form of flight, increased absenteeism is another outcome of stress. 94 One particular stress consequence, called job burnout, occurs when people experience emotional exhaustion, cynicism, and reduced feelings of personal accomplishment.95 Emotional exhaustion, the

EXHIBIT 4.6

General Adaptation Syndrome

Stage 1 Alarm reaction

Stage 2 Resistance

High

Ability to Cope

Normal state

Low

Time Source: Adapted from H. Selye. The SLress of Life (New Yod:: McGraw-HilL 1956).

Stage 3 Exhaustion

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first stage, is characterized by tiredness, a lack of energy, and a feeling that one's emotional resources are depleted. This is followed by cynicism (also called depersona/iztaion), which is an indifferent attitude toward work, emotional detachment from clients, a cynical view of the organization, and a tendency to strictly follow rules and regulations rather than adapt to the needs of others. The final stage of burnout, called reduced personal accomplishment, entails feel ings of diminished confidence in one's ability to perform the job well. In such situations, employees develop a sense of learned helplessness a~ they no longer bel ieve that their efforts make a difference.

STRESSORS: THE CAUSES OF STRESS Before identifying ways to manage work-related stress, we must first understand its causes, known as stressors. Stressors include any environmental conditions that place a physical or emotional demand on a person. 96 There are numerous stressors in the workplace and in life in general. We will briefly describe four of the most common work-related stressors: organizational constraints, interpersonal conflict, work overload, and low task control. 97

Organizational Constraints Stress research has identified organizational constraints as one of the most pervasive causes of workplace stress.98 This stressor includes lack of equipment, supplies, budget funding, co-worker support, information, and other resources necessary to complete the required work. Most employees experience stress because these constraints interfere with task performance, which indirectly threatens their rewards, status, and job security. Organizational constraints refer to situational factors, which comprise one of the four direct predictors of individual behaviour and performance (see the MARS model in Chapter 2). It is the only direct influence on individual performance that is beyond the employee's immediate control. This lack of control is a powerful stressor because it threatens the individual's fundamental drive to influence his or her external environment. Interpersonal Conflict Organizations consist of groups of people working interdependently toward some purpose. But even though they share common organizational goals, employees frequently disagree with each other regarding how to achieve those goals as well as how the work and resources should be distributed along that journey. Therefore, conflict is a way of life in organizations. As we wi ll learn in Chapter II , specific conditions and practices enable employees to effectively resolve their differences with few negative emotions. Unfortunately, dysfunctional conflict can easily flare up and, left unchecked, escalate to a level that produces considerable stress and counterproductive work behaviours. In organizational settings, most interpersonal conflict is caused by structural sources, such as ambiguous rules, lack of resources, and conflicting goals between employees or departments. However, workplace conflict also arises when a person's actions are perceived by others as threatening. This fast-growing form of interpersonal conflict, called psychological harassment, includes repeated hostile or unwanted conduct, verbal comments, actions, and gestures that undermine an employee's dignity or psychological or physical integrity. Psychological harassment defines a broad landscape of behaviours, from threats and bullying to subtle yet persistent forms of incivility. 99 Psychological harassment exists in almost every workplace. One global survey of I 6,5 I 7 employees reported that 83 percent of respondent~ in Europe, 65 percent in North and South America, and 55 percent in Asia say they have been physically or emotionally bullied at work. 100 Sexual harassment is a specific type of harassment in which a person's employment or job performance is conditional and depends on unwanted sexual relations and/or the person experiences sexual conduct from others (such a~ posting pornographic material) that unreasonably interferes with work performance or creates an intimidating, hostile, or offensive working environment. 101 Work Overload "We just keep rushing along in a confused state of never having time to do the things that seem to be pressing upon us." Sound familiar? Most Canadians have probably had a similar thought in the past year. But although this comment comes from Canada, it wasn't written in the past year or even in the past decade. It appeared in an article called "Let's Slow Down!" in a Royal Bank of

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Canada newsletter in 1949! 102 The fact is, people have been struggling for more than half a century with the pace of life, including the challenges of performing too many tasks and working too many hours. Work overload is one of the most common workplace stressors. Employees are expected (or believe they are expected) to complete more work with more effort than they can provide withi n the allotted time. 103 Unfortunately, work overload has consistently worsened over the past few decades. In 1991, approximately 30 percent of Canadians estimated that they worked an average of 45 hours or more per week. Ten years later (200 I), that figure had jumped to more than 45 percent. In the most recent poll (20 I I), 60 percent of Canadians reported working an average of 45 hours or more each week. 104 Why do employees work such long hours? One explanation attributes it to the combined effects of technology and global ization. People increasingly work with co-workers in distant time zones, and their constantly-on communications habits make it diff icult to separate work from personal life. A related

Global Connections 4.2: CHRONIC WORK OVERLOAD IN CHINA 105 Eva Marti (not her real name) has lived in Beij ing fo r eig ht years, but the Swiss-born designer still struggles with the workload expected of her. "What am I doing in here?" she asks at 2 a.m. on her fourth straig ht nig ht of work. "This kind of overtime wou ld never happen in Switzerland." The average Chinese employee works more than 2,000 hours each year. whereas Swiss wo rkers average less than 1,500 hours. Long ho urs due to work overload is a chronic problem for many employees in Ch ina, not just for expatriates. One survey found that 70 percent of white-collar workers in downtown Beij ing show signs of overwork. Another study reported t hat half the anesthesio log ists in China work more than 10 hou rs each d ay; nearly 80 percent of them say they feel too tired at work. Ch inese newspapers frequently report death from overwork (called guo/aosi in Ch ina) among yo ung professionals.

Stress seems to be on the rise in China due to increasing workloads and hours of work. © blue jean lmagesfGetty Images

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explanation is that employees are under increasing pressure to be productive in a globalized world. A third reason, called the "ideal worker norm," is that professionals expect themselves and others to work longer hours. For many, toiling away far beyond the normal workweek is a badge of honour, a symbol of their superhuman capacity to perform above others. For example, 39 percent of mi llennia! employees in one recent large-scale survey admitted that they work long hours and have a 24n schedule so they look like a "work martyr" to their boss. 106

Low Task Control Workplace stress is higher when employees lack control over how and when they perform their ta~ks a~ well as over the pace of work activity. Work is potentially more stressful when it is paced by a machine, involves monitoring equipment, or when the work schedule is controlled by someone else. Low ta~k control is a stressor because employees face high workloads without the ability to adjust the pace of the load to their own energy, attention span, and other resources. Furthermore, the degree to which low ta~k control is a stressor increases with the burden of responsibility the employee must carry. 107 Assembly-line workers have low task control, but their stress can be fairly low if their level of responsibility is also low. In contrast, sports coaches are under immense pressure to win games (high responsibility), yet they have little control over what happens on the playing field (low task control).

INDIVIDUAL DIFFERENCES IN STRESS People exposed to the same stressor experience different levels of stress. One contributing factor is the employee's physical health. Regular exercise and a healthy lifestyle produce a larger store of energy to cope with stress. A second variable is the coping strategy employees use to ward off a particular stressor. 108 People sometimes figure out ways to remove the stressor or to minimize its presence. Seeking support from others, reframing the stressor in a more positive light, blaming others for the stressor, and denying the stressor's existence are some other coping mechanisms. Some coping strategies work better for specific stressors and some are better across al l stressors. 109 Thus, someone who uses a less effective coping mechanism in a particular situation would experience more stress in response to that situation. People have a tendency to rely on one or two coping strategies, and those who rely on generally poor coping strategies (such a~ denying the stressor exists) are going to experience more stress. Personality is a third rea~on why people experience different levels of stress when faced with the same stressor. 110 Individuals with low neuroticism (high emotional stability) usually experience lower stress levels because, by definition, they are less prone to anxiety, depression, and other negative emotions. Extraverts also tend to experience lower stress than do introverts, likely because extraversion includes a degree of positive thinking and extraverts interact with others, which helps buffer the effect of stressors. Those with a positive self-concept-high self-esteem, self-efficacy, and internal locus of control (see Chapter 3)-feel more confident and in control when faced with a stressor. In other words, they tend to have a stronger sense of optimism. 111 Stress also tends to be higher among employees who have an uncontrollable work motivation and who constantly think about work and have low work enjoyment. This condition, known as wor kah olism (also called work addiction), is characteristic of people with perfectionism (a specific form of very high conscientiousness) and a natural tendency to have negative emotions (related to high neuroticism). 112

Ar e you a workaholic? You can discover the extent to which you are a workaholic by

completing this self-assessment in Connect.

MANAG ING WORK-RELATED STRESS Many people deny the existence of their stress until it ha~ serious outcomes. This avoidance strategy creates a vicious cycle, because the failure to cope with stress becomes another stressor on top of the one that created the stress in the first place. To prevent this

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vicious cycle, employers and employees need to apply one or more of the stress management strategies described below: remove the stressor, withdraw from the stressor, change stress perceptions, control stress consequences, and receive social support. 113

Remove the Stressor

There are many ways to remove the stressor, but some of the more common actions involve assigning employees to jobs that match their skills and preferences, reducing excessive workplace noise, having a complaint system and taking corrective action against harassment, and giving employees more control over the work process. Another important way that companies can remove stressors is by facilitating better work-life balance. Work-l ife balance initiatives minimize conflict between the employee's work and nonwork demands. Five of the most common work-l ife balance initiatives are flexible work arrangements, telecommuting, limiting work hours, personal leave, and child care support. 114 Flexible work arrangemellls. Work-life balance improves when employees have flexibility in scheduling their hours and actually use that flexibility. For instance, almost two-thirds of 370 major Canadian companies recently surveyed offer employees flex days or personal days. 115 A variation of flexible work arrangements is job sharing, whereby two people share one job. This reduces the number of hours that each person is required to work and may allow some flexibility by swapping days each person works. Telecommuting. Telecommuting (also called teleworking) involves working from home or a site close to home rather than commuting a longer distance to the office every day (see Chapter I). It potentially improves work-life balance by reduc ing or eliminating commuting time and increasing t1ex ibility to perform nonwork obligations (such as picking up the kids from school). 116 However, teleworking may increase stress for those who crave social interaction and who Jack the space and privacy necessary to work at home. Limiting work hours. Much work-l ife cont1 ict and resulting stress occur because technology has blurred the line between work and nonwork. Many employees continue to receive emails and text messages from the boss after work hours. Volkswagen and some other companies are more clearly separating work from nonwork by halting emails posted more than half an hour after the end of the work day. Similarly, France recently passed legislation giving employees the "right to disconnect," meaning that they have a legal right to ignore company messages after hours. 117 Personal/eave. Employers with strong work-l ife values offer extended maternity, paternity, and personal leave for employees to care for a new family member or take advantage of a personal experience. Most countries provide 12 to 16 weeks of paid leave, with some offering one year or more of fully or partially paid maternity Jeave. 118 Child care support. Many large and medium-sized employers provide on-site or subsidized child care facilities. Child care support reduces stress because employees are less rushed to drop off and pick up children and less worried during the day about how well their chi ldren are doing. 119

Withdraw from the Stressor

Removing the stressor may be the ideal solution, but it is often not feasible. An alternative strategy is to permanently or temporarily remove employees from the stressor. Permanent withdrawal occurs when employees are transferred to jobs that are more compatible with their abilities and values. Temporarily withdrawing from stressors is the most frequent way that employees manage stress. Vacations and hol idays are important opportunities for employees to recover from stress and re-energize for future challenges. A smal l number of companies offer paid or unpaid sabbaticals. 120 Many firms also provide innovative ways for employees to withdraw from stressful work throughout the day, such as games rooms, ice cream cart breaks, nap rooms, and cafeterias that include live piano rec itals.

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Writing software code can be taxing work, but employees at Vigilant Global have ways to temporarily withdraw from these stressors. The Montreal firm that designs software solutions for the finance industry has a games room w here employees play table tennis or foosball, enjoy electronic games, or relax w ith an ebook. And for the ultimate withdrawal from stressors, Vigilant Global has a d edicated Zen room with massage chairs and spa-like background music.121 ©bbernard/Shutterstock

Change Stress Perceptions How much stress employees experience depends on how they perceive the stressor. 122 Consequently, another way to manage stress is to help employees improve their self-concept so job challenges are not perceived as threatening. Personal goal setting and selfreinforcement can also reduce the stress that people experience when they enter new work settings. In addition, research suggests that some (but not all) forms of humour can improve optimism and create positive emotions by taking some psychological weight off a stressful s intation. 123 Control Stress Consequences Keeping physically fit and maintaining a healthy lifestyle are effective stress management strategies because they control stress consequences. Good physical fitness reduces the adverse physiological consequences of stress by helping employees moderate their breathing and heart rate, muscle tension, and stomach acid ity. The key variable here is physical fitness, not exercise. Exerc ise leads to physical fitness, but research suggests that exerc ise does not reduce stress symptoms among people who are not yet physically fit. 124 Various forms of med itation can potentially reduce anxiety and other symptoms of stress, but their effect on blood pressure and other physiological symptoms is minimal. 125 Well ness programs can help control the consequences of stress. These programs inform employees about the benefits of better nutrition and fitness, regular sleep, and other good health habits. Finally, many large employers offer employee assistance programs (EAPs)-'Orth Inc . June 20 15).

When a~ked how the Detroit-ba~ finance company has grown so quickly, Emerson replied: "The number one thing is culture. It allows us to move very quickly and react very quickly in making business decisions." 34 Launi Skinner, Bill Emerson, and many other leaders bel ieve that an organization's success partly depends on its culture. Several popular-press management books similarly a~sert that the most successful companies have strong cultures. In fact, one popul ar management book, Built to Last, suggests that successful companies are " cult-li ke" (al though not actually cul ts, the authors are careful to point out.)35 Does OB research support this view that compani es are more effecti ve when they have a strong culture? Yes, potential ly, but the evidence indicates that the relati onshi p depends on a few conditi ons.36

Global Connections 14.1: THE IMPORTANCE OF ORGANIZATIONAL CULTURE AT ALIBABA Alibaba Group Holding Ltd. was less than two years old when Jack Ma and his 17 co-founders decided to more clearly define the company's core values. Alibaba had quickly outgrown Ma's apartment in Hangzhou, China, where the company was born, and was on its way to becoming one of the world's largest and most successful e-commerce companies. Ma firm ly believed that shaping Alibaba's corporate culture during its infancy would provide a powerful way to guide employees for many years to come. "If Alibaba desires susta inable development, we must have a management ph ilosophy," explains Ma. "But if we don't have a powerful and persistent corporate culture as the root, we cannot create the philosophy and thinking." Alibaba's six core values are customer first, teamwork, embrace change, integrity, passion, and comm itment. The company is often described as having a "kung fu" culture in which employees are expected to "approach every1h ing with fire in their belly" (passion) and to "demonstrate perseverance and excellence" (commitment). These values emerged from the Chinese martial arts novels that inspired Ma. "You have to have the spirit of never g ive up, the fighting spirit, keep on doing," says Ma of the values that exemplify the novels. 37

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Jack Ma and other co-fou nders o f Aliba ba recognized that the China-based e-commerce gia nt's long-term success depends on a "powerful and persistent" organizational culture. © REUTERS I Alamy Stock Photo

MEANING AND POTENTIAL BENEFITS OF A STRONG CULTURE Before discussing these contingencies, let's examine the meaning of a "strong" organizational culture and its potential benefits. The strength of an organization's culture refers to how widely and deeply employees hold the company's dominant values and assumptions. In a strong organizational culture, most employees across all subunits understand and embrace the dominant values. These values and assumptions are also institutionalized through well-establ ished artifacts, which further entrench the culture. In addition, strong cultures tend to be long-lasting; some can be traced back to the values and assumptions establ ished by the company's founder. In contrast, companies have weak cultures when the dominant values are held mainly by a few people at the top of the organization, the culture is difficult to interpret from artifacts, and the culntral values and assumptions are unstable over time or highly varied across the organization. Under specific conditions, companies are more effective when they have strong cultures because of the three important functions listed in Exhibit 14.4 and described below: Control system. Organizational culture is a deeply embedded form of social control that influences employee decisions and behaviour.38 Culture is perva~ive and operates nonconsciously. Think of it as an automatic pilot, nonconsciously directing employees so their behaviour is consistent with organizational expectations. For this reason, some writers describe organizational culture as a compa~s that points everyone in the same direction. Social glue. Organizational culture is the social glue that bonds people together and makes them feel part of the organizational experience. 39 Employees are motivated to internalize the organization's dominant cu lture because it fulfi ls their need for social identity. Th is social glue attracts new staff and retains top performers. It also becomes the common thread that holds employees together in global organizations. "The values of the company are really the bedrock-the glue which holds the firm together," says former Infosys CEO Nandan Nilekani.40

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EXHIBIT 14.4

Potential Benefits and Contingencies o f Culture Strength

Benefits of culture strength depend upon...

Whether culture content frts the environment Mode~ate,

not cult~ike, strength

An adaptive cutture

Functions of Strong Cultures

Control system

Organizational Outcomes

Social glue

Organizational performance

Sense-making

Employee well-being

Sense-making. Organizational culture helps employees to make sense of what goes on and why things happen in the company. 41 Corporate culture also makes it easier for them to understand what is expected of them. For instance, research has found that sales employees in companies with stronger organizational cultures have clearer role perceptions and less role-related stress.42

CONTINGENCIES OF ORGANIZATIONAL CULTURE AND EFFECTIVENESS Studies have found only a moderately positive relationship between culture strength and organizational effectiveness. The reason for this weak link is that strong cultures improve organizational effectiveness only under specific conditions (see Exhibit 14.4). The three main contingencies are: ( I) whether the culture content is aligned with the environment, (2) whether the culture is moderately strong, not cultlike, and (3) whether the culture supports being adaptive.

Culture Content Is Aligned with the External Environment The benefits of a strong culture depend on whether the culture content-its dominant values and assumptions-is al igned with the external environment. Companies require an employee-centric culture in environments where business success depends mainly on employee talent, whereas an efficiency-focused culture may be more critical for companies in environments with strong competition and standardized product~. If the dominant values are congruent with the environment, then employees are more likely to engage in behaviours that improve the organization's interaction with that environment. But when the dominant values are misaligned with the environment, a strong culture encourages behaviours that can undermine the organization's connection with its stakeholders. For example, Coles became a successful competitor in the Australian retai l food industry after it was acquired by Wesfarmers, which injected a strong culture around performance and customer service. Wesfarmers is a highly successful Australian conglomerate, but it doesn't nurture the same culture in all of its businesses (food, hardware, clothing, office supplies, insurance, fertilizers, mining, and more). Instead, Wesfarmers ensures each company maintains a strong culture around the values that matter most for that industry and its stakeholders. "It would be a huge mistake if we tried to impose one culture over al l these businesses," explains Richard Goyder, who recently stepped down as Wesfarmers CEO. "Bunnings (Australia's largest home improvement retailer) and Coles have to be customercentric, wherea~ our coal business has to be absolutely focused on safety."43 Culture Strength Is Not the Level of a Cult A second contingency is the degree of culture strength. Various experts suggest that companies with very strong cultures (i.e., corporate "cults") may

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401

be less effective than companies with moderately strong cultures.44 One reason why corporate cults may undermine organizational effectiveness is that they lock people into mental models, which can blind them to new opportunities and unique problems. The effect of these very strong cultures is that people overlook or incorrectly define subtle misalignments between the organization's activities and the changing environment. The other reason why very strong cultures may be dysfunctional is that they suppress dissenting subcultures. The challenge for organizational leaders is to maintain not only a strong culture but one that allows subcultural diversity. Subcultures encourage task-oriented conflict, which improves creative thinking and offers some level of ethical vigilance over the dominant culture. In the long run, a subculture's nascent values could become important dominant values as the environment changes. Corporate cults suppress subcultures, thereby undermining these benefits.

Culture Supports Being Adaptive A third condition influencing the effect of cultural strength on organizational effectiveness is whether the culture content includes an adaptive culture.45 An adaptive culture embraces change, creativity, open-mindedness, growth, and learning. Organizational leaders across many industries increasingly view an adaptive culture as an important ingredient for the organization's long-term success. "At the end of the day, you have to create a culture that not only accepts change but seeks out how to change," emphasizes former GM CEO Dan Akerson. " It's critically important that we inculcate that into our culture."46 What does an adaptive culture look like? It is one in which employees recognize that the organization's survival and success depends on their ability to discover emerging changes in the external environment and to adapt their own behaviour to those changes. Thus, employees in adaptive cultures see things from an open systems perspective and take responsibil ity for the organization's performance and alignment with the external environment. In an adaptive culture, receptivity to change extends to internal processes and roles. Employees believe that satisfying stakeholder needs requires continuous improvement of internal work processes. 'They also recognize the importance of remaining flexible in their own work roles. The phra~ 'That's not my job" is typical of nonadaptive culntres. Finally, an adaptive culntre has a strong teaming orientation because being receptive to change necessarily means that the company also supports actionoriented discovery. With a learning orientation, employees welcome new learning opportunities, actively experiment with new ideas and practices, view reasonable mistakes as a natural part of the learning process, and continuously question pa~t practices (see Chapter 7).47

Debating Point IS CORPORATE CULTURE AN OVERUSED PHRASE? Corporate culture is probably one of the most frequently uttered phrases in organ izations these days. That's quite an accomplishment for two words that were rarely paired together prior to 1982 48 Executives often say they have crafted the company's culture to attract top talent and better serve clients. Job applicants have made organizationa l culture one of the top factors in their decision about whether to join a particular company. Journalists routinely blame corporate culture for business fa ilures, deviant activities, and quirky employee conduct. This chapter offers plenty of arguments supporting the position that organ izational culture explains employee decisions and behaviour. A strong culture is a control system that guides employees, often nonconsciously. It is, after all, the •way we do things around here." A strong culture also serves as the company's "social glue," which strengthens cohesion among employees. In other words, employees in strong cultures have similar beliefs and values which, in turn, increases their motivation to follow the corporate herd.

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Organizational culture can be a useful concept to explain workplace activities, but some OB experts suggest that the phrase is overused. To begin with, corporate cu lture is usually presented as a singular thing within the company-one organization with one culture. Th is presumption of a homogeneous culture-in which every employee understands and embraces the same few dominant values-just doesn't exist. Every organization has a fragmented culture to varying degrees. Furthermore, many employees engage in fac;ades of conformity. They pretend to live the company's values but don't actually do so because 49 they don't believe in them. Fragmentation and fac;ades suggest that culture is not an integrated force field that manipulates people like mindless robots. Instead, employees ultimately make decisions based on a variety of influences, not only the organization's values and assumptions. Another argument that corporate culture is overused as a tool to explain the workplace is that values don't drive behaviour as often as many people believe. Instead, employees turn to their values to guide behaviour only when they are reminded of those values or when the situation produces fairly obvious conflicting or questionable decisions. 50 Most of the time, front line staff perform their jobs without much thought to their values. Their decisions are usually in relation to technical rather than values-based matters. As such, corporate culture has a fairly peripheral role in daily routine work activities. A third problem is that organizational culture is a blunt instrument for explaining workplace behaviour and for recommending how to change those behaviours. "Fix the culture" is almost meaningless because the problems prompting this advice could be due to any number of artifacts. Furthermore, some problems attributed to a poor corporate culture may be due to more mundane and precise dysfunctions-unintended consequences of poorly designed rewards, ineffective leadership, misaligned corporate strategy, biased information systems, and a host of other conditions. Rather than blame the company's culture, we should pay more attention to specific systems, structures, behaviours, and attitudes that explain what went wrong. Furthermore, as one paper recently noted, organizational culture is often the outcome of these specific artifacts, not the cause of the problems those artifacts create. 51

ORGANIZATIONAL CULTURE AND BUSINESS ETHICS An organization's culture influences the ethical conduct of its employees. Thi s makes sense because good behavi our is driven by ethical val ues, and ethical val ues become embedded in an organi zation's dominant culture. For example, criti cs claim that News Corp's tabloids have had a culture that rewards aggressive, partisan, and sensationalistic tacti cs. This culture may have uncovered news, but it allegedly also pushed some journalists and executives over the ethical l ine, incl uding illegally hacking i nto the phones of celebriti es, crime victims, and politicians. A Briti sh parliamentary committee (among others) concl uded that News Corp's wrongdoing was caused by a wayward culture whi ch "permeated from the top throughout the organization." As one journalist concluded, "Phone hacking is done by employees w ithin the corporate culture of 'whatever it takes."'52 Some leaders also try to improve ethical conduct by changing and strengthening the organization's culture around more socially desi rable val ues. Thi s strategy occurred at Barclays Bank PLC, which was found guil ty of rigging interest rates a few years ago. After the Bri tish bank's most senior executi ves were forced out due to the scandal, the new CEO focused on establi shing a clear set of ethi cal values (respect, i ntegri ty, service, excellence, stewardship). He then advised all 140,000 Barclays employees that these val ues shou ld guide their behaviour so Barclays could become a more ethical organizati on. "There might be some who don't feel they can fully buy i n to an approach which so squarely li nks performance to the upholding of our val ues," warned Barclays' CEO. "My message to those people is si mple: Barclays is not the place for you. The rules have changed. You won't feel comfortable at

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Barclays and, to be frank, we won' t feel comfortable with you as colleagues." 53 T he point here is that culture and ethics go hand-in-hand. To create a more ethical organization, leaders need to develop an enacted culture that steers employees toward morally correct behaviour.

Merging Organizational Cultures L04

Top executives at Ell isDon, one of Canada's largest construction firms, couldn't bel ieve their good fortune when Looby Construction indicated its interest in a takeover. Looby was a respected competi tor, yet EllisDon executives approached the potential acquisition cautiously. The two companies went through eight months of d iscussion before concluding that the acquisition made sense cul turally as well a~ financially. "For us, the cultural fit is just as important or maybe more important than the financial side because if the culture doesn't fit, the financ ial side will never work," says Ell isDon CEO Geoff Smith. "To ensure this, we had to open up to them just as much as they had to open up to us." Ell isDon vice-president Stephen Damp recalls how a deep level of compatible thinking resonated throughout those conversations. "You listen to how they [Looby executives and staff] approach their problems, their approach to their people, the market, the type of clients they like to work for," says Damp. "The whole time I was thinking: 'Th is is like having an internal conversation with Geoff [Smith].' Their culture is amazingly aligned wi th Ell isDon." 54 EllisDon executives are acutely aware that mergers and acquisitions often fail financially when the merging organizations have incompatible cultures. 55 Unless the acquired firm is left to operate independently, companies with clashing cultures tend to undermine employee performance and customer service. Consequently, several studies estimate that only between 30 percent and SO percent of corporate acquisitions add value. 56

BICULTURAL AUDIT Organizational leaders can minimize cultural coll isions in corporate mergers and fulfil their duty of due diligence by conducting a bicultural audit. 57 A bicultural audit diagnoses cultural relations between the companies and determines the extent to which cultural clashes will likely occur. The process begins by identifying cultural differences between the merging companies. This might be done by surveying employees or, in the example of EllisDon and Looby Construction, through an extended series of meetings where executives and staff of both firms discuss how they think through important decisions in their business. From the survey data or meetings, the parties determine which differences between the two firms will result in conflict and which cultural values provide common ground on which to build a cultural foundation in the merged organization. The final stage involves identifying strategies and preparing action plans to bridge the two organizations' cultures.

STRATEGIES FOR MERGING DIFFERENT ORGANIZATIONAL CULTURES In some ca~es, the bicultural audit results in a decision to end merger talks because the two cultures are too different to merge effectively. However, even with substantially different cultures, two companies may form a workable union if they apply the appropriate merger strategy. The four main strategies for merging different corporate cultures are assimilation, deculturation, integration, and separation (see Exh ibit 14.5). 58 Assimilation Assimilation occurs when employees at the acquired company will ingly embrace the cultural values of the acquiring organization. Typically, this strategy works best when the acquired company has a weak culture that is either similar to the acquiring company's culture or is dysfunctional, wherea~ the acquiring company's culture is strong and aligned with the external environment.

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EXHIBIT 14.5 ~......,

Strategies for Merging Different Organizational Cultures

0..111-

w....... wllm:

Assimilation

Acquired company embraces acquiring firm's culture. Acquired firm has a weak culture.

Deculturation

Acquiring firm imposes its culture on unwilling acquired firm.

Rarely works-·may be necessary only when acquired firm•s culture doesn't v.'Ork but employees don't realize it.

Merging companies combine the two or more

Existing cultures can be improved.

lntega.ttion

culture.'i into a new composite culture.

Separation

Merging oompanie.'i remain di'\tinct entities with mini· mal exchange of culture or organizational practice.,.

Firms operate successfully in different businesses requiring different cultures.

Sourr:e.s: Based on idea.~ in A. R. Malekzedeh and A. Nahavandi. "Making MergerS Work by Managing CuJtwe...:;.'' Journal of Busines.. .:: Str.u.egy. I I (May-June I990). pp. S~-57: K. W. Smjth. "A Brnnd·New Cultwe for the Merged Firm." MergerS and Acquisitions. 35 (June 2000). pp. 45-50.

The culntral a~similation strategy seldom produces culntral cla~hes because the acquiring firm's culture is highly respected and the acquired firm's culntre is fairly easily altered. The a~similation strategy occurred when Southwest Airlines acquired AirTran Airways. The two firms already had similar cultures, but Southwest's legendary "Southwest way" culture also made the acquisition relatively free of culture clashes. "It's helpful that Southwest ha~ a great cultural reputation," says a Southwest executive about the AirTran Airways acquisition 5 9

Deculturation Assimilation is rare. Employees usually resist organizational change, particularly when they are asked to throw away personal and cultural values. Under these conditions, some acquiring companies apply a deculturation strategy by imposing their culture and business practices on the acquired organization. The acquiring firm strips away reward systems and other artifacts that support the old culture. People who cannot adopt the acquiring company's culture often lose their jobs. Deculturation may be necessary when the acquired firm's culture doesn't work, even when employees in the acquired company aren't convinced of this. However, this strategy is difficult to apply effectively because the acquired firm's employees resist the cultural intrusions from the buying finn, thereby delaying or undermining the merger process. Integration A third strategy is to combine the cu ltures of the two firms into one new composite culture that preserves the best features of the prev ious cultures. Integration is slow and potentially risky because there are many forces preserving the existing cultures. Still, this strategy should be considered when the companies have relatively weak cultures or when their cultures include several overlapping values. Integration works best when the cultures of both merging companies could be improved, which motivates employees to adopt the best cultural elements of the separate entities. Incorporating the best cultural elements of the original companies symbolizes that employees from both firms have meaningful values for the combined organization. "Find one thing in the organization that was good and use it as a cornerstone for a new culture," adv ises a respected executive who has led several mergers and acquisitions. "People don't want to work for an organization for years and then be told it's rubbish."60 Separation A separation strategy occurs when the merging companies agree to remain distinct entities with minimal exchange of culture or organizational practices. This strategy is most appropriate when the two merging companies are in unrelated industries, because the most appropriate cultural values tend to differ by industry. Separation is also the preferred approach for the corporate cultures of diversified conglomerates. The cultural separation strategy is rare, however. Executives in acquiring firms usually have difficulty keeping their hands off the acquired finn. According to one estimate, only I5 percent of mergers leave the acquired company as a stand-alone unit61

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Alaska Airlines' decision to acquire V irgin America brought audible gasps from customers and investment analysts alike. Both airlines are successful and their routes are complementary, but many observers question the cultural fit of a combined airline. "I th ink of [Virgin America) as a young, hip airline. Alaska is more of a friendly aunt," says one business traveller. At first, Alaska A ir Group CEO Brad Tilden asserted that both airlines have similar cult ures focused on employees, customers, and safety. But after a few months, Tilden adm itted he was struggling to decide whether the cultures are sufficiently different that they should be kept separate. Creating a single airline w ith the best cultural elements of both (integration strategy) would be more cost-efficient, but maintai ning A laska and V irg in as distinct operations (separation strategy) might avoid an internal culture clash and retain va lu ed V irg in staff and customers. The company eventually chose the separation strategy for the first few years, but the Virg in brand w ill eventually disappear. "Alaska Airlines and Virgin America are different airl ines, but we believe different works," Tilden announced when t he merger was completed. He also plans to bring some of Virgin 's hip culture to Alaska. "Culture has been a real challenge in many mergers, so we're working to do things differently," says Ben Minicucci, the Canadian executive who is Alaska Air's president and is leading the integration. "We are being very thoughtful about culture and are working to create an environment that reflects w ho we are and where we've been. that also enables us to work together, be bold, and succeed in a rapidly evolving industry."62 ©A P Photo/Ted S. Warren, File/ CP Images

Chang ing and Strengthening O rganizational Culture Is it possible to change an organization's culture? Yes, but doing so isn't easy, the change rarely occurs quickly, and often the culture ends up changing (or replacing) corporate leaders. A few experts argue that an organization's culture "cannot be managed," so attempting to change the company's values and assumptions is a waste of time.63 This may be an extreme view, but organizational culture experts generally agree that changing an organization's culture is a monumental challenge. At the same time, the external environment changes over time, so organizations need to shift their culture to maintain al ignment with the emerging environment. Over the next few pages, we will highlight five strategies that have had some success at altering corporate cultures. These strategies, illustrated in Exhibit 14.6, are not exhaustive, but each seems to work well under the right circumstances.

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EXHIBIT 14.6

Strategies for Chan ging and Strengthenin g Organizational Cult ure

Changing and Strengthening Support workforce stability and communication

Organizational Culture

Align artifacts with the desired culture

Introduce culturally consistent rewards/recog nition

MODEL DESIRED CULTURE THROUGH ACTIONS OF FOUNDERS AND LEADERS Whether deliberately or haphazardly, the company's founder usually forms an organization's culture.64 The founder's personality, values, habits, and critical events all play a role in establishing the firm's core values and assumptions. The founder is often an inspiring visionary who provides a compelling role model for others to follow. In later years, organizational culture is reinforced through stories and legends about the founder that symbolize the core values. "All companies, especially entrepreneurial companies, take the shape of the owner," says Bruce Poon Tip, CEO and founder of Toronto-based G Adventures. For example, he says "we have a culture of winning and a culture of excellence that is driven by me." 65 Although fmmders usually establish an organization's culn~re, subsequent leaders need to actively guide, reinforce, and sometimes alter that culture.66 This advice was recently echoed by Bill Emerson, CEO of Quicken Loans. '1f you don't spend time to create a culture in your organization, one will create it~elf," he warns. "And the one that creates itself is probably not going to be good.'.67 The process of leading cultural change is a~iated with both transformational leadership and authentic leadership (see Chapter I2). In each of those models, leaders base their words and actions on personal values, and those values potential ly become a reflection of the organization's values. For instance, one recent study found that the preferred confl ict-handling style of leaders influences the work unit's or organization's cultural expectations of how employees address conflict sintations. Another study reported that work units or companies with strong servant leadership were more likely to have a culture that valued providing service to others 68

ALIGN ARTIFACTS WITH THE DESIRED CULTURE Artifacts represent more than just the visible indicators of a company's cultm e. They are also mechanisms that keep the culture in place or shift the culture to a new set of values and a~sumptions. A~ we discuss in the next chapter on organizational change, systems and structures are powerful mechanisms to support the desired state of affairs. These systems and structures are artifacts, such as the workplace

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layout, reporting structure, office rituals, type of information distributed, and language that is reinforced or discouraged. Corporate cultures are also strengthened through the artifacts of stories and behaviours. According to Max DePree, former CEO of furnintre manufacturer Herman Miller Inc ., every organization needs "tribal storytellers" to keep the organization's history and culture alive. 69 Leaders play a role by creating memorable events that symbol ize the cultural values they want to develop or maintain.

INTRODUCE CULTURALLY CONSISTENT REWARDS AND RECOGNITION Reward systems and informal recognition practices are artifacts, but they deserve separate discussion because of their powerful effect on strengthening or reshaping an organization's culture. 7 For example, to change Home Depot's freewheel ing culture, Robert Nardelli introduced precise measures of corporate performance and dri lled managers with weekly performance objectives related to those metrics. A two-hour weekly conference call became a ritual in which Home Depot's top executives were held accountable for the previous week's goals. These actions reinforced a more discipl ined (and centralized) performance-oriented culture. 71

°

SUPPORT WORKFORCE STABILITY AND COMMUNICATION An organization's culture is embedded in the minds of its employees. Organizational stories are rarely written down; rituals and ceremonies do not usual ly exist in procedure manuals; organizational metaphors are not found in corporate directories. Thus, a strong culture depends on a stable workforce. Workforce stability is also important because it takes time for employees to fully understand the organization's culture and how to enact it in their daily work lives. The organization's culture can literally disintegrate during periods of high turnover and precipitous downsizing because the corporate memory leaves with the departing employees. Along with workforce stabi lity, a strong organizational culture depends on a workplace where employees regularly communicate with each other. This ongoing communication enables employees to develop shared language, stories, and other artifacts. Clio's recently developed headquarters has played an important role in this regard. The new campus in Burnaby has an open-office design, breakout spaces that encourage spontaneous informal interaction among employees, and a lunch room where employees are encouraged to gather at any time of day. In addition, the company hosts regular social events and other forms of social bonding. Clio even has an annual multi-day strategy session at its Burnaby headquarters which is attended by even the most remote employees.

USE ATTRACTION, SELECTION , AND SOCIALIZATION FOR CULTURAL FIT A valuable way to strengthen and possibly change an organization's culture is to recruit and select job appl icants whose values are compatible with the culture. For example, Clio co-founders Jack Newton and Rian Gauvreau were able to strengthen and guide the company's culture in the early years by personally screening every applicant for cultural fit. One recent survey of more than 2,000 American hiring managers and human resource managers found that a job applicant's fit with the company's culture was the second most important factor in the decision to hire that person (appl icant skills was the top priority). A global poll of almost 170,000 people in 30 countries reported that the organization's culture has the greatest influence on their decision to apply for a job.72 This process of recruiting, selecting, and retaining applicants whose values are congruent with the organization's culture is explained by attraction-selection-attrition (ASA) theory.73 ASA theory states that organizations have a natural tendency to attract, select, and retain people with values and personality characteristics that are consistent with the organization's character, resulting in a more homogeneous organization and a stronger culture. Anraction. Job applicants engage in self-selection by avoiding prospective employers whose values seem incompatible with their own values.74 They look for subtle artifacts during interviews and through public information that communicate the company's culture. Some organizations encourage this self-selection by actively describing their cultures. At Bankwest,

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for instance, job seekers can complete an online quiz that estimates their fit with the Australian financial institution's collegial, developmental, customer-focused culture 75 Selection. How well the person "fits" in with the company's culture is often a factor in deciding which job applicants to hire. 76 Zappos carefully selects applicants whose personal values are aligned with the company's values. The applicant is first assessed for technical skills and experience at the online shoe and clothing retailer, then he or she receives "a separate set of interviews purely for culture fit," says CEO Tony Hsieh. Unusual methods are sometimes applied to determine how well an applicant's values are compatible with Zappos' culture. For example, to determine an applicant's humility (one of Zappos' core values}, staff a~k the Zappos-hired driver how well he or she was treated by the applicant during the drive to the company's headquarters in La~ Vegas. Attrition. People seek environments that are sufficiently congruent with their personal values and are motivated to leave environments that are a poor fit. This occurs because person-organization values congruence supports their social identity and minimizes internal role conflict. Even if employees aren't forced out, many quit when values incongruence is sufficiently high.n Zappos, Vancity,

As one of the world's most successful adventure travel companies, G Adventures depends on a strong culture to guide employee decisions and behaviour. The Toronto-based firm ma intains a strong culture by carefully hiring people whose values are compatible with it. "You can teach people the skills they need but you can't teach culture," explains G Adventures founder Bruce Peon Tip. Job applicants short-listed by senior staff participate in the company's qu irky G-Factor Interview, which is conducted by a random selection of three staff members. Job interviews at Base Camp (Toronto headquarters) occur in the "ball pit," the small room shown in this photo filled about one-th ird metre high with plastic balls. The applicant answers several questions randomly chosen by the spin of a large prize wheel on t he wall (left side of this photo). The questions are unusual, such as: "If you had a tattoo on your forehead, what would it be?" Employees listen carefully to the answers to determin e whether the applicant's values are compatible w ith G Adventures' culture. Applicants who fail the G-Factor Interview don't get hired, even if they have exceptional skills. 78 © G Adventures

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G Adventures, and a few other companies will even pay newcomers to quit within the ftrst few weeks of employment if the new employees think their personal values conflict with the company's culntre.

Organizational Socia lization L06

Organizational socialization is another process that companies use to maintain a strong corporate culture and, more generally, help people to adj ust to new employment. Organizational socialization is the process by which individuals Jearn the values, expected behaviours, and social knowledge necessary to assume their roles in the organization. 79 This process can potentially change employee values to become more al igned with the company's culntre. However, changing an employee's personal values is much more difficult than is often assumed, because personal values are fairly stable beyond early adulthood. More likely, effective socialization gives newcomers a clearer understanding about the company's values and how they are translated into specific on-the-job behaviours. 80 Along with supporting the organization's culture, socialization helps newcomers adjust to co-workers, work procedures, and other corporate realities. Research indicates that when employees are effectively social ized into the organization, they tend to perform better, have higher job satisfaction, and remain longer with the organization.81

LEARNING AND ADJUSTMENT PROCESS Organizational socialization is a process of both learning and adjustment. It is a learning process because newcomers try to make sense of the company's physical workplace, social dynamics, and strategic and cultural environment. They Jearn about the organization's performance expectations, power dynamics, corporate culntre, company history, and jargon. They also need to form successful and satisfying relationships with other people from whom they can Jearn the ropes.82 In other words, effective socialization supports newcomers' organizational comprehension. It accelerates development of an accurate cognitive map of the physical, social, strategic, and cultural dynamics of the organization. Ideally, this learning should be distributed over time to minimize information overload. Organizational socialization is also an adjustment process because individuals need to adapt to their new work environment. They develop new work roles that reconfigure their social identity, adopt new team norms, and practise new behaviours. 83 The adjustment process is fairly rapid for many people, usually occurring within a few months. However, newcomers with diverse work experience seem to adjust better than those with limited previous experience, possibly because they have a larger toolkit of knowledge and ski lls to make the adjustment possible.84

PSYCHOLOGICAL CONTRACTS The psychological contract refers to the individual's bel iefs about the terms and conditions of a reciprocal exchange agreement between that person and another party (the employer in most work situations). The psychological contract is a perception formed during recruitment and throughout the organizational socialization process about what the employee is entitled to receive and is obliged to offer the employer in return.85 Job applicants form perceptions of what the company wi ll offer them by way of career and learning opportunities, job resources, pay and benefits, qual ity of management, job security, and so forth. They also form perceptions about what the company expects from them, such as hours of work, continuous ski ll development, and demonstrated loyalty. The psychological contract continues to develop and evolve after job appl icants become employees, but they are also continuously testing the employer's fulfilment of that exchange relationship.

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Steve Wu assumed that his new j ob as an investment analyst would involve long hours working on prestigious fast-paced deals. The recent UCLA graduate experienced the long hours, but much of the work was drudgery. The reality shock and psycholog ical contract violation motivated Wu to quit j ust one month before his first year, forfeiting a five-figure bonus. He has since j oined a mobile-gaming startup. Chris Martinez also expected long hours at the private equity firm that hired him, but admits the work involved "repetitive, simple work" on spreadsheets, little of which was ever seen by corporate clients. "It's almost expected that an analyst, especially in their first year, is j ust going to be miserable," says Martinez, w ho has since q uit. Wu and Martinez are two of the many investment analysts in recent years w ho concluded that their psychological contracts had been v iolated. One recent study found that new hires at a dozen investment banks stayed an average of only 17 months, down from 26 months a decade earlier and 30 months two decades ago 86 © Tetra Images/ Getty Images

Types of Psychological Contracts Some psychological contracts are more transactional whereas others are more relational.87 Transactional contracts are primarily short-term economic exchanges. Responsibil ities are well de fined around a fairly narrow set of obligations that do not change over the life of the contract. People hired in temporary positions and as consultants tend to have transactional contracts. To some extent, new employees also form transactional contracts until they develop a sense of continuity with the organization.88 Re lational contracts, on the other hand, are rather like marriages; they are long-term attachments that encompass a broad array of subjecti ve mutual obligations. Employees with a relational psychological contract are more willing to contribute their time and effort without expecting the organ ization to pay back thi s debt in the short term. Relational contracts are al so dynamic, meaning that the parties tolerate and expect that mutual obligations are not necessarily balanced in the short-run. Not surprising ly, organi zational citizenship behaviours are more likely to prevail under relational than transactional contracts. Permanent e mployees are more likely to be lieve they have a relational contract.

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STAGES OF ORGANIZATIONAL SOCIALIZATION Organizational socialization is a conti nuous process, beginning before you submit a job application and continuing throughout your career within the company. However, it is most intense when people move across organizational boundaries, such as when they first j oin a company or get transferred to an international a~signment. Each of these transitions is a process that can be divided into three stages. Our focus here is on the socialization of new employees, so the three stages are called pre-employment social ization, encounter, and role management (see Exhibit 14.7). These stages parallel the individual's transition from outsider to newcomer and then to insider.89

Stage 1: Pre-employment Socialization Think back to the months and weeks before you began working in a new job (or attending a new school). You actively searched for information about the company, formed expectations about working there, and felt some anticipation about fitting into that environment. The pre-employment social ization stage encompasses all the learning and adjustment that occurs before the first day of work. In fact, a large part of the socialization adjustment process occurs during this stage.90 The main problem with pre-employment socialization is that outsiders rely on indirect information about what it is like to work in the organization. This information is often distorted by inherent conflicts that arise during the mating dance between employer and applicant. 9 1 One conflict occurs between the e mployer's need to attract qualified applicants and the applicant's need for complete information to make accurate employment decisions. Many firms describe only positive a~pects of the job and company, causing applicants to accept job offers with incomplete or false expectations. Another conflict that prevents accurate information exchange occurs when appl icants avoid a~king important questions about the company because they want to convey a favourable image to their prospective employer. For instance, applicants usually don't like to a~k about starting salaries and promotion opportunities because it makes them seem greedy or aggressive. Yet, unless the employer provides this information, applicants might fill in the missing details with false a~sumptions that produce inaccurate expectations. Two other types of conflict tend to distort pre-employment information for employers. Applicants engage in impression management when seeking employment, motivating them to hide negative information, act out of character, and occasional ly embellish information about their past accomplishments. At the same time, employers are sometimes reluctant to ask some types of questions or use potential ly valuable selection devices because they might scare off applicants. Unfortunately, employers form inaccurate expectations about job candidates because they receive exaggerated resumes and are often reluctant to a~k for more delicate information from those applicants. Stage 2: Encounter The first day on the j ob typically marks the beginning of the encounter stage of organizational socialization. This is the stage in which newcomers test how well their pre-employment expectations fit reality. Many companies fail the test, resulting in reality shock- the stress that results

EXHIBIT 14.7

Stages of Organizational Socialization

Pre-employment socialization (outsider) • l earn about the organization and job • Form employment relationship expectations

Encounter (newcomer)

-

• Test expectations against perceived realities

Role management (insider) • Strengthen work relationships • Practise new role behaviours • Resolve worknonwork conflicts

Socialization outcomes • • • • •

Higher molivation Higher loyally Higher satisfaction Lower stress Lower unover

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when employees perceive discrepancies between their pre-employment expectations and on-the-job reality.92 Reality shock doesn't necessari ly occur on the first day; it might develop over several weeks or even months as newcomers form a better understanding of their new work environment. Reality shock is common in many organizations. 93 Newcomers sometimes face unmet expectations whereby the employer doesn' t deliver on its promises, such as failing to prov ide chal lenging projects or the resources to get the work done. However, new hires also experience reality shock due to unrealistic expectations, wh ich are distorted work expectations formed from the infor mation exchange conflicts described earlier. Whatever the cause, reality shock impedes the learning and adjustment process because the newcomer's energy is directed toward managing the resulting stress. 94

Stage 3: Role Management Role management, the third stage of organizational socialization, really begins during pre-employment socialization, but it is most active a~ employees make the transition from newcomers to insiders. They strengthen relationships with co-workers and supervisors, practise new role behaviours, and adopt attitudes and values consistent with their new positions and the organization. Role management also involves resolving the conflicts between work and nonwork activities, including resolving discrepancies between their personal values and those emphasized by the organizational culture.

IMPROVING THE SOCIALIZATION PROCESS Companies have a tendency to exaggerate positive features of the job and neglect to mention the undesirable elements. Their motivation is to attract as many job applicants as possible, which they assume wi ll improve the selection choices. Unfortunately, this flypaper approach often ends badly. Those hired soon discover that the actual workplace is not as favourable a~ the employer's marketing hype (i.e., unmet expectations), resulting in real ity shock and a broken psychological contract. In contrast, a realistic job preview (RJP) offers a balance of positive and negative information about the job and work context. 95 This balanced description of the company and work helps job applicants to decide for themselves whether their skills, needs, and values are compatible with the job and organization. RJPs scare away some applicants, but they also tend to reduce turnover and increase job performance.96 This occurs because RJPs help applicants develop more accurate pre-employment expectations, which, in turn, minimize real ity shock. RJPs represent a type of vaccination by preparing employees for the more challenging and troublesome aspects of the work context. There is also some evidence that RJPs increase affective organizational commitment. One explanation is that companies providi ng candid information are easier to trust. Another explanation is that RJPs show respect for the psychological contract and concern for employee welfare.97

Socialization Agents Ask new employees what most helped them to adjust to their j obs and chances are they will mention helpful co-workers, bosses, or maybe even friends who work elsewhere

Global Connections 14.2: CONNECTED SOCIALIZATION AT TRIVAGO trivago, the world 's largest hotel search company, puts considerable resources into its talent (employee) socialization process. Before their first day of work, new hires are assig ned a bud dy to answer their questions. The entire fi rst week of employment is dedicated to so cialization and other aspects of on boarding at the company's headquarters in Dusseldorf, Germany. Throughout the week, new employees attend information sessio ns (as shown in this photo) and enjoy several events that help them learn more about the company and form strong bonds with each other. "The whole mission during this week is to get to know trivago, integ rate into ou r culture here, and get to know as many people as possible," explains Samantha Strube, trivago's talent integration team leader.98

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trivago, the world's largest hotel search compa ny, invests considerable time and resources in the socialization of new employees. ©trivago

in the organization. The fact is, soc ialization agents play a central role in this process.99 Supervisors tend to provide technical information, performance feedback, and information about j ob duties. They also improve the socialization process by giving newcomers reasonably challenging first a~signments, buffering them from excessive demands, helping them form social ties with co-workers, and generating positive emotions around their new work experience. 100 Co-workers are important socialization agents because they are easily accessible, can answer questions when problems arise, and serve a~ role models for appropriate behaviour. New employees tend to receive this information and support when co-workers welcome them into the work team. Co-workers also aid the socialization process by being t1exible and tolerant in their interactions with new hires. Newcomer socialization is most successful when companies help to strengthen social bonds between the new hires and current employees. Cisco Systems is a role model in th is regard. For example, one newcomer at the California-based Internet technology company recently described how duri ng her first two weeks teammates helped her learn about the work context, took her out to restaurants, actively sought her ideas in team meetings, and held a game night so everyone could have fun socializing after work. Another good example is apparent at Lupin Limited, which has a popular buddy system that not only improves socialization of newcomers at the Mumbai, India, pharmaceutical company; it ha~ also become a valuable form of leadership development for the buddy co-worker. "A happy by-product of the buddy program is the biggest supervisor training program the company has ever conducted in its history," says Divakar Kaza, Lupin's president of human resources. 10 1

Chapter Summary LO 1

Describe the elements of organizational culture and discuss the importance of organizational subcultures.

Organizational culture consists of the values and assumptions shared w ithin an organization. Shared assumptions are nonconscious, taken-for-granted perceptions or beliefs that have worked so well in the past that they are considered the correct way to think and act toward problems and opportunities. Values are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety o f situations.

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Organizations differ in their cultural content, that is, the relative ordering of values. There are several classifications of organizational culture, but they tend to oversimplify the wide variety of cultures and completely ignore the underlying assumptions of culture. Organizations have subcultures as well as the dominant culture. Subcultures maintain the organization's standards of performance and ethical behaviour. They are also the source of emerging values that replace misal igned core values. List four categories of artifacts through which corporate culture is d ecip hered. Artifacts are the observable symbols and signs of an organization's culture. Four broad categories of artifacts include organizational stories and legends, rituals and ceremonies, language, and physical structures and symbols. Understanding an organ ization's culture requires assessment of many artifacts because they are subtle and often ambiguous.

L02

Discuss the importance of organizational culture and the conditions under which organizational culture s trength improves organizational performance. Organizational culture has three main functions: it is a form of social control, the "social glue" that bonds people together, and a way to help e mployees make sense of the workplace. Companies with strong cultures generally perform better than those with weak cultures, but only when the cultural content is appropriate for the organization's environment. Also, the culture should not be so strong that it drives out dissenting values, which may form emerging values for the future. Organizations should have adaptive cultures so that employees s upport ongoing change in the organization and their own roles.

L03

L04

Compare and cont rast four st rategies for merging organiza tional cultures.

Organizational culture cla~hes are conm10n in mergers and acquisitions. This problem can be minimized by perfonning a bicultural audit to diagnose the compatibility of the organizational cultures. The four main strategies for merging different corporate cultures are assimilation, deculturation, integration, and separation.

LOS

Describe five strategies for changing and s trengthening an organization 's culture, including the application of attraction-selection-attrition theory.

An organization's culture begins with its founders and leaders, because they use personal values to transform the organization. The founder's activities are later retold a~ organizational stories. Companies also introduce artifact~ a~ mechanisms to maintain or change the culture. A related strategy is to introduce rewards and recognition practice~ that are consistent with the desired cultural values. A fourth method to change and strengthen an organization's culture is to support workforce stability and communication. Stability is necessary because culture exist~ in employees. Conmmnication activities improve sharing of the culture. Finally, companies strengthen and change their culture by attracting and selecting applicants with personal values that fit the company's culture, by encouraging those with misaligned values to leave the company (attrition), and by engaging in organizational socialization-the process by which individuals leam the values, expected behaviours, and social knowledge necessary to ated by the authors of this activity.

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Self-Assessments for Chapter 14 SELF-ASSESSMENT NAME

DESCRIPTION

Which corporate culture do you prefer?

An organization's culture may be very appealing to some people and much less so to others. Afte r all. each of us ha.'i a hierarchy o f persona] values. and that hier.trchy may be compatible or incompat· ible with the company•s shared values. This self-assessment identifies the corporate culture that fiL~ most closely with your persona] values and a'isumptions.

CHAPTER 15

Organizational Change LEARNING OBJECTIVES

After reading this chapter, you should be able to LO 1 Describe the elements of Lewin's force fie ld analysis model. L02 Discuss the reasons why people resist organizational change and how change agents should view this resistance. L03 Outline six st rateg ies for minimizing resistance to change, and debate ways to effectively create an urgency for change. L04 Discuss how leadership, coa litions, social networks, and pilot projects assist organ izational change.

LOS Describe and compare action research, appreciative inquiry, large group interventions, and parallel learning structures as forma l approaches to organ izational change. LOG Discuss two cross-cu ltura l and th ree eth ical issues in organizational change.

Blueshore Financial w as founded in the 1940s as North Shore Credit Union, mainly serving the needs of shipbuilding workers and deep sea fisherm en living along Vancouver's north shore. North Va ncouver has since becom e on e of Canada's wealthiest areas, and its residents have much more 4 19

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sophisticated banking needs. However, the credit union had not evolved until recently. "We were a blue-collar credit union in a white-collar world," admits Blueshore CEO Chris Catliff. "We were little more than a paper-based savings and loan ... We had no differentiated brand, and the credit union was floundering." Catliff explained to employees that the organization's survival depended on reinventing itself to better serve its clients through differentiated financial services. He also cautioned that the transformation would require considerable adaptability and commitment from "a dedicated team hungry for change." A special task force of employees and managers worked with an external consultant to develop the new business model. "They worked in a boardroom for two weeks, fuelled by pizza, the odd beer and a desire to innovate," recalls Catliff, who challenged the team "not to come back until you've reinvented banking." The task force proposed a list of dramatic innovations, including a much narrower focus on wealth-oriented services in a "financial spa" setting, rather like a luxury hotel. "You don't have to be a big global organization to succeed in business, but sometimes you have to have big ideas," Catliff suggests. Blueshore marketing vice-president Catharine Downes describes the credit union's change process as "a massive project, touching all aspects of our business, culture, and operations. It demanded a highly orchestrated approach to ensure every single employee fully understood the scope of the change. From both a tactical and cultural standpoint, rebrand ing represented a major change management process for our associates and clients." Commun ication with employees was key to the success of Blueshore's transformation. "The most practical piece of advice I can offer others is to recogn ize the critical importance of open commun ication in times of change. Be consistent, repetitive, and authentic," Catliff advises. "Tell them [employees and others] why you are changing and what you hope to gain from the change." Catliff also emphasizes the power of employee involvement in organizational change. "Ask your staff for their input, actively listen to what they have to say, and show you value their perceptions and opinions. By doing this you will form a relationship based on mutual trust and respect, which will make it easier for you to initiate and integrate change together." Blueshore's radical transformation took several years and required some difficult adjustments. "The tough part was that some staff didn't like the change, and self-selected out," says Catliff. But the results have exceeded expectations. BlueShore Financial's assets under administration have jumped from over $700 million in 2000 to $4.7 billion today. Blueshore's dozen branches have become leading financial planning centres from Vancouver to Whistler. Blueshore is also consistently rated as one of Canada's best employers (small and medium category).'

l ueshore Financial's transformati on from a flounderi ng mass market cred it union to one of Vancouver's leadi ng financial pl anning f irms illustrates many of the strategies and practices necessary to successfully change organizations. Chris Catliff, l ike other leaders l ooking for organizational change, created an urgency for change, actively communicated the change process, and involved employees as partners i n the process. Bl ueshore's transformation took several years and required difficul t adjustments. Indeed, most organizational change is messy, requ iri ng considerable leadership effort and vigilance. As we w ill describe throughout th is chapter, the challenge of change is not so much in decidi ng whi ch way to go; the challenge is in the execution of this strategy. When l eaders discover the need for change and identify some ideas about the preferred route to a better future, the change process involves navigating around the numerous obstacles and gaining organization-wide support for that change. This chapter unfolds as follows. We begin by introducing Lewin's model of change and its component parts. This discussion includes sources of resistance to change, ways to mini mize this resistance, and ways to stabil ize desired behaviours. Next, the chapter examines four approaches to organizational change-acti on research, appreciative inquiry, large group interventi ons, and parallel learning structures. The last section of thi s chapter considers both cross-cul tural and ethi cal issues in organizational change.

B

Chapter Fifteen

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4 21

Lewin's Force Field Analysis Model "I've always believed that when the rate of change inside an instin1tion becomes slower than the rate of change outside, the end is in sight. The only question is when."2 This statement by former General Electric CEO Jack Welch highlights one of the messages throughout this book: organizations operate as open systems that need to keep pace with ongoing changes in their external environment, such as consumer needs, global competition, technology, community expectations, government (de)reguJation, and environmental standards. Successful organizations monitor their environments and take appropriate steps to maintain a compatible fit with new external conditions. Rather than resisting change, employees in successful companies embrace change as an integral part of organizational life. It is easy to see environmental forces pushing companies to change the way they operate. What is more difficult to see is the complex interplay of these forces on the internal dynamics of organizations. Social psychologist Kurt Lewin developed a model to describe this process using the metaphor of a force field (see Exhibit 15. 1). 3 Although it was developed more than 50 years ago, more recent reviews affirm that Lewin's force field analysis model remains one of the most widely respected ways of viewing the change process. 4 One side of the force field model represents the drivingforces that push organizations toward a new state of affairs. These might include new competitors or technologies, evolving client expectations, or a host of other environmental changes. Corporate leaders also produce driving forces even when external forces for change aren't apparent. For instance, some experts call for "divine discontent" as a key feaUire of successful organizations, meaning that leaders continually urge employees to strive for higher standards or better practices. Even when the company outshines the competition, employees believe they can do better. "We have a habit of divine discontent with our performance," says creative agency Ogilvy & Mather about its corporate culture. "It is an antidote to smugness."5 The other side of Lewin's model represents the restraining forces that maintain the status quo. These restraining forces are commonly called "resistance to change" because they appear to block the change process. Stability occurs when the driving and restraining forces are roughly in equilibriumthat is, they are of approximately equal strength in opposite directions. Lewin's force field model emphasizes that effective change occurs by unfreezing the current situation, moving to a desired condition, and then refreezing the system so it remains in the desired state. Unfreezing involves producing disequilibrium between the driving and restraining forces. As we will

EXHIBIT 15.1

Lewin's Force Field Analysis Model

Desired Condit ions

1

Current Condit ions

Before Change - - - - - --

After Change

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describe later, this may occur by increasing the driving forces, reducing the restraining forces, or doing a combination of both. Refreezing occurs when the organization's systems and structures are aligned with the des ired behaviours. They must support and reinforce the new role patterns and prevent the organization from slipping back into the old way of doing things. Over the next section, we use Lewin's model to understand why change is blocked and how the process can evolve more smoothly.

Understanding Resistance to Change United Airl ines conti nues to suffer from operational and customer service problems a few years after its merger with Continental Airlines. United executives say the poor results are partly due to the challenges of combining complex reservation and operational systems. But they have also been frustrated by subtle forms of employee resistance to change. Some Continental employees have opposed United Airlines' operational practices, while some United Airlines employees have failed to embrace Continental's customer service standards. " You know, the cultural change takes time," explai ned the former United Airlines CEO who orchestrated the merger. "And people resist change. People are sort of set in their ways."6 Executives at United Airl ines experienced considerable resistance to change followi ng the merger with Continental Airl ines. Resistance to change takes many forms, ranging from overt work stoppages to subtle attempts to continue the old ways. 7 A study of Canadian bank employees reported that subtle resistance is much more common than overt resistance. Some employees in that study avoided the desired changes by moving into different jobs at the bank. Others continued to perform tasks the old way as long as management didn't notice. Even when employees complied with the planned changes, they showed resistance by performing the new task whi le letting customers know that they disapproved of these changes forced on them! 8

•

by the NUMBERS

Facing the Challenge of Resistance to Change9 of 517 Canadian human resource managers surveyed say employees resist changes put forward by management.

of 2,219 executives and employees surveyed globally say they suffer from change fatigue (feeling worn out from changing too much or too often).

of 2,219 executives and employees surveyed globally say their company doesn't have the necessary capabilities to ensure that change is sustained over time.

of 814 recruitment professionals surveyed in the U.S., U.K., China, and five other countries say the main barrier to innovation in their organization is a corporate culture that resists change.

33%

of executives surveyed in 328 organizations (employing 5 million people globally) report that their managers are effective at dealing openly w ith resistance to change.

Chapter Fifteen

Organizational Change

4 23

Most change agents are understandably frustrated by passive or active resistance to their planned change, but resistance is a common and natural human response. As Canadian-born economist John Kenneth Galbraith once quipped, "Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof." 10 Even when people support change, they typically a~sume that it is others-not themselves-who need to do the changing. Resistance is a form of conflict, but change agents unfortunately tend to interpret that disagreement as relationship conflict (see Chapter I I). They describe the people who resist as unreasonable, dysfunctional, and irrational reactionaries to a desirable initiative. Perversely, the change agent's conflictoriented response to resistance tends to escalate the conflict, which often generates even stronger resistance to the change initiative. A more productive approach is to view resistance to change a~ task conf1ict. From the task conflict perspective, resistance is a signal either that the change agent has not sufficiently prepared employees for change or that the change initiative should be altered or improved. 11 Employees might not feel a sufficiently strong urgency for change, or they might feel the change strategy is ill-conceived. Even if they recognize the need for change and agree with the strategy, employees might resist because they lack confidence to change or believe the change will make them worse off than the current sin1ation. Resistance takes many forms, and change agents need to decipher those different types of resistance to understand their underlying causes. 12 Resistance is also a form of voice, so the discussion potential ly improves procedural justice (see Chapter 5) as well a~ decision making (see Chapter 7). By redirecting initial forms of resistance into constructive conversations, change agents can generate a strong feeling of fairness among employees. Furthermore, resistance is motivated behaviour; it potentially engages people to think about the change strategy and process. Change agents can harness that motivational force to ultimately strengthen commitment to the change initiative.

WHY EMPLOYEES RESIST CHANGE Change management experts have developed a long list of reasons why people resist change. 13 Some 14 people inherently oppose change because of their personality and values. Aside from these dispositional factors, employees typically oppose organizational change because they lack suff icient motivation, ability, role clarity, or situational support to change their attin1des, decisions, and behaviour. 15 In other words, an employee's readiness for change depends on all four elements of the MARS model. These MARS elements are the foundations of the six most commonly cited reasons why people resist change: (!)negative valence of change, (2) fear of the unknown, (3) not-invented-here syndrome, (4) breaking routines, (5) incongruent team dynamics, and (6) incongruent organizational systems and structures.

Are you ready for change? You can discover your level of readiness for change by completing this self-assessment in Connect.

Negative Valence of Change Employees tend to resist change when they bel ieve the new work environment will have more negative than positive outcomes. 16 In other words, they apply (although imperfectly) the rational choice decision-making model (Chapter 7) to estimate whether the change wi ll make them better or worse off (i.e., positive or negative valence). This cost-benefit analysis mainly considers how the change wi ll affect them personally. However, resistance also increases when employees bel ieve the change will do more harm than good to the team, organization, or society. 17 Fear of the Unknown

Organizational change usually has a degree of uncertai nty, and employees tend to assume the worst when they are unsure whether the change will have good or bad outcomes. Uncertainty is also associated with lack of personal control, which is another source of negative emotions.18 Consequently, the uncertainty inherent in most organizational change is usually considered less desirable than the relative certainty of the status quo. As such, it adds more negative valence to the cost-benefit calculation we described above.

42 4

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GEORGIA, USA WELCOM ES

General Motors (GM) has in-sourced almost all of its information technology (IT) work, hired 10,000 IT employees to replace contractors, built new IT in novation centres, and reduced 23 data centres owned by suppliers to j ust two centres owned by GM. GM's chie f information o fficer Randy Mott (shown in this photo) and his executive team faced many logistical challenges throughout the transformation. They were also challenged by resistance from GM line managers, many of whom were concerned that GM's IT staff wouldn't provide the same quality of service that t he external contractors had provided. "This supplier is doing a great job for me, so don't mess it up,'' some managers warned. Line managers' fear of the unknown and perceived negative outcomes about the IT changes led to "some really frank discussions," Mott acknowledges. "In the early days we were fighting the fact that the IT organization's credibility for building and creating and supporting things was not high." 19 © David Goldman/AP Photos/CP Images

Not-Invented-Here Syndrome

Employees sometimes oppose or even discreetly undermine organizational change initiatives that originate elsewhere. This "not-invented-here" syndrome is most apparent among employees who are usually responsible for the knowledge or initiative, rather than the external sources. 20 For example, information technology staff are more likely to resist implementing new technology championed by marketing or finance employees. If the IT staff support the change, they are implicitly acknowledging another group's superiority within IT's own area of expertise. To protect their self-worth, some employees del iberately inflate problems with changes that they did not initiate, just to "prove" that those idea~ were not superior to their own. As one consultant warned, "Unless they're scared enough to listen, they'll never forgive you for being right and for knowing something they don't." 21 An example of the not-invented-here syndrome occurred several years ago when Goldcorp CEO Rob McEwan decided to post the Canadian mining company 's confidential geological data online and offer a generous reward to anyone who could help find more gold on the property. The Goldcorp Challenge wa~ a huge success, but the firm's geological staff complained just before the event was launched. "We have real concerns," they told McEwen. "You're going to ask the rest of the world to tell you where we' re going to find gold in our mine, and we think they' re going to think we' re real ly dumb and that you don't have any confidence in us."22

Breaking Routines

People are creatures of habit. They typically resist initiatives that require them to come out of their comfort zones and to break those automated routines and learn new role patterns. And unless the new patterns of behaviour are strongly supported and reinforced, employees tend

Chapter Fifteen

Organizational Change

4 25

to revert to their past routines and habits. "When you are leading for growth, you know you are going to disrupt comfortable routines and a~k for new behaviour, new priorities, new ski lls," says Ray Davis, executive chair of Oregon-based Umpqua Bank, which is regarded as one of America's most innovative financial institutions. "Even when we want to change, and do change, we tend to relax and the rubber band snaps us back into our comfort zones."23

Incongruent Team Dynamics Teams develop and enforce conformity to a set of norms that guide behaviour (see Chapter 8). However, conformity to existing team norms may discourage employees from accepting organizational change. For instance, organizational initiatives to improve customer service may be thwarted by team norms that discourage the extra effort expected to serve customers at this higher standard. Incongruent Organizational Systems and Structures Rewards, information systems, patterns of authority, career paths, selection criteria, and other systems and structures are both friends and foes of organizational change. When properly al igned, they reinforce desired behaviours. When misaligned, they pull people back into their old attitudes and behaviour. Even enthusia~tic employees lose momentum after fail ing to overcome the structural confines of the past.

Unfreezing, Changing, and Refreezing According to Lewin's force field analysis model, effective change occurs by unfreezing the current situation, moving to a desired condition, and then refreezing the system so it remains in this desired state. Unfreezing occurs when the driving forces are stronger than the restraining forces. This happens by making the driving forces stronger, weakening or removing the restraining forces, or combining both. The first option is to increase the driving forces, motivating employees to change through fear or threats (real or contrived). This strategy rarely works, however, because the action of increasing the driving forces alone is usually met with an equal and opposing increa~e in the restraining forces. A useful metaphor is pushing against the coils of a mattress. The harder corporate leaders push for change, the stronger the restraining forces push back. This antagonism threatens the change effort by producing tension and conflict within the organization. The second option is to weaken or remove the restraining forces. The problem with this change strategy is that it provides no motivation for change. To some extent, weakening the restraining forces is like clearing a pathway for change. An unobstructed road makes it easier to travel to the destination but does not motivate anyone to go there. The preferred option, therefore, is to both increase the driving forces and reduce or remove the restraining forces. Increasing the driving forces creates an urgency for change, whi le reducing the restraining forces lessens motivation to oppose the change and removes obstacles such a~ lack of abi lity and sintational constraints.

CREATING AN URGENCY FOR CHANGE A few months after he became CEO of Nokia Corp., Canadian executive Stephen Elop sent employees a scorching email, warning them about the urgency for change. "I have learned that we are standing on a burning platform," wrote Elop. "And, we have more than one explosion-we have multiple points of scorching heat that are fuell ing a blazing fire around us." Elop specifically described strong competition from Apple and Google, Nokia's tumbling brand preference, and its falling credit rating. 24 Nokia has since sold its mobile phone division to Microsoft, but this incident illustrates how executives recognize the need for a strong urgency for change. 25 Developing an urgency for change typical ly occurs by informing or reminding employees about competitors, changing consumer trends, impending government regulations, and other forms of turbulence in the external environment. These are the main driving forces in Lewin's model. They push people out of their comfort zones, energizing them to face the risks that change creates. In many organizations, however, leaders buffer employees from the

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Global Connections 15.1: PANASONIC GENERATES AN URGENCY FOR CHANGE BY REVEALING THE TRUTH 26 One of Kazuhiro Tsuga's first actions as president of Panasonic Corporation was to shut down the company's plasma flat-panel television screen business. For several years, executives and engineers at the Japanese company had fiercely defended the company's considerable investment in plasma screens, which provide higher-quality images but are more expensive and much heavier than popular LCD TV screens. Employees also lacked an urgency for change because Panasonic's previous executives had hidden the severity of declining sales. "Only a few members of the management team knew how deep the loss was [at the TV operation]," explains Tsuga (shown in this photo). "What I did was tell them, 'This is the loss, a huge loss.' I showed them the losses in detail at every stage. Once it's visible to them, people don't want to continue to make losses."

Panasonic Corporation president Kazuhiro Tsuga created an urgency for change away from plasma screen development by revealing the severity of declining sales in that product. © ZUMA Press, l nc.fAiamy Stock Photo

external environment to such an extent that these driving forces are hardly felt by anyone below the top executive level. The result is that employees don't understand why they need to change and leaders are surprised when their change initiatives do not have much effect.

Customer-Driven Change

Some companies fuel the urgency for change by putting employees and managers in direct contact with customers. Dissatisfied customers represent a compelling drivi ng force for change because the organization's survival typically depends on having customers who are satisfied with the product or service. Personal interaction with customers also provides a human element that further energizes employees to change current behaviour patterns. For example, JPMorgan Chase executives take bus trips to visit customers and bank branches across the United States. These bus tours

Chapter Fifteen

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4 27

generate an urgency for change because executives get direct exposure to ways in which the bank can be improved. "We've already learned 100 different things," said JPMorgan Chase CEO Jamie Dimon during a bus tour around Florida, citing examples such as "Why can't we do mortgages quicker?" and "Why can't we service a credit card account better out of a branch?"27

Creating an U rgency for Change without External Forces Exposing employees to external forces can strengthen the urgency for change, but leaders often need to begin the change process before problems come knocking at the company 's door. The chal lenge is greatest when companies are successful in their markets. Studies have found that when the organization is performing well, decision makers become less vigilant about external threats and are more resistant to change. "The biggest risk is that complacency can also come with that success," warns Richard Goyder, who recently stepped down as CEO of Wesfarmers, Austral ia's largest conglomerate. "That complacency may result in riskaversion, or it may simply show up as a lack of urgency, as people take the foot off the accelerator and just assume that success will come as it always has." 28 Creating an urgency for change when the organization is the market leader requires plenty of persuasive influence to help employees visual ize future competitive threats and environmental shifts. Experts warn, however, that employees may see this strategy a~ manipulative, which produces cynicism about change and undermines trust in the change agent 29 Fortunately, the urgency for change doesn't need to originate from problems or threats to the company; this motivation can also develop through the leader's vision of a more appealing future. A future vision of a bel!er organization effectively makes the current situation less appealing. When the vision connects to employees' values and needs, it can be a motivating force for change even when external problems are insignificant.

Are you tolerant of change? You can discover your level of tolerance for change by

completing this self-assessment in Connect.

REDUCING THE RESTRAINING FORCES Earl ier, we used the mattress metaphor to explain that increa~ing the driving forces alone will not bring about change because employees often push back harder to offset the opposing forces. Instead, change agents need to address each of the sources of resistance. Six of the main strategies for minimizing resistance to change are outlined in Exhibit 15.2. Communication, learning, employee involvement, and stress management should be the first priorities for change management. 30 However, negotiation and coercion may be necessary where some people will clearly lose something from the change and in cases where the speed of change is critical.

Communication Communication is the highest priority and first strategy required for any organizational change. According to one survey, communication (together with involvement) is considered the top strategy for engaging employees in the change process. 31 Communication improves the change process in at least two ways. 32 One way is that communication is necessary to generate the urgency for change that we described previously. Leaders motivate employees to support the change by candidly tell ing them about the external threats and opportunities that make change so important. Th is function was illustrated in the opening case study for this chapter. When the future of North Shore Credit Union (now Blueshore Financial) became apparent, CEO Chris Catliff communicated directly to employees about the problems facing the company and why significant change was urgently needed. "Tell them [employees) why you are changing and what you hope to gain from the change," advises Catliff. The second way that communication minimizes resistance to change is by illuminating the future and thereby reducing fear of the unknown. The more leaders communicate their vision, particularly details about that future and milestones already achieved toward that future, the more easily employees can understand their own roles in that future.

428

EXHIBIT 15.2

Part Four Organizational Processes

Strategies for Minimizing Resistance to Change

Sllnav

£..-pie

W..Applled

..........

Communication

Customer complaint letters are s hown

When e mployees don't feel an

Time-consuming and potentially

to employees.

urgency for change, don•t know how the change will affect them, or resist

costly.

change due to a fear o f the unknown. Learning

Employees Jearn how to work in teams as company adopt~ a team ·ba~ structure.

Employee involvement

Company forms a tas k fo rce to recommend new customer service

pr.tctices.

When employees need to break old routines and adopt new role patterns.

Time-consuming. potentially costly, and some employees might not be able to Jearn the new s kills.

When the change effort needs more

Very time-consuming. Might lead

employee commitmenL some employ· ees need to protect their se]f.worth,

to conflict and poor decisions if e mployees' inte rests are incompatible with organizational needs.

and/or employee ideas would improve decisions about the change strategy. Stress management

Employees attend sessions to discuss their worries about the change.

employee v.'Orries.

reduce stress for all employees.

Negotiation

Employee.' agree to replaoe strict job categories with multiskilling in return

When e mployees will clearly lose something of value from the change

May be expensive. particularly if other employees want to negotiate

for increased job security.

and would not otherwise s upport the new conditions. Also necessary when the company must change quickly.

their support. Also tends to produce compliance but not commitment to the change.

Company president tells managers to "get on board" with the change or leave.

When other s trategies are ineffective and the company need.' to change quickly.

Can lead to more subtle forms of res istance. a'i well as long·tenn antagonism with the change agent.

Coercion

When communication. tr.Uning. and involvement do not s ufficiently ease

Time-consuming and potentially expensive. Some method'i may not

Sources: Adapted from J. P. Kotter and LA. Schlesinger. "Choosing Strategjes for Change." Harvard Business R~· i ew 57 ( 1919). pp. 106-114: P.R. Lawreoc.e. "How to Deal

with Resistance to Change." Han·ard Busines..:; Review. May-June 1954. pp. 49-57.

Learning

Learning is an important process in most organizational change initiatives because employees need new knowledge and skills to fit the organization's evolving requirements. Learning not only helps employees perform better following the change; it also increases their readiness for change by strengthening their belief about working successfully in the new situation (called change self-ejjicacy). And when employees develop stronger change self-efficacy, they develop a stronger acceptance of and commitment to the change.33

Employee Involvement

Employee involvement is almost essential in the change process, although a low level of involvement may be necessary when the change must occur quickly or employee interests are highly incompatible with the organization's needs. The value of involvement is illustrated in the opening case study to this chapter. Blueshore Financial's transformation began with a task force of employees and executives who generated creative ideas for the North Vancouver credit union's future. As the change proceeded, employees discussed and made suggestions to the executive team about improved operational practices in the emerging financial spa model. The potential benefits of employee involvement, which were discussed in (Chapter 7}, are relevant to organizational change. Employees who participate in decisions about a change tend to feel more personal responsibil ity for its successful implementation, rather than being disinterested agents of someone e lse's decisions]4 This sense of ownership also minimizes the not-inventedhere syndrome and fear of the unknown . Furthermore, the work environment is so complex that determining the best direction of the change effort requires ideas and knowledge of many people. Employee involvement is such an important component of organizational change that special

Chapter Fifteen

Organizational Change

4 29

initiatives have been developed to allow participation in large groups. These change interventions are described later in the chapter.

Stress Management Organizational change is a stressful experience for many people because it threatens self-esteem and creates uncertainty about the future.35 Communication, learning, and employee involvement can reduce some of the stressors 3 6 However, research indicates that companies also need to introduce stress management practices to help employees cope with changes? 7 In particular, stress management minimizes resistance by removing some of the negative valence and fear of the unknown about the change process. Stress also saps energy, so minimizing stress potentially increases employee motivation to support the change process. Negotiation As long as people resist change, organizational change strategies will require a variety of influence tactics. Negotiation is a form of influence that involves the promise of benefits or resources in exchange for the target person's compliance with the influencer's request. This strategy potential ly gains support from those who would otherwise lose out from the change. However, this support usually goes no further than compl iance with the change effort. Negotiation rarely produces commitment to change, so negotiation might not be effective in the long term. Coercion If all else fails, leaders rely on coercion as part of the change process. Coercion includes a range of assertive influence behaviours (see Chapter 10}, such as persistently reminding people of their obligations, frequently monitoring behaviour to ensure compl iance, confronting people who do not change, and using threats of punishment (including dismissal) to force compliance. Replacing or threatening to replace staff who will not support the change is an extreme step, but it is fairly common in major organizational transformations. Several years ago, StandardAero CEO Bob Hamaberg threatened to fire senior managers who opposed his initiative to introduce lean management (methods to improve work efficiency). "You must have senior management commitment," Hamaberg said bluntly at the time. "I had some obstacles. I removed the obstacles." Harsh words and actions, but due to this visionary transformation, StandardAero's Winnipeg location (where the company began) has grown significantly and the company overallhas become a world leader in the aircraft engine repair and overhaul business.38 Firing people is the least desirable way to change organizations. However, dismissals and other forms of coercion are sometimes necessary when speed is essential and other tactics are ineffective. In particular, it may be necessary to remove several members of an executive team who are unwill ing or unable to change their existing mental models of the ideal organization. This is also a radical form of organizational "unlearning" (see Chapter 1) because when executives leave, they remove knowledge of the organization's past routines that have become dysfunctional. 39 Even so, coercion is a risky strategy because survivors (employees who do not leave) may have less trust in corporate leaders and engage in more pol itical tactics to protect their own job security.

REFREEZING THE DESIRED CONDITIONS Unfreezing and changing behaviour won' t produce lasting change. People are creatures of habit, so they easily slip back into familiar patterns. Therefore, leaders need to refreeze the new behaviours by realigning organ izational systems and team dynamics with the desired changes. The desired patterns of behaviour can be "nailed down" by changing the physical structure and situational conditions. Organizational rewards are also powerful systems that refreeze behaviours. 40 If the change process is supposed to encourage efficiency, then rewards should be realigned to motivate and reinforce efficient behaviour. Information systems play a complementary role in the change process, particularly as conduit~ for feedback.4 1 Feedback mechanisms help employees learn how well they are moving toward the desired objectives, and they provide a permanent architecture to support the new behaviour patterns in the long term. The adage "What gets mea~ured, gets done" applies here. Employees concentrate on the new priorities when they receive a continuous flow of feedback about how well they are achieving those goals.

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Superior Cabinets was in serious financial trouble a decade ago, so CEO Scott Hodson (shown here) and his newly-hired executive team launched a radical transformation of the Saskatoonbased manufacturer. They refocused the cabinetmaker from a mass production operation to a customer-driven business that continuously reduces wasteful work processes (lean manufacturing). Superior is now highly efficient and profitable. A decade ago, it took 400 people and 16 weeks to produce and install 25 kitchens per day. "Today it takes 300 people and we install it in six weeks, guaranteed," says Hodson. "The reason we got through it [the transformation] was because our people embraced the change," Hodson emphasizes. Communication, training, and involvement were important. However, the company also introduced several new systems and structures that reinforced and supported the new mindset and employee behaviours. Superior invested in technology that focused information around customers. For instance, customer orders are submitted directly online from Superior's showrooms and the system enables employees to monitor how well customer orders are progressing. More precise performance standards were introduced with associated visual scorecards that track costs, product quality, on-time delivery, and other key indicators. Production has been reorganized into team-based cells for better coordination among staff. Superior Cabinets employees now participate in a profit-sharing plan so they can benefit financially from the company's success 42 © Superior Cabinets

Leadersh ip, Coalitions, and Pilot Proj ects L04

Kurt Lewin's force field analysis model is a useful template to explain the dynamics of organizational change. But it overlooks four other ingredients in effective change processes: leadership, coal itions, social networks, and pilot projects.

TRANSFORMATIONAL LEADERSHIP AND CHANGE The opening case study to this chapter described how Chris Catliff transformed North Shore Credit Union from a floundering undifferentiated savings and loan business into Blueshore Financial-a highly successful wealth management institution focused on clients with complex and sophisticated financial

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needs. Catliff and other Blueshore executives were transformational leaders in this change process. They developed a vision of the organization's desired future state, communicated that vision in ways that were meaningful to others, made decisions and acted in ways that were consistent with that vision, and encouraged employees to experiment with ways to al ign work activities more closely with the vision.43 A key element of leading change is a strategic vision.44 A leader's vision provides a sense of direction and establishes the critical success factors against which the real changes are evaluated. Furthermore, a vision provides an emotional foundation to the change because it links the individual's values and self-concept to the desired change. 45 A strategic vision also minimizes employee fear of the unknown and provides a better understanding of what behaviours employees must learn for the desired future.

COALITIONS, SOCIAL NETWORKS, AND CHANGE One of the great truths of organizational change is that change agents cannot lead the initiative alone. They need the assistance of several people with a similar degree of commitment to the change. 46 lndeed, some research suggests that this grou~ften called a guiding coalition-appears to be the most important factor in the success of public sector organizational change programs.47 Membership in the guiding coalition extends beyond the executive team. Ideally, it includes a diagonal swath of employees representing different functions and most levels of the organization. The guiding coalition is sometimes formed from a special task force that initially investigates the opportunities for change. Members of the guiding coalition should also be influence leaders; that is, they should be highly respected by peers in their area of the organization. Social Networks a nd Viral Change The change process can be strengthened through social networks, which are structures of people connected to each other through one or more forms of interdependence (see Chapter 10). They have an important role in communication and influence, both of which are key ingredients for organizational change. To some extent, coalition members support the change process by feeding into these networks. But social networks contribute to organizational change whether or not the change process has a formal coalition. Social networks are not easily controlled, yet some change agents have tapped into social networks to build a groundswell of support for a change initiative. This viral change process adopts principles found in word-of-mouth and viral marketing. 48 Viral and word-of-mouth marketing occur when information seeded to a few people is transmitted to others through their friendship connections. Within organizations, social networks represent the channels through which news and opinion about change initiatives are transmitted. Participants in that network have relatively high trust, so their information and views are more persuasive than those from more formal channels. Social networks also provide opportunities for behaviour observation-mployees observe each other's behaviour and often adopt that behaviour themselves. As key people in the network change their behaviour, that behaviour is copied by others in the network.49

Global Connections 15.2: TRAILBLAZING VIRAL CHANGE AT RSA INSURANCE RSA Insurance Group recently launched a flexible benefits package th at required employees to pick their preferred benefits options. But instead of just emailing reminders, human resources staff at the U.K. insurer relied on a viral change process that more effectively motivated employees to choose their options. HR carefully described the flexible benefits plan to 500 "trailblazers• -early adopters of the company's new internal social network (Yammer) who had a large following of co-workers. (continued)

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(continued)

Trailblazers were soon posting their views about the preferred flexible benefits offered. These posts were read by thousands of employees, many of whom would have ignored the email memos from HR. "We used people in the network to communicate what their favourite elements of the proposition were; explains RSA's director of internal communications. Trailblazers are role models whose ideas receive considerable interest from other employees, so they achieve far more effective results in terms of changing employee behaviour (i.e., signing up for preferred benefits) than HR accomplishes through impersonal emails. 50

London-based RSA Insurance Group relied on viral change through social media "trailblazers" to improve flexible benefits selection among employees. ©Chris Batson/Aiamy Stock Photo

PILOT PROJECTS AND DIFFUSION OF CHANGE Many companies i ntroduce change through a pilot project, whi ch involves applying change to one work unit or secti on of the organization. This cautious approach tests the effecti veness of the change as well as the strategies to gain empl oyee support for the change, yet is more flexible and less risky than company-w ide initiatives 5 1 Pilot projects also make it easier to select organizational groups that are most ready for change, thus increasing the change initiative's l ikelihood of success.

Chapter Fifteen

EXHIBIT 15.3

Organizational Change

433

Strat egies f or Diffusing Change from a Pilot Project

.......... \Videly communicate and celebrate the pilot project's success. Reward and recognize pilot project employees as weH a'i those ·who work a t tr.tnsferring that change to other parL~ of the organization. Ensure that managers s upport and reinforce the desired behaviours related to the pilot project's success. Identify and address potential sources of resistance to change.

AlllhJ Give employees the opportunity to inter.tct with and Jearn from those in the pilot project. Rea'isign or temporarily second some pilot project employees to other work units where they can coach and serve as role models. Give employees technical training to implement practices identified in the pilot project.

ltlllel'8up..._ Communicate and teach employees how lhe pilot project practices are relevant for lheir own functional areas.

..............

Ensure that the pilot project is described in a way that is neither too specific nor too gener.tl .

Give s taff s ufficient time and resources to learn and implement the pilot project practices in their V.'Ork uni ts.

How does change get diffused from the pilot project to other parts of the organization? Using the MARS model as a template (see Chapter 2}, Exhibit 15.3 outlines several strategies. First, employees are more likely to adopt the practices of a pi lot project when they are motivated to do so. 52 This occurs when they see that the pilot project is successful and people in the pilot project receive recognition and rewards for changing their previous work practices. Diffusion also occurs more successfully when managers support and reinforce the desired behaviours. More general ly, change agents need to mi nimize the sources of resistance to change that we discussed earlier in this chapter. Second, employees must have the ability-the required ski lls and knowledge-to adopt the practices introduced in the pilot project. According to innovation diffusion studies, people adopt ideas more readily when they have an opportunity to interact with and Jearn from others who have already applied the new practices. 53 Third, pilot projects get diffused when employees have clear role perceptions -that is, when they understand how the practices in a pilot project apply to them even though they are in a completely different functional area. For instance, accounting department employees won't easily recognize how they can adopt quality improvement practices developed by employees in the production department. The challenge here is for change agents to provide guidance that is not too specific (not too narrowly defined around the pilot project environment) because it might not seem relevant to other areas of the organization. At the same time, the pilot project intervention should not be described too broadly or abstractly to other employees because this makes the information and role model too vague. Finally, employees require supportive situational factors, including the resources and time necessary to adopt the practices demonstrated in the pilot project.

Four Approaches to Organizational Change So far, this chapter has examined the dynamics of change that occur every day in organizations. However, organizational change agents and consultants also apply various structured approaches to organizational change. This section introduces four of the leading approaches: action research, appreciative inquiry, large group interventions, and parallel learning structures.

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ACTION RESEARCH APPROACH Along with introducing the force field model, Kurt Lewin recommended an action research approach to the change process. The philosophy of action research is that meaningful change is a combination of action orientation (changing ani tudes and behaviour) and research orientation (testing theory). 54 On one hand, the change process needs to be action-oriented because the ultimate goal is to change the workplace. An action orientation involves diagnosing current problems and applying interventions that resolve those problems. On the other hand, the change process is a research study because change agents apply a conceptual framework (such as team dynamics or organizational culture) to a real situation. As with any good research, the change process involves collecting data to diagnose problems more effectively and to systematical ly evaluate how well the theory works in practice. 55 Within this dual framework of action and research, the action research approach adopts an opensystems view. It recognizes that organizations have many interdependent parts, so change agents need to anticipate both the intended and the unintended consequences of their interventions. Action research is also a highly participative process because open-systems change requires both the knowledge and the commitment of members within that system. Indeed, employees are essentially co-researchers as well as participants in the intervention. Overall, action research is a data-based, problem-oriented process that diagnoses the need for change, introduces the intervention, and then evaluates and stabilizes the desired changes. The main phases of action research are illustrated in Exhibit 15.4 and described here: 56 I. Form client-consultant relationship. Action research usually assumes that the change agent originates outside the system (such as a consultant), so the process begins by forming the client-consultant relationship. Consultants need to determine the client's readiness for change, including whether people are motivated to participate in the process, are open to meaningful change, and possess the abilities to complete the process.

2. Diagnose the need for change. Action research is a problem-oriented activity that carefully diagnoses the problem to determine the appropriate direction for the change effort. Organizational diagnosis relies on systematic analysis of the situation. It involves gathering and analyzing data about an ongoing system, including interviews and surveys of employees and other stakeholders. Organizational diagnosis also involves employees so they improve, understand, and support the appropriate change method, the schedule for the actions involved, and the expected standards of successful change. 3. Introduce intervention. This stage in the action research model applies one or more actions to correct the problem. It may include any of the prescriptions mentioned in this book, such as building more effective teams, managing confl ict, building a better organizational structure, or changing the corporate culture. An important issue is how quickly the changes should occur.s7 Some experts recommend incremental change, in which the organization fine-tunes the system and takes smal l steps toward a desired state. Others claim that rapid change is often required, in which the system is overhauled decisively and quickly.

EXHIBIT 15.4

The Action Research Process

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4. Evaluate and stabilize change. Action research recommends evaluating the effectiveness of the intervention against the standards establ ished in the diagnostic stage. Unfortunately, even when these standards are clearly stated, the effectiveness of an intervention might not be apparent for several years or might be difficult to separate from other factors. If the activity has the desired effect, the change agent and participants need to stabilize the new conditions. This refers to the refreezing process that was described earl ier. Rewards, information systems, team norms, and other conditions are redesigned so they support the new values and behaviours.

Debating Point: WHAT'S THE BEST SPEED FOR ORGANIZATIONAL CHANGE? One of the great debates among organizational change experts is how quickly the change should occur. One view is that slow, incremental change is better because it gives employees more time to adjust to the new realities, to keep up with what needs to be learned, and to manage their stress in this process. Incremental change is also preferred because it gives leaders more time to change course if the current direction isn't working as hoped. Ergon Energy discovered the importance of incremental change. Government legislation required companies to upgrade their record-keeping system, but the Australian energy provider decided to make the changes incrementally because employees had already experienced constant change over the previous couple of years. "Even resilient staff such as those employed at Ergon Energy have a change tolerance level," explains Peta Sweeney, a consultant who worked with Ergon staff during this transition. "Consequently this led deliberately to discounting a revolutionary 'big bang' approach to record-keeping improvements." Sweeney reports that changing incrementally significantly improved employee engagement in the process. "Staff are more willing to participate in the change journey as well as offering suggestions for improvements. They do so knowing that changes will take place gradually and allow for time to fully bed down new practices and that effective enterprise-wide changes require their help.·SS In spite of these apparent virtues of incremental change, some experts claim that rapid change is usually a much better choice. They do not claim that change needs to be radical or evenly rapid all of the time. Rather, they suggest that most change initiatives need to be, on average, much quicker than incremental. One argument is that companies operate in such a fast-paced environment that any speed less than "rapid" is risky; an incremental change initiative risks putting organizations further behind its competitors to the point that any change seems futile. A second argument is that rapid change creates a collective sense of momentum, whereas inertia eventually catches up with incremental change. 59 In other words, employees feel the sense of progress when change occurs quickly. This forward movement generates its own energy that helps motivate employees toward the future objectives. Incremental change, by comparison , is sluggish and lethargic. A related argument is that any organizational change requires plenty of energy, particularly from the leaders who must continually communicate, role model, coach, and otherwise support and influence employees toward the new state of affairs. 60 This energy is fin ite, and it is more likely to run out when the change is spread over a long rather than a short period of time. Third, incremental change doesn't necessarily give employees more time to adjust; instead, it typically gives them more time to dig in their heels! Rapid change, on the other hand, happens at such speed that employees don't have the opportunity to find ways to hold back, retrench, or even think about strategies to oppose the change effort. Finally, though proponents of incremental change point to its benefits for minimizing stress, there is reason to believe that it often has the opposite effect. Changing slowly can feel like a slow train wreck-the more you see it coming, the more painful it feels. Quicker change, particularly when there are support systems to help employees through the process, may be less painful than incremental change.

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The action research approach has dominated organizational change thinking since it was introduced in the 1940s. However, some experts are concerned that the problem-oriented nature of action researchin which something is wrong that must be fixed-focuses on the negative dynamics of the group or system rather than its positive opportunities and potential. This concern with action research has Jed to the development of a more positive approach to organizational change, called appreciative inquiry. 61

APPRECIATIVE INQUIRY APPROACH App reciative inquiry tries to break out of the problem-solving mind~et of traditional change management practices by reframing relationships around the positive and the possible. It searches for organizational (or team) strengths and capabilities and then applies that knowledge for further success and well-being. Appreciative inquiry is therefore deeply grounded in the emerging philosophy of positive organizational behaviour, which suggests that focusing on an individual's positive qualities and traits rather than on what is wrong with the person will improve organizational success and personal well-being. In other words, this approach empha~izes building on strengths rather than trying to directly correct problems.62 Appreciative inquiry typically examines successful events, organizations, and work units. This focus becomes a form of behavioural modell ing, but it also increases open dialogue by redirecting the group's attention away from its own problems. Appreciative inquiry is especially useful when participants are aware of their problems or already suffer from negativity in their relationships. The positive orientation of appreciative inquiry enables groups to overcome these negative tensions and build a more hopeful perspective of their future by focusing on what is possible.63 Appreciative inquiry 's positive focus is illustrated by the intervention conducted a few years ago at Heidelberg USA. The American arm of the world's largest printing press manufacturer (Heidelberger Druckmaschinen AG) had experienced morale-busting product setbacks as well as downsizing due to the economic recession. To rebu ild employee morale and engagement, Heidelberg held a two-day appreciative inquiry summit involving one-third of its staff. Organized into diverse groups from across the organization, participants envisioned what Heidelberg would ideally look like in the future. From these sessions emerged a new vision and greater autonomy for employees to serve customers. "Appreciative inquiry can energize an organization even in tough ti mes because it begins the conversation with possibilities instead of problems," says a senior executive at Heidelberg USA. 64 Appreciative inquiry embraces five principles (see Exhibit 15.5).65 One of these is the positive principle, which we describe above. A second principle, called the constmctionist principle, takes the position that conversations don't describe reality; they shape that reality. The understanding we form of an event, group, or situation depends on the questions we ask and the language we use. Therefore, appreciative inquiry uses words and language carefully because it is sensitive to the thoughts and feelings behind that communication. This relates to a third principle, called the simultaneity

Appreciative Inquiry Principles

EXHIBIT 15.5

Five Principles of Appreciative Inquiry

Appn•""'..e....,.......,

Delalp....

Positive principle

FoctL~ing on positive evenL~ and potential produces more positive. effective, and enduring change.

Constructionist principle

How we perceive and understand the change process depends on the questions we a...,;k and language we use throughout that process.

Simultaneity principle

Inquiry and change are simultaneous, not sequential.

Poetic principle

Organizations are open books. so we have choices in how they may be perceived, framed, and de.,cribed.

Anticipalory principle

People are motivated and guided by the vision they see and believe in for lhe future.

Source: Based on D. L. Cooperrider and D. K. Whii.Jley. Appreciative lnquiry: A Pos:iLive Revolution in Change. (San Frunci..:;oo: Berrett-Koehler. 2005). Chap. 7: D. K.Whitney and A. Trosten-Bloom. The power of appreciative inquiry: A prnctical g.ulde to pOSiLi\'e change. 2nd ed. (San Frnncisco: Berrett-Koehler Publishers. 201 0). Chap. 3.

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4 37

principle, which states that inquiry and change are simultaneous, not sequential. The moment we ask questions of others, we are changing those people. Furthermore, the questions we a~k determine the information we receive, which in ntrn affects which change intervention we choose. The key learning point from this principle is to be mindful of effects that the inquiry has on the direction of the change process. A fourth principle, cal led the poetic principle, states that organizations are open books, so we have choices in how they may be perceived, framed, and described. The poetic principle is re flected in the notion that a glass of water can be viewed as half full or half empty. Therefore, appreciative inquiry actively frames reality in a way that provides constructive value for future development. The anticipatory principle, the fifth principle of appreciative inquiry, emphasizes the importance of a positive collective vision of the future state. People are motivated and guided by the vision they see and believe in. Images that are mundane or disempowering will affect current e ffort and behaviour differently than will images that are inspiring and engaging . We noted the importance of visions earlier in this chapter (change agents) and in our discussion of transformational leadership (Chapter 12). The Four- 0 Model of Appreciative Inquiry These five principles Jay the foundation for appreciative inquiry's "Four-D" process. The model's name refers to it~ four stages, shown in Exhibit 15.6. Appreciative inquiry begins with discovery- identify ing the positive elements of the observed events or organization.66 This might involve documenting positive customer experiences elsewhere in the organization. Or it might include interviewing members of another organization to discover it~ fundamental strengths.

Toronto Western Hospital (TWH) held an appreciative inqui ry (AI) retreat at w hich staff discussed the hospital's past successes and crafted a vision for its future. TWH's executive team felt the AI philosophy should guide daily leadership behaviour, so they developed and taught a positive leadership program, which has since been completed by more than 150 leaders at the hospital. Kathy Sabo, executive lead at TWH w hen the positive leadership program was launched, says the training teaches hospital leaders to "embed [AI) in our da ily work differently than we do nownot just focused on a particular in itiative but how do we enact it daily." The program has improved TWH's balanced scorecard results, patient satisfaction, and staff engagement. "We've seen really positive outcomes in how people apply the [A I) theory, how they behave as leaders, how that has impacted their staff," observes Sabo, who has recently retired.67 © Shutterstock/Monkey Business Images

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EXHIBIT 15.6

The Four-D Model of Appreciative Inquiry

1. Discovery

Identify the best of "what is"

-

2. Dreaming

3. Designing

4. Delivering

Envisioning "what might be"

Engaging in dialogue about "what should be"

Developing objectives about "what will be"

Sources: Ba..:;ed on F.l Barrett and D. L. Cooperrider. "Generati\•e Metaphor lnter\•entio n: A New Approach for Working with Systems Divided

by Conflict and Otught in Defensive Perception." Journal of Applied Behavioural Sc-ience 26 (1990). p. 229: D. Whitney and C. Schau. "Appreciative Inquiry: An Innovative Process for Organization Change." EmpiO)•ment Relations Today 25 (Spring 1998). pp. 11-21: D. L. Cooperrider and D. K.\Vhitney. Appreciative inquiry: A positive revolution in change. (San r...aneisoo: Berrett-Koehler. 2005). Chap. 3.

As participants discuss their findings, they shift into the dreaming stage by envisioning what might be possible in an ideal organization. By pointing out a hypothetical ideal organization or situation, participants feel safer revealing their hopes and aspirations than they would if they were discussing their own organization or predicament. As participants make their private thoughts public to the group, the process shifts into the third stage, called designing. Designing involves dialogue in which participants listen with selfless receptivity to each other's models and a~sumptions and eventually form collective views within the team. In effect, they create a common mental model of what should be. As this model takes shape, group members shift the focus back to their own s ituation. In the final stage of appreciative inquiry, called delivering (also known a~ destiny), participants establish specific objectives and direction for their own organization on the basis of their model of what wi ll be. Appreciative inquiry was introduced almost three decades ago, but it real ly gained popularity only within the past few years. Appreciative inquiry success stories of organizational change have been reported in a variety of companies, including Canadian Tire, Toronto Western Hospital, Heidelberg USA, the British Broadcasting Corporation, and Hunter Dougla~ 68 Appreciative inquiry has much to offer, but it is not always the best approach to changing teams or organizations and, indeed, has not always been successful. This approach depends on participants' ability to let go of the problem-oriented approach, including the "blame game" of determining who may have been responsible for past failures. It also requires leaders who are will ing to accept appreciative inquiry's less structured process. 69 Another concern is that research has not yet examined the contingencies of this approach.70 In other words, we don't yet know under what conditions appreciative inquiry is a useful approach to organizational change and under what conditions it is less effective. Overall, appreciative inquiry can be an effective approach to organizational change, but we are still discovering its potential and limitations.

LARGE GROUP INTERVENTIO N APPROACH Appreciative inquiry can occur in smal l teams, but it is often designed to involve a large number of people, such as the hundreds of employees who participated in the process at Heidelberg USA and Toronto Western Hospital. As such, appreciative inquiry is often identif ied as one of several large group organizational change interventions. Large group interventions adopt a "whole systems" perspective of the change process 71 This means that they view organizations as open systems (see Chapter I) and assume that change will be more successful when many employees and other stakeholders are included in the process.72 Large group interventions are high-involvement events because participants discuss their experiences, expectations, and ideas with others, typically in small groups within the large collective setting.

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4 39

Similar to appreciative inquiry, large group interventions adopt a future-oriented positive focus rather than a past-oriented problem focus. Future search conferences, for instance, are large group interventions typically held over a few days in which participants identify emerging trends and develop strategies for the organization to real ize potential under those future conditions. In addition to this strategy development, large group interventions generate a collective vision or sense-making about the organization and its future. This " meaning-making" process is important for the organization's evolving identity and how participants relate to that identity. Large group interventions have occurred in a variety ofcompanies and industries. Emerson & Cuming's chemical manufacturing facility in Canton, Massachusetts held a large group summit in which managers, supervisors, and production employees were organized into five stakeholder teams to identify initiatives that would improve the plant's safety, efficiency, and cooperation. Several Canadian school boards have conducted funtre search conferences, including the Ottawa-Carleton School Board, Toronto District School Board, and Lester B. Pearson School Board. The Canadian Nature Federation also held a future search event to assist their change process 73 Future search meetings and similar large group change events potentially minimize resistance to change and assist the quality of the change process, but they also have limitations 74 One problem is that involving so many people invariably limits the opportunity to contribute and increases the risk that a few people will dominate the process. Another concern is that these events focus on finding common ground, and this may prevent the participants from discovering substantive differences that interfere with future progress. A third issue is that these events generate high expectations about an ideal future state that are difficult to satisfy in practice. Employees become even more cynical and resistant to change if they do not see meaningful decisions and actions resulting from these meetings.

PARALLEL LEARN ING STRUCTURE APPROACH Parallel learning structures are highly participative arrangements composed of people from most levels of the organization who follow the action research model to produce meaningful organizational change. They are social structures developed alongside the formal hierarchy with the purpose of increasing the organization's learning.75 Ideally, participants in parallel learning structures are sufficiently free from the constraints of the larger organization that they can effectively solve organizational issues. Royal Dutch/Shell relied on a parallel learning structure to introduce a more customer-focused organization.76 Rather than try to change the entire organ ization at once, executives held week-long "retail boot camps" with teams from six countries, consisting of front line people (such as gas station managers, truck drivers, and marketing professionals). Participants learned about competitive trends in their regions and were taught powerfu l marketing tools to identify new opportunities. The teams then returned home to study their markets and develop proposals for improvement. Four months later, boot camp teams returned for a second workshop, at which each proposal was critiqued by Royal Dutch/Shell executives. Each team had 60 days to put its ideas into action; then the teams returned for a third workshop to analyze what worked and what didn't. This paralle l learn ing process did much more than introduce new marketi ng ideas. It created enthusiasm in participants that spread contagiously to their co-workers, including managers above them, when they returned to their home countries.

Cross-Cultura l and Eth ical Issues in Organizational Change Throughout this chapter, we have emphasized that change is an inevitable and often continuous aspect of organizational life because organizations need to remain al igned with the dynamic external environment. Yet we also need to be aware of cross-cultural and ethical issues with any change process. Many organizational change practices are built around Western

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cultural assumptions and values, which may differ from and sometimes confl ict with a~sumptions and values in other cultures.77 One possible cross-cultural limitation is that Western organizational change models, such as Lewin's force field analysis, often assume that change ha~ a beginning and an ending in a logical linear sequence (that is, a straight line from point A to point B). Yet change is viewed more as a cycl ical phenomenon in some cultures, such as the earth's revolution around the sun. Other cultures have more of an interconnected view of change, whereby one change leads to another (often unplanned) change, which leads to another change, and so on until the change objective is ultimately achieved in a more circuitous way. Another cross-cultural issue with some organizational change interventions is the assumption that effective organizational change is necessarily punctuated by tension and overt conflict. Indeed, some change interventions encourage such confl ict. But this direct confrontation view is incompatible with cultures that emphasize harmony and equilibrium. These cross-culntral differences suggest that a more contingency-oriented perspective is required for organizational change to work effectively in this era of globalization. Some organizational change practices also face ethical issues.78 One ethical concern is the risk of violating individual privacy rights. The action research model is bui lt on the idea of collecting information from organizational members, yet this requires that employees provide personal information and reveal emotions they may not want to divulge.79 A second ethical issue is that some change activities potentially increa~e management's power by inducing compliance and conformity in organizational members. For instance, action research is a system-wide activity that requires employee participation rather than allowing individuals to get involved voluntarily. A third risk is that some organizational change interventions undermine the individual's self-esteem. The unfreezing process requires that participants disconfirm their existing beliefs, sometimes including their own competence at certain ta~ks or interpersonal relations. Organizational change is usually more difficult than it initially seems. Yet the dilemma is that most organizations operate in hyperfast environments that demand continuous and rapid adaptation. Organizations survive and gain competitive advantage by mastering the complex dynamics of moving people through the continuous process of change a~ quickly as the external environment is changing.

O rgan izational Behaviour: The Journey Continues Nearly 100 years ago, industrialist Andrew Carnegie said, "Take away my people, but leave my factories, and soon gra~s will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory."80 Carnegie's statement reflects the message woven throughout this textbook: Organizations are not buildings or machinery or financial assets; rather, they are the people in them. Organizations are human entities-full of life, sometimes fragile, and always exciting.

Andrew Carnegie © Everell Historicai/ Shullerstock

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Chapter Summary Describe the elemen ts of Lewin's force field analysis model. Lewin's force field analysis model states that all systems have driving and restraining forces. Change occurs through the process of unfreezing, changing, and refreezing. Unfreezing produces disequilibrium between the driving and restraining forces. Refreezing realigns the organization's systems and structures with the desired behaviours.

L01

Discuss the reasons why people resist organization al change and h ow change agents should view this resistance. Restraining forces are manifested as employee resistance to change. The main rea~ons why people resist change are the negative valence of change, fear of the unknown, not-invented-here syndrome, breaking routines, incongruent team dynan1ics, and incongruent organizational systems. Resistance to change should be viewed as a resource, not an inherent obstacle to change. C hange agents need to view resistance as task conflict rather than relationship conflict. Resistance is a signal that the change agent has not s ufficiently strengthened employee readiness for change. It is also seen as a form of voice, so discussion resulting from resistance potentially improves procedural justice.

L02

Outline six st rategies for minimizing resista n ce to ch ange, an d deba te ways to effectively create a n urgency for change. Organizational change requires e mployees to have an urgency for change. This typically occurs by informing them about driving forces in the external environment. Urgency for change also develops by putting employees in direct contact with customers. Leaders often need to create an urgency for change before the external pressures are felt, and this can occur through a vision of a more appealing future. Resistance to change may be minimized by keeping employees informed about what to expect from the change effort (communicating); teaching employees valuable ski lls for the desired future (learning); involving them in the change process; helping employees cope with the stress of change; negotiating trade-off.~ with those who will clearly lose from the change effort; and us ing coercion (sparingly and as a last resort).

L03

Discuss how leadership, coalitions, social networks, and pilot p rojects assist organizational change_ Every successful change requires transformational leaders with a clear, well-articu lated vision of the desired future state. These change agents need the assistance of several people (a gu iding coal ition) who are located throughout the organization. Change also occurs more informally through social networks. Viral change operates through social networks using influencers. Many organizational change initiatives begin with a pilot project. The success of the pilot project is then diffused to other parts of the organization. This occurs by applying the MARS model, including motivating employees to adopt the pilot project's methods, training people to know how to adopt these practices, helping to clarify how the pi lot can be applied to different areas, and providing time and resources to support this diffusion.

L04

Describe and comp are action research, ap preciative inquiry, large group in terventions, and p arallel learning structures as formal ap proaches to organizational change. Action research is a highly participative, open-systems approach to change management that combines an action-orientation (changing attitudes and behaviour) with research orientation (testing theory). It is a data-based, problem-oriented process that diagnoses the need for change, introduces the intervention, and then evaluates and stabil izes the desired changes. Appreciative inquiry embraces the positive organizational behaviour philosophy by focusing participants on the positive and possible. In addition, appreciative inquiry applies the constructionist, simultaneity, poetic, and anticipatory principles. The four stages of appreciative inquiry include discovery, dreaming, design ing, and delivering. Large group interventions are highly participative events that view organizations as open systems (i .e., involve as many employees and other stakeholders as possible), and adopt a future and positive focus of change. Parallel learning structures rely on social structures developed alongside the formal hierarchy with the purpose of increasing the organization's learning. They are highly participative arrangements, comprised of people from most levels of the organization who follow the action research model to produce meaningful organizational change.

LOS

Discuss two cross-cultural an d three ethical issues in organizational change. One significant concern is that organ izational change theories developed with a Western cultural orientation potentially conflict with cultural values in some other countries. Also, organizational change practices can raise one or more ethical concerns, including increasing management's power over employees, threatening individual privacy right~. and undermining individual sel f-esteem.

L06

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Key Terms action research appreciative inq uiry force field analysis

parallel learning structures refreezing unfreezing

Critical Thinking Questions I. C hances are that the school you are attending is currently undergoing some sort of change to adapt more closely w ith its environment. Discuss the external forces that are driving the change. What internal drivers for change also exist? 2. Use Lewin's force field analysis to describe the dynamics of organizational change at Blueshore Financial, the s ubject of the opening ca~e study for this chapter. The vignette provides some information, but think about other forces for and against change beyond the information provided here. 3. Employee resistance is a symptom, not a problem, in the change process. What are some of the real problems that may cause e mployee resistance? 4. Senior management of a large multinational corporation is planning to restructure the organization. C urrently, the organization is decentralized around geographic area~ so that the executive responsible for each area has considerable autonomy over manufacturing and sales. The new structure will transfer power to the executives responsible for different product groups; the executives responsible for each geographic area will no longer be responsible for manufacturing in their area but will retain control over sales activities. Describe two types of resistance senior management might encounter from this organizational change. 5. Discuss the role of reward systems in organizational change. Specifically, identify where reward systems re late to Lewin's force fie ld model and where they undermine the organizational change process. 6. Web Circuits is a Malaysian -ba~ed custom manufacturer for high-technology companies. Senior management wants to introduce lean management practices to reduce production cost~ and remain competitive. A consultant ha~ recommended that the company start with a pilot project in one department and, when successful, diffuse these practices to other areas of the organization. Discuss the advantages of this recommendation, and identify three ways (other than the pilot project's success) to make diffusion of the change effort more s uccessful. 7. What is the role o f formal and informal networks in organ izations interested in undergoing change? 8. Suppose that you are vice-president of branch services at the Kelowna Credit Union. You notice that several branches have consistently low customer service ratings even though there are no apparent differences in resources or staff characteristics. Describe an appreciative inquiry process in one of these branches that might help to overcome this problem.

Case Study: TRANSACT INSURANCE CORPORATION by Steven L. McShane, Curtin University (Australia) and University of Victoria (Canada) and Terrance J. Bogyo TransAct Insurance Corporation (TIC) provides automobile insurance in parts of Canada that allow private insurers. Last year, a new CEO was hired by TIC's board of directors to improve the company's competitiveness and customer service. A fter spending several months assessing the situation, the new CEO introduced a strategic plan to improve TIC's competitive position. He also replaced three vice-presidents. Jim Leon wa~ hired a~ vice-president of Claims, TIC's largest division w ith I ,500 employees, 50 claims centre managers, and 5 regional directors. Jim immediately met with all claims managers and directors, and vis ited employees at TIC's 50 claims centres. As an outsider, this was a formidable task, but his strong interpersonal skills and uncanny ability to remember nan1es and ideas helped him through the process. Through these vis it~ and discussions, Jim discovered that the

Chapter Fifteen

Organizational Change

44 3

claims divis ion had been managed in a relatively authoritarian, top-down manner. He could also see that morale was very low and employee-management relations were guarded . High workloads and isolation (adjusters working in tiny cubicles) were two other common complaints. Several managers acknowledged that the high tumover among claims adjusters was partly due to these conditions. Following discussions with TIC's CEO, Jim decided to make morale and supervisory leadership his top priority. He initiated a divisional newsletter with a tear-off feedback form for employees to register their comments. He announced an open-door policy in which any Claims Division employee could speak to him directly and confidential ly without going first to the inm1ediate supervisor. Jim also fought organizational barriers to initiate a flex-time program so that e mployees could design work schedules around their needs. This program later becan1e a model for other area~ of T IC. One of J im 's most pronounced symbols of change was the "Claims Management Credo" outlining the philosophy that every claims manager would follow. At his first meeting w ith the complete claims management teanl, Jim presented a list of what he thought were important philosophies and actions of effective managers. T he management group was a~ ked to select and prioritize items from this list. T hey were to ld that the resulting list would be the divis ion's management philosophy and all managers would be held accountable for abiding by it~ principles. Most claims managers were uneasy about this process, but they also understood that the organization was under competitive pressure and that Jim was using this exercise to demonstrate his leadership. The claims managers developed a list of I 0 items, such as encouraging teamwork, fostering a trusting work environment, setting clear and rea~onable goals, and so on. T he list wa~ circulated to senior management in the organ ization for their comment and approval, and sent back to all claims managers for their endorsement. Once this was done, a copy of the final document wa~ sent to every claims division e mployee. Jim also announced plans to follow up w ith an annual survey to evaluate each claims manager's performance. T his concerned the managers, but most of them believed that the credo exercise was a result of Jim 's initial enthusiasm and that he would be too busy to introduce a survey after settling into the job. One year after the credo had been distributed, Jim announced that the first annual survey would be conducted . All claims employees would complete the survey and return it confidentially to the human resources department where the s urvey results would be compiled for each claims centre manager. The survey asked the extent to which the manager had Jived up to each of the 10 items in the credo. Each form also provided space for comments. Claims centre managers were surprised that a survey would be conducted, but they were even more worried about Jim's state ment that the results would be shared with employees. What " results" would employees see? Who would distribute these results? What happens if a manager get~ poor ratings from his or her subordinates? "We'll work out the details later," said J im in response to these questions. "Even if the survey results aren't great, the information will give us a good baseline for next year's survey." The claims division s urvey had a high response rate. In some centres, every employee completed and returned a form. Each report showed the claim centre manager's average score for each of the 10 items as well a~ how many e mployees rated the manager at each level of the five-point scale. T he reports also included every comment made by employees at that centre. No one wa~ prepared for the results of the first survey. Most managers received moderate or poor ratings on the 10 items. Very few managers averaged above 3.0 (on a 5-point scale) on more than a couple of items. T his suggested that, at best, e mployees were ambivalent about whether their claims centre manager had abided by the I0 management philosophy items. T he comments were even more devastating than the ratings. Comments ranged from mildly disappointed to extremely critical o f their claims manager. Employees also described their longstanding frustration with TIC, high workloads, and isolated working conditions. Several people bluntly stated that they were skeptical about the changes that Jim had promised . "We've heard the promises before, but now we've lost faith," wrote one claims adjuster. The survey result~ were sent to each claims manager, the regional director, and e mployees at the claims centre. Jim instructed managers to discuss the s urvey data and comments w ith their regional manager and directly with e mployees. T he claims centre managers were shocked to Jearn that the reports included individual comments. They had assumed the reports would exclude comments and only show averaged scores for all employees at the centre. Some managers went to their regional director, complaining that revealing the personal comment~ would ruin their careers. Many directors sympathized, but the results were already avai lable to e mployees. When Jim heard about these concems, he agreed that the results were lower than expected and that the conm1ent~ should not have been shown to employees. After discussing the situation with his directors, he decided that d1e discussion meetings between claims managers and their employees should proceed as planned. To delay or withdraw d1e report~ would undermine the credibility and trust that Jim was trying to develop with employees. However, the regional director attended the meeting in each claims centre to minimize direct conflict bel\veen the claims centre manager and employees. Although many of these meetings went s moothly, a few created harsh feelings between managers and their e mployees. Sources of some comments were easi ly identi fied by their content, and this created a few delicate moment~ in several sessions. A few months after these meetings, two claims centre managers quit and three others asked for transfers back to nonmanagement positions in TIC. Meanwhile, Jim wondered how to manage this process more effectively, particularly since e mployees expected another survey the following year.

444

Part Four

Organizational Processes

Discussion Questions I. What symptom(s) exist in this case to suggest that something has gone wrong?

2. What are the main causes of these symptoms? 3. What actions should the company take to correct these problems? @2000. Steven L. McShane and Terrance J. Bogyo. This case is based on actual events in a Canadian organization. but names, industry. and some characteristics have been changed to maintain anonymity.

Team Exercise: STRATEGIC CHANGE INCIDENTS Purpose This exercise is designed to help you identify strategies for facilitating organizational change in various s ituations. Instructions I. The instructor will place students into tean1s, and each tean1 will be assigned one or both of the scenarios presented below. 2. Each tean1 will diagnose the scenario to determine the most appropriate set o f change management practices. Where appropriate, these practices s hould (a) create an urgency to change, (b) minimize resistance to change, and (c) refreeze the s ituation to support the change initiative. Each of these scenarios is based on real events. 3. Each tean1 will present and defend i t~ change management strategy. Class discussion regarding the appropriateness and fea~ibility of each strategy w ill occur after all teams assigned the same scenario have presented. The instructor will then describe what the organizations actually did in these s ituations.

Scenario 1: Greener Telco The chief executive officer of a large telephone company want~ it~ executives to make the organization more environmentally friendly by encouraging e mployees to reduce wa~te in the workplace. Government and other stakeholders expect the company to take this action and be publicly successful. Consequently, the CEO wants to significantly reduce paper usage, garbage, and other waste throughout the company's many w idespread offices. Unfortunately, a survey indicates that e mployees do not value environmental objectives and do not know how to "reduce, reuse, recycle." As the executive responsible for this change, you have been asked to develop a strategy that might bring about meaningful behavioural change toward this environmental goal. What would you do? Scenario 2: Go Forward Airline A major airline had experienced a decade of rough turbulence, including two bouts of bankruptcy protection, I0 managing directors, and morale so low that employees had removed the company's logo from d1eir uniforms because they were e mbarra~sed to let others know where they worked. Service was terrible, and the airplanes rarely arrived or left the terminal on time . This wa~ costing the airline significant an1ount~ of money in pa~senger layovers. Managers were paralyzed by anxiety; most didn't know how to set strategic goals that actually succeeded. One-fifth of all flight~ were losing money, and the company overall was near financial collapse Gust three months from defaulting on payroll obligations). You and the recently hired CEO must get employees to quickly improve operational efficiency and customer service. What actions would you take to bring about these changes?

Self-Assessments for Chapter 15

I

SELF-ASSESSMENT NAME

DESCRIPTION

Are you ready for change?

People seldom accept change quickly or easily. They have good reasons for opposing change or don't understand the urgency for change. particularly where it requires them to alter their own behaviour. This se]f..assessment identifies conditions that are holding back your readiness for a specific change initiative.

Are you tolerant of change?

Some people eagerly seek out novelty and new experiences. Others are keen to maintain the status quo and predictability. No matter how much communication. involvement and other change management strategies are applied. people in the latter category continue to resist because they have Jiule toler.mce of change. This self-assessment estimates your natur.tl tendency to tolerate change.

I

Additional Cases Case 1

A M IR KISS?

Case 2

ARCTIC M INING CONSULTANTS

Case 3

BRIDGING THE TWO WORLDS: THE ORGANIZATIONAL DILEMMA

Case 4

GOING TO TH E X-STREAM

Case 5

KEEPING SUZANNE CHALM ERS

Case 6

NORTHWEST CANADIAN FOREST PRODUCTS LIMITED (REVISED)

Case 7

THE REGENCY GRAND HOTEL

Case 8

SIMMONS LABORATORIES

Case 9

TAMARACK INDUSTRIES

Case 10 THE OUTSTANDING FACULTY AWARD Case 1 1 VETEM EN TS LTEE

Case 1

A MIR KISS?

by Steven L. McShane, Curti n Un iversity (Australia) a nd U niversity of Vict o ria (Canada) A team of psychologists at Moscow's Institute for Biomedical Problems (IBMP) wanted to Jearn more about the dynamics of long-term isolation in space. This knowledge would be applied to the International Space Station, a joint project of several countries that would send people into space for more than six months. It would eventually include a trip to Mars taking up to three years. IBMP set up a replica of the Mir space station in Moscow. They then arranged for three international researchers from Japan, Canada, and Austria to spend I 10 days isolated in a chamber the size of a train car. This chamber joined a smal ler chamber where four Russian cosmonauts had already completed half of their 240 days of isolation. This was the first time an international crew was involved in the studies. None of the participants spoke Engl ish as their first language, yet they communicated throughout their stay in English at varying levels of proficiency. Judith Lapierre, a French Canadian, was the only female taking part in the experiment. Along with a PhD in publ ic health and social medicine, Lapierre had studied space sociology at the International Space University in France, and conducted isolation research in the Antarctic. This was her fourth trip to Russia, where she had learned the language. The Japanese space program proposed a female participant along with male colleagues for the mission, but IBMP did not accept the Japanese female appl icant into the program. The Japanese and Austrian participants viewed the participation of a woman as a favourable factor, says Lapierre. They also assisted her in making the surroundings more comfortable by rearranging the furniture, hanging posters on the wall, and covering the kitchen table with a tablecloth. "We adapted our environment, whereas the Russians just viewed it as something to be endured," she explains. "We decorated for Christma~. because I'm the kind of person who likes to host people." NEW YEAR'S EVE TURMOIL

Ironically, it wa~ at one of those social events, the New Year's Eve party, when events took a turn for the worse. After drinking vodka (allowed by the Russian space agency), two of the Russian cosmonauts got into a fistfight that left blood splattered on the chamber walls. At one point, a colleague hid the knives in the station's kitchen because of fears that the two Russians were about to stab each other. CA-1

CA-2

Additional Cases

The two cosmonauts, who generally did not get along, had to be restrained by other men. Soon after that brawl, the Russian commander grabbed Lapierre, dragged her out of view of the television monitoring cameras, and kissed her aggressively-twice. Lapierre fought him off, but the message didn't register. He tried to kiss her again the next morning. The next day, the international crew complained to IB MP about the behaviour of the Russian cosmonauts. The Russian institute apparently took no action against any of the aggressors. Instead, the institute's psychologists repl ied that the incidents were part of the experiment. They wanted crew members to solve their personal problems with mature discussion, without asking for outside help. "You have to understand that Mir is an autonomous object, far away from anything," Vadim Gushin, the IB MP psychologist in charge of project, explained after the experiment had ended in March. "If the crew can't solve problems among themselves, they can't work together." Following IBMP's response, the international crew wrote a scathing Jetter to the Russian institute and the space agencies involved in the experiment. "We had never expected such events to take place in a highly controlled scientific experiment where individuals go through a multistep selection process," they wrote. "If we had known . . . we would not have joined it as subjects." The Jetter also complained about IBMP's response to their concerns. Informed of the New Year's Eve incident, the Japanese space program convened an emergency meeting on January 2nd to address the issue. Soon after, the Japanese team member quit, apparently shocked by IBMP's inaction. He was replaced with a Russian researcher on the international team. Ten days after the fight-a little over a month after the international team began the mission-the doors between the Russian and international crew's chambers were barred at the request of the international research team. Lapierre later emphasized that this action was taken because of concerns about violence, not because of the incident involving her. A STOLEN KISS OR SEXUAL HARASSMENT

By the end of the experiment in March, news of the fistfight between the cosmonauts and the commander's attempts to kiss Lapierre had reached the public. Russian scientists attempted to play down the kissing incident by saying that it was one fleeting kiss, a clash of cultures, and a female participant who was too emotional. "In the West, some kinds of kissing are regarded as sexual harassment. In our culture it's nothing," said Russian scientist Vadim Gushin in an interview. In another interview, he explained, "The problem of sexual harassment is given a lot of attention in North America but less in Europe. In Russia it is even Jess of an issue, not because we are more or Jess moral than the rest of the world; we just have different priorities." Judith Lapierre says the kissing incident was tolerable compared to this reaction from the Russian scientists who conducted the experiment. "They don't get it at all," she complains. "They don't think anything is wrong. I'm more frustrated than ever. The worst thing is that they don't realize it was wrong." Norbert Kraft, the Austrian scientist on the international team, also disagreed with the Russian interpretation of events. "They're trying to protect themselves," he says. "They're trying to put the fault on others. But this is not a cultural issue. If a woman doesn't want to be kissed, it is not acceptable." Sourr:es: G. Sinclair Jr.. ''If you Scream in Space. Does Anyone Hear?'"' Winnipeg Free Pres...::. May 5. 2000. p. A4: S. MarLin. "Reining in Lhe Spac.e Cowboys.." Globe& Mail. Apr-il 19. 2000. p. Rl: M. Gray. "A Space Dream SourS." Maclean's. April 17.2000. p. 26: E. Niiler. "In Se.areh of the Perfect AsLrt)flaut." Boston Globe. April4. 2000. p. FA: J. Tracy. "I 10-Day lsolatjon Ends in Sullen . . . lsolatioo." Moscow Times. March 30.2000. p. 1: M. Warren. "A Mir Kiss?" Daily Telegraph (london). Mareh 30.2000. p. 22: G. York. "Canadian's Hara..:;s:ment Complaint Sychological context. organizational cu~ure The value• assumptions shared within an organi7.:ttion.

and

organizational effectiveness A broad concept represented by scvcr-.al perspectives. includ· ing the organizntion'~ lit with the external environment. internal ~ubsys1cms configuration for high pcrfonmmcc. emphasis on organizational learning. and ability to satisfy the need~ of key stakeholders. organiza tional learning A perspective which holds that organizational cffccti\-eness depends on the organiLation's capacity to acquire. share, usc. and store valuable knowledge. organiza tional politics

Behaviours that oththe ex pen.~ of other people and possibly the organization.

ers percci''C as sclf·M:rving

tactic~ at

organizational socialization The proccs.< by ..t.ich individuals learn the values. expected hcha"iours. and social ~ ledge ncces.ury to assume their roles in the orga.niu1ton.. organizational strategy The way the organization positions itself m its setting in relation to its stakeholders. gh-.:n the organization's resources. cap;t.biJities. and mi~sion. organizational structure The division of labour as well a. the patterns of coordination, communication. wortnow. and forma1 power that direct organiz.ational activities. orga nizations Groups of people who wort interdependently toward •omc purpose. parallel learning structures Highly participative armngcmcnb composed of people from most levels or the organization who follow the action research model to produce meaningful organizational change. p a tlt-goa l le a dersh ip th eory A leadership theory stating that effecLivc leaders choose the most appropriate leadership style(s). depending on the cmplo)'CC tmd situation. 10 influence employee expectations ttbout de.sircd results and their positive outcom~ . perc.e ptlon The procc.s of receiving informotion about and making sense of the world 3t0Und u.-eiopment and maintenance rather than the task.

natural representativeness heuristic A 1endcncy to evaluate probabilities of c,·enl'i o r ob~t> by the degree to which they resemble (are representative of) other events or objects rather than on ohjccti>-e probability information.

production blodclng A time constraint in team decision malcing due to the procedural requirement that only one person may speak at a time.

reward power A person's ability to cootrol the allocation of rewards v31ued by others and to rCn\0\'C negative sanctions.

profit·sharing plan A reward system that pays bonuses to e mployee,\ on the basis o f the previous year's level or oorpomtc profit'i.

rituals The programmed routines of daily organizational life that dramatize the organiz.a· cion's culture.

profit-sharing p lans A person's inherent motivation to have a positive self-concept (and to ha>-e od>ers perceive llimlber fa>-ourably). snch as being competent. aur>c:u>-.:. Judy. ethic31. and important.

role ~reeptlons The degree to which a person understands the job duties assigned to or expected of him or her.

resources.

prospect theory effect A natural tendency to feel more dissatisfaction from losing a particular amount than satisfaction from gaining an equal amount psychological contract The individual's beliefs about the terms and conditions of a reciproca1 exchange agr«mcnt bct\\"CeD that person and another party (typically an emplo)"")psyehological harassment Repeated and hostile or unwanted conduct. \'Crbal comments. actions. or gestures 1hat affect an employee's dig· nity or psychological or physical integrity and that result in a harmful work environme nt for the e mployee.

role A set of behaviours that people are upected to perform because they hold certain positions in a team and organiza1ion. satisficing Selecting an 31temat.ive that is satisfactory or "good enough," rather thtm the alte rnative with the highes t value (maximization).

scenario planning A systematic process of thinking about alternative fucures and what the organization should do to anticipate and react to thtxe environments. scientific management The practice of systcm:atically partitioning work into its small· est elements and standardizing t:ts ks to achien~ maximum efficiency.

rational choice paradigm The view in deci·

scientific method A set of principles and procedure.~ that help researchers to systematically under· stand prcviO\l~ly unexplained events and condition.'i.

sion making that people should~and typically do-use logic and all a\'llilable information to choose the altemati>·e with the highest >'lllue.

selective attention The prcceS< of attending to some infonnation recei\·ed by our senses and ignoring other information.

A method of

self-concept An indi>;dual'< -246: K. Hallahan. "W.L. Mackenzie King: Rockefeller's ·Other' Public Relatjons Counselor in Colorado:· Public RelaJhms Rniew 29. no. 4 (2003): 401-414. 10. The extent to which OB influences career succes.~ depends on course pedagogy as well as the prac.tical value of the OB conceplS covered in the course. In fact. OB scholars have an ongoing debate about the practical releva1lCe of OB research. See. for example: J.P. Walsh et al.. ..On the Relationship between Research and Practice: Debate and Reflec· lions:· Joumal ofManagemem lttqu;ry 16. no. 2 (2007): 128-54: R. Gulati . "Tent Poles. Tribalism. and Boundary Spanning: The Rigor.Relevance Debate in Management Research:· Academy of Management lumal 50. no. 4 (2007): 775-82: J. Pearce and L. Huang. "'The Decreasing Value of Our Research to Managemem Education:· Academy of Managemem Learning & Educaihm 11. no. 2 (2012): 247-62: J.M. Banunek and S.L. Rynes. "Academics and Practitioners Are Alike and Unlike: The Paradoxe.~ of Ac--ademic-Practitioner Relatjonshjps:· Journal ofManagemeUI 40. no. 5 (2014): I 181-201: N. Butler. H. Delaney. and S. Spoelstra. "Problematizing ·Relevance· in the B usine.~~ School: The Case of Leadership S tudie.~:· Brii;.flt Journal ofManagemem26. no. 4 (2015): 731-44. I I. P.R. Lawrence and N. Nohria. Drhen: How Human Nature Shapes Our Choices (San Fran. cisco: Jossey.Bass. 2002). 12. S.L. Ryne.~ et al.. "Behavioral Coursework in B usine.~~ Education: Growing Evidence of a Legiti· macy Crisis:· Academy ofMtmagemem Learni11g & Educatill 2. no. 3 (2003): 269-83: R.P. Singh and A.G. Schick. "Organizational Beha,rior: Where Does It Fit in Today·s Management Curriculum?:· Journal ofEducm;onfor Business 82. no. 6 (2007): 349-56. 13. R.L. Priem and J. Rosenstein. "L~ Organization Theory ObviolL~ to Practhjoners? A Test of One E.~abljs hed Theory... Organiz.ation Sdence II . no. 5 (2000): 509-24. MBA students in the study performed much better than the other two groups. 14. R.S. Rubin and E.C. Dierdorff. "'How Relevant Is the MBA? Assessing the Alignment of Required CurTicula and Required Managerial Competencies ... Academy ofManagemem Learn· ing & Educatill 8. no. 2 (2009): 20&-24: Y.

Baruch and 0. Lavi.Steiner. "The Career Impact of Management Education from an Average. Ranked University: Human Capilal Perspective:· Career Derelopmeni ltllernmimwl20. no. 3 (20 15): 21&-37. 15. M.S. Myers. E"·ery Employee a Manager (New York: McGraw Hill. 1970). 16. M.A. West et al .... Reducing Patjem Mortality in Hospitals: The Role of Human Resource Management... Joumal of Organizational Behavir27. no. 7 (2006): 983- 1002: A. Edma~>-39. 27. Jpsos. ··Global Srudy of Online Employees Shows One in Five (I 7%) Work from Elsewhere:· News relea~ for lp.ws (New Yoa·k: lpsos. 23 January 20 12): U.S. Bureau of Labor Statistics.

"American lime Use Survey-20 14 Results:· news release for U.S. Department of Labor (Wa.~hington. DC. June 24. 2015): "Canadians Rank lOth in Schedule Satisfaction.·· News release for Randslad Canada (Toronto: CNW. 2 1 June 2016): Flexible \York Arrangt!mtllls: \Vhm Was Heart!. Employment and Social Development Canada (Ottawa: Government of Canada. September 201 6). 28. E.J. Hill et al.. "Workplace J-1 exibility. Work Hours. and Work- Life Conflict: Finding an Extra Day or Two:· Journal of Family Psydwf. ogy 24. no. 3 (20 10): 349-58: A. Bourhis and R. Mekkaoui. .. Beyond Work-fmnily Balance: Are Family-Friendly Organizations More Anractive?:· Rt!lations lndusfriellt!slllldu.Hrial Relatious 65. no. I (2010): 98-J 17: M.C. Noonan and J .L. Gla~~- "'The Hard Truth about Telecommuting:· Momhly LAbor Rt!view 135. no. 6 (2012): 3&-45: B. H. Martin and R. MacDonnell. "Is Telework Effective for Organizations?:· Managemt!ni Resean:h Review 35. no. 7 (2012): 602- 16: T.D. Allen. T.D. Golden. and K.M. Shockley. "How Effective Is Telecommuting? A.~~ssing the Status of Our Scientific Findings:· Psychological Sdt!nc~ in the Public llllerest 16. no. 2 (2015): 40-68: N. Bloom el al .... Does Woa-king from Home Work? Evidence from a Chinese Experiment:· 71te Quanerly Joumal of Ecmwmks 130. no. I (20 15): 165-2 18: R.S. Gajendran. D.A. Harrison. and K. Delaney-Kiinger...Are Telecommuters Remotely Good Citizens? Unpac.king Telecommuting's Effects on Performance Via J.Deals and Job Resources: · Pt!rsonnd Psychology 68. no. 2 (20 15): 353-93. The WestJet quotation is from: R. Marowits ...More Employees Working from Home in Shift to ·Telecommuting.... Toronro Swr. 23 May 2016. 29. D. Meinen...Make Telecommuting Pay Off:· HR Magaz;ne. June 2011.33: M. McQuigge. "A Panacea for Some. Working from Home StiU a Tough Sell for Some Employers:· Canad;an Press (Toronto). June 26. 20 13: Aetna. ··Teleworking on the Rise. Saving Co.~ts aaxlthe Environment:· May 2015. http.-57: E.E. Kossek. R.J. 1'bomp.S ON£9. no. 7 (2014): ei0292J: D. Karis. D. Wildman. and A. Mal'~ ... lmpro\•ing Remote Collaboration with Video Conferenc.ing and Video Portals:· Human-Compu1er lnteroctioll3 1. no. I (2016): 1-58. 33. CSL Limited. ·Providing a Positive Working Environment" (Parkville. Australia. 2015).

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EN-1 1

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89. T.F. Pettigrew and L.R. Tropp. "A Meta-Analytic Test of Intergroup Contact Theory:· Joumal of l'ersonalify and Social l'.rychlogy 90. no. 5 (2006): 75 1-83: Y. Amichai-Hantburger. B.S. Hasler. and T. Shani-Shennan. ··Structured and Unsttuctured Intergroup Contact in the Digital Age:· Computers in Human Belw.-ior 52 (2015): 515-22.

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90. l'lle contact hypothesis wa~ first introduced in G.W. Allpon. Tlte Nature of Prejudice (Reading. MA: Addison-Wesley. 1954). Chap. 16.

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